FILING STATEMENT

OF

ESV RESOURCES LTD. (to be renamed “Denarius Silver Corp.”)

REVERSE TAKEOVER INVOLVING THE ACQUISITION BY ESV RESOURCES LTD. OF 1255269 B.C. LTD & GRAN COLOMBIA GOLD TITIRIBI CORP.

Dated as of February 18, 2021

All information contained in this Filing Statement with respect to 1255269 B.C. Ltd. and Gran Colombia Gold Titiribi Corp. was supplied by 1255269 B.C. Ltd. and Gran Colombia Gold Titiribi Corp., as applicable, for inclusion herein.

Neither the TSX Venture Exchange nor any securities regulatory authority has in any way passed upon the merits of the reverse take-over described in this Filing Statement.

FORWARD LOOKING INFORMATION ............................................................................................ VI INTRODUCTION ................................................................................................................................... VII GLOSSARY OF TERMS ........................................................................................................................ IX SUMMARY OF FILING STATEMENT ................................................................................................ 15 RISK FACTORS ....................................................................................................................................... 21 PART I - INFORMATION CONCERNING ESV ................................................................................. 31 NAME AND INCORPORATION ............................................................................................................ 31 GENERAL DEVELOPMENT OF BUSINESS .......................................................................................... 31 SELECTED FINANCIAL INFORMATION AND MANAGEMENT’S DISCUSSION AND ANALYSIS ......... 33 DESCRIPTION OF SECURITIES .......................................................................................................... 34 STOCK OPTIONS ................................................................................................................................ 34 PRIOR SALES ..................................................................................................................................... 36 EXECUTIVE COMPENSATION ............................................................................................................ 37 CONDITIONAL LISTING APPROVAL ................................................................................................. 40 LEGAL PROCEEDINGS ....................................................................................................................... 40 AUDITOR, TRANSFER AGENT AND REGISTRAR ............................................................................... 40 MATERIAL CONTRACTS ................................................................................................................... 40 PART II - INFORMATION CONCERNING THE TARGETS ........................................................... 42 THE GUIA ANTIGUA VENDOR ................................................................................................... 42 NAME AND INCORPORATION ............................................................................................................ 42 GENERAL DEVELOPMENT OF THE BUSINESS .................................................................................. 42 SIGNIFICANT ACQUISITIONS ............................................................................................................. 43 NARRATIVE DESCRIPTION OF THE BUSINESS .................................................................................. 44 SELECTED FINANCIAL INFORMATION AND MANAGEMENT’S DISCUSSION AND ANALYSIS ........... 44 DESCRIPTION OF SECURITIES .......................................................................................................... 45 CONSOLIDATED CAPITALIZATION ................................................................................................... 45 PRIOR SALES ..................................................................................................................................... 45 STOCK EXCHANGE PRICE ................................................................................................................. 46 TERMINATION AND CHANGE OF CONTROL BENEFITS ................................................................... 46 DIRECTOR COMPENSATION ............................................................................................................. 46 MANAGEMENT CONTRACTS ............................................................................................................. 46 ARM’S LENGTH TRANSACTIONS ...................................................................................................... 46 LEGAL PROCEEDINGS ....................................................................................................................... 46

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AUDITORS .......................................................................................................................................... 47 MATERIAL CONTRACTS ................................................................................................................... 47 GRAN COLOMBIA TITIRIBI ....................................................................................................... 48 NAME AND INCORPORATION ............................................................................................................ 48 GENERAL DEVELOPMENT OF THE BUSINESS .................................................................................. 48 NARRATIVE DESCRIPTION OF THE BUSINESS .................................................................................. 49 SELECTED FINANCIAL INFORMATION AND MANAGEMENT’S DISCUSSION AND ANALYSIS ........... 49 DESCRIPTION OF SECURITIES .......................................................................................................... 50 CONSOLIDATED CAPITALIZATION ................................................................................................... 50 PRIOR SALES ..................................................................................................................................... 51 STOCK EXCHANGE PRICE ................................................................................................................. 51 TERMINATION AND CHANGE OF CONTROL BENEFITS ................................................................... 51 DIRECTOR COMPENSATION ............................................................................................................. 51 MANAGEMENT CONTRACTS ............................................................................................................. 51 ARM’S LENGTH TRANSACTIONS ...................................................................................................... 51 LEGAL PROCEEDINGS ....................................................................................................................... 52 AUDITORS .......................................................................................................................................... 52 MATERIAL CONTRACTS ................................................................................................................... 52 PART III - INFORMATION CONCERNING THE PROJECTS........................................................ 53 THE GUIA ANTIGUA PROJECT ................................................................................................. 53 THE ZANCUDO PROEJCT ........................................................................................................... 66 PART IV - INFORMATION CONCERNING THE RESULTING ISSUER ...................................... 88 NAME AND INCORPORATION ............................................................................................................ 88 INTERCORPORATE RELATIONSHIPS ................................................................................................ 88 AMALGAMATION AGREEMENT ......................................................................................................... 89 NARRATIVE DESCRIPTION OF THE BUSINESS .................................................................................. 89 DESCRIPTION OF THE SECURITIES ................................................................................................... 90 PRO FORMA CONSOLIDATED CAPITALIZATION ............................................................................. 91 AVAILABLE FUNDS AND PRINCIPAL PURPOSES .............................................................................. 92 PRINCIPAL SECURITYHOLDERS ....................................................................................................... 94 DIRECTORS AND OFFICERS OF THE RESULTING ISSUER ................................................................ 94 PROMOTER CONSIDERATION ........................................................................................................... 97 CORPORATE CEASE TRADE ORDERS OR BANKRUPTCIES .............................................................. 97 PENALTIES AND SANCTIONS ............................................................................................................. 98

PERSONAL BANKRUPTCIES .............................................................................................................. 98 CONFLICTS OF INTEREST ................................................................................................................. 98 OTHER REPORTING ISSUER EXPERIENCE ....................................................................................... 98 PROPOSED EXECUTIVE COMPENSATION ......................................................................................... 100 TERMINATION AND CHANGE OF CONTROL BENEFITS ................................................................... 101 COMPENSATION OF DIRECTORS ...................................................................................................... 102 INDEBTEDNESS OF DIRECTORS AND OFFICERS ............................................................................... 102 INVESTOR RELATIONS ARRANGEMENTS ......................................................................................... 102 OPTIONS AND WARRANTS TO PURCHASE SECURITIES ................................................................... 102 STOCK OPTION PLAN ........................................................................................................................ 103 ESCROWED SECURITIES ................................................................................................................... 105 AUDITORS .......................................................................................................................................... 107 TRANSFER AGENT AND REGISTRAR ................................................................................................ 107 PART IV - GENERAL MATTERS ....................................................................................................... 108 SPONSOR ............................................................................................................................................ 108 OTHER MATERIAL FACTS ................................................................................................................ 108 APPROVAL OF THE BOARD OF DIRECTORS ..................................................................................... 108

APPENDIX A FINANCIAL STATEMENTS OF ESV RESOURCES LTD.

APPENDIX B FINANCIAL STATEMENTS OF 1255629 B.C. LTD.

APPENDIX C FINANCIAL STATEMENTS OF ARCADIAN MINERALS CORP. APPENDIX D FINANCIAL STATEMENTS OF GRAN COLOMBIA GOLD TITIRIBI CORP.

APPENDIX E PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS OF THE RESULTING ISSUER

APPENDIX F MANAGEMENT’S DISCUSSION AND ANALYSIS OF ESV RESOURCES LTD.

APPENDIX G MANAGEMENT’S DISCUSSION AND ANALYSIS OF 1255629 B.C. LTD. APPENDIX H MANAGEMENT’S DISCUSSION AND ANALYSIS OF ARCADIAN MINERALS CORP.

APPENDIX I MANAGEMENT’S DISCUSSION AND ANALYSIS OF GRAN COLOMBIA GOLD TITIRIBI CORP.

CERTIFICATE OF ESV RESOURCES LTD.

CERTIFICATE OF 1255629 B.C. LTD.

CERTIFICATE OF GRAN COLOMBIA GOLD TITIRIBI CORP.

ACKNOWLEDGEMENT – PERSONAL INFORMATION

FORWARD LOOKING INFORMATION

This Filing Statement contains forward-looking information. Often, but not always, forward-looking information can be identified by the use of words such as “plans”, “expects”, “does not expect”, “is expected”, “estimates”, “intends”, “anticipates”, “does not anticipate”, or “believes”, or variations of such words and phrases or states that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken to occur or be achieved. Forward-looking information includes all matters that are not historical facts. Forward-looking information appears in a number of places throughout this Filing Statement. Examples of such information includes: (i) the intention to complete, and expected closing date of, the Transaction, (ii) the description of the Resulting Issuer that assumes completion of the Transaction; and (iii) proposed exploration and development activities, and method for funding thereof, expectations regarding the ability to raise capital and to be able to obtain and maintain all applicable licenses and permits for proposed activities, treatment under governmental regulatory regimes, status assets, future growth and performance.

Forward-looking statements are necessarily based upon a number of factors and assumptions that, if untrue, could cause actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by such statements. Forward-looking statements are based upon a number of estimates and assumptions that, while considered reasonable by ESV at this time, are inherently subject to significant business, economic and competitive uncertainties and contingencies that may cause ESV, the Guia Antigua Vendor, Gran Colombia Titiribi or the Resulting Issuer’s actual financial results, performance, or achievements to be materially different from those expressed or implied herein. Some of the material factors or assumptions used to develop forward-looking statements include, without limitation, the future price of precious and base metals, anticipated costs and the Resulting Issuer’s ability to fund its programs, the Resulting Issuer’s ability to carry on exploration and development activities, the timing and results of drilling programs, the discovery of mineral resources on the Resulting Issuer’s mineral properties, the timely receipt of required approvals and permits, including those approvals and permits required for successful project permitting, construction and operation of projects, the costs of operating and exploration expenditures, the Resulting Issuer’s ability to operate in a safe, efficient and effective manner, the Resulting Issuer’s ability to obtain financing as and when required and on reasonable terms and the impact of COVID-19 and the resumption of business.

Forward-looking information involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of ESV, the Guia Antigua Vendor, Gran Colombia Titiribi or the Resulting Issuer to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information. Although ESV has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements.

Known and unknown factors could cause actual results or events to differ materially from those projected in the forward-looking statements. Such factors include, but are not limited to, fluctuations in the currency markets; changes in interest rates; disruption to the credit markets and delays in obtaining financing; inflationary pressures; risks arising from holding derivative instruments (such as credit risk, market liquidity risk and mark-to-market risk); changes in national and local government legislation, taxation, controls, regulations and political or economic developments in Canada, the United States of America, Colombia, or other countries in which the Resulting Issuer may, upon completion of the Transaction, carry

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on business; business opportunities that may be presented to, or pursued by the Resulting Issuer upon completion of the Transaction; the Resulting Issuer’s ability to successfully integrate acquisitions; operating or technical difficulties in connection with business activities; the possibility of cost overruns or unanticipated expenses; employee relations; the risks of obtaining and renewing necessary licenses and permits; diminishing quantities or grades of reserves; adverse changes in the Resulting Issuer’s credit rating; the occurrence of natural disasters, hostilities, acts of war or terrorism; and the ongoing global pandemic involving the novel COVID-19. The factors identified above are not intended to represent a complete list of the factors that could affect ESV, the Guia Antigua Vendor, Gran Colombia Titiribi or the Resulting Issuer. Additional factors are noted under the heading “ Risk Factors ”.

Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking information prove incorrect, actual results, performance or achievement may vary materially from those expressed or implied by the forward-looking information contained in this Filing Statement. These factors should be carefully considered and readers are cautioned not to place undue reliance on forward-looking information, which speaks only as of the date of this Filing Statement. All subsequent forward-looking information attributable to ESV, the Guia Antigua Vendor, Gran Colombia Titiribi or the Resulting Issuer herein is expressly qualified in its entirety by the cautionary statements contained in or referred to herein. ESV, the Guia Antigua Vendor, Gran Colombia Titiribi and the Resulting Issuer do not undertake any obligation to release publicly any revisions to this forward-looking information to reflect events or circumstances that occur after the date of this Filing Statement or to reflect the occurrence of unanticipated events, except as may be required under applicable securities laws.

INTRODUCTION

MARKET DATA

Unless otherwise indicated, market data and industry forecasts contained in this Filing Statement have been obtained from publicly available sources (including industry publications, surveys and forecasts), and the good faith estimates of management of ESV, the Guia Antigua Vendor and Gran Colombia Titiribi, respectively (“ Management ”). Unless otherwise indicated, Management estimates are derived from publicly available information released by independent industry analysts and third-party sources, as well as data from their internal research, and are based on assumptions made by Management based on such data and its knowledge of the industry and markets, which Management believes to be reasonable. The internal research of Management has not been independently verified by any independent source. While Management believes the market position, market opportunity and market share information included in this Filing Statement is generally reliable, such information is inherently imprecise. In addition, projections, assumptions and estimates of the future performance of ESV, the Guia Antigua Vendor, Gran Colombia Titiribi and the Resulting Issuer and their respective future performance is necessarily subject to a high degree of uncertainty and risk due to a variety of factors. See “ Forward-Looking Information” and “ Risk Factors ”.

INFORMATION RELATING TO THE GUIA ANTIGUA VENDOR AND GRAN COLOMBIA TITIRIBI

The information contained or referred to in this Filing Statement relating to the Guia Antigua Vendor or Gran Colombia Titiribi, as applicable, has been furnished by the Guia Antigua Vendor and Gran Colombia Titiribi, respectively. In preparing this Filing Statement, ESV relied upon the Guia Antigua Vendor and Gran Colombia Titiribi, as applicable, to ensure that the Filing Statement contains full, true and plain disclosure of all material facts relating to the Guia Antigua Vendor and Gran Colombia Titiribi, respectively.

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CURRENCY

In this Filing Statement, references to "$" or "dollars" are to the lawful currency of Canada, unless otherwise indicated. If applicable, all references to "US$" or "USD" are to the lawful currency of the United States.

GENERAL

Except as otherwise indicated in this Filing Statement, all information disclosed in this Filing Statement is as of February 18, 2021 and the phrase "as of the date hereof" and equivalent phrases refer to that date.

No Person is authorized to give any information or to make any representation not contained in this Filing Statement and, if given or made, such information or representation should not be relied upon as having been authorized by ESV or the directors and officers of ESV. This Filing Statement does not constitute an offer to sell, or a solicitation of an offer to acquire, any securities, or the solicitation of a proxy, by any Person in any jurisdiction in which such an offer or solicitation is not authorized or in which the Person making such offer or solicitation is not qualified to do so or to any Person to whom it is unlawful to make such an offer or proxy solicitation.

Neither delivery of this Filing Statement nor any distribution of the securities referred to in this Filing Statement will, under any circumstances, create an implication that there has been no change in the information set forth herein since the date of this Filing Statement.

GLOSSARY OF TERMS

The following is a glossary of certain definitions used in this Filing Statement. Terms and abbreviations used in the financial statements of ESV, the Guia Antigua Vendor, Gran Colombia Titiribi and the Resulting Issuer in the appendices to this Filing Statement are defined separately and the terms and abbreviations defined below are not used therein, except where otherwise indicated. Words importing the singular, where the context requires, include the plural and vice versa and words importing any gender include all genders.

“ Affiliate ” A company is an “Affiliate” of another company if (a) one of them is the subsidiary of the other, or (b) each of them is controlled by the same Person. A company is “controlled” by a Person if (a) voting securities of the company are held, other than by way of security only, by or for the benefit of that Person, and (b) the voting securities, if voted, entitle the Person to elect a majority of the directors of the company. A Person beneficially owns securities that are beneficially owned by (a) a company controlled by that Person, or (b) an Affiliate of that Person or an Affiliate of any company controlled by that Person;
“ Amalco ” means the BCBCA company formed pursuant to the Amalgamation, which will be a wholly-owned subsidiary of the Resulting Issuer;
“ Amalgamation ” means the amalgamation of Subco and the Guia Antigua Vendor under Section 269 of the BCBCA;
“ Amalgamation means the amalgamation agreement dated effective November 20, 2020, among ESV, Agreement ” Subco and the Guia Antigua Vendor, setting forth the terms pursuant to which Subco and the Guia Antigua Vendor will complete the Amalgamation, as may be amended pursuant to the terms set forth therein;
“ Arcadian ” means Arcadian Minerals Corp., a wholly owned subsidiary of the Guia Antigua Vendor, subsisting under the laws of Panama;
“ Arm’s Length means a transaction which is not a Related Party Transaction; Transaction ”
“ Associate ” when used to indicate a relationship with a Person, means (a) an issuer of which the Person beneficially owns or controls, directly or indirectly, voting securities entitling him to more than 10% of the voting rights attached to all outstanding voting securities of the issuer, (b) any partner of the Person, (c) any trust or estate in which the Person has a substantial beneficial interest or in respect of which the Person serves as trustee or in a similar capacity, (d) in the case of a Person who is an individual, (i) that Person’s spouse or child, or (ii) any relative of that Person or of his spouse who has the same residence as that Person; but (e) where the Exchange determines that two Persons shall, or shall not, be deemed to be associates with respect to a Member firm, Member corporation or holding company of a Member corporation, then such determination shall be determinative of their relationships in the application of Rule D of the Exchange with respect to that Member firm, Member corporation or holding company;
“ BCBCA ” means the Business Corporations Act (British Columbia);

“ Board of means the Board of Directors of ESV, the Guia Antigua Vendor, Gran Colombia Directors ” Titiribi or the Resulting Issuer as applicable;
“ Closing ” means the closing of the Transaction;
“ Closing Date ” means the date on which the Closing occurs;
“ company ” unless specifically indicated otherwise, means a corporation, incorporated association or organization, body corporate, partnership, trust, association or other entity other than an individual;
“ Completion Date ” means the date of the Final Exchange Bulletin;
“ Computershare ” means Computershare Investor Services Inc.;
“ Concurrent Private means the non-brokered private placement of 18,675,053 Subscription Receipts in the Placement ” Guia Antigua Vendor, at a price of $0.45 per Subscription Receipt, for aggregate gross proceeds of $8,403,774, which proceeds are being held in escrow pending satisfaction of the Escrow Release Conditions;
“ Consideration means the 27,000,000 ESV Shares to be issued to Gran Colombia in connection with Shares ” the Share Purchase Transaction;
“ Control Person ” means any Person that holds or is one of a combination of Persons that holds a sufficient number of any of the securities of an issuer so as to affect materially the control of that issuer, or that holds more than 20% of the outstanding voting securities of an issuer except where there is evidence showing that the holder of those securities does not materially affect the control of the issuer;
“ Escrow Agent ” means Cassels Brock & Blackwell LLP;
“ Escrow Release means the escrow release conditions in connection with the Concurrent Private Conditions ” Placement, as follows:
(a) all conditions precedent to the completion of the Amalgamation as set out in Article 3 of the Amalgamation Agreement, other than the release of the escrowed funds and filing of the requisite articles of amalgamation, shall have been satisfied to the satisfaction of, or waived by, either ESV or the Guia Antigua Vendor, as applicable; and
(b) Escrow Agent having received an officer’s certificate from each of the Guia Antigua Vendor’s and ESV’s officers that each party has irrevocably instructed its counsel that upon release of the escrowed funds to the Guia Antigua Vendor, to issue the Guia Antigua Vendor Shares underlying the Subscription Receipts and to complete the Amalgamation and issue the securities of the Resulting Issuer;
“ ESV ” means ESV Resources Ltd., a corporation subsisting under the BCBCA;
“ ESV Shareholders ” means the holders of the ESV Shares;

“ESV Shares”	means the 31,602,862 common shares issued and outstanding in the capital of ESV
	prior to the completion of the Transaction;
“ESV Options”	means the 1,900,000, incentive stock option issued in accordance with the Stock
	Option Plan, exercisable to acquire ESV Shares at a price of $0.10 per ESV Share
	until August 27, 2030;
“Exchange”	means the TSX Venture Exchange;
“Exchange Policies”	means the policies of the Exchange and all bulletins, orders, policies, rules, regulations and by-laws of the Exchange as amended from time to time;
“Filing Statement”	means this filing statement, together with all appendices attached hereto and including
	the summary hereof;
“Final Exchange	means the bulletin which is issued by the Exchange following closing of the
Bulletin”	Transaction and the submission of all Post-Approval Documents which evidences the
	final Exchange acceptance of the Transaction;
“Gran Colombia”	means Gran Colombia Gold Corp., a corporation subsisting under the BCBCA;
“Gran Colombia	means Gran Colombia Gold S.A., a wholly-owned subsidiary of Gran Colombia
Panama”	subsisting under the laws of Panama;
“Gran Colombia	means Gran Colombia Gold Titiribi Corp., a wholly-owned subsidiary of Gran
Titiribi”	Colombia Panama (and an indirectly wholly-owned subsidiary of Gran Colombia),
	subsisting under the laws of Panama;
“Gran Colombia	means the 500 common shares in the capital of Gran Colombia Titiribi held by Gran
Titiribi Shares”	Colombia Panama, which represent all of the issued and outstanding common shares
	in the capital of the Gran Colombia Titiribi;
“Guia Antigua	means the Guia Antigua project located 130 kilometers northeast of Medellin in the
Project”	Segovia-Remedios mining district, Department of Antioquia;
“Guia Antigua	means the independent NI 43-101 technical report entitled “Guia Antigua (El
Technical Report”	Chicharrón) Silver-Gold Project, Municipalities of Segovia and Remedios,
	Department of Antioquia, Colombia” prepared for the Guia Antigua Vendor and ESV,
	authored by Stewart Redwood, BSc (Hons), PhD, FIMMM, FGS of Panama City,
	Panama and dated September 16, 2020;
“Guia Antigua	means 1255269 B.C. Ltd., a corporation subsisting under the BCBCA;
Vendor”
“Guia Antigua	means the holders of the Guia Antigua Vendor Shares;
Vendor
Shareholders”

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“Guia Antigua	means the 15,000,000 common shares in the capital of the Guia Antigua Vendor as
Vendor Shares”	constituted prior to completion of the Transaction;
“IAMGOLD Option	means the option agreement between Zancudo Gold Sucursal Colombia, a Colombian
Agreement”	branch of Zancudo Gold Corp., predecessor to Gran Colombia Titiribi, and
	IAMGOLD Sucursal Colombia, a Colombian Branch of IAMGOLD Corp., pursuant
	to which IAMGOLD Corp. may acquire up to a 70% undivided interest in the
	Zancudo Project incurring certain exploration expenditures within certain timelines
	and completing a feasibility study on the Zancudo Project;
“IFRS”	means the International Financial Reporting Standards;
“Industrias	means Industrias Argentum S.A.S., a wholly-owned subsidiary of Arcadian (and an
	indirectly wholly-owned subsidiary of the Guia Antigua Vendor), subsisting under
	the laws of Colombia;
“Insider”	if used in relation to an issuer, means: (a) a director or senior officer of the issuer; (b)
	a director or senior officer of a company that is an Insider or subsidiary of the issuer;
	(c) a Person that beneficially owns or controls, directly or indirectly, voting shares
	carrying more than 10% of the voting rights attached to all outstanding voting shares
	of the issuer; or (d) the issuer itself if it holds any of its own securities;
“Listing”	means the listing of the Resulting Issuer Shares on the Exchange following Closing;
“MD&A”	means management’s discussion and analysis;
“Member”	means a member of the Exchange as defined in the Exchange Policies;
“Named Executive	has the meaning ascribed to it in Form 51-102F6 –Statement of Executive
Officer” or “NEO”	Compensation_under National Instrument 51-102 entitled“Continuous Disclosure_
	Obligations”;
“NI 43-101”	means National Instrument 43-101 –Standards of Disclosure for Mineral Projects;
“Non-Arm’s Length	means (a) in relation to a company: a promoter, officer, director, other Insider or
Party”	Control Person of that company (including an issuer) and any Associates or Affiliates
	of any such Persons; and (b) in relation to an individual, any Associate of the
	individual or any company of which the individual is a promoter, officer, director,
	Insider or Control Person;
“Person”	means a company or individual;
“Post Approval	means the documents prescribed as such by Exchange Policy 5.2 –Changes of
Documents”	Business and Reverse Takeovers;
“Related Party	has the meaning ascribed to that term under Multilateral Instrument 61-101 –
Transaction”	Protection of Minority Security Holders in Special Transactions, and includes a
	related party transaction that is determined by the Exchange to be a Related Party
	Transaction;

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“Release Deadline”	means 5:00 p.m. (Vancouver time) on February 28, 2021;
“Resulting Issuer”	means ESV, after giving effect to the Transaction, to be renamed “Denarius Silver
	Corp.”;
“Resulting Issuer	means the agreement to be entered into among the Resulting Issuer, Computershare
Escrow Agreement”	and certain shareholders of the Resulting Issuer pursuant to which the Resulting Issuer
	Escrow Shares owned by such shareholders will be held in escrow in accordance with
	the requirements of the Exchange;
“Resulting Issuer	means the Resulting Issuer Shares to be held in escrow pursuant to the Resulting
Escrow Shares”	Issuer Escrow Agreement released in accordance with the applicable provisions
	thereof;
“Resulting Issuer	means the 9,200,000 incentive stock options of the Resulting Issuer outstanding upon
Options”	Closing of the Transaction;
“Resulting Issuer	means the common shares in the capital of the Resulting Issuer;
Shares”
“Resulting Issuer	means the 2,375,250 common share purchase warrants exercisable to acquire
Warrants”	Resulting Issuer Shares at a price of $0.10 per Resulting Issuer Share until August 27,
	2021;
“Share Purchase	means the share purchase agreement among Gran Colombia, Gran Colombia Panama,
Agreement”	Gran Colombia Titiribi and ESV dated November 20, 2020, pursuant to which ESV
	will acquire the Gran Colombia Titiribi Shares in exchange for the issuance of the
	Consideration Shares to Gran Colombia;
“Share Purchase	means the transactions contemplated in the Share Purchase Agreement;
Transaction”
“Stock Option Plan”	means the ESV incentive stock option plan, as approved by the ESV Shareholders at
	its most recent annual general meeting, or the proposed stock option plan for the
	Resulting Issuer;
“Subco”	means 1270702 B.C. Ltd., which is a wholly-owned subsidiary of ESV incorporated
	under the BCBCA;
“Subscription	means the 18,675,053 subscription receipts in the Guia Antigua Vendor, issued
Receipts”	pursuant to the Concurrent Private Placement, with each Subscription Receipt
	automatically converting into one Guia Antigua Vendor Share on satisfaction of the
	Escrow Release Conditions on or before the Release Deadline;
“Transaction”	means, collectively, the Amalgamation, the Share Purchase Transaction, the
	fulfilment of the Escrow Release Conditions and the change of name of ESV
	Resources Ltd. to “Denarius Silver Corp.”;

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“ Voluntary Pooled means the Resulting Issuer Shares that are, in addition to any resale restrictions Consideration imposed under the Exchange Policies, subject to voluntary resale restrictions under Shares ” the terms of a voluntary pooling agreement between the registered holders of the Consideration Shares and ESV, such that twenty-five percent (25%) of the Voluntary Pooled Consideration Shares would be released from the resale restriction on March 27, 2021, a further twenty-five percent (25%) of the Voluntary Pooled Consideration Shares would be released from the resale restriction on June 27, 2021, a further twenty-five percent (25%) of the Voluntary Pooled Consideration Shares would be released from the resale restriction on September 27, 2021 and the remaining twentyfive percent (25%) of the Voluntary Pooled Consideration Shares would be released from the resale restriction on December 28, 2021;
“ Voluntary Pooled means certain Resulting Issuer Shares that are subject to voluntary resale restrictions ESV Shares ” such that the holders thereof agreed, in addition to any resale restrictions imposed under the Exchange Policies, 25% would be released on March 27, 2021, 25% would be released on June 27, 2021, 25% would be released on September 27, 2021 and 25% would be released on December 28, 2021;
“ Voluntary Pooled means Resulting Issuer Shares subject to voluntary resale restrictions such that the Guia Antigua holders thereof agreed, in addition to any resale restrictions imposed under the Vendor Shares ” Exchange Policies, 25% would be released on March 27, 2021, 25% would be released on June 27, 2021, 25% would be released on September 27, 2021 and 25% would be released on December 28, 2021;
“ Zancudo Project ” means the exploration project located in the Municipality of Titiribi, Department of Antioquia, Colombia; and
“ Zancudo Technical means the independent NI 43-101 technical report entitled “NI 43-101 Technical Report ” Report for the Zancudo Gold-Silver Project, Municipality of Titiribi, Department of Antioquia, Colombia” prepared for ESV, authored by Stewart Redwood, BSc (Hons), PhD, FIMMM, FGS, of Panama City, Panama and dated December 12, 2020.

All dollar amounts in this Filing Statement are expressed in Canadian dollars unless otherwise indicated.

SUMMARY OF FILING STATEMENT

The following is a summary of information relating to ESV, the Guia Antigua Vendor, Gran Colombia Titiribi and the Resulting Issuer (assuming completion of the Transaction) and should be read together with the more detailed information and financial data and statements contained elsewhere in this Filing Statement. Certain capitalized words and terms used in this Summary are defined in the Glossary of Terms.

THE COMPANIES

ESV proposes to acquire the Guia Antigua Vendor, by way of a three-cornered amalgamation pursuant to which the Guia Antigua Vendor will amalgamate with Subco. Following completion of the Amalgamation, Amalco will be a wholly-owned subsidiary of the Resulting Issuer. ESV proposes to acquire Gran Colombia Titiribi pursuant to the terms of the Share Purchase Agreement. Following completion of the Share Purchase Transaction, Gran Colombia Titiribi will be a wholly-owned subsidiary of the Resulting Issuer.

ESV’s proposed acquisitions of the Guia Antigua Vendor and Gran Colombia Titiribi constitute a reverse takeover under the policies of the Exchange. The Transaction is an Arm’s Length Transaction. Upon completion of the Transaction, the Resulting Issuer will be engaged in the existing and collective businesses of the Guia Antigua Vendor and Gran Colombia Titiribi and is expected to become a Tier 2 Mining Issuer under the policies of the Exchange. See “Part IV - Information Concerning the Resulting Issuer”.

The Guia Antigua Vendor, through its subsidiaries, Arcadian and Industrias, has, in respect of the Guia Antigua Project, the right for exploration, mining and processing operations and the commercialization of mineral products. Following completion of the Amalgamation, Amalco will control the aforementioned rights in respect of the Guia Antigua Project. S ee “Part II – Information Concerning the Targets”.

Gran Colombia Titiribi controls the rights to the Zancudo Project, subject to the IAMGOLD Option Agreement. Pursuant to the IAMGOLD Option Agreement, IAMGOLD Corp. may acquire up to a 70% undivided interest in the Zancudo Project upon incurring certain exploration expenditures within certain timelines and completing a feasibility study on the Zancudo Project. S ee “Part II – Information Concerning the Targets”.

CONCURRENT PRIVATE PLACEMENT

In connection with the Amalgamation, the Guia Antigua Vendor has completed the Concurrent Private Placement to raise aggregate proceeds of $8,403,774 through the sale of 18,675,053 Subscription Receipts, at a price of $0.45 per Subscription Receipt. Upon notice of satisfaction of the Escrow Release Conditions, prior to the Release Deadline, escrowed proceeds from the Concurrent Private Placement will be released to the Resulting Issuer, and each Subscription Receipt will be automatically converted (without any further action on the part of the holder and for no additional consideration) into one Guia Antigua Vendor Share. Those Guia Antigua Vendor Shares will then convert to Resulting Issuer Shares, respectively, in accordance with the terms of the Amalgamation. Gran Colombia participated in the Concurrent Private Placement and purchased $3,000,000 worth of Subscription Receipts.

In connection with the Concurrent Private Placement, upon Closing, ESV will pay an aggregate of $197,761 in finder’s fees.

Upon release from escrow to the Resulting Issuer, the proceeds raised through the Concurrent Private Placement will be used to continue funding the Resulting Issuer’s business plan, satisfy the Resulting Issuer’s financial obligations and for general working capital purposes.

AMALGAMATION AGREEMENT

On November 20, 2020, ESV, Subco and the Guia Antigua Vendor entered into an Amalgamation Agreement, pursuant to which, on Closing, the Resulting Issuer will acquire the Guia Antigua Vendor, in exchange for the issuance of an aggregate of 15,000,000 Resulting Issuer Shares to the Guia Antigua Vendor Shareholders (18,675,053 Guia Antigua Vendor Shares will be issued to the holders of the Subscription Receipts upon satisfaction of the Escrow Release Conditions, which such Guia Antigua Vendor Shares shall be exchanged for Resulting Issuer Shares in connection with the Amalgamation).

Subject to obtaining Exchange approval and the issuance of the Final Exchange Bulletin, the Amalgamation will be effected pursuant to Section 269 of the BCBCA. Pursuant to the Amalgamation Agreement, Subco and the Guia Antigua Vendor will amalgamate and continue as Amalco. Amalco will be a wholly-owned subsidiary of the Resulting Issuer.

In connection with the Amalgamation Agreement, ESV will issue to all of the shareholders of the Guia Antigua Vendor, shares of the Resulting Issuer on the basis of one common share in the Resulting Issuer for each common share that they hold in the Guia Antigua Vendor.

Completion of the Amalgamation is subject to a number of conditions, including requisite shareholder and regulatory approvals of the Amalgamation and certain other conditions typical of a transaction of this nature.

In connection with the Amalgamation Agreement, upon Closing, ESV will pay to Fiore Management and Advisory Corp., a financial advisory fee equal to 300,000 Resulting Issuer Shares.

SHARE PURCHASE AGREEMENT

On November 20, 2020, ESV, Gran Colombia, Gran Colombia Panama and Gran Colombia Titiribi entered into the Share Purchase Agreement, pursuant to which, on Closing, ESV will acquire from Gran Colombia Panama all of the issued and outstanding securities in the capital of Gran Colombia Titiribi, being an aggregate of 500 Gran Colombia Titiribi Shares.

As condition for the Gran Colombia Titiribi Shares, ESV will issue to Gran Colombia 27,000,000 Consideration Shares.

Completion of the Share Purchase Transaction is subject to a number of conditions, including requisite regulatory approvals of the Amalgamation and the Share Purchase Transaction, satisfaction of the conditions to completion of the Amalgamation, receipt of conditional approval of the Listing and certain other conditions typical of a transaction of this nature.

In connection with the Share Purchase Agreement, upon Closing, ESV will pay to Fiore Management and Advisory Corp., a financial advisory fee equal to two percent (2%) of the Consideration Shares, being 540,000 Resulting Issuer Shares.

NAME CHANGE

ESV will change its name to “Denarius Silver Corp.” immediately prior to or upon completion of the Transaction.

INTERESTS OF INSIDERS

Insiders of ESV will be treated in the same manner as all other Guia Antigua Vendor Shareholders and Gran Colombia in connection with the Transaction. As of the date of this Filing Statement, Frederic Leigh (Chief Executive Officer and Director of ESV) directly and indirectly holds 500,000 ESV Shares, Michelle Borthwick (Chief Financial Officer and Corporate Secretary of ESV) holds 105,000 ESV Shares, Thomas O’Neill (Director of ESV) holds 25,000 ESV Shares and Bernadette D’Silva (Director of ESV) holds nil ESV Shares.

ARM’S LENGTH PARTY TRANSACTION

The Transaction is an Arm’s Length Transaction under the policies of the Exchange.

AVAILABLE FUNDS AND PRINCIPAL PURPOSES

The Resulting Issuer is expected to have working capital of approximately $7,718,836 on Closing. The Resulting Issuer is expected to use the funds available to it in furtherance of its stated business objectives which are summarized in the table appearing below.

	Estimated Amount
Sources of Funds:
Estimated working capital(1)	($684,938)
Gross proceeds from the Concurrent Private Placement	$8,403,774
Total Sources(1)	$7,718,836
Uses of Funds:
Costs related to the Transaction(2)	$300,000
Commission related to Concurrent Private Placement	$197,761
Colombia Site Office and Local Operational Overhead	$600,000
Phase I Work Program for the Guia Antigua Project(4)	$1,168,616
Phase II Work Program for the Guia Antigua Project(4)	$2,569,670
Sourcing and Due Diligence of Future Project Acquisitions	$500,000
Corporate marketing	$500,000
General and administrative expenses(3)	$1,400,000
Unallocated working capital to fund ongoing operations	$482,789
Total Uses	$7,718,836

Notes:

(1) Based on the gross proceeds of the Concurrent Private Placement and the estimated working capital deficit of ESV as at January 31, 2021 in the amount of ($250,000), the estimated working capital deficit of the Guia Antigua Vendor as at January 31, 2021 in the amount of ($472,000) and the estimated working capital of Gran Colombia Titiribi as at January 31, 2021 in the amount of $37,062.
(2) Consisting of legal fees, filing fees, accounting fees and other professional advisory fees related to the Transaction. (3) Comprised of: $750,000 (salaries); $150,000 (non-executive director fees); $60,000 (D&O insurance); $220,000 (audit, accounting and tax related fees); $44,000 (public company maintenance fees); $60,000 (marketing); $66,000 (office, IT and other); and $50,000 (listing and filing fees).
(4) The estimated cost of the Phase I Work Program for the Guia Antigua Project is US$920,460 and the estimated cost for the Phase II Work Program for the Guia Antigua Project is US$2,024,000. Based on the US/CAD Bank of Canada exchange rate as of the date of this Filing Statement (US$1.2696), the estimated cost of Phase I Work Program for the Guia Antigua Project is $1,168,616 and the estimated cost of Phase II Work Program for the Guia Antigua Project is $2,569,670.

Based on current projections, the Resulting Issuer’s working capital available for funding ongoing operations is expected to meet its expenses for a minimum period of 12 months commencing immediately after the completion of the Transaction.

For additional information, see “ Part IV - Information Concerning the Resulting Issuer – Available Funds and Principal Purposes ”.

Notwithstanding the proposed uses of available funds discussed above, there may be circumstances where, for sound business reasons, a reallocation of funds may be necessary. It is difficult, at this time, to definitively project the total funds necessary to affect the planned activities of the Resulting Issuer. For these reasons, management of ESV considers it to be in the best interests of the Resulting Issuer and its shareholders to afford management a reasonable degree of flexibility as to how the funds are employed among the uses identified above, or for other purposes, as the need arises. Further, the above uses of available funds should be considered estimates. See “ Forward-Looking Information ”.

PROPOSED DIRECTORS AND OFFICERS OF THE RESULTING ISSUER

Upon Closing, the Resulting Issuer’s Board of Directors will be reconstituted to consist of Jeff Couch, Frederic Leigh, Paul Sparkes, Serafino Iacono, and Lombardo Paredes-Arenas. Officers of the Resulting Issuer will consist of Frederic Leigh as Chief Executive Officer (“ CEO ”), Mike Davies as Chief Financial Officer (“ CFO ”) and Amanda Fullerton as Corporate Secretary.

SELECTED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION

Upon completion of the Transaction, the Resulting Issuer will have no long or short term debt and working capital of approximately $7,718,836. The issued share capital of the Resulting Issuer will be 93,117,915 Resulting Issuer Shares (See “Part IV - Information Concerning the Resulting Issuer – Pro Forma Capitalization” and the unaudited Pro Forma Financial Statements of the Resulting Issuer as at March 31, 2020 and June 30, 2020 attached to this Filing Statement as Appendix E) .

The following table contains certain pro forma financial information regarding the Resulting Issuer. This table should be read in conjunction with the pro forma consolidated financial statements of the Resulting Issuer included in this Filing Statement as Appendix E.

Pro Forma Consolidated Balance Sheet

Pro Forma Balance Sheet as at September 30, 2020 Total assets $15,598,120 Total long and short term liabilities $560,977

The following information should be read in conjunction with the financial statements and reports thereon included in this Filing Statement, being:

audited financial statements of ESV for the years ended March 31, 2020, 2019 and 2018, are attached as Appendix A hereto;
interim unaudited financial statements of ESV for the six months ended September 30, 2020, are attached as Appendix A hereto;
audited financial statements of the Guia Antigua Vendor for the period of incorporation on June 30, 2020 to November 30, 2020, are attached as Appendix B hereto;
audited carve-out combined financial statements of Arcadian for the year ended December 31, 2019 and the unaudited carve-out combined financial statements for the six-month period ended December 31, 2018, are attached as Appendix C hereto;
interim unaudited carve-out combined financial statements of Arcadian for the six-months ended June 30, 2020 and 2019, are attached as Appendix C hereto;
audited consolidated financial statements of Gran Colombia Titiribi for the years ended December 31, 2019 and 2018, are attached as Appendix D hereto; and
interim consolidated financial statements of Gran Colombia Titiribi for the nine months ended September 30, 2020, are attached as Appendix D hereto.

MARKET FOR SECURITIES AND MARKET PRICE

The ESV Shares are listed on the NEX board of the TSX Venture Exchange under the trading symbol “ESV.H” and were halted from trading on September 23, 2020 pending Closing of the Transaction. The closing market price of the ESV Shares on September 22, 2020, the most recent day on which there was a trade of ESV Shares prior to the trading halt was $0.56. It is anticipated that the Resulting Issuer Shares will begin trading on the Exchange upon completion of the Transaction under the symbol “DSLV”. There is no public market for the shares of the Guia Antigua Vendor or the shares of Gran Colombia.

CONFLICTS OF INTEREST

Some of the individuals proposed for appointment or acting as directors or officers of the Resulting Issuer upon the completion of the Transaction are also directors, officers and/or promoters of other reporting and

non-reporting issuers. As of the date of this Filing Statement and to the knowledge of the directors and officers of ESV, the Guia Antigua Vendor and Gran Colombia Titiribi, there are no existing conflicts of interest between the Resulting Issuer and any of the individuals proposed for appointment or acting as directors or officers following the completion of the Transaction. Conflicts of interest, if any, will be subject to, and will be resolved in accordance with, the procedures and remedies under the BCBCA.

INTEREST OF EXPERTS AND OTHERS

Information relating to the Guia Antigua Project and the Zancudo Project in this Filing Statement has been prepared and certified by Stewart Redwood, BSc (Hons), PhD, FIMMM, FGS. Stewart Redwood, BSc (Hons), PhD, FIMMM, FGS is a qualified person as such term is defined in NI 43-1010. Stewart Redwood, BSc (Hons), PhD, FIMMM, FGS does not beneficially own, directly or indirectly, any securities, nor does it have any interest in the property of ESV, the Guia Antigua Vendor or Gran Colombia Titiribi.

In addition, none of the aforementioned Persons or companies, nor any director, officer or employee of any of the aforementioned Persons or companies, is or is expected to be elected, appointed or employed as a director, officer or employee of the Resulting Issuer or of any Associate or Affiliate of the Resulting Issuer. See “ Forward-Looking Information ”.

Moreover, except as disclosed herein, none of the aforementioned Persons or companies nor any director, officer or employee of any of the aforementioned Persons or companies, currently holds more than 1% of the ESV Shares and, upon completion of the Transaction, is not expected to hold more than 1% of the issued and outstanding Resulting Issuer Shares.

AUDITORS

The audit reports of ESV, the Guia Antigua Vendor and Arcadian described or included in this Filing Statement were prepared by Davidson & Company LLP, and the audit report on the consolidated financial statements of Gran Colombia Titiribi described or included in this Filing Statement was prepared by KPMG LLP.

Davidson & Company LLP has advised ESV, the Guia Antigua Vendor, and Arcadian that it is independent within the meaning of the Code of Professional Conduct of the Chartered Professional Accountants of British Columbia.

KPMG LLP has advised that it is independent with respect to Gran Colombia Titiribi within the meaning of the relevant rules and related interpretations prescribed by the relevant professional bodies in Canada and applicable legislation or regulation.

RISK FACTORS

ESV, and thus the securities of ESV, should be considered highly speculative investments and the transactions contemplated herein should be considered to be of a high-risk nature. For a comprehensive discussion of the risk factors relating to the Resulting Issuer, see “ Risk Factors ”.

CONDITIONAL APPROVAL OF EXCHANGE

The Exchange has conditionally accepted the Transaction, subject to ESV fulfilling all of the requirements of the Exchange. There is no assurance that ESV will be able to meet all of such requirements. If ESV is unable to meet all of such requirements, the Transaction will not be completed.

RISK FACTORS

There are a number of risk factors associated with ESV, the Guia Antigua Vendor, Gran Colombia Titiribi and the Transaction. Upon completion of the Transaction, the collective businesses of the Guia Antigua Vendor and Gran Colombia Titiribi will be the business of the Resulting Issuer. Accordingly, risk factors relating to the current businesses of the Guia Antigua Vendor and Gran Colombia Titiribi, respectively, will be risk factors relating to the Resulting Issuer’s business and references to the Guia Antigua Vendor or Gran Colombia Titiribi in these risk factors should, where the context requires, be read to include the risks to the Resulting Issuer. An investment in the securities of the Resulting Issuer involves significant risks. Investors should carefully consider the risks described below and the other information contained in this Filing Statement before making an investment in the Resulting Issuer. Additional risks and uncertainties not presently known to ESV, the Guia Antigua Vendor and Gran Colombia Titiribi or that ESV, the Guia Antigua Vendor and Gran Colombia currently consider immaterial may also impair the business and operations of the Resulting Issuer and cause the trading price of the Resulting Issuer Shares to decline. If any of the following or other risks occur, the Resulting Issuer’s business, prospects, financial condition, results of operations and cash flows could be materially adversely impacted. In that event, the trading price of the Resulting Issuer Shares could decline and you could lose all or part of your investment. There is no assurance that risk management steps taken will avoid future loss due to the occurrence of the risks described below or other unforeseen risks.

RISK FACTORS RELATED TO THE TRANSACTION

Completion of the Transaction

Completion of the Transaction is subject to, among other things, the acceptance of the Exchange and the receipt of all necessary regulatory approvals. There can be no certainty, nor can either party provide any assurance, that these conditions will be satisfied or, if satisfied, when they will be satisfied. In the event that any of those conditions are not satisfied or waived, the Transaction may not be completed. The requirement to take certain actions or to agree to certain conditions to satisfy such requirements or obtain any such approvals may have a material adverse effect on the business and affairs of ESV or the trading price of ESV Shares after completion of the Transaction. In addition, there are other risks associated with the Transaction including (i) market reaction to the Transaction and the future trading prices of the Resulting Issuer Shares cannot be predicted; and (ii) uncertainty as to whether the Transaction will have a positive impact on the entities involved therein.

In addition to the foregoing, ESV and the Guia Antigua Vendor each have the right to terminate the Amalgamation Agreement and ESV and Gran Colombia each have the right to terminate the Share Purchase Agreement in certain circumstances. Accordingly, there is no certainty, nor can either party provide any assurance, that the Amalgamation Agreement or the Share Purchase Agreement will not be terminated before the completion of the Transaction.

Following Completion of the Transaction, the Resulting Issuer may Issue Additional Equity Securities

Following completion of the Transaction, the Resulting Issuer may issue equity securities to finance its activities, including to finance acquisitions. If the Resulting Issuer were to issue Resulting Issuer Shares, existing holders of such shares may experience dilution in the Resulting Issuer. Moreover, if the Resulting Issuer’s intention to issue additional equity securities becomes publicly known, the Resulting Issuer’s share price may be materially adversely affected.

Change of Shareholder Influence

Immediately after the completion of the Transaction, the former Guia Antigua Vendor Shareholders (including, with the exception of Gran Colombia, the subscribers who received Guia Antigua Vendor Shares in connection with the conversion of the Subscription Receipts) will own approximately 29.00% of the Resulting Issuer Shares on a non-diluted basis and Gran Colombia will own approximately 36.15% of the Resulting Issuer Shares on a non-diluted basis. Each of Gran Colombia and the former Guia Antigua Vendor Shareholders may therefore be in a position to exercise significant influence over all matters requiring shareholder approval, including the election of directors, determination of significant corporate actions, amendments to the Resulting Issuer’s articles of incorporation and the approval of any business combinations, mergers or takeover attempts, in a manner that could conflict with the interests of other shareholders. Although neither ESV, the Guia Antigua Vendor nor Gran Colombia Titiribi, respectively, is aware of any agreements or understandings among Gran Colombia or the Guia Antigua Vendor Shareholders as to voting, if Gran Colombia or the Guia Antigua Vendor Shareholders voted in concert they would exert more influence over the Resulting Issuer than would the former ESV Shareholders.

GENERAL RISKS

Limited Operating History

ESV, the Guia Antigua Vendor and Gran Colombia Titiribi each have no history of earnings or profitability and the Resulting Issuer will have no history of earnings or profitability. The likelihood of success of the Resulting Issuer must be considered in light of the problems, expenses, difficulties, complication and delays frequently encountered in connection with the establishment of any business. The Resulting Issuer will have limited financial resources and there is no assurance that additional funding will be available to it for further operations or to fulfill its obligations under applicable agreements. There is no assurance that the Resulting Issuer will be able to generate revenues, operate profitably, or provide a return on investment, or that it will successfully implement its plans.

Negative Operating Cash Flow and Dependence on Third Party Financing

ESV, the Guia Antigua Vendor and Gran Colombia Titiribi each have no source of operating cash flow and there can be no assurance that the Resulting Issuer will ever achieve profitability. Accordingly, it is dependent on third party financing to continue business activities, maintain capacity and satisfy contractual obligations. The amount and timing of expenditures will depend on a number of factors, including in material part the progress of ongoing exploration, the results of consultants’ analyses and recommendations, the rate at which operating losses are incurred, the entering into of any strategic partnerships and the acquisition of additional property interests. Failure to obtain such additional financing could result in delay or indefinite postponement of further exploration and development of the Resulting Issuer’s properties or require it to sell, one or more of its properties.

Uncertainty of Additional Funding

As stated above, the Resulting Issuer will be dependent on third party financing, whether through debt, equity, or other means. There is no assurance that it will be successful in obtaining required financing in the future or that such financing will be available on terms acceptable to the Resulting Issuer. Volatile resource markets, a claim against the Resulting Issuer, a significant event disrupting the Resulting Issuer’s business, or other factors may make it difficult or impossible to obtain financing through debt, equity, or other means on favourable terms, or at all. In addition, any future financing may also be dilutive to existing shareholders of the Resulting Issuer.

Competitive Conditions

The Resulting Issuer will actively compete for resource acquisitions, exploration leases, licenses and concessions and skilled industry personnel with a substantial number of other mining companies, many of which have significantly greater financial resources than the Resulting Issuer. The Resulting Issuer’s competitors will include major integrated mining companies and numerous other independent mining companies and individual producers and operators.

Reliance Upon Management

The Resulting Issuer will be dependent upon the continued support and involvement of its principals and management. Should the Resulting Issuer lose the services of one or more of the principals or management, the ability of the Resulting Issuer to achieve its objectives could be adversely affected.

Title to Properties

The Resulting Issuer will diligently investigate all title matters concerning the ownership of all mining claims and plans to do so for all new claims and rights to be acquired. Any newly acquired options entitling the Resulting Issuer to acquire mining properties may be affected by undetected defects in title, such as the reduction in size of the mining titles and other third party claims affecting the Resulting Issuer’s interests. Maintenance of such interests is subject to ongoing compliance with the terms governing such mining titles. Mining properties sometimes contain claims or transfer histories that examiners cannot verify. A successful claim that the Resulting Issuer does not have title to any of its mining properties could cause the Resulting Issuer to lose any rights to explore, develop and extract any ore on that property, without compensation for its prior expenditures relating to such property.

Conflicts of Interest

The Board of Directors may become directors of other reporting companies or have significant shareholdings in other resource companies and, to the extent that such other companies may participate in ventures in which the Resulting Issuer may participate, the Board of Directors may have a conflict of interest in negotiating and concluding terms respecting the extent of such participation. The Resulting Issuer and the Board of Directors will attempt to minimize such conflicts. In the event that such a conflict of interest arises at a meeting of the Board of Directors, a director who has such a conflict will abstain from voting for or against the approval of such participation or such terms. In appropriate cases, the Resulting Issuer will establish a special committee of independent directors to review a matter in which several directors, or management, may have a conflict. Conflicts, if any, will be subject to the procedures and remedies as provided under the BCBCA. The provisions of the BCBCA require a director or officer of a corporation who has a material interest in a contract or transaction of the corporation, or a director or officer of a corporation who is a director or officer of or has a material interest in a Person who has a material interest in a contract or transaction with the corporation, to disclose his or her interest and, in the case of directors, to refrain from voting on any matter in respect of such contract unless permitted under the BCBCA, as the case may be. Other than as indicated, the Resulting Issuer has no other procedures or mechanisms to deal with conflicts of interest.

Permits and Licences

The operations of the Resulting Issuer will require licences and permits from various governmental and nongovernmental authorities. The Resulting Issuer will obtain all necessary licences and permits required to carry on with activities which it proposes to conduct under applicable laws and regulations. However, such licences and permits are subject to changes in regulations and in various operating circumstances. There can be no assurance that the Resulting Issuer will be able to obtain all necessary licences and permits required to carry out exploration, development and extraction operations on its mining properties. See Part III: “Information concerning the Guia Antigua Project and the Zancudo Project”.

Environmental and other Regulatory Requirements

Environmental and other regulatory requirements will affect the future operations of the Resulting Issuer, including exploration and development activities and commencement of production on the Resulting Issuer’s mining properties. Such projects will require permits from various federal and local governmental authorities and such operations are and will be governed by laws and regulations governing exploration, production, exports, taxes, labour standards, occupational health, waste disposal, toxic substances, land use, environmental protection, mine safety and other matters. The Resulting Issuer believes it is in substantial compliance with all material laws and regulations which currently apply to its activities. Companies engaged in the development and operation of mines and related facilities often experience increased costs, and delays in production and other schedules as a result of the need to comply with applicable laws, regulations and permits.

Additional permits and studies, which may include environmental impact studies conducted before permits can be obtained, may be necessary prior to operation of the Resulting Issuer’s mining properties and there can be no assurance that the Resulting Issuer will be able to obtain or maintain all necessary permits that may be required to commence construction, development or operation of ore extraction facilities at the Resulting Issuer’s mining properties on terms which enable operations to be conducted at economically justifiable costs. See Part III: “Information concerning the Guia Antigua Project and the Zancudo Project”.

Failure to comply with applicable laws, regulations, and permitting requirements may result in enforcement actions, including orders issued by regulatory or judicial authorities causing operations to cease or be curtailed, and may include corrective measures requiring capital expenditures, installation of additional equipment, or remedial actions. Parties engaged in mining operations may be required to compensate those suffering loss or damage by reason of the mining exploration activities and may have civil or criminal fines or penalties imposed for violations of applicable laws or regulations and, in particular, environmental laws.

Amendments to current laws, regulations and permits governing operations and activities of mining companies, or more stringent implementation thereof, could have a material adverse impact on the Resulting Issuer and cause increases in capital expenditures or production costs or reductions in levels of production at producing properties or require abandonment or delays in development of new mining properties.

Changes in Legislation

Any changes in government policy may result in changes to laws affecting ownership of assets, exploration policies, monetary policies, taxation, rates of exchange, environmental regulations, labour relations and return of capital. This may affect both the Resulting Issuer’s ability to undertake exploration and development activities in respect of present and future properties in the manner currently contemplated, as well as its ability to continue to explore, develop and operate those properties in which it has an interest or in respect of which it has obtained exploration and development rights to date. The possibility that future governments may adopt substantially different policies, which might extend to expropriation of assets, cannot be ruled out.

Additionally, the mining industry in Colombia is subject to extensive controls and regulations imposed by various levels of government. All current legislation is a matter of public record and the Resulting Issuer will be unable to predict what additional legislation or amendments may be enacted. Amendments to current laws, regulations and permits governing operations and activities of mining companies, including environmental laws and regulations which are evolving in Colombia, or more stringent implementation thereof, could have a material adverse impact on the Resulting Issuer and cause increases in expenditures and costs, affect the Resulting Issuer’s ability to expand or transfer existing operations or require the Resulting Issuer to abandon or delay the development of new properties. The current Colombian mining code was enacted in 2001 and amended in 2010. The 2010 amendment was declared unconstitutional in

2011 by the Colombian Constitutional Court due to inadequate consultations prior to enactment. The Constitutional Court, however, left it in force for two more years (until May 2013) for the Government to propose, and Congress to approve, a new amendment. No new amendment of the mining code was passed by May 2013; therefore, the original 2001 mining code (without the 2010 amendment) is currently in force. However, the government announced in 2014 its intention to introduce before Congress a bill to amend the 2001 mining code, which has not yet occurred. Such changes, as well as changes or enactment of new laws and regulations could include environmental, zoning and control issues, which, together with any local zoning regulations, could have an impact on the Resulting Issuer’s activities.

Economic and Political Factors – Colombia

Emerging Market Country

There are certain economic risks that are inherent in any investment in an emerging market country such as Colombia. Economic instability in Colombia and in other Latin American and emerging market countries has been caused by many different factors, including the following:

high interest rates;
changes in currency values;
high levels of inflation;
exchange controls;
wage and price controls;
changes in economic or tax policies;
the imposition of trade barriers; and
internal security issues.

Any of these factors could have an adverse impact on the Resulting Issuer’s financial condition and results of operations.

Economic and Political Developments

Upon completion of the Transaction, the Resulting Issuer’s projects will be located in Colombia; consequently it will be dependent upon the performance of the Colombian economy. As a result, the Resulting Issuer’s business, financial position and results of operations may be affected by the general conditions of the Colombian economy, price instabilities, currency fluctuations, inflation, interest rates, regulation, taxation, social instabilities, political unrest and other developments in or affecting Colombia over which the Resulting Issuer has no control. In addition, the Resulting Issuer’s exploration and production activities may be affected in varying degrees by political stability and government regulations relating to the industry.

In the past, Colombia has experienced periods of weak economic activity and deterioration in economic conditions. The Resulting Issuer cannot assure that such conditions will not return or that such conditions will not have a material adverse effect on the Resulting Issuer’s business, financial condition or results of operations.

The Resulting Issuer’s financial condition and results of operations may also be affected by changes in the political climate in Colombia to the extent that such changes affect the nation’s economic policies, growth, stability or regulatory environment. Exploration may be affected in varying degrees by government regulations with respect to restrictions on future exploitation and production, price controls, export controls, foreign exchange controls, income taxes, wealth taxes, expropriation of property, environmental legislation and site safety. There can be no assurance that the Colombian government will continue to pursue businessfriendly and open market economic policies or policies that stimulate economic growth and social stability. Any changes in the Colombian economy or the Colombian government’s economic policies, in particular

as they relate to the mining industry, may have a negative impact on the Resulting Issuer’s business, financial condition and results of operations.

Although Colombia has a long-standing tradition respecting the rule of law, which has been bolstered in recent years by the present and former government’s policies and programs, no assurances can be given that the Resulting Issuer’s plans and operations will not be adversely affected by future developments in Colombia. The Resulting Issuer’s property interests and proposed exploration activities in Colombia are subject to political, economic and other uncertainties, including the risk of expropriation, nationalization, renegotiation or nullification of existing contracts, mining licenses and permits or other agreements, changes in laws or taxation policies, currency exchange restrictions, changing political conditions, and international monetary fluctuations. Future government actions concerning the economy, taxation, or the operation and regulation of nationally important facilities such as mines, could have a significant effect on the Resulting Issuer.

Any changes in regulations or shifts in political attitudes are beyond the Resulting Issuer’s control and may adversely affect the Resulting Issuer’s business. Exploration may be affected in varying degrees by government regulations with respect to restrictions on future exploitation and production, price controls, export controls, foreign exchange controls, income and/or mining taxes, expropriation of property, environmental legislation and permitting and mine and/or site safety.

Exchange Controls

Foreign operations may require funding if their cash requirements exceed operating cash flow. To the extent that funding is required, there may be exchange controls limiting such funding or adverse tax consequences associated with such funding. Colombia does not currently have any exchange controls and none are anticipated. In addition, taxes and exchange controls may affect the dividends that the Resulting Issuer receives from its foreign subsidiaries or branch offices of foreign subsidiaries. Exchange controls may prevent the Resulting Issuer from transferring funds abroad.

There can be no assurance that the Colombian governmental authorities will not require prior authorization or will grant such authorization for the Resulting Issuer’s foreign subsidiaries or branch offices of foreign subsidiaries to make dividend payments to the Resulting Issuer and the Resulting Issuer cannot assure that there will not be a tax imposed with respect to the expatriation of the proceeds from the Resulting Issuer’s foreign subsidiaries or branch offices of foreign subsidiaries. The implementation of a restrictive exchange control policy, including the imposition of restrictions on the repatriation of earnings to foreign entities, could affect the Resulting Issuer’s ability to engage in foreign exchange activities, and could also have a material adverse effect on the Resulting Issuer’s business, financial condition and results of operations.

Decline in Economic Growth

Colombia experienced a slowdown in its economic growth in 2009 and other adverse economic and financial effects as a result of the global economic crisis. Emerging-market investment generally poses a greater degree of risk than investment in more mature market economies because the economies in the developing world are more susceptible to destabilization resulting from domestic and international developments.

A significant decline in the economic growth of any of Colombia’s major trading partners, such as the United States, could have a material adverse impact on Colombia’s balance of trade and adversely affect Colombia’s economic growth. The United States is Colombia’s largest export market. A decline in United States demand for imports could have a material adverse effect on Colombian exports and Colombia’s economic growth. In addition, because international investors’ reactions to the events occurring in one emerging market country sometimes appear to demonstrate a “contagion” effect, in which an entire region or class of investment losses favour with international investors, Colombia could be adversely affected by negative economic or financial developments in other emerging market countries. Colombia has been

adversely affected by such contagion effects on a number of occasions, including following the 1997 Asian financial crisis, the 1998 Russian financial crisis, the 1999 devaluation of the Brazilian real, the 2001 Argentine financial crisis and the collapse of energy prices in 2015-2016. Similar developments can be expected to affect the Colombian economy in the future.

There can be no assurance that any crises such as those described above or similar events will not negatively affect investor confidence in emerging markets or the economies of the principal countries in Latin America, including Colombia. In addition, there can be no assurance that these events will not adversely affect Colombia’s economy and its industries.

Seizure or Expropriation of Assets

Pursuant to Article 58 of the Colombian constitution, the Colombian government can exercise its eminent domain powers in respect of the assets that the Resulting Issuer will acquire upon completion of the Transaction in the event such action is required in order to protect public interests. According to Law 388 of 1997, eminent domain powers may be exercised through: (i) an ordinary expropriation proceeding (expropiacion ordinaria), (ii) an administrative expropriation (expropriacion administrativa) or (iii) an expropriation for war reasons (expropiacion en caso de guerra). In all cases, the Resulting Issuer would be entitled to a fair indemnification for the expropriated assets. However, indemnification may be paid in some cases years after the asset is effectively expropriated. Furthermore, the indemnification may be lower than the price for which the expropriated asset could be sold in a free market sale or the value of the asset as part of an ongoing business.

Protection of Mining Rights

The Resulting Issuer’s rights to its projects in Colombia are guaranteed by the Constitution and applicable laws. The Constitution and legislation include several legal recourses for the Resulting Issuer for the exercise of its rights to seek protection against third parties, which include, among others, illegal miners and squatters and includes the forcible removal of such third parties from the areas of the Resulting Issuer’s mineral rights. However, the effective protection of the Resulting Issuer’s mineral rights and the capability or willingness of Colombian authorities to enforce the Resulting Issuer’s rights cannot be assured.

Local Legal and Regulatory Systems

The jurisdictions in which the Resulting Issuer operates its exploration, development and production activities may have different or less developed legal systems than Canada or the United States, which may result in risks such as:

effective legal redress in the courts of such jurisdictions, whether in respect of a breach of law or regulation;
it being more difficult to obtain or retain title in an ownership dispute;
a higher degree of discretion on the part of governmental authorities;
the lack of judicial or administrative guidance on interpreting applicable rules and regulations;
inconsistencies or conflicts between and within various laws, regulations, decrees, orders and resolutions; and
relative inexperience of the judiciary and courts in such matters.

In certain jurisdictions the commitment of local business people, government officials and agencies and the judicial systems to abide by legal requirements and negotiated agreements may be more uncertain, creating particular concerns with respect to licenses and agreements for the Resulting Issuer’s business. These licenses and agreements may be susceptible to revision or cancellation and legal redress may be uncertain or delayed.

Colombia – Less Developed Country

The Resulting Issuer’s foreign operations involve substantial costs and are subject to certain risks because the mining industries in the countries in which the Resulting Issuer operates are less developed. The mining industry in Colombia is not as efficient or developed as the mining industry in Canada. As a result, the Resulting Issuer’s exploration and operating activities may take longer to complete and may be more expensive than similar operations in Canada. The availability of technical expertise, specific equipment and supplies may be more limited than in Canada. The Resulting Issuer expects that such factors will subject the Resulting Issuer’s operations in Colombia to economic and operating risks that may not be experienced in Canada.

Sanctions by the United States Government

The United States government may impose economic or trade sanctions on Colombia that could result in a significant loss to the Resulting Issuer. Colombia is among several nations whose progress in stemming the production and transit of illegal drugs is subject to annual certification by the President of the United States. Although Colombia has received certifications in the past, there can be no assurance that, in the future, Colombia will receive certification or a national interest waiver. The failure to receive certification or a national interest waiver may result in any of the following:

all bilateral aid, except anti-narcotics and humanitarian aid, would be suspended;
the Export-Import Bank of the United States and the Overseas Private Investment Corporation would not approve financing for new projects in Colombia;
United States representatives at multilateral lending institutions would be required to vote against all loan requests from Colombia, although such votes would not constitute vetoes; and
the President of the United States and Congress would retain the right to apply future trade sanctions.

Each of these consequences could result in adverse economic consequences in Colombia and could further heighten the political and economic risks associated with the Resulting Issuer’s operations there. Any sanctions imposed on Colombia by the United States government could threaten the Resulting Issuer’s ability to obtain necessary financing to develop the Resulting Issuer’s Colombian properties. There can be no assurance that the United States will not impose sanctions on Colombia in the future, nor can the Resulting Issuer predict the effect in Colombia that these sanctions might cause.

Guerilla and other Criminal Activity

Colombia is home to South America’s largest and longest running insurgency, and during the 40-year course of armed conflict between government forces and anti-government insurgent groups and illegal paramilitary groups, both funded by the drug trade, Colombia has experienced significant social upheaval and criminal activity relating to drug trafficking. Insurgents have attacked and kidnapped civilians and violent guerrilla activity exists in some parts of the country.

While the situation has improved dramatically in recent years, there can be no guarantee that the situation will not again deteriorate. Any increase in kidnapping or terrorist activity in Colombia or in the areas of the Resulting Issuer’s projects generally may disrupt supply chains and discourage qualified individuals from being involved with the Resulting Issuer’s operations. Colombia’s government has recently signed a peace accord with the Revolutionary Armed Forces of Colombia, Colombia’s largest guerrilla group. The parties reached agreements on reforms to ease political participation for opposition movements, and land and rural development, among other issues. In addition, Colombia’s government has had preliminary conversations with the National Liberation Army, Colombia´s second largest rebel group, although formal negotiations are at an early stage.

Additionally, the perception that matters have not improved in Colombia may hinder the Resulting Issuer’s ability to access capital in a timely or cost-effective manner. There can be no assurance that continuing attempts to reduce or prevent guerilla, drug trafficking or criminal activity will be successful or that guerilla, drug trafficking and/or criminal activity will not disrupt the Resulting Issuer’s operations in the future.

Risk of Global Outbreaks of Contagious Diseases

Risk of global outbreaks of contagious diseases, including the outbreak of a novel coronavirus (“ COVID19 ”) have the potential to significantly and adversely impact operations and business of the Resulting Issuer. On March 11, 2020, the World Health Organization recognized COVID-19 as a global pandemic. ESV is continuously evaluating the uncertainty and impact of the outbreak on its ability to operate due to employee absences, the length of travel and quarantine restrictions imposed by governments of affected countries, information technology constraints, government interventions, market volatility, overall economic uncertainty and other factors currently unknown and not anticipated.

There can be no certainty that COVID-19, or other infectious illness, and the restrictive measures implemented to slow the spread of the virus will not materially impact operations or personnel of the Resulting Issuer. It is not possible to predict the duration or magnitude of the adverse results of the outbreak and its effects on the business of the Resulting Issuer, the results of operations or the ability to raise funds at this time.

Volatility of Share Price

In recent years, the securities markets in the United States and Canada, and the Exchange in particular, have experienced a high level of price and volume volatility, and the market prices of securities of many companies have experienced wide fluctuations in price that have not necessarily been related to the operating performance, underlying asset values or prospects of such companies. There can be no assurance that continual fluctuations in price will not occur. It may be anticipated that any quoted market for the Resulting Issuer Shares will be subject to market trends and conditions generally, notwithstanding any potential success of the Resulting Issuer in creating revenues, cash flows or earnings.

Liquidity

The Resulting Issuer cannot predict at what prices the Resulting Issuer Shares will trade upon completion of the Transaction, and there can be no assurance that an active trading market in the Resulting Issuer Shares will develop or be sustained. Acceptance of the Exchange has not yet been obtained. There is a significant liquidity risk associated with an investment in the Resulting Issuer Shares.

Dividends

At the present time it is unlikely shareholders will receive a dividend on the Resulting Issuer Shares.

Repatriation of Earnings

There are currently no restrictions on the repatriation from Colombia of earnings to foreign entities. However, there can be no assurance that restrictions on repatriations of earnings from Colombia will not be imposed in the future.

Enforcement of Civil Liabilities

Substantially all of the Resulting Issuer’s assets will be located outside of Canada and certain of the directors and officers of the Resulting Issuer are resident outside of Canada . As a result, it may be difficult

or impossible to enforce judgments granted by a court in Canada against the assets of the Resulting Issuer or the Resulting Issuer’s directors and officers residing outside of Canada.

MINING RELATED RISKS

No Known Mineral Reserves or Mineral Resources

There are no known bodies of commercial minerals on the Guia Antigua Project or the Zancudo Project. The exploration programs undertaken and proposed constitute an exploratory search for mineral resources or programs to qualify identified mineralization as mineral resources. There is no assurance that the Resulting Issuer will be successful in its search for mineral resources and mineral reserves.

Exploration Risks

The Guia Antigua Project and the Zancudo Project are in early exploration stages and are without known bodies of commercially exploitable ore. Exploration for mineral resources involves a high degree of risk and few properties that are explored are ultimately developed into producing mines. The risks and uncertainties inherent in exploration activities include but are not limited to: general economic, market and business conditions, the regulatory process and actions, failure to obtain necessary permits and approvals, technical issues, new legislation, competitive and general economic factors and conditions, the uncertainties resulting from potential delays or changes in plans, the occurrence of unexpected events and management’s capacity to execute and implement its future plans. The discovery of mineral deposits is dependent upon a number of factors, not the least of which are the technical skills of the exploration personnel involved and the capital required for the programs. The cost of conducting exploration programs may be substantial and the likelihood of success is difficult to assess. There is no assurance that the Resulting Issuer’s mineral exploration activities will result in any discoveries of new bodies of commercial ore. There is also no assurance that even if commercial quantities of ore are discovered that a new ore body will be developed and brought into commercial production. The commercial viability of a mineral deposit once discovered is also dependent upon a number of factors, most of which factors are beyond the control of the Resulting Issuer and may result in the Resulting Issuer not receiving adequate return on investment capital.

PART I - INFORMATION CONCERNING ESV

The following information is presented on a pre-Amalgamation basis and prior to giving effect to the Transaction. See “Part IV - Information Concerning the Resulting Issuer” for pro forma business, financial and share capital information relating to the Resulting Issuer.

NAME AND INCORPORATION

The full name of ESV is “ESV Resources Ltd.”

The head office of ESV is located at Suite 3123 – 595 Burrard Street, Vancouver, British Columbia, V7X 1J1. The registered and records office of ESV is located at Suite 2200 – 885 West Georgia Street, Vancouver, British Columbia, V6C 3E8.

On April 8, 1981, ESV was incorporated under the laws of the Province of British Columba, under the name “G.S. Gabel & Associates Ltd.” On July 30, 1993, ESV changes its name from “G.S. Gabel & Associates Ltd.” to “G.S. Gabel Corporation”. On December 16, 1996, the name of ESV was changed from “G.S. Gabel Corporation” to “E.S.I. Environmental Sensors Inc.” On August 27, 2020, ESV changed its name from “E.S.I. Environmental Sensors Inc.” to “ESV Resources Ltd.”

ESV currently has no subsidiaries other than Subco which was incorporated on October 20, 2020 under the BCBCA solely for the purpose of this Transaction. The full name of Subco is “1270702 B.C. Ltd.”

The current directors of ESV are Frederic Leigh, Thomas O’Neill and Bernadette D’Silva. The current officers of ESV are Frederic Leigh (Chief Executive Officer) and Michelle Borthwick (Chief Financial Officer and Corporate Secretary).

On Closing, it is anticipated that the Resulting Issuer will change its name to “Denarius Silver Corp.”

GENERAL DEVELOPMENT OF BUSINESS

History

ESV Shares are listed on the Exchange under the trading symbol “ESV.H”. Trading in the ESV Shares was halted on September 23, 2020, following the entering into of a letter of intent in respect of the Amalgamation. The closing price of the ESV Shares on the last day the ESV Shares traded before the halt (September 22, 2020) was $0.56. Trading in the ESV Shares remains halted as of the date of this Filing Statement.

On March 31, 1992, ESV amalgamated with Aanderaa Instruments Ltd. and retained the name “G.S. Gabel & Associates Ltd.”

On January 23, 1997, ESV’s original articles were cancelled and replaced with new articles adopted by special resolution on January 23, 1997.

On October 24, 2005, ESV consolidated its common shares on the basis of one post-consolidated common share for every fifteen (15) common shares previously outstanding.

On August 8, 2017, ESV consolidated its common shares on the basis of one post-consolidated common share for every ten (10) common shares previously outstanding.

On August 27, 2020, ESV consolidated its common shares on the bases of one post-consolidated common shares for every seven (7) common shares previously outstanding. Further, ESV completed a non-brokered private placement of 21,428,571 post-consolidation units, at a price of $0.07 per unit, with each unit comprised of one ESV Share and one-quarter-of-one common share purchase warrant, each whole warrant entitling the holder thereof to acquire one addition ESV Share at a price of $0.10 per ESV Share.

Amalgamation Agreement

Share Purchase Agreement

As condition for the Gran Colombia Titiribi Shares, ESV will issue to Gran Colombia 27,000,000 Consideration Shares.

Existing Business

As at the date of this Filing Statement, ESV no longer has any active business operations or sources of revenue and is currently in the process of searching for and evaluating new business opportunities.

SELECTED FINANCIAL INFORMATION AND MANAGEMENT’S DISCUSSION AND ANALYSIS

Selected Financial Information

A summary of selected financial information of ESV for the six-month unaudited interim period ended September 30, 2020, and for the years ended March 31, 2020, 2019 and 2018 is as follows and should be read in conjunction with ESV’s interim unaudited financial statements for the six months ended September 30, 2020 and the audited financial statements for the years ended March 31, 2020, 2019 and 2018 attached as Appendix A:

	Six Months Ended September 30, 2020 (unaudited)	Financial Year Ended March 31, 2020 (audited)	Financial Year Ended March 31, 2019 (audited)	Financial Year Ended March 31, 2018 (audited)
Total revenues	$ -	$ -	$ -	$ -
Total expenses	$176,663	$32,924	$428,710	$541,187
Net income/(loss) and comprehensive income/(loss) for the year	$(176,663)	$(22,262)	$(420,988)	$(62,090)
Basic and diluted loss per share(2)	$(0.02)	$(0.00)	$(0.02)	$(0.00)
Total assets	$49,329	$1,953	$16,957	$7,678
Total current liabilities	$78,339	$1,925,940	$1,918,682	$1,488,415
Total long-term financial liabilities	Nil	Nil	Nil	Nil
Cash dividends declared per share(2)	Nil	Nil	Nil	Nil
Amounts deferred in connection with the Transaction	Nil	Nil	Nil	Nil

Notes:

(1) The information presented is derived from ESV’s audited financial statements for which the financial information has been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).

(2) The information presented is also derived from ESV’s interim financial statements which have been prepared by management and are in accordance with IFRS and presented in Canadian dollars

Management’s Discussion and Analysis

ESV’s MD&A for the year ended March 31, 2020 and for the six-month interim period ended September 30, 2020 are attached as Appendix “F” hereto.

DESCRIPTION OF SECURITIES

Common Shares

The authorized capital of ESV consists of an unlimited number of common shares without par value and 10,000,000 preferred shares with a par value of $1.00. As of the date of the Filing Statement, there are 31,602,862 common shares issued and outstanding, each share carrying the right to one vote and nil preferred shares. No group of shareholders has the right to elect a specified number of directors, nor are there cumulative or similar voting rights attached to the common shares. The holders of common shares are entitled to dividends, if, as and when declared by the Board of Directors, to one vote per share at meetings of the shareholders of ESV and, upon liquidation, to share equally in such assets of ESV as are distributable to the holders of ESV Shares.

Preferred Shares

ESV is authorized to issue 10,000,000 preferred shares. As of the date of this Filing Statement, there are no preferred shares issued.

STOCK OPTIONS

ESV has implemented the Stock Option Plan pursuant to which the Board may grant options to purchase ESV Shares to officers, directors and employees of the Company or affiliated corporations and to consultants retained by ESV. A summary of the Stock Option Plan is set forth below:

(a) the Stock Option Plan reserves, for issuance pursuant to the exercise of stock options, a maximum number of common shares of ESV equal to up to a maximum of 10% of the issued common shares of ESV at the time of any stock option grant;
(b) an optionee must either be an Eligible Charitable Organization or a Director, Employee or Consultant of ESV (as defined in the Stock Option Plan) at the time the option is granted in order to be eligible for the grant of a stock option to the optionee;
(c) the aggregate number of options granted to any one Person (and companies wholly owned by that Person) in a 12 month period must not exceed 5% of the issued common shares of ESV calculated on the date an option is granted to the Person (unless ESV has obtained the requisite Disinterested Shareholder Approval;
(d) the aggregate number of options granted to any one Consultant in a 12 month period must not exceed 2% of the issued common shares of ESV, calculated at the date an option is granted to the Consultant;
(e) the aggregate number of options granted to all Persons retained to provide Investor Relations Activities must not exceed 2% of the issued shares of ESV in any 12 month period, calculated at the date an option is granted to any such Person;
(f) options issued to Persons retained to provide Investor Relations Activities must vest in stages over a period of not less than 12 months with no more than 1/4 of the options vesting in any 3 month period;

(g) the minimum exercise price per common share of a stock option must not be less than the Market Price of the common shares of ESV, subject to a minimum exercise price of $0.05;
(h) options can be exercisable for a maximum of 10 years from the date of grant (subject to extension where the expiry date falls within a “blackout period” (see (o) below);
(i) stock options (other than options held by a person involved in investor relations activities) will cease to be exercisable 90 days after the optionee ceases to be a Director (which term includes a senior officer), Employee, Consultant, Eligible Charitable Organization or Management Company Employee otherwise than by death, or for a “reasonable period” after the optionee ceases to serve in such capacity, as determined by the Board of Directors. Stock options granted to persons involved in Investor Relations Activities will cease to be exercisable 30 days after the optionee ceases to serve in such capacity otherwise than by death, or for a “reasonable period” after the optionee ceases to serve in such capacity, as determined by the Board of Directors;
(j) all options are non-assignable and non-transferable;
(k) Disinterested Shareholder Approval will be obtained for any reduction in the exercise price of a stock option if the optionee is an Insider of ESV at the time of the proposed amendment;
(l) the Stock Option Plan contains provisions for adjustment in the number of common shares or other property issuable on exercise of a stock option in the event of a share consolidation, split, reclassification or other capital reorganization, or a stock dividend, amalgamation, merger or other relevant corporate transaction, or any other relevant change in or event affecting the common shares;
(m) upon the occurrence of an Accelerated Vesting Event (as defined in the Stock Option Plan), the Board of Directors will have the power, at its sole discretion and without being required to obtain the approval of Shareholders or the holder of any stock option, to make such changes to the terms of stock options as it considers fair and appropriate in the circumstances, including but not limited to: (a) accelerating the vesting of stock options, conditionally or unconditionally; (b) terminating every stock option if under the transaction giving rise to the Accelerated Vesting Event, options in replacement of the stock options are proposed to be granted to or exchanged with the holders of stock options, which replacement options treat the holders of stock options in a manner which the Board of Directors considers fair and appropriate in the circumstances having regard to the treatment of holders of common shares under such transaction; (c) otherwise modifying the terms of any stock option to assist the holder to tender into any take-over bid or other transaction constituting an Accelerated Vesting Event; or (d) following the successful completion of such Accelerated Vesting Event, terminating any stock option to the extent it has not been exercised prior to successful completion of the Accelerated Vesting Event. The determination of the Board of Directors in respect of any such Accelerated Vesting Event shall for the purposes of the New Option Plan be final, conclusive and binding;
(n) in connection with the exercise of an option, as a condition to such exercise ESV shall require the optionee to pay to ESV an amount as necessary so as to ensure that ESV is in compliance with the applicable provisions of any federal, provincial or local laws relating to the withholding of tax or other required deductions relating to the exercise of such option; and
(o) a stock option will be automatically extended past its expiry date if such expiry date falls within a blackout period during which ESV prohibits optionees from exercising their options, subject to the

following requirements: (a) the blackout period must (i) be formally imposed by ESV pursuant to its internal trading policies; and (ii) must expire upon the general disclosure of undisclosed Material Information; and (b) the automatic extension of an optionee's stock option will not be permitted where the optionee or ESV is subject to a cease trade order (or similar order under applicable securities laws) in respect of ESV's securities.

“Consultant”, “Director”, “Disinterested Shareholder Approval”, “Eligible Charitable Organization”, “Employee”, “Investor Relations Activities”, “Management Company Employee”, “Material Information” and “Person” all have the same definition as set out in the Stock Option Plan.

As of the date of the Filing Statement, there are 1,900,000 ESV Options granted under the Stock Option Plan .

PRIOR SALES

During the 12-month period prior to the date of this Filing Statement, ESV has issued the following securities:

Date	Number and Type of Securities	Issue Price	Aggregate Issue Price	Consideration Received
October 27, 2020	957,950 ESV Shares(1)	$0.10	$95,795	Cash
September 3, 2020	2,023,943 ESV Shares(2)	$0.10	$202,394.30	Cash
August 27, 2020	4,285,714 ESV Shares(3)	$0.07	$300,000	Debt settlement
August 27, 2020	21,428,571 units(4)	$0.07	$1,500,000	Cash
August 27, 2020	1,900,000 ESV Options	$0.10	-	-

Notes:

(1) ESV issued 957,950 ESV Shares upon the exercise of 957,950 warrants comprising part of the units issued on August 27, 2020.

(2) ESV issued 2,023,943 ESV Shares upon the exercise of 2,023,943 warrants comprising part of the units issued on August 27, 2020. (3) ESV issued 4,285,714 in settlement of an aggregate of $300,000 of debt owing to bona fide debtors.

(4) Each unit comprised of one ESV Share and one-quarter-of-one ESV Warrant, each whole warrant entitling the holder thereof to acquire one addition ESV Share at a price of $0.10 per ESV Share.

STOCK EXCHANGE PRICE

The following table sets out trading information for the ESV Shares for the periods indicated.

Trading Periods	High	Low	Trading Volume
September 2020(1)	$0.56	$0.40	304,937
August 2020(1)	-	-	-
July 2020	-	-	-
June 2020	-	-	-
May 2020	-	-	-
April 2020	-	-	-
January – March 2020	-	-	-
October – December 2019	-	-	-
July – September 2019	-	-	-
April – June 2019	-	-	-
January – March 2019	-	-	-
October – December 2018	-	-	-
July – September 2018	-	-	-

Notes:

(1) Trading of ESV Shares were halted on September 23, 2020 in connection with the announcement of the Transaction.

(2) Trading was originally halted on August 4, 2018 and trading resumed on August 31, 2020.

EXECUTIVE COMPENSATION

In accordance with the provisions of applicable securities legislation, ESV had one “Named Executive Officers” during the financial year ended March 31, 2020, namely Satvir Dhillion (former Chief Executive Officer, former Interim CFO, former interim Corporate Secretary and former Director). For the purpose of this Filing Statement, “Named Executive Officer” of ESV means an individual who, at any time during the year, was:

(a) a CEO;
(b) a CFO;
(c) each of the three most highly compensated executive officers of the company, including any of its subsidiaries, or the three most highly compensated individuals acting in a similar capacity, other than the CEO and CFO, at the end of the financial year ended March 31, 2020 whose total compensation was, individually, more than $150,000, as determined in accordance with subsection 1.3(6) of National Instrument 51-102, for that financial year; and
(d) each individual who would be a NEO under paragraph (c) but for the fact that the individual was neither an executive officer of the company or its subsidiaries, nor acting in a similar capacity, at the end of that financial year;

Compensation Discussion and Analysis

The Board of Directors of ESV does not have a compensation committee as the Board of Directors is responsible for determining all forms of compensation, including long-term incentive compensation in the

form of stock options, to be granted to the chief executive officer and the directors, and for reviewing the chief executive officer’s recommendations respecting compensation of the other officers of ESV. In its review and determination of executive compensation, the Board of Directors strives to ensure such arrangements reflect the responsibilities and risks associated with each position. When determining the compensation of its officers, the Board of Directors considers: (i) recruiting and retaining executives critical to the success of ESV and the enhancement of shareholder value; (ii) providing fair and competitive compensation; (iii) balancing the interests of management and ESV Shareholders; and iv) rewarding performance, both on an individual basis and with respect to operations in general.

ESV does not have written employment agreements with its Named Executive Officers (as defined above).

Option-Based Awards

The Stock Option Plan is used to attract, retain and incentivize qualified and experienced personnel. The Stock Option Plan is an important part of ESV’ long-term incentive strategy for its NEOs, as well as for its other directors, officers, other management, employees and consultants (collectively, “ eligible persons ”), permitting them to participate in any appreciation of the market value of the ESV Shares over a stated period of time. The Stock Option Plan is designed to foster a proprietary interest in stock ownership, and to reinforce a commitment to ESV’ long-term growth, performance and success as well as increases in shareholder value. The Board of Directors reviews the grant of stock options to NEOs from time to time, based on various factors such as the NEO’s level of responsibility and role and importance in ESV achieving its corporate goals, objectives and prospects. Previous grants of options are taken into account when considering new grants of stock options to NEOs.

Use of Financial Instruments

ESV does not have a policy that would prohibit a NEO or director from purchasing financial instruments, including prepaid variable forward contracts, equity swaps, collars or units of exchange funds, that are designed to hedge or offset a decrease in market value of equity securities granted as compensation or held, directly or indirectly, by the NEO or director. However, management is not aware of any NEO or director purchasing such an instrument.

Satvir Dhillon is sole current NEO of ESV for the purposes of the following disclosure. Mr. Dhillon resigned of his roles with ESV on August 27, 2020. The compensation for the NEOs, received directly or indirectly, for the financial years ended March 31, 2020, 2019 and 2018 are as follows:

NEO SUMMARY OF COMPENSATION TABLE

Name and principal position	Period ended	Salary ($)	Share- based awards ($)	Option -based awards ($)(4)	Non-equity incentive plan compensation ($)	Non-equity incentive plan compensation ($)	Pension value ($)	All other compensation ($)	Total Compensation ($)
					Annual Incentive Plans	Long- term incentive plans
Satvir Dhillon(1) Former Director, Former CEO, Former Interim CFO and Former Interim Corporate Secretary	2020(2)	Nil	Nil	Nil	Nil	Nil	Nil	Nil	Nil
	2019(2)	Nil	Nil	Nil	Nil	Nil	Nil	Nil	Nil
	2018(2)	Nil	Nil	Nil	Nil	Nil	Nil	Nil	Nil
Johan Grandin Former Director and Former CEO(3)	2020(2)	Nil	Nil	Nil	Nil	Nil	Nil	Nil	Nil
	2019(2)	Nil	Nil	Nil	Nil	Nil	Nil	Nil	Nil
	2018(2)	180,000	Nil	Nil	Nil	Nil	Nil	Nil	180,000
Scott Davis, Former CFO(4)	2020(2)	Nil	Nil	Nil	Nil	Nil	Nil	Nil	Nil
	2019(2)	Nil	Nil	Nil	Nil	Nil	Nil	90,000	90,000
	2018(2)	Nil	Nil	Nil	Nil	Nil	Nil	Nil	Nil

Notes:

(1) Mr. Dhillon was appointed CEO of ESV as well as interim CFO and Corporate Secretary effective August 20, 2018. Mr. Dhillon resigned as CEO, CFO, Corporate Secretary and Director on August 27, 2020.

(2) Represents fiscal year ended.

(3) Mr. Grandin was appointed as a director of the Company effective April 2011 and as Chief Executive Officer of the Company effective June 15, 2016. Mr. Grandin resigned as a director and Chief Executive Officer of the Company effective August 20, 2018.

(4) Mr. Davis was appointed Chief Financial Officer of the Company on June 15, 2016 and resigned effective August 20, 2018.

Incentive Plan Awards

ESV has in effect the Stock Option Plan in order to provide effective incentives to directors, officers, senior management personnel and employees of ESV and to enable ESV to attract and retain experienced and qualified individuals in those positions by permitting such individuals to directly participate in an increase in per share value created for ESV Shareholders. ESV has no equity incentive plans other than the Stock Option Plan.

During the year ended March 31, 2020, no incentive stock options were outstanding to NEOs under the Stock Option Plan.

Termination and Change of Control Benefits

ESV does not currently have any contract, agreement, plan or arrangement, that provides for payments to a NEO at, following or in connection with any termination (whether voluntary, involuntary or constructive), resignation, retirement, a change of control in ESV or a change in the NEO’s responsibilities.

Director Compensation

There are no formal plans other than the Stock Option Plan pursuant to which options to purchase securities of ESV were or may be granted to executive officers. ESV grants incentive stock options from time to time to its directors, officers, consultants and employees in accordance with Exchange Policy at the discretion of its Board of Directors.

During the financial year ended March 31, 2020, ESV did not provide any compensation to its directors and no options were granted under the Stock Option Plan to directors.

ARM’S LENGTH TRANSACTIONS

The Amalgamation and the Share Purchase Transaction are each Arm’s Length Transactions within the meaning of the policies of the Exchange.

CONDITIONAL LISTING APPROVAL

LEGAL PROCEEDINGS

ESV is not currently a party to any actual or pending material legal proceedings to which it is or is likely to be a party or of which any of its assets are or are likely to be subject. Management of ESV is currently not aware of any legal proceedings contemplated against it.

AUDITOR, TRANSFER AGENT AND REGISTRAR

The independent auditor of ESV is Davidson & Company LLP, Chartered Professional Accountants located at Suite 1200, 609 Granville Street, Vancouver, British Columbia, V7Y 1G8.

The transfer agent and registrar of ESV is Computershare Investor Services Inc. located at 3rd Floor, 510 Burrard Street, Vancouver, British Columbia, V6C 3B9.

MATERIAL CONTRACTS

ESV is a party to the Amalgamation Agreement dated November 20, 2020 among ESV, Subco and the Guia Antigua Vendor. ESV is also a party to the Share Purchase Agreement dated November 20, 2020 among ESV, Gran Colombia, Gran Colombia Panama and Gran Colombia Titiribi.

Copies of these agreements will be available for inspection at the registered office of ESV located at 2200 - 885 West Georgia Street, Vancouver, British Columbia, V6C 3E8, during ordinary business hours from the date hereof until completion of the Transaction and for a period of 30 days thereafter, as well as on ESV’s profile on SEDAR at www.sedar.com.

PART II - INFORMATION CONCERNING THE TARGETS

The following information provided by the Guia Antigua Vendor and Gran Colombia Titiribi, respectively, and is reflective of the current business, financial and share capital positions of the Guia Antigua Vendor and Gran Colombia Titiribi, respectively. See “Part IV - Information Concerning the Resulting Issuer” for pro forma business, financial and share capital information relating to the Resulting Issuer following the Transaction.

THE GUIA ANTIGUA VENDOR

NAME AND INCORPORATION

The Guia Antigua Vendor is a private company, incorporated under the name “1255269 B.C. Ltd.” on June 30 2020, pursuant to the provisions of the BCBCA. The registered and records office of the Guia Antigua is located at 10[th] Floor, 595 Howe Street, Vancouver, BC V6C 2T5. No public market exists for the Guia Antigua Vendor Shares.

The Guia Antigua Vendor has one direct wholly-owned subsidiary (Arcadian) and one indirect whollyowned subsidiary (Industrias), through which the Guia Antigua Vendor holds its interest in the Guia Antigua Project.

GENERAL DEVELOPMENT OF THE BUSINESS

The Properties

The Guia Antigua Vendor is a private company which holds certain rights to the Guia Antigua Project located in the Municipalities of Segovia and Remedios, Department of Antioquia, north-western Colombia. Following completion of the Transaction, it is anticipated that exploration and development of the Guia Antigua Project will be a primary focus of the Resulting Issuer.

The Guia Antigua Project

The mining rights to the Guia Antigua Project are owned by Gran Colombia Segovia Sucursal Colombia, a branch of Gran Colombia Gold Segovia S.A., which is a subsidiary of Gran Colombia. Gran Colombia Segovia Sucursal Colombia made available an area of approximately 386 hectares in the eastern part of Mining Title RPP-140 to Industrias by way of a joint venture agreement between Gran Colombia Segovia Sucursal Colombia and Industrias dated August 31, 2017, pursuant to which Industrias received a 70% interest in the joint venture (the “ Joint Venture ”). The Joint Venture was acquired by Gold X Mining Corp. in 2018, as result of which, Gold X Mining Corp. owned a 30% carried participating interest in the Joint Venture covering the Guia Antigua Project and owned the other carrying 70% of the Joint Venture through Arcadian (which owns Industrias). On August 28, 2020, the Guia Antigua Project was acquired by the Guia Antigua Vendor from Gold X Mining Corp. pursuant to the terms of a purchase agreement dated August 28, 2020. As a result, the Guia Antigua Vendor acquired all of the issued and outstanding shares of Arcadian and Gold X Mining Corp.’s interest in the Joint Venture. The two contractual ownership positions have been unified through a mining license agreement for the Guia Antigua Project dated October 21, 2020, among Gran Colombia Gold Segovia S.A., Industrias and their respective parent and branch offices (in the case of Gran Colombia Gold Segovia S.A.). See “Part IV - Information Concerning the Projects – The Guia Antigua Project .”

Amalgamation Agreement

In connection with the Amalgamation Agreement, upon closing, ESV will pay to Fiore Management and Advisory Corp., a financial advisory fee equal to 300,000 Resulting Issuer Shares.

Concurrent Private Placement

In connection with the Concurrent Private Placement, upon Closing, ESV will pay an aggregate of $197,761 in finder’s fees.

See “Summary of Filing Statement”.

SIGNIFICANT ACQUISITIONS

On August 28, 2020, the Guia Antigua Project was acquired by the Guia Antigua Vendor from Gold X Mining Corp. pursuant to the terms of a purchase agreement dated August 28, 2020. As a result, the Guia

Antigua Vendor acquired all of the issued and outstanding shares of Arcadian and Gold X Mining Corp.’s interest in the Joint Venture. The transaction contemplated in the purchase agreement dated August 28, 2020 between the Guia Antigua Vendor and Gold X Mining Corp. was an Arm’s Length Transaction. The audited carve-out combined financial statements of Arcadian for the year ended December 31, 2019 and for the six-month period ended December 31, 2018 are attached to this Filing Statement as Appendix C.

NARRATIVE DESCRIPTION OF THE BUSINESS

The Guia Antigua Vendor is a junior exploration company engaged in the acquisition, exploration and development of mineral rights. The Guia Antigua Vendor expects to explore and develop the Guia Antigua Project with the intent to identify additional mineralization and increase shareholder value through discovery.

The Guia Antigua Vendor, following completion of the Amalgamation, is planning to conduct various exploration activities on the Guia Antigua Project, including the recommended work programs on the Guia Antigua Project ( See “Information Concerning the Projects – The Guia Antigua Projects” ).

SELECTED FINANCIAL INFORMATION AND MANAGEMENT’S DISCUSSION AND ANALYSIS

Selected Financial Information

A summary of selected financial information of the Guia Antigua Vendor for the period from incorporation on June 30, 2020 to November 30, 2020, is as follows and should be read in conjunction with the audited financial statements for the for the period from incorporation on June 30, 2020 to November 30, 2020, attached as Appendix B.

	Period from incorporation on June 30, 2020 to November 30, 2020 (audited)
Total revenues	$Nil
Total expenses	$Nil
Net income/(loss) and comprehensive income/(loss) for the year	$Nil
Basic and diluted loss per share(2)	$Nil
Total assets	$Nil
Total current liabilities	$Nil
Total long-term financial liabilities	$Nil
Cash dividends declared per share(2)	$Nil
Amounts deferred in connection with the Transaction	N/A

Notes: (1) The information presented is derived from the Guia Antigua Vendor’s audited financial statements for which the financial information has been prepared in accordance with IFRS as issued by the IASB.

Management’s Discussion and Analysis

The Guia Antigua Vendor’s MD&A for the period from incorporation on June 30, 2020 to November 30, 2020 is attached as Appendix G hereto.

DESCRIPTION OF SECURITIES

The Guia Antigua Vendor is authorized to issue an unlimited number of Guia Antigua Vendor Shares of which 15,000,000 Guia Antigua Vendor Shares are issued and outstanding as at the date of this Filing Statement.

Common Shares

The Guia Antigua Vendor is authorized to issue an unlimited number of common shares. As at the date of this Filing Statement, there are 15,000,000 Guia Antigua Vendor Shares issued and outstanding. The holders of Guia Antigua Vendor Shares are entitled to receive notice of and to attend at all meetings of the holders of Guia Antigua Vendor Shares and to one vote for each Guia Antigua Vendor Share. The holders of Guia Antigua Vendor Shares are entitled to receive dividends as and when declared by the Board of Directors of the Guia Antigua Vendor. Upon a liquidation event, subject to the prior rights of any shares ranking senior to the Guia Antigua Vendor Shares with respect to priority in the distribution of property or assets of the Guia Antigua Vendor, the holders of Guia Antigua Vendor Shares will be entitled to receive the remaining property and assets of the Guia Antigua Vendor.

Options

There were no stock options issued or outstanding as of the date of this Filing Statement.

CONSOLIDATED CAPITALIZATION

The following table outlines the capitalization of the Guia Antigua Vendor:

Designation of Security	Amount Authorized	Amount outstanding as at November 30, 2020	Amount Outstanding as at the date of this Filing Statement prior to giving effect to the Transaction
Guia Antigua Vendor Shares	unlimited	15,000,000	15,000,000

PRIOR SALES

The following table sets out the dates and prices at which securities of the Guia Antigua Vendor were sold within the 12 months preceding this Filing Statement.

Date	Type of Security	Price per Security ($)	Number of Securities
November 10, 2020	Subscription Receipts	0.45	18,675,053
July 29, 2020	Common Shares	$0.10	10,000,000
July 29, 2020	Common Shares	$0.015	5,000,000

STOCK EXCHANGE PRICE

The Guia Antigua Vendor Shares are not listed on any stock exchange.

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

The Guia Antigua Vendor has not paid any compensation to executives, including Named Executive Officers. The Guia Antigua Vendor has not adopted any formal policy or philosophy in respect of executive compensation. The Guia Antigua Vendor does not offer any benefits or perquisites to executives nor does it have any compensation due or owing to any executives, including Named Executive Officers.

TERMINATION AND CHANGE OF CONTROL BENEFITS

The Guia Antigua Vendor does not have any plans or arrangements in place with its officers that provides for payment following or in connection with any termination, resignation, retirement, or change of control of the Guia Antigua Vendor.

DIRECTOR COMPENSATION

There are no arrangements, standard or otherwise, pursuant to which the directors are compensated by the Guia Antigua Vendor for their services in their capacity as director. The directors are reimbursed for expenses incurred in carrying out his or her duties as director but does not otherwise receive remuneration for serving on the Guia Antigua Vendor Board of Directors.

MANAGEMENT CONTRACTS

The Guia Antigua Vendor is not a party to a management contract with anyone.

ARM’S LENGTH TRANSACTIONS

The Guia Antigua Vendor has not completed a transaction involving a Non-Arm’s Length Party since its incorporation, other than as disclosed in the Guia Antigua Vendor’s financial statements. The proposed Amalgamation is an Arm’s Length Transaction.

LEGAL PROCEEDINGS

There are no legal proceedings material to the Guia Antigua Vendor in which it is a party or which any of its properties is the subject matter and, to the knowledge of the Guia Antigua Vendor, no such proceedings are known to be contemplated as at the date of this Filing Statement.

AUDITORS

The independent auditor of the Guia Antigua Vendor is Davidson & Company LLP, Chartered Professional Accountants located at Suite 1200, 609 Granville Street, Vancouver, British Columbia, V7Y 1G8.

MATERIAL CONTRACTS

Other than contracts entered into the ordinary course of business, the following are the only contracts material to the Guia Antigua Vendor that have been entered into since incorporation;

(a) the Amalgamation Agreement dated November 20, 2020 among ESV, Subco and the Guia Antigua Vendor;
(b) the joint venture agreement between Gran Colombia Segovia Sucursal Colombia and Industrias dated August 31, 2017;
(c) the purchase agreement between the Guia Antigua Vendor and Gold X Mining Corp. dated August 28, 2020; and
(d) the mining license agreement for the Guia Antigua Project dated October 21, 2020, among Gran Colombia Gold Segovia S.A., Industrias and their respective parent and branch offices.

Copies of all material contracts may be inspected at the offices of Cassels Brock & Blackwell LLP, counsel to ESV, located at 2200 – 855 West Georgia Street, Vancouver, British Columbia, V6C 3E8.

GRAN COLOMBIA TITIRIBI

NAME AND INCORPORATION

Gran Colombia Titiribi is a private company, incorporated under the name “Gran Colombia Gold Titiribi Corp.” on April 5, 2010 under the laws of Panama. The registered and records office of Gran Colombia Titiribi is located at Avenida-Nicanor A. de Obarrio, Calle 50, Edificio Plaza Credicorp Bank, Piso 26, Panama, Republica de Panama. No public market exists for the Gran Colombia Titiribi Shares.

Gran Colombia Titiribi has no subsidiaries. Gran Colombia Titiribi has one Colombian branch, Gran Colombia Gold Titiribi Sucursal Colombia.

GENERAL DEVELOPMENT OF THE BUSINESS

The Properties

Gran Colombia Titiribi is a private company which, through its Colombian branch, Gran Colombia Titiribi Sucursal Colombia, controls the rights to the Zancudo Project located in the in the Municipalities of Titiribi, Angelopolis and Armenia, Department of Antioquia, Colombia. Following completion of the Transaction, it is anticipated that exploration and development of the Zancudo Project will be a primary focus of the Resulting Issuer.

The Zancudo Project

The Zancudo Project consists of a 1,054.15-hectare mining concession area located in the Titiribi mining district in Antioquia, Colombia, about 27 kilometers southwest of Medellin. Zancudo comprises a historical gold mine (the Independencia Mine) located in the Middle Cauca Gold Belt. Gran Colombia acquired the Zancudo Project in 2010 and completed a 14,000 meter drilling program in 2011 and 2012. In March 2017, Gran Colombia, through its subsidiary Zancudo Gold Corp. (a predecessor to Gran Colombia Titiribi) signed an option agreement with IAMGOLD Corp., an Arm’s Length Party to Gran Colombia and Gran Colombia Titiribi (“ IAMGOLD ”) for the exploration and potential purchase of an interest by IAMGOLD in the Zancudo Project. Under the option agreement, IAMGOLD has been granted an option to acquire an initial undivided 65% interest (the “ First Option ”) in the Zancudo Project by incurring an aggregate of US$10 million of mineral exploration expenditures over a six-year period, subject to meeting specified annual work commitments during this period. From 2017 through 2019, IAMGOLD has completed a total of approximately 17,385 meters of drilling at the Zancudo Project and has incurred over US$4 million of its exploration commitment. However, due to COVID-19, IAMGOLD delayed its drilling program until October 2020 and, as of the effective date of the Zancudo Technical Report, has drilled five holes in 2020. IAMGOLD has also been granted an additional option (the “ Second Option ”) to acquire a further 5% undivided interest, for an aggregate 70% undivided interest in the Zancudo Project, by completing a feasibility study within three years after exercising the First Option. Upon exercise of the First Option or the Second Option, as the case may be, the parties will form a joint venture to hold the Zancudo Project, to advance the exploration and, if feasible, to advance the development and mining of any commercially exploitable ore body. See “Part IV - Information Concerning the Projects – The Zancudo Project .”

The Share Purchase Agreement

On November 20, 2020, ESV, Gran Colombia, Gran Colombia Panama and Gran Colombia Titiribi entered into the Share Purchase Agreement, pursuant to which, on Closing, ESV will acquire from Gran Colombia

Panama all of the issued and outstanding securities in the capital of Gran Colombia Titiribi, being an aggregate of 500 Gran Colombia Titiribi Shares.

As condition for the Gran Colombia Titiribi Shares, ESV will issue to Gran Colombia 27,000,000 Consideration Shares.

NARRATIVE DESCRIPTION OF THE BUSINESS

Gran Colombia Titiribi is a directly wholly-owned subsidiary of Gran Colombia Panama and an indirectly wholly-owned subsidiary of Gran Colombia. Gran Colombia Titiribi is a mining exploration company engaged in the acquisition, exploration and development of mineral rights. Pursuant to the IAMGOLD Option Agreement, Gran Colombia Titiribi currently holds a carried interest in the Zancudo Project while IAMGOLD Corp. continues to fund and perform all exploration and drilling work thereon. Upon the exercise of the First Option and Second Option, as the case may be, Gran Colombia Titiribi will enter into a joint venture agreement with IAMGOLD Corp. and may take a more active role in the development and mining of any commercially exploitable ore body, as further set out in the IAMGOLD Option Agreement. ( See “Information Concerning the Projects” ).

SELECTED FINANCIAL INFORMATION AND MANAGEMENT’S DISCUSSION AND ANALYSIS

Selected Financial Information

A summary of selected financial information of Gran Colombia Titiribi for the nine-month unaudited interim period ended September 30, 2020 and for the years ended December 31, 2019 and December 31, 2018, is as follows and should be read in conjunction with Gran Colombia Titiribi’s interim unaudited financial statements for the nine months ended September 30, 2020 and the audited financial statements for the years ended December 31, 2019 and 2018, attached as Appendix D.

	Nine Months Ended September 30, 2020 (unaudited)	Financial Year Ended December 31, 2019 (audited)	Financial Year Ended December 31, 2018 (audited)
Total revenues	$Nil	$Nil	$Nil
Total expenses	US$32,000	US$14,000	US$21,000
Net income/(loss) and comprehensive income/(loss) for the year	US$(32,000)	US$(14,000)	US$(21,000)

Basic and diluted loss per share(2)	US$(64)	US$(28)	US$(42)
Total assets	US$56,000	US$80,000	US$24,000
Total current liabilities	US$6,000	US$1,000	US$1,000
Total long-term financial liabilities	US$5,719,000	$6,755,000	$9,975,000
Cash dividends declared per share(2)	Nil	Nil	Nil
Amounts deferred in connection with the Transaction	Nil	Nil	Nil

Notes:

(1) The information presented is derived from Gran Colombia Titiribi’s audited financial statements for which the financial information has been prepared in accordance with IFRS as issued by IASB.

(2) The information presented is also derived from Gran Colombia Titiribi’s interim financial statements which have been prepared by management and are in accordance with IFRS.

Management’s Discussion and Analysis

Gran Colombia Titiribi’s MD&A for the year ended December 31, 2019 and the nine months ended September 30, 2020 are attached as Appendix “I” hereto.

DESCRIPTION OF SECURITIES

Gran Colombia Titiribi is authorized to issue 500 Gran Colombia Titiribi Shares of which 500 Gran Colombia Titiribi Shares are issued and outstanding as at the date of this Filing Statement.

Common Shares

Gran Colombia Titiribi is authorized to issue 500 common shares. As at the date of this Filing Statement, there are 500 Gran Colombia Titiribi Shares issued and outstanding. The holders of Gran Colombia Titiribi Shares are entitled to receive notice of and to attend at all meetings of the holders of Gran Colombia Titiribi Shares and to one vote for each Gran Colombia Titiribi Share. The holders of Gran Colombia Titiribi Shares are entitled to receive dividends as and when declared by the Board of Directors of Gran Colombia Titiribi. Upon a liquidation event, subject to the prior rights of any shares ranking senior to the Gran Colombia Titiribi Shares with respect to priority in the distribution of property or assets of Gran Colombia Titiribi, the holders of Gran Colombia Titiribi Shares will be entitled to receive the remaining property and assets of Gran Colombia Titiribi.

Options

There were no stock options issued or outstanding as of the date of this Filing Statement.

CONSOLIDATED CAPITALIZATION

The following table outlines the capitalization of Gran Colombia Titiribi:

Designation of Security	Amount Authorized	Amount outstanding as at December 31, 2019	Amount Outstanding as at the date of this Filing Statement prior to giving effect to the Transaction
Gran Colombia Titiribi Shares	500	500	500

PRIOR SALES

No securities of Gran Colombia Titiribi were sold within the 12 months preceding this Filing Statement.

STOCK EXCHANGE PRICE

The Gran Colombia Titiribi Shares are not listed on any stock exchange.

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

As described above under “Narrative Description of the Business,” Gran Colombia Titiribi does not have any active business operations. Its sole purposes is to hold a carried investment in the Zancudo Project and fulfil its obligations under the IAMGOLD Option Agreement. While Gran Colombia Titiribi may take on a more active role in the operations of the Zancudo Project as a joint venture party after the exercise of the First Option or the Second Option, as the case may be, Gran Colombia Titiribi’s current purpose is solely passive and, accordingly, Gran Colombia Titiribi does not compensate any of its Named Executive Officers or directors. As of the date of the Filing Statement, Gran Colombia Titiribi does not have an executive compensation policy.

TERMINATION AND CHANGE OF CONTROL BENEFITS

Gran Colombia Titiribi does not have any plans or arrangements in place with its officers that provides for payment following or in connection with any termination, resignation, retirement, or change of control of Gran Colombia Titiribi.

DIRECTOR COMPENSATION

There are no arrangements, standard or otherwise, pursuant to which the directors are compensated by Gran Colombia Titiribi for his services in their capacity as director. The directors are reimbursed for expenses incurred in carrying out his or her duties as director but does not otherwise receive remuneration for serving on the Gran Colombia Titiribi Board of Directors.

MANAGEMENT CONTRACTS

Gran Colombia Titiribi is not a party to a management contract with anyone.

ARM’S LENGTH TRANSACTIONS

Gran Colombia Titiribi has not completed a transaction involving a Non-Arm’s Length Party since its incorporation. The proposed Share Purchase Transaction is an Arm’s Length Transaction.

LEGAL PROCEEDINGS

There are no legal proceedings material to Gran Colombia Titiribi in which it is a party or which any of its properties is the subject matter and, to the knowledge of Gran Colombia Titiribi, no such proceedings are known to be contemplated as at the date of this Filing Statement

AUDITORS

The independent auditor of Gran Colombia Titiribi is KPMG LLP located at 333 Bay Street, Suite 4600, Toronto, Ontario M5H 2R2.

MATERIAL CONTRACTS

Other than contracts entered into the ordinary course of business, the following are the only contracts material to Gran Colombia Titiribi that have been entered into since incorporation;

(a) the Share Purchase Agreement dated November 20, 2020 among ESV, Gran Colombia, Gran Colombia Panama and Gran Colombia Titiribi; and
(b) IAMGOLD Option Agreement dated February 27, 2017.

Copies of all material contracts may be inspected at the offices of Cassels Brock & Blackwell LLP, counsel to ESV, located at 2200 – 855 West Georgia Street, Vancouver, British Columbia, V6C 3E8.

PART III - INFORMATION CONCERNING THE PROJECTS

THE GUIA ANTIGUA PROJECT

Source of Information and Data

The below is a summary of the Guia Antigua Technical Report. The Guia Antigua Technical Report is available in its entirety on SEDAR at www.sedar.com and readers should review it in its entirety for a full description of the Guia Antigua Project.

Definitions contained in this Part and not otherwise defined in this Filing Statement, shall have the meanings ascribed to such definitions in the Guia Antigua Technical Report.

PROPERTY DESCRIPTION AND LOCATION

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Location map of the Guia Antigua Project, Antioquia, Colombia.

The Guia Antigua Vendor is the owner of a mining license agreement dated October 21, 2020 (the “ Mining License Agreement ”) in respect of a 386 hectare (ha) parcel, referred to herein as the Guia Antigua License Area, located in the eastern part of mining title No. RPP-140 (Ñemeñeme). The mining title covers a total area of 2871.4524 ha and is owned by Gran Colombia Gold Segovia Sucursal Colombia (“ GCG Colombia ”), a branch of Gran Colombia Gold Segovia S.A., Panama (“ GCG Segovia ”), which is a subsidiary of Gran Colombia, a company registered in British Columbia.

The Guia Antigua Vendor directly owns 100% of Arcadian, a Panamanian company, which in turn owns 100% Industrias, a Colombian company. Industrias owns a 100% interest in the Guia Antigua License Area as per the Mining License Agreement, which gives Industrias the right to carry out exploration, development, mining, transportation, processing and commercialisation activities on the Guia Antigua Project. The Mining License Agreement is valid until February 27, 2043 and may be terminated by mutual agreement, by Industrias by giving six months’ notice, or by either party for a breach of obligations. As at the date of the Guia Antigua Technical Report, the Guia Antigua Vendor, Arcadian and Industrias are independent of Gran Colombia.

Upon completion of the Transaction, the Resulting Issuer will hold a 100% indirect interest in the Guia Antigua Project, via its indirect ownership of Industrias.

The mining rights granted under the Mining License Agreement are summarised in the table below.

Title Number	National Mining Agency File No.	National Mining Cadastre No.	Title Owner	Area (ha)	Date of Registry	Date of Expiry	Guia Antigua License Area (ha)
RPP-140	R140011	EDKE-01	GCG Colombia	2871.4524	4 April 1983	In perpetuity	386

Mining rights of the Guia Antigua License Area.

The RPP type of mining right means Private Property Recognition of a Mining Title ( Reconocimiento de Propiedad Privada or RPP) and it is not a Concession Contract. RPPs were created by Law 20 of 1969 that respected prior mining and land rights and required that proof of mining be submitted. The RPP title is an old freehold property dating from the 19[th] century. The RPP titles grant mining rights in perpetuity as long as exploitation is carried out. The title was registered as RPP-140 on April 4, 1983 by Resolution No. 000410 of the Colombia Ministry of Mines and Energy. It was originally granted to Frontino Gold Mines Ltd. and was transferred to Zandor Capital S.A. Colombia in 2010, which changed its name to GCG Colombia in 2018. The main legal obligation of the titleholder of RPP-140 is not to suspend exploitation for more than one year. The Guia Antigua Project is currently in exploitation and is in good standing. RPP140 is subject to other obligations such as payment of taxes, payment of the compensation and royalties for exploited minerals and the presentation of quarterly Basic Mining Reports and Technical Reports.

In addition to statutory royalties and taxes, the Guia Antigua License Area is subject to a 1% net smelter returns royalty on 70% of the Guia Antigua Project as set forth in a royalty agreement dated November 12, 2017 between Tyrol Private Fund, Arcadian and Industrias.

The granting of a concession contract in Colombia does not include a legal right of surface access, for which permission has to be obtained from the land owners or community. Under the terms of the Mining License

Agreement, GCG Colombia is obligated to ensure Industrias’ access to the area. GCG Colombia does not own the surface rights over the Guia Antigua License Area. Industrias has a land lease agreement with the owner of the land at the mine portal and former plant-site; this contract is currently suspended until activities start again, and the contract can be restarted immediately. Industrias had temporary lease agreements for the use of drill platforms while drilling. Industrias intends to negotiate contracts with the landowners for surface access as necessary in connection with future exploration.

Mining operations on the Guia Antigua Project require an environmental license issued by the competent environmental authority. However, since RPP-140 had been in exploitation before the existence of any legal requirement for environmental licenses, the environmental permitting of mining operations within such mining title is limited to the approval by the environmental authority of an Environmental Management Plan (Plan de Manejo Ambiental or PMA). The current PMA for the GCG Colombia operations was approved in 2012. The updated 2016 PMA and complimentary information provided in 2017 is still under review by COR-ANTIOQUIA, the regional environmental authority. As such, the 2012 PMA remains in effect. Re-opening of the Guia Antigua Mine and/or construction of a new treatment plant will require either an extension to the current PMA or a separate PMA.

ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE, AND PHYSIOGRAPHY

The Guia Antigua Project is located 130 km NE of Medellin in the Municipalities of Segovia and Remedios, Department of Antioquia, north-western Colombia, at 7°04’45” N and 74°40’07” W. The town of Segovia is readily accessible by metalled road from Medellin, a distance of about 227 km that is a 4-hour drive. The district is also accessible by air by 30-minute charter flights from Medellin to a surfaced air-strip at Otú Airport, located 15 km south of Segovia, a 20-minute drive. The Guia Antigua Mine is 4.4 km east of Segovia and is reached by unsurfaced road over a distance of 7.0 km that takes about 35 minutes to drive.

The Guia Antigua Project is part of the Segovia-Remedios mining district and is close to the towns of Segovia and Remedios. These have good mining services and infrastructure, and abundant mining labour. These towns are connected to Medellin, the capital of Antioquia, by a paved highway of 227 km, and there is a network of unpaved roads in and around the project.

The climate is tropical monsoon climate (Am) in the Köppen climate classification scheme, that is characterised by constant high temperatures of average 18°C or higher for every month, and wet and dry seasons. The average temperature at Segovia is 25°C, the relative humidity is 70%, and the average annual rainfall is 2,670 mm. There is a dry season from December to April, and a rainy season from May to December. Field work and mining operations can be carried out all year round.

The project lies within the tropical moist forest ecological zone of the Holdridge Life Zone climatic classification system. The vegetation is tropical forest that has been partly cleared for pasture, and secondary forest growth. Land is used mainly for cattle and mining.

The Guia Antigua Project is located in the foothills of the north-eastern part of the Central Cordillera of the Colombian Andes at low elevations of about 470 to 619 m above mean sea level (masl). The Guia Antigua Mine portal is at 600 masl. The terrain is incised into steep ridges and valleys. It is part of an eroded peneplain surface that is inclined to the east towards the River Doña Teresa. This is a tributary of the River Magdalena that flows northwards into the Caribbean Sea.

HISTORY

The history of the Guia Antigua Project is summarised in the table below

From	To	Company and Activity
19thor 20thcentury		Historical small mine workings, age not known.
2007		Discovery of Guia Antigua Vein by gold in saprolite and/or colluvium, and mined in small pits in a local gold rush (apogeo).
16 October 2009	16 April 2010	Establecimiento de Comercio Mina la Guia Antigua contract with Frontino Gold Mines Ltd.
27 September 2011	October 2014	Sociedad Guias Gold SAS contract with Zandor Colombia (now GCG Colombia). Developed levels 1 and 2 of the Guia Antigua Mine. Processing plant shut down in 2014.
15 October 2014	October 2016	Sociedad Guias Gold SAS new contract with Zandor Colombia (now GCG Colombia). Mineral trucked to Puerto Berrio for treatment.
9 February 2017	27 September 2017	Gisborne joint venture agreement with Zandor Capital (now GCG Segovia) (70%-30%).
27 September 2017	20 July 2018	Gisborne assigned its interest to Industrias.
20 July 2018	28 August 2020	Sandspring (now Gold X) acquired Industrias and GCG Segovia’s interest in the joint venture.
5 December 2018	12 March 2019	Diamond drilling programme of 1,753.9 m in 11 holes.
2019		Geological mapping programme.
28 August 2020		1255269 B.C. Ltd acquired the project from Gold X.
23 September 2020		ESV agreement to acquire 1255269 B.C. Ltd.
May 2020	In progress	Soil sampling programme.

The Guia Antigua Project has not been operated historically by Gran Colombia or its predecessor Frontino Gold Mines Ltd, hence there are no historical records of the mine more than a decade old. The Guia Antigua Vein was discovered by artisanal miners in 2007 who found gold in saprolite and/or or colluvium at El Chicharrón that was mined in small open cuts and tunnels in a minor gold-rush known locally as an “apogeo”.

Establecimiento de Comercio Mina la Guia Antigua, a Colombian company, had a contract with Frontino Gold Mines Ltd. in 2009-2010. The mine was then operated and developed by Sociedad Guias Gold S.A.S.

(“ Guias Gold” ), a private Colombian company, in a contract with Zandor Colombia (now GCG Colombia) dated September, 27 2011. The company produced doré bars in a treatment plant at the mine site by a process of crushing, grinding, sulphide flotation, cyanide leaching, Merrill Crowe process and smelting. In 2014 the plant was closed and removed. A new contract was entered into between Guias Gold and Zandor Colombia (now GCG Colombia) dated October 15, 2014 until October 2016. The mineral was transported by truck to a plant owned by Ecodesarrollos Mineros S.A.S. at Minas Del Vapor, Puerto Berrio, Antioquia.

The total recorded production in 2014-2016 was 6,034 metric tons of ore with an average head grade of 404.90 g/t Ag and 6.05 g/t Au, containing 78,558 ounces of silver and 1,174 ounces of gold with a Ag/Au ratio of 67. There are no data on the recoveries and the actual amount of metal produced. There is no production data for previous years. There are no known historical ore reserves. There was no subsequent production.

The mine was developed on a vein dipping at about 35° northwest. It is accessed by an irregular winze, and ore and waste were extracted by an inclined ramp about 110 m long. The vein was mined on two levels over a maximum strike length of about 150 m.

A joint venture agreement dated February 9, 2017 was made between Zandor Capital S.A., Panama (“ Zandor Capital ”), now called GCG Segovia), holding a 30% interest, and Gisborne Capital Inc. (“ Gisborne ”, now called Arcadian), a company registered in Panama, holding a 70% interest. Gisborne assigned the agreement to Industrias, a Colombian subsidiary of Gisborne, which in turn was, at that time, a subsidiary of GA Mine Corp., a company registered in British Columbia.

Sandspring Resources Ltd. (“ Sandspring ”), now called Gold X Mining Corp. (“ Gold X ”), a company registered in Ontario, acquired 100% of the Guia Antigua Project in July 2018 by the purchase of GA Mine Corp., thereby acquiring Industrias’ 70% interest in the joint venture, and the purchase of GCG Segovia’s 30% interest in the joint venture. Industrias/Gran Colombia carried out sampling of the Guia Antigua Mine and small artisanal mines in 2017 to 2019, a programme of 11 diamond drill holes totalling 1,753.9 m from December 2018 to March 2019, geological mapping in 2019, and started a soil sampling programme in May 2020.

GEOLOGICAL SETTING

Regional Geology

The Guia Antigua Project is located in the northern part of the Central Cordillera of the northern Andes of Colombia. The Central Cordillera represents the western margin of the continent, to which oceanic terranes were accreted on the western side to form the Western Cordillera. Vein-type silver-gold mineralization at Guia Antigua is part of the Segovia-Remedios district and is hosted by the Segovia Batholith. This formed in a continental magmatic arc of granitoids of late Triassic to Jurassic age (ca 210-146 Ma) that formed on the western margin of the continent related to subduction of Pacific oceanic crust. Mineralisation in the Segovia-Remedios district is related to a younger magmatic phase, the Upper Cretaceous Antioquia Batholith (ca. 96-72 Ma). The Segovia-Remedios district is located on the 2,000 km long Palestina Fault Zone that underwent 250-300 km of dextral strike slip movement between the Maastrichtian and the middle Eocene, and separates two basement terranes: the Chibcha Terrane of Meso- to Neoproterozoic high grade metamorphic rocks in the east, and the Cajamarca-Valdivia or Antioquia Terrane to the west, formed of Palaeozoic to Triassic, medium to high grade metamorphic and igneous rocks overlain by metasedimentary and metaigneous rocks of the Middle to Late Triassic Cajamarca Group.

Local Geology

Mineralisation of the Guia Antigua Project is hosted by the Segovia Batholith of quartz diorite to granodiorite composition of Middle to Upper Jurassic age, with mineralisation of Upper Cretaceous age. The batholith is 10 km wide at Segovia. It is bounded by two N-S trending regional faults, the Otú and Nus Faults on the western and eastern sides respectively, which are part of the Palestina Fault System. Relics of Precambrian quartzite are intruded by batholith on the east side of the Otú Fault, and on the west side there are marbles and schists of the Cajamarca Group of Palaeozoic age. These are intruded by the El Carmen Stock, the northeastern part of the Upper Cretaceous Antioquia Batholith. The Segovia Batholith is in faulted contact on the east side with black shales and basic to intermediate volcanic rocks of Cretaceous Segovia Formation.

Property Geology

The Guia Antigua Project is underlain by quartz diorite to granodiorite of the Segovia Batholith that crosscuts a body of microgabbro in the southeastern part of the Guia Antigua License Area. The quartz diorite to granodiorite is equigranular with a grain size of 0.5 to 10 mm, and is composed of quartz, feldspar, hornblende and biotite. The microgabbro is dark grey to green coloured, fine grained and composed of amphibole, plagioclase and minor quartz. A large roof pendant of laminated siltstones with thermal metamorphism to hornfels, about 650 m long elongated NE and up to 300 m wide, occurs at the Guia Antigua Mine. The intrusive rocks are cut by N-S trending dykes of andesite with phenocrysts of plagioclase and amphibole, aphanitic basalt dykes, and NW trending lamprophyre dykes with phenocrysts of hornblende.

The principal vein, the Guia Antigua Vein, strikes 040° and dips about 35° northwest where it has been mapped in the mine, and varies to 010° strike. The Guia Antigua Vein width is 0.60-1.00 m and has varying degrees of shearing and brecciation. Some parts of the Guia Antigua Vein have been thickened up to about 2.80 m by thrust stacking.

The Guia Antigua Vein is formed of quartz with some carbonate. The sulphide minerals are pyrite, arsenopyrite, sphalerite, galena and possible argentite or another silver-bearing mineral. The sulphides form massive zones, patches or blebs within quartz, and can also form bands or ribbons. Galena and possible argentite fill fractures in the quartz vein, and in some places there are abundant fine grained pyrite and galena in veinlets in the outer parts of the vein, cross-cutting banded quartz and sulphides. There are two main stages of mineralisation: 1) quartz with arsenopyrite associated with gold, and 2) galena, sphalerite and quartz with high grade silver in possible argentite or other silver minerals that were deposited in fractures following a phase of deformation. Finally, late stage calcite veins cut both quartz and sulphides.

The Guia Antigua Vein has been developed in the mine for a strike length of about 150 m, down dip for about 50 m, and to a depth of about 70 m below surface. The width is between 0.60 m and 2.80 m. The Guia Antigua Vein can be traced for about 250 m to the south in several small artisanal mines named Laguna Azul, Rafa, Chengue, YY and NN, and for about 550 m to the northeast to the Chicharrón and Caliche mines, giving the Guia Antigua Vein a total known strike length of approximately 950 m.

EXPLORATION

Exploration of the Guia Antigua Project has been carried out by geological mapping, rock channel sampling and soil sampling by Guias Gold, Gran Colombia and Industrias as summarised in the table below. All of the Industrias exploration work was carried out by Gran Colombia.

Year	Company	Survey	Location	Number	Units
2012	Gran Colombia	Channel sampling	Artisanal mines and surface outcrops	32	Samples
2016	Guias Gold	Channel sampling	Guia Antigua mine	968	Samples
2016	Guias Gold	Channel sampling	Artisanal mines	60	Samples
2017	Argentum (by Gran Colombia)	Channel sampling	Guia Antigua mine	29	Samples
2018	Argentum (by Gran Colombia)	Channel sampling	Guia Antigua mine	115	Samples
2018-2019	Argentum (by Gran Colombia)	Channel and grab sampling	Artisanal mines and surface outcrops	127	Samples
2019	Argentum(byGran Colombia)	Geological mapping	Guia Antigua Area	3.86	km2
2020	Argentum (by Gran Colombia)	Soil survey	Guia Antigua Area	542	Samples

Summary of the exploration carried out at the Guia Antigua Project.

Geological mapping was carried out of the surface of the Guia Antigua License Area at 1:10,000 scale in 2019 by Gran Colombia on behalf of Industrias.

Guias Gold carried out systematic channel sampling of the Guia Antigua Mine in 2016. The samples were vertical channel samples taken across the veins. The average grades were 8.32 g/t Au and 556.0 g/t Ag over 0.85 m width, with a range of grades from 0.02 to 125.79 g/t Au, and 0.6 to 7,863.6 g/t Ag.

Check sampling of the Guia Antigua Mine was carried out in 2017 by Industrias/Gran Colombia. The results show gold and silver grades of the same order of magnitude as the Guias Gold samples, although the number of samples is much lower (as shown in the table below). The average grade of 29 samples is 15.64 g/t Au and 151.2 g/t Ag over 0.69 m.

	Width (m)	Au(g/t)	Ag (g/t)
Number	29	29	29
Mean	0.69	15.638	151.24
Median	0.6	1.090	21.00
Max	1.3	241.190	1519.00
Min	0.2	0.025	0.60

Summary statistics of channel samples taken from the Guia Antigua Mine by Industrias/Gran Colombia, 2017.

Industrias/Gran Colombia carried out additional channel sampling of the Guia Antigua Mine in April 2018. A total of 115 samples were taken from 32 vertical channels, each comprising 2 to 5 samples separated on the basis of geology. The channel samples were marked by paint with the channel number. The samples were collected by hammer and chisel on a plastic sack on the floor of the working, then double bagged in plastic bags with a tear-off sample ticket inserted, and sealed with a cable tie. The samples were stored in a secure sample storage facility at the GCG Colombia exploration and core logging facility at the Segovia mine where QA-QC samples were inserted, and were shipped to the SGS laboratory in Medellin by GCG Colombia vehicle and driver. All samples were analysed for Au and Ag and about half for multielements. A summary of the statistics of the results for Au, Ag, Pb, Zn and as is shown in Error! Reference source not found. .

The results have values of 0.012 to 133.7 g/t Au and 0.15 to 10,381 g/t Ag (as shown in the table below). These are accompanied by 16 ppm to 10.31% Pb, 81 ppm to 3.58% Zn and 31 ppm to 1.48% As, a

potentially deleterious element. The length-weighted average of 32 channel samples is 7.643 g/t Au and 335.1 g/t Ag over 1.66 m. The greater width compared to the previous sampling is due to the inclusion of footwall and hanging wall samples.

	Width(m)	Au(g/t)	Ag (g/t)	Pb(ppm)	Zn(ppm)	As(ppm)
Number	115	115	115	51	51	51
Mean	0.46	6.745	358.1	4999	3713	3688
Median	0.45	1.307	45.4	663	1209	3267
Max	0.86	133.730	10381.0	103100	35800	14800
Min	0.22	0.012	0.15	16	81	31

Summary statistics of channel samples taken from the Guia Antigua Mine by Industrias/Gran Colombia, 2018.

Channel sampling of artisanal mines and surface outcrops in the Guia Antigua Project was carried out by Gran Colombia, Guias Gold and Industrias/Gran Colombia. The underground samples were vertical channels cut across the veins. The results are summarised in the table below and show high grades of Au and Ag in several mines, in particular the Chicharrón 1 and 2 mines.

Mine	Au(g/t)	Au(g/t)	Au(g/t)	Au(g/t)	Au(g/t)	Ag (g/t)	Ag (g/t)	Ag (g/t)	Ag (g/t)	Ag (g/t)
	Number	Minimum	Maximum	Mean	Median	Number	Minimum	Maximum	Mean	Median
Caliche	29	0.021	16.630	2.003	0.979	29	0.15	12.8	2.2	1.1
Chengue	14	0.080	8.540	2.175	1.645	14	1.4	365.4	75.3	43.9
Chicharron 1	8	0.790	3.400	2.064	1.950	8	10.0	414.9	90.6	39.3
Chicharron 2	29	0.410	20.040	2.729	1.220	29	0.0	1071.5	192.7	69.4
El Salto	8	0.010	12.240	3.476	1.685	8	0.9	1727.0	590.4	471.4
La Gongora	25	1.300	41.920	8.490	5.250	25	25.8	1092.3	211.1	165.2
LaMosquera	1		0.010			1		0.6
Laguna Azul	23	0.010	3.250	0.521	0.170	23	0.5	40.1	8.6	5.5
Los Rieles	9	0.007	0.130	0.031	0.010	9	1.6	4.8	2.8	2.5
NN	1		2.510			1		3.7
Rafa	8	0.130	83.410	11.905	1.885	8	3.6	1559.0	258.5	23.0
YY	1		0.110			1		0.4
Surface	31	0.006	9.180	1.703	0.140	31	0.2	61.3	6.8	2.1
Surface2018	32	0.003	2.879	0.794	0.166	32	0.4	3263.0	117.7	2.4

Basic statistics of Au and Ag grades from channel sampling of artisanal mines and surface samples.

A soil sampling survey is currently being carried out by Gran Colombia / Industrias on the Guia Antigua License Area and in Gran Colombia’s adjacent Vera mine area. The survey started in May 2020 and will continue for several months. The objective of the survey is to explore for new veins by testing the positive flower structure model (Telluris Consulting, 2018). Soil samples are being taken at 25 m intervals along E- W sample lines spaced 100 m apart. Samples are taken using a hand auger from the B soil horizon at 0.400.60 m depth. About 400 g of sample is collected and put in a plastic sample bag. As of October 31, 2020 a total of 542 samples had been collected, including QAQC samples.

MINERALIZATION

Mineralization at the Guia Antigua Project is hosted by gold-silver-bearing mesothermal quartz-sulphide veins that are part of the Segovia-Remedios district. In contrast to the western part of the district, the Guia Antigua deposit has a high content of silver associated with lead and zinc, while gold tends to be associated

with early arsenopyrite. The veins are hosted by a batholith with a roof pendant of laminated siltstone country rocks with thermal metamorphism to hornfels. The wall rock alteration is sericite with quartz and pyrite. The deposit model has similarities with the oxidised pluton-related gold deposit model, and SegoviaRemedios is considered to be the prime example of this type of deposit in the Americas.

DRILLING

A programme of diamond drilling was carried out by Industrias/Gran Colombia in December 2018 to March 2019.

A programme of 1,753.9 m of diamond drilling in 11 holes from 3 platforms was carried out by Industrias/Gran Colombia between December 2018 and March 2019. Gran Colombia supervised the drill programme and carried out core logging and sampling on behalf of Industrias at its core logging facility and exploration office at the Segovia mine. The hole lengths varied from 109.9 m to 227.1 m with an average of 172.7 m, excluding one hole that was lost in an old mine void at 26.5 m. The hole inclinations varied from -45° to -80°, and the azimuths from 080° to 315°.

The drill contractor was Explomin S.A.S., Colombia using a Longyear LF-70 drill rig with HQ diameter core (63.5 mm diameter). The drill collars were surveyed using a total station survey instrument tied to a network of survey monuments erected by Gran Colombia. Downhole directional surveys were made using a Reflex AZ-Trac tool. No markers or monuments were placed on the drill collars, and the drill platforms were restored and revegetated after use. The platforms were located beside local access roads so that no road building was required, although the road from Segovia to the project was improved. The main host rock is a fine to coarse grained (0.5-10 mm), equigranular intrusive rock formed of quartz, feldspar, hornblende and biotite, of quartz diorite to granodiorite composition, weathered to saprolite near surface. The other main lithology intersected is hornfels which is a laminated to massive calcareous siltstone to mudstone with thermal metamorphism that varies in colour from black to dark brown, medium to pale green, and white. There is local development of red garnet indicating incipient metasomatism to form skarn. Both rock types are cross cut by dykes of aplite, pegmatite, basic dykes and felsic dykes. The alteration types are zones of potassium feldspar and biotite alteration in the quartz diorite to granodiorite, widespread quartz veinlets, sericite-pyrite alteration in the wall rocks of the veins, and argillic alteration in basalt dykes in vein wall rocks.

The veins are composed of quartz and some carbonate with pyrite, arsenopyrite, pyrrhotite, sphalerite, galena, possible argentite and native silver. The sulphide textures are massive, patchy, disseminated, veins and banded.

The drilling cut four main veins of potential economic interest identified as follows:

Guadalupe Vein: this vein was cut in single intersection of 2.16 m @ 2.457 g/t Au and 203.5 g/t Ag from 65.74 m in hole GA-ES-001. The geometry of the vein is not known as it is a single intersection.
Guia Antigua (El Chicharrón) Vein: a NE-trending faulted and sheared vein with a low dip to NW, which has low grade mineralization. The best intersection is 1.38 m @ 1.071 g/t Au and 22.4 g/t Ag from 19.49 m in GA-ES-003, and the average of 10 holes is 2.54 m @ 0.330 g/t Au and 5.9 g/t Ag.
Cerdeña Vein: a narrow, subhorizontal vein at depth with a best intersection of 0.20 m @ 1.250 g/t Au and 0.7 g/t Ag in GA-ES-007, and an average of 7 intersections of 0.50 m @ 0.159 g/t Au and 0.6 g/t Ag.

Sin Nombre Vein: a sub-vertical vein with a single intersection of 1.2 m @ 8.569 g/t Au and 3,298.0 g/t Ag from 164.5 m (GA-ES-001). Native silver and argentite occur in the vein.

The Guia Antigua Vein is poorly developed and low grade in the drill intersections); however, the NE trending high grade shoot defined in the mine was not drilled. The high grade Ag-Au intersections of the new Guadalupe and Sin Nombre Veins are significant and are new exploration targets.

SAMPLING, ANALYSIS AND SECURITY OF SAMPLES

The methods used for preparation and analyses of the samples are summarized in the table below.

Programme	Laboratory	Method	Code	Procedure	Lower Limit of Detection (ppm)	Upper Limit of Detection (ppm)
Gran Colombia 2012	SGS, Medellin	Preparation	PRP93	Dry, crush to >90% passing 10 mesh, split 250 g and pulverise to>95% passing 140 mesh.	n/a	n/a
		Au	FAA515	Fire assay 50 g, AAS	0.005	10
		Au overlimit>10g/t	FAG505	Fire assay 50 g, gravimetry	0.5	10000
		Ag	AAS42C	Multiacid digestion, AAS	0.3	100
		Multielements	ICP12B	Nitric and hydrochloric acid digestion, ICP-AES	Variable	Variable
		Ag, Pb, Zn, Fe overlimits	AAS41B	Multiacid digestion, AAS	Ag 10, others 100
Guias Gold 2016	Not known	Preparation		Not known	n/a	n/a
		Au, Ag		Not known	Unknown	Unknown
Channel samples Argentum / Gran Colombia 2017, 2018	SGS, Medellin	Preparation	PRP93	Dry, crush to >90% passing 10 mesh, split 250 g and pulverise to>95% passing 140 mesh.	n/a	n/a
		Au	FAA313	Fire assay 30 g, AAS	0.005	10
		Au overlimit>10g/t	FAG303	Fire assay 30 g, gravimetry	1.00	10000
		Ag	AAS12C	Aqua regia digestion, AAS	0.3	500
		Ag overlimit>100 g/t	AAS11B	Nitric and hydrochloric acid digestion, AAS	10
		50 multielements	ICM40B	Multiacid digestion, ICP-AES, ICP-MS	Variable	Variable
		As, Pb, Zn overlimits	AAS41B	Multiacid digestion, AAS	100
Core, channel samples 2018-2019	SGS, Medellin	Preparation	PRP91	Dry, crush to >90% passing 10 mesh, split 500 g and pulverise to>95% passing 140 mesh.	n/a	n/a
		Au	FAA313	Fire assay30g,AAS	0.005	10
		Au overlimit>10g/t	FAG303	Fire assay 30 g, gravimetry	3.00	10000
		Ag	AAS12C	Aqua regia digestion, AAS	0.3	500
		Ag	AAS42C	Multiacid digestion, AAS	0.3
		Ag overlimit>100 g/t	AAS41B	Nitric and hydrochloric acid digestion, AAS	10
		Agoverlimit >500g/t	AAS11B	Nitric and hydrochloric acid digestion,AAS	10
		36 multielements	ICP40B	Multiacid digestion, ICP-OES	Variable	Variable
		As, Fe overlimits	AAS41B	Multiacid digestion, AAS	100
Soils 2020	SGS, Medellin	Preparation	PRP94	Drying, disaggregate, sieve to -80 mesh (180 microns), pulverise to 95% passing 140 mesh (106 microns)	n/a	n/a
	SGS Peru	Au	FAA313	Fire assay 30 g, AAS	0.005	10
		50 multielements	ICM40B	Multiacid digestion, ICP-AES, ICP-MS	Variable	Variable

Summary of the sample preparation and analyses methods.

Abbreviations: AAS - atomic absorption spectrophotometer; ICP-AES/ICP-OES - inductively coupled plasma atomic/optical emission spectrometer; ICP-MS - inductively coupled plasma mass spectrometer. Note: SGS indicates that refractory minerals such as oxides have limited solubility in multiacid digestions for ICP analyses. Often elements can precipitate or volatilize during digestion. These factors can compromise analytical results for Al, Ba, Cr, Hf, Mo, Mn, Nb, Pb, Si, Sn, Ti, Ta, W, Zr, As, Sb, Se and Te in some sample types.

It is not known where the Guias Gold channel samples were prepared and assayed. The Au and Ag grades were extracted by Gran Colombia from original AutoCAD drawings to an Excel table. There are no sample lists or assay certificates, and no details of sample preparation, analytical methods, quality assurance-quality control or sample security.

All of the Gran Colombia and Industrias/Gran Colombia samples were prepared and analysed by SGS Colombia S.A. at a laboratory in Medellin, Colombia or were analysed at the SGS Peru S.A. laboratory in El Callao, Lima, Peru, both part of the SGS Group (SGS). SGS is certified to ISO 9001 and ISO/IEC 17025 standards. SGS is independent of Gran Colombia, Industrias, the Guia Antigua Vendor and ESV.

The Gran Colombia and Industrias/Gran Colombia samples were stored in crates in the Gran Colombia Segovia core store which is secure and is kept locked. The sample batches were taken to the geology office for insertion of standards and blanks, packing in sacks, and preparation of sample shipment forms and laboratory work orders. The samples were sent to the SGS laboratory in Medellin by company truck and custody was handed over to SGS with a work order. Sample cards were filled in by hand and were then digitised into Excel or an SQL database.

Channel Sampling

The QA-QC for the 2017 and 2018 channel sampling comprised the insertion of coarse blanks at intervals of 1 in 25 samples, certified standard reference materials (CSRM) at intervals of 1 in 25 samples, and field duplicates at intervals of 1 in 25 samples.

The coarse blank was quartz bought in Medellin. The blank samples were monitored for Au by charts with reference to the lower limit of detection (LLD) with a reference line at 5 times the LLD. All samples passed and no contamination was detected.

The CSRM were supplied by Geostats Pty Ltd, Western Australia and 7 different types were used covering a range of gold grades (G313-1, G313-6, G313-7, G315-3, G914-10, G915-5, G915-10). The results were plotted on charts with reference to performance gates of the recommended value and the standard deviation (SD). A result between ±2SD and ±3SD is a warning, two or more consecutive results between ±2SD and ±3SD are a failure, and results greater than ±3 SD are a failure. For failures the batch is reanalysed. All samples passed. The CSRM used were certified only for Au.

The field duplicates consist of a second sample taken at the same site as the preceding sample. They were evaluated by scatter charts and plots of relative difference.

Drill Programme

The QA-QC for the drill programme comprised the insertion of coarse blanks at intervals of 1 in 25 samples, CSRM at intervals of 1 in 25 samples, field duplicates at intervals of 1 in 25 samples, and coarse preparation duplicates at intervals of 1 in 25 samples. The QA-QC results were evaluated in two ways, firstly by QAQC reports that were generated on receipt of the results from the laboratory, and flag whether the samples pass or fail based on the performance gates described below, and secondly by cumulative graphic plots.

Two CSRM samples were used that are certified for Au and Ag, SQ88 and OREAS 67A. The results are plotted on charts with reference to performance gates of the recommended value and the standard deviation (SD). A result between ±2SD and ±3SD is a warning, two or more consecutive results between ±2SD and ±3SD are a failure, and results greater than ±3 SD are a failure. For failures the batch is reanalysed. All samples passed.

The coarse blank is quartz bought in Medellin. The blank samples are monitored for Au and Ag by charts with reference to the LLD with a reference line at 5 times the LLD. All samples passed and no contamination was detected.

The field duplicates consist of a quarter core sample leaving a quarter core sample in the box, which is compared with the original half core sample. They are evaluated by scatter charts and plots of relative difference that show that most samples are within the ±30% tolerance limit, the high scatter being the result of geological heterogeneity.

The coarse duplicate is made by taking a second split of the crushed sample to prepare a second pulverised sample, and the fine duplicate is made by taking a second split after the sample is pulverised. They are evaluated by scatter charts and plots of relative difference that show that the samples are generally within the tolerance limits of ±20% and ±10% respectively, with one outlier for Au in the coarse duplicates. The fine duplicates for Ag show a bias toward the duplicate but the samples are very low grade and this is not considered to be significant.

MINERAL RESOURCES AND MINERAL RESERVES

There are no mineral resource estimates for the Guia Antigua Project that are compliant with the current CIM standards and definitions required by the NI 43-101.

EXPLORATION AND DEVELOPMENT

The Guia Antigua Project warrants further exploration of the Guia Antigua vein and other veins encountered by drilling, and for new veins in the western part of the Guia Antigua License Area.

A two-phase exploration programme is recommended as described below.

The author of the Guia Antigua Technical Report recommends that a structural geological study be carried out by a consultant structural geologist to determine the geometry, structural controls, correlation and fault displacements of the veins. Drill holes should then be located on the basis of this study.

Phase 1 of the recommended exploration programme is as follows:

Completion of the soil survey and infill soil sampling over soil anomalies.
Helicopter magnetic survey to identify veins, dykes and faults, and map lithology and zones of alteration.
Compilation and three-dimensional modelling of the veins based on mapping, underground sampling, the 2019 drill holes, soil sampling and magnetic survey.
Interpretation of the structure by a consultant structural geologist.
Definition of drill targets and hole locations.
Exploration diamond drilling of the Guia Antigua Vein and other veins by 15 holes of 200 m length each for a total of 3,000 m.

The estimated cost for the Phase 1 programme is US$920,460. The estimated time is approximately 12 months using 1 drill rig.

Phase 2 is conditional on the results of Phase 1 and the recommended programme consists of:

Infill and down-dip diamond drilling of 7,000 m total in 35 holes of 200 m length each or equivalent if some holes are longer. The location and length of the holes are to be determined based on the Phase 1 results.
Metallurgical test work.
Preliminary mineral resource estimate.

The estimated cost for the Phase 2 programme is US$2,024,000. The estimated time is approximately 9 months (2 drill rigs) to 15 months (1 drill rig).

A tentative budget is shown below. The total estimated cost of Phases 1 and 2 is approximately US$2,944,460.

Item	Unit	Quantity	Unit cost (US$)	Total (U$)
Phase 1
Soil survey	sample	1000	60	60,000
Helicopter magnetic survey (E-W lines, 100 m line spacing) plus mob/demob $15,000	line km	52	200	25,400
Modelling, structural interpretation, target definition				25,000
Drilling contractor (15 holes x 200 m)	m	3000	200	600,000
Analyses	sample	750	25	18,750
Surveying	day	37.5	300	11,250
Transport	day	150	100	15,000
Geology	day	225	200	45,000
Contingency 15%				120,060
Sub-total Phase 1				920,460
Phase 2
Drilling contractor (35 holes x 200 m)	m	7000	200	1,400,000
Analyses	sample	1750	25	43,750
Surveying	day	87.5	300	26,250
Transport	day	350	100	35,000
Geology	day	525	200	105,000
Metallurgical testing				100,000
Preliminary resource estimate				50,000
Contingency 15%				264,000
Sub-total Phase 2				2,024,000
Total				2,944,460

THE ZANCUDO PROEJCT

Source of Information and Data

The below is a summary of the Zancudo Technical Report. The Zancudo Technical Report is available in its entirety on SEDAR at www.sedar.com and readers should review it in its entirety for a full description of the Zancudo Project.

Definitions contained in this Part and not otherwise defined in this Filing Statement, shall have the meanings ascribed to such definitions in the Zancudo Technical Report.

PROPERTY DESCRIPTION AND LOCATION

The Zancudo Project is located in the Municipality of Titiribi, Department of Antioquia, Republic of Colombia as shown in the map below. Zancudo is approximately 30 km southwest of the city of Medellin, the capital of the Department of Antioquia. The geographical coordinates for the village of Sitio Viejo, located within the Zancudo Project, are 6°04’30” N, 75°47’26” W at an altitude of 1,302 m above mean sea level (masl).

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Location map of the Zancudo Project, Department of Antioquia, Colombia.

Gran Colombia owns three adjoining mining concession contracts and one exploration license at Zancudo with a total area of 1,054.15 ha, as listed in the table below. The properties are held by Gran Colombia Gold Titiribi Sucursal Colombia (previously called Zancudo Gold Sucursal Colombia), a branch of Gran Colombia Gold Titiribi Corp. (previously called Zancudo Gold Corp. S.A.) that is owned by Gran Colombia.

The location of the mining title is defined by the coordinates of its corners. These is no legal requirement to mark these by monuments in the field or have these officially surveyed, and this has not been done.

Title Number	National Mining Cadastre (RMN) No.	Old Contract No.	Type	Title Owner	Area (ha)	Date of Registration	Date of Expiry
H5911005	HGIE-07	5911	Concession contract (Law 685 of 2001)	Gran Colombia Gold Titiribi Sucursal Colombia	147.1289	09 May 2006	08 May 2036
HDWA-02	HDWA-02	5747	Concession contract (Law 685 of 2001)	Gran Colombia Gold Titiribi Sucursal Colombia	604.0170	01 February 2008	31 January 2038
C5521011	FDHK-01	5521	Concession contract (Decree 2655 of 1988)	Gran Colombia Gold Titiribi Sucursal Colombia	250.1013	19 December 2007	07 January 2028
HEOM-12	HEOM-12	4985	Exploration license (Decree 2655 of 1988)	Gran Colombia Gold Titiribi Sucursal Colombia	52.9029	11 March 2008	10 March 2009

Description of the mining titles at the Zancudo Project.

Note 1: The name of the title holder of each of the properties is in the process of being changed from Zancudo Gold Sucursal Colombia to Gran Colombia Gold Titiribi Sucursal Colombia.

Note 2: Exploration license No. HEOM-12 was requested on 13 October 1999 under the 1988 Mining Code under which exploration licenses could only be awarded for one year if the area covered by the license was less than 100 ha. It is in the process of being converted to a concession contract. Pursuant to Article 35 of Decree Law 19 of 2012, it is understood that if the conversion to a concession contract was requested within the corresponding term and in compliance with the requirements, then the contract is understood to be extended until the final decision is reached by the competent authority.

The entrance to the Independencia mine and the processing plant are located outside of the concession contract but are on of land owned by Gran Colombia. Under Colombian mining law, the adit or infrastructure of a mine may be located outside the boundaries of a concession provided that the concession holder has a right to use such land by way of a lease, easement or by being the land owner.

An option agreement was signed on 27 February 2017 between Zancudo Gold Sucursal Colombia (now Gran Colombia Gold Titiribi Sucursal Colombia) and IAMGOLD Sucursal Colombia (“ IAMGOLD Colombia ”), a branch of IAMGOLD Corporation (“ IAMGOLD ”), a company registered in Ontario, whereby IAMGOLD Colombia whereby IAMGOLD Colombia can earn an initial 65% interest (the First Option) in the Zancudo Project by making exploration expenditures of US$10 million over 6 years, subject to meeting specified annual work commitments during this period in accordance with the schedule set forth

in the table below. The Anniversary Date is August 3, 2017, being the date that Gran Colombia Gold Titiribi Sucursal Colombia obtained the permits required for drilling. In addition, the First Option requires IAMGOLD Colombia to define total NI 43-101 measured, indicated and inferred mineral resources of at least 500,000 ounces of Gold Equivalent (defined as the amount of gold plus the amount of silver multiplied by the projected silver recovery to gold recovery divided by 60) and complete a NI 43-101 Preliminary Economic Assessment between years 5 and 6.

Expenditure (US$)	Anniversary	Date
1,000,000	1st Anniversary Date	03 August 2018
1,500,000	2nd Anniversary Date	03 August 2019
1,500,000	3rd Anniversary Date	03 August 2020
2,000,000	4th Anniversary Date	03 August 2021
2,000,000	5th Anniversary Date	03 August 2022
2,000,000	6th Anniversary Date	03 August 2023

Schedule of exploration expenditure commitments for the First Option.

IAMGOLD Colombia has a second option to acquire a further 5% interest (the Second Option, and together with the First Option, the IAMGOLD Option), for a total 70% interest in the Zancudo Project, by completing a NI 43-101 feasibility study within three years after exercising the First Option. IAMGOLD Colombia may elect to proceed with the Second Option if it has incurred the required US$10 million in expenditures and defined NI 43-101 measured and indicated mineral resources of at least 1.0 million ounces of Gold Equivalent, in which case a Preliminary Economic Assessment is not required between years 5 and 6.

IAMGOLD Colombia and Gran Colombia Gold Titiribi Sucursal Colombia shall form a joint venture following the exercise of the First or Second Option, as appropriate. The parties shall contribute pro rata to the joint venture, with dilution for non-contribution. If either party dilutes to 10% then the joint venture will terminate and the diluted party will receive a 1% net smelter royalty, which the other party shall have the right of first refusal to purchase.

Pursuant to (and subject to completion of) the Share Purchase Transaction, the Resulting Issuer will hold a 100% indirect interest the Zancudo Project, subject to the terms of the IAMGOLD Option The reference to the 100% indirect interest in the Zancudo Project refers to Gran Colombia Titiribi will become a whollyowned subsidiary of the Resulting Issuer, which such subsidiary in turn (via its Colombian branch, Gran Colombia Gold Titiribi Sucursal Colombia) owns the Zancudo Project. Gran Colombia will own approximately 35% of the Resulting Issuer following completion of the Transaction.

Gran Colombia Gold Titiribi Sucursal Colombia owns the surface rights over a land lot located in the District of Sitio Viejo, Municipality of Titiribi, with an approximate area of 4.51 hectares. In addition, Gran Colombia Gold Titiribi Sucursal Colombia leases the surface rights over two separate land lots, as summarised in the table below. IAMGOLD Colombia negotiates temporary surface access agreements as necessary for access for sampling and drilling.

Matricula No.	Name	Rights	Owner	Location	Area (ha)	Time (years)	Expiry Date
033- 11991	La Arabia	Owner	Zancudo Gold Sucursal Colombia	Sitio Viejo, Titiribí	4.51	Permanent	Permanent
-	Chumbimbo (Pequeña Toya)	Tennant (rental)	Antonio María Castaño Sánchez	El Zancudo, Titiribí	-	1	11 May 2021
033-1002	Reprocessing Plant	Tennant (rental)	Maria Gilma Deossa Jaramillo	Sitio Viejo, Titiribí	0.45	1	11 May 2021

Surface land ownership and rental contracts at the Zancudo Project. The rental contracts are renewed annually.

Gran Colombia Gold Titiribi Sucursal Colombia has been granted three permits for industrial water use for drilling by the regional environmental authority CORANTIOQUIA, and has made an application for a fourth permit, as summarised in the table below.

Permit No.	Stream	Date Granted	Time(years)	Expiry Date	l/s
AS1-2017-197	El Mani	03 August 2017	3	03 August 2020	0.0694
AS1-2017-198	La Relleno	03 August 2017	5	03 August 2022	0.0694
AS1-2017-461	Los Chorros	03 August 2017	5	03 August 2022	0.0694
AS1-2020-575	La Manuela	Application 13 August 2020

Water concessions for the Zancudo Project

Royalties are payable to the state of 4% of the gross value at the mine mouth for gold and silver and 5% for copper (Law 141 of 1994, modified by Law 756 of 2002). For the purposes of royalties, the gold and silver price is set by the government and is typically 80% of the average of the London afternoon fix price for the previous month.

The regional environmental authority CORANTIOQUIA has not identified any environmental liabilities at the Zancudo Project. However, the Zancudo Project has potential environmental liabilities due to past mining activities including surface disturbance and degradation including deforestation; waste rock, scoria and tailings from past mining and smelting operations; and contamination of soil and water by mercury, cyanide, arsenic, acid drainage, heavy metals and solids from past mining operations.

Under Colombian mining and environmental laws, companies are responsible for any environmental remediation and any other environmental liabilities based on actions or omissions occurring from and after the entry into force and effect of the relevant concession contract, exploration license or mining request, as applicable, even if such actions or omissions occurred at a time when a third party was the owner of the relevant mining title. On the other hand, companies are not responsible for any such remediation or liabilities based on actions or omissions occurring before the entry into force and effect of the relevant concession contract, exploration license or mining request, as applicable, from historical mining by

previous owners and operators, or based on the actions or omissions of third parties who carry out activities outside of the mining title such as illegal miners.

There is no known artisanal mining on the Zancudo Project.

The La Candela Forest Reserve covers part of title HDWA-02 (5757). Mining cannot be carried out in the forest reserve. The Falda de Cauca and Franá Biological Corridor occurs on the western side of the concessions and overlaps parts of title HDWA-02 and HEOM-12. Current legislation does not restrict mining activities in Biological Corridors, however they are socially and environmentally sensitive zones, and a local municipal agreement has declared these to be Forest Reserves. The area of overlap of the protected areas with the title is not known to be a significant target for exploration.

ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE, AND PHYSIOGRAPHY

The Zancudo Project is located 30 km southwest of Medellin (population 2.5 million), the capital of the Department of Antioquia and the second largest city in Colombia. There is an international airport located in Medellin. It is 56 km and about a 1½ hour drive by paved road from Medellin via the Autopista Sur/Route 25 south to Caldas, then Route 60 west through Amagá, and turn off on to a secondary road to Titiribi. From Titiribi there is an unpaved road to the village of Sitio Viejo where IAMGOLD Colombia has a field office.

Access within the Zancudo Project is by unpaved road from Sitio Viejo to the Independencia Mine, and another unpaved road at higher altitude from Titiribi to the village of Otra Mina and beyond.

The climate is Tropical rainforest climate (Af) in the Köppen climate classification scheme, characterised by constant high temperatures with an average of 18°C or higher for every month, and average rainfall of at least 60 mm every month. The nearest weather data is for Amaga, located 10 km east of Zancudo at 1,407 masl, where the average annual temperature is 22.0°C and varies from 21.2-22.9°C, the average annual high temperature is 27.6°C, the average annual low temperature is 16.5°C, and the average annual rainfall is 2,187 mm and varies from 76 mm to 276 mm per month (www.climate-data.org). Rainfall has a bimodal distribution with the wettest months from April to June, and again from August to November. Field work can be carried out all year round.

The Zancudo Project is 175 km west of the Pacific Ocean and 230 km south of the Caribbean Sea and Atlantic Ocean. The nearest port is Buenaventura on the Pacific Ocean. The nearest railhead is at Medellin.

Field personnel for the exploration program are available from the towns of Sitio Viejo and Titiribi and neighboring districts. There are coal mines in the district, and the district is expected to be able to supply the basic workforce for any future mining operation.

Titiribi is supplied by electrical power on the Colombian national power grid. The region has high rainfall and there are ample water resources available. Water rights belong to the state and are governed by Decree 1541 (1978). For any mining purposes, applications for water concessions are made to CORANTIOQUIA (Corporación Autónoma Regional del Centro de Antioquia).

The Zancudo Project lies within the tropical, moist forest ecological zone of the Holdridge Life Zone climatic classification system. The vegetation is tropical forest that has been partly cleared for pasture, with secondary forest growth. Land use is cattle grazing, coal mining, and minor cultivation of coffee, sugar cane, citrus fruit and bananas.

HISTORY

The history of the Zancudo Project is summarised in the table below The history of mining at Zancudo has been described in historical various historical studies referenced in the Zancudo Technical Report.

Year	Company	Activity
1746	Spanish colonisers	First gold mine discovered in the district in the River Amaga.
1764-1824	Spanish colonisers	Numerousgold mines staked.
1775	Benito del Rio	Founded San Antonio de Real de Minas de los Titiribies at Sitio Viejo. Became a municipality in 1807. Moved to present location in 1815.
1828	Sociedad de Minas de Antioquia	Companyformed.
1848	Sociedad de Zancudo	The most important company in the district was formed in Medellin by Jose Maria Uribe Restrepo.
Unknown	Sociedad de Otra Mina	Another miningcompanyin the district.
Unknown	Sociedad de los Chorros	Another miningcompanyin the district.
1851-1858	Hacienda de Fundicion de Titiribi	First ore roasters installed at Sitio Viejo by Tyrell Moore.
1863-1865	Hacienda de Fundicion del ZancudoySabaletas	Roasters installed by Sociedad de Zancudo at Sabaletas byReinhold Paschke.
1898	Compañia Unida de Zancudo	Company formed in Medellin and Paris to recapitalise Sociedad El Zancudo, of which it owned 57%.
1945	Sociedad de Zancudo	El Zancudo mine closed and companybankrupt.
1945-1985		No significant activity.
1985-1993	Compañia de Reciclaje Minero, S.A. (COREMINE)	Evaluated reserves and metallurgy to re-process scoria dumps at Sitio Viejo.
1993	Compañia Minera El Escorial S.O.M.	Mining contract 5521 returned to owner El Escorial.
1993-2010	Consorcio de Inversionistas, C.D.I., S.A. (CDI)	Built pilot plant to process scoria at Sitio Viejo in 1994. Rehabilitated Independencia, La Matilde and El Castaño Mines. Built 120 tpd plant at Independencia. Minor production.
2000s	Proyecto Sabaletas S.A.S. (Mineros S.A.)	Re-processed 70,000 t of scoria dumps at Sabaletas toproduce Au and Ag.
2009-2013	Proyecto Sabaletas S.A.S. (Mineros S.A.)	Re-processed 135,407 t of scoria dumps at Sitio Viejo to produce Au and Ag.
2010	Gran Colombia Gold Corp.	Bought theproject from CDI.
2011-2012	Gran Colombia Gold Corp.	Exploration and diamond drilling.
2014	Anglo Americanplc	Evaluated theporphyry potential of theproject.

Year	Company	Activity
2018-2027	IAMGOLD Corporation	Optioned the project from Gran Colombia. Exploration and diamond drilling. First Option for 6 years for 65%. Second Option for 3 more yearsfortotal70%.
2020	ESV Resources Ltd.	Share purchase agreement entered into with Gran Colombia in connection with proposed Share Purchase Transaction.

Summary of the history of the Zancudo Project.

Annual production data is generally lacking except for the period of 1912-1922 when the Sociedad de Zancudo reported production of 129,325 ounces (4.2 t) of gold and 958,570 ounces (30.8 t) of silver from 284,370 tonnes of ore. The recovered grade was 14.62 g/t gold and 108.37 g/t silver. Free gold was 53.5% of the total gold, and the balance was produced by smelting. The head grade from 1864-1899 was 16.66 g/t Au and 256.61 g/t .

Years	Ore(t)	Au(oz)	Au(kg)	Ag (oz)	Ag (kg)
1912-1922	284,370	129,325	4,158	958,570	30,819
Gold and silver production by Sociedad de Zancudo, 1912-1922 (Grosse, 1926).

The total production from the Zancudo District from 1793 to 2006 is between 1.4 and 2.0 Moz Auequivalent (43.1-64.3 t) according to different estimates as set forth in the table below.

Years	AuEq (Moz)	AuEq (t)	Source
1793-1919	1.451	45.1	Miller & Singewald (1919), Emmons (1937)
1794-1922	1.386	43.1	Botsford(1926)
1793-2006	1.5 to 2.0	48.2 to 64.3	James(2006)

Estimates of the total historical production of gold and silver expressed as Au equivalent from the Zancudo District.

Between 1985 and 1993 the Compañia de Reciclaje Minero, S.A. (“COREMINE”) carried out studies to extract gold and silver from the scoria dumps at Sitio Viejo between 1985 and 1991. Consorcio de Inversionistas, C.D.I., S.A. (CDI) operated the project from 1993 to 2010 and built a pilot plant at Sitio Viejo to treat the scoria, rehabilitated the Independencia, La Matilde and El Castaño Mines, built a 120 tonnes per day (tpd) mineral treatment plant at the Independencia Mine, and carried out small scale exploitation of the mines from 2002 until about 2009. Proyecto Sabaletas S.A.S. (Sabaletas), a subsidiary of Mineros S.A. (Mineros), a Colombian gold mining company, reprocessed scoria to recover gold and silver under a contract from CDI in the 2000’s to 2013. The company reprocessed about 70,000 tonnes of scoria with a grade of 8.0 g/t gold at Sabaletas. The plant operated at Sitio Viejo from 2009 to 2013 and processed about 135,407 tonnes of scoria grading 4.0 g/t Au.

Gran Colombia bought the Zancudo Project from CDI in 2010 for the price of US$15.0 million in cash. Gran Colombia carried out exploration and diamond drilling in 2011-2012 that is described in a report by Gaviria et al. (2013). The exploration programme was operated by its subsidiary Mineros Nacionales S.A. in 2013. Anglo American plc evaluated the porphyry potential of Zancudo in 2014. IAMGOLD

Corporation, pursuant to the IAMGOLD Option described above, has carried out an on-going programme of exploration and diamond drilling since 2017.

GEOLOGICAL SETTING AND MINERALIZATION

Regional Geology

The Zancudo deposit is located on the western side of the Central Cordillera of the Colombian Andes which is separated from the Western Cordillera to the west by the River Cauca. The Zancudo deposit lies within the Romeral terrane, an oceanic terrane comprising metamorphosed mafic to ultramafic complexes, ophiolite sequences and oceanic sediments of probable Late Jurassic to Early Cretaceous age. This terrane was accreted to the continental margin along the Romeral Fault, which lies east of Zancudo, in the Aptian (125 to 110 Ma). Movement on the Romeral Fault was dextral indicating that terrane accretion was highly oblique from the southwest. The terrane is bounded by the Cauca-Patia Fault on the west side. Further west, additional oceanic and island arc terranes were subsequently accreted to the Western Cordillera in the Paleogene and Neogene periods, culminating in the on‐going collision of the Panamá-Choco arc since the late Miocene. This reactivated the Cauca-Patia and Romeral faults with left lateral and reverse movements. The Central Cordillera is formed of continental crust of Proterozoic and Paleozoic-age comprising metasediments, amphibolites and gneisses. The Romeral terrane is partially covered by continental sedimentary rocks of the Oligocene to Lower Miocene age Amagá Formation, comprising gray to green colored conglomerates, sandstones, shales and coal seams, and by thick subaerial basaltic to andesitic volcanic and sedimentary rocks of the late Miocene Combia Formation. The host rocks to mineralization at the Zancudo Project are schists of the Arquia Complex and sedimentary rocks of the Amagá Formation.

Local Geology

The Titiribi porphyry intrudes the Arquía Complex schists and Amagá Formation siliciclastic sedimentary rocks. Gold mineralization is related to the emplacement of the porphyry stocks. High grade epithermal Au-Ag veins of the Zancudo Project occur along the lower eastern flank of the Cerro Vetas porphyry complex of monzodiorite, diorite-granodiorite to quartz monzonite composition. The porphyry has been dated by potassium-argon method on hornblende from Cerro el Corcovado at Titiribi at 9.0 ± 0.9 Ma and 7.8 ± 1.0 Ma (Gonzalez, 1976), and at 7.6 ± 0.3 Ma by uranium-lead dating of zircon from the Cerro Vetas porphyry . The ages of intrusion, alteration and mineralization are thus Late Miocene.

Project Geology

The host rocks are schists of the Late Jurassic to Early Cretaceous Arquia Complex, continental sedimentary rocks of the Oligocene to Lower Miocene Amagá Formation, and Late Miocene andesite and dacite porphyry intrusions.

The Arquia Complex comprises chlorite schists, quartz-sericite schists and intervals of black graphitic schist. The schistosity trends NS to NW and dips steeply to the west. The sedimentary rocks of the Amagá Formation Lower Member are unconformable on the schists with a basal coarse to medium grained polymictic conglomerate followed by sandstone with carbonaceous beds, carbonaceous sandy mudstone, gray claystone, and in the upper part a violet claystone with thick lenses of sandstone. The stratigraphic thickness preserved is up to 50 m. The schists and sediments are cut by minor porphyry intrusions in the form of dykes and sills of andesite porphyry and dacite porphyry There are also fine grained, equigranular diorite intrusions. These intrusions are located on the northern side of the Cerro Vetas porphyry intrusion center.

There are extensive deposits of Recent colluvium at the towns of Titiribi and Sitio Viejo.

EXPLORATION

The exploration carried out at the Zancudo Project is summarised in the table below. CDI carried out limited exploration of the Independencia Mine in 1994-2007, but its focus was on mining. Gran Colombia and IAMGOLD have carried out systematic exploration of the Zancudo Project in 2011-2012 and 2017-present, respectively, mainly by mapping and geochemistry. ESV has not carried out any exploration of the Zancudo Project to date.

Year	Company	Survey	Units	Number	Notes
1994-2007	CDI	Underground mapping	m	Not known
		Underground rock sampling	Samples	Not known
2011-2012	Gran Colombia	Topography	ha	>1050	Aster satellite image, 30 m DEM and contours
		Geological mapping	ha	750	Concessions C5521011 and HDWA-02
		Rock sampling	Samples
		Underground surveying	m	Not known	Digitise historical mine plans; survey mines
		Underground channel sampling	Samples	116
		Thin sectionpetrography	Samples	15	E. Tidy,2012
		Mineralogy by SEM-EDS	Samples	22	G. Di Prisco, 2013
2014	Anglo American	Stream sediment sampling	Samples	26
		Rock chipsampling	Samples	12
2017-2020	IAMGOLD	Geological mapping	ha	1055	Whole property
		Soil sampling	Samples	764	Albertos, Arabia, F- Gomez, Alto- GTargets
		Rock sampling	Samples	492	Surface and underground

Summary of exploration carried out at the Zancudo Project.

Below are further details on the exploration activities conducted by various operators:

The topographic contour base map and 30 m digital elevation model (DEM) were generated from Aster satellite imagery. Local grids were set up by IAMGOLD for soil sampling in four target areas. Historical mine plans were digitised by Gran Colombia and the accessible mines were surveyed. Channel sampling was carried out in old mines by CDI, Gran Colombia and IAMGOLD. Geological mapping was carried out of the whole concession area by Gran Colombia and

IAMGOLD. Gran Colombia contracted E. Tidy y Cia. Ltda. to carry out thin section petrography of 15 core samples in 2012 to describe lithology and alteration.

Gran Colombia contracted Terra Mineralogical Services to carry out a predictive metallurgical study of 22 core samples in 2012-13 by scanning electron microscope SEM-EDS scans of polished thin sections (Di Prisco, 2013). A limited number of stream sediment samples were taken by Anglo American. IAMGOLD carried out soil sampling in local grids in four targets, Albertos, Arabia, F- Gomez, and Alto-G. The results for Au and Ag are shown in the figures below. The results are used to locate drill holes. Further soil surveys are planned.
Gran Colombia and IAMGOLD have carried out extensive rock channel sampling underground and on surface. The results for Au and Ag are shown in the figures below.

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Rock sampling results for gold at the Zancudo Project.

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Rock sampling results for silver at the Zancudo Project.

No geophysical surveys have been carried out by Gran Colombia or IAMGOLD. An aeromagnetic (total magnetic intensity) map of the Zancudo Project was published by Sunward Resources as part of a regional survey of the Titiribi district. It shows several magnetic highs in the Zancudo Project.

Mineralization at Zancudo Project occurs in multiple veins that have been exploited over a strike length of 3,500 m. The average vein width is 0.35 m, with a maximum of 3.0 m. The known vertical extent of mineralization is at least 400 m. The historical mine workings are shown in Error! Reference source not found. and have been plotted from historical mine plans and underground surveys carried out by Gran Colombia and IAMGOLD Colombia.

Gold mineralization at Zancudo occurs in two zones, the Upper Zone and the Lower Zone. Mineralization in the Upper Zone occurs in flat-lying veins and disseminations in conglomerates and sandstones at or near the base of the sedimentary sequence at the unconformity with the underlying schists. These were mined in subhorizontal structures called “mantos” near surface at Zancudo and Otra Mina and most of the historical gold production came from these. A near continuous zone of flat lying veins occurs west of the Zancudo Fault over a strike length of 1,600 m with a strike of N30°W and a width of 400 m in the northern zone (PPM, 2002, 2003).

Mineralization in the Lower Zone is hosted by N-S striking, steeply-dipping veins in chlorite schists. These were mined by several long cross-cuts with the levels defined in meters above the La Independencia level, namely: Chaverra (+269 m level), Castaño (+230 m), Sucre (+189 m), Palma (+189 m), Troya (+140 m) and La Independencia (0 m level, at 923 m altitude) ( Error! Reference source not found. ). These were all made before 1923 and were described by Botsford (1926) and Grosse (1926). The Independencia Mine has a cross-cut 740 m long in direction 254°, and four veins (Colmena, Platanal and splays) were exploited over a strike length of about 300 m and to 125 m above the Independencia level.

A structural study carried out by Telluris Consulting (2012, 2013) defined four phases of deformation:

Pre-mineralisation deformation of the Palaeozoic and Jurassic-Cretaceous rocks to form schists (D1);
NE-SW to E-W compression that resulted in the folding of the Oligocene Amaga Formation sedimentary rocks with the older schists prior to mineralisation, and formation of probable thrust faults on the eastern limb with an east dipping imbricate structure (D2);
WNW to NW-SE oriented compression during the late Miocene associated with emplacement of the Au-Cu porphyries, associated volcanic rocks and the formation of epithermal veins (D3), with reactivation of the D2 structures as sinistral transpressional shear zones. Steeply eastward dipping veins such as Platanal and Colmena formed by reactivation of probable thrust imbricate structures. The unconformable contact of the Amaga Formation sediments with the schists was reactivated as a shear zone to form the Santa Catalina vein. Low angle veins such as Manto Antiguo and Colmena II formed as reverse faults in the footwall of the Santa Catalina vein.
Continued E-W to WNW-ESE oriented post-mineralisation compression (D4) resulting in further folding and faulting such as the Zancudo Fault that defines the eastern margin of mineralisation in the Independencia Mine.

The Zancudo deposit occurs on the eastern limb of an upright N-S trending antiform with schists in the core and Amaga Formation sedimentary rocks on the eastern limb.

In the La Independencia mine the kinematic indicators along the N-S veins indicate that they were activated as sinistral transpressional shears forming NNW to NW steep tensional splay veins with coeval, low-angle, contractional splay structures (thrusts) along NNE to NE trends. In places, the mineralisation is associated with sheared andesite dykes that are silicified and host fine visible gold along sub-parallel structures indicating that the dykes were emplaced during or shortly before the main mineralisation event.

The low-angle veins (mantos) that trend NNE to NE tend to show a SE dip due to NW vergence but in the confined space within the N-S-trending structural corridor, contraction was also accommodated by backthrusting (i.e. SE vergent, NW-dipping thrusts/veins). Due to the complex interaction of the frontal and back thrusts there are some low-angle to sub-horizontal zones of high-grade mineralisation where they intersect but their dip and strike continuities are limited by other, steeper veins and faults. In this part of the deposit the mineralisation is primarily hosted in banded and massive epithermal-style veins. Although there is some stockwork veining, especially on a small scale at strike-swings and marginal to the main veins, large-scale stockwork or breccia bodies appear to be scarce or absent.

The principal veins that have been drilled by Gran Colombia and IAMGOLD are the steep, N5-20°W trending Santa Catalina Vein over 2,700 m strike length, divided from north to south into the Albertos, Castaño, Las Brisas and El Mani targets; the high angle Porvenir Vein in the footwall of Santa Catalina with a known strike length of 400 m; the low angle Manto Antiguo (Zancudo) and Manto Las Manuelas veins mined over a strike length of 1,600 m and a width of 400 m; and the newly discovered low angle Manto Inferior and La Miel Veins.

The alteration types defined for logging by IAMGOLD are argillic (sericite, illite-smectite, ± quartz, calcite, dolomite, pyrite), intermediate argillic (kaolinite/dickite, illite-smectite, quartz, pyrite), propylitic (chlorite, calcite, epidote, albite, pyrite) and silicic (quartz or chalcedony (IAMGOLD, 2020). Argillic, intermediate argillic and silicic alteration form alteration halos to the mineralised structures. Pervasive propylitic alteration affects diorite.

IAMGOLD log mineralisation as mineralised veinlets (<1 cm) (MVL), mineralised veins (1-10 cm) (MV) and mineralised vein breccias (>10 cm) (MVBX). (IAMGOLD, 2020). The codes for the first two are combined with general lithological codes for the wall rock code that are SH, schist; SD, sedimentary rock; and HA, andesite; for example, MVL-SH is veinlets in schist. All three types of structure have halos of argillic alteration. The vein textures are massive sulphide with grain size up to 20 mm; banded quartzsulphide with wall rock clasts; and quartz veins with cockscomb banding, colloform banding, druses, bladed quartz replacement of calcite, and ginguro bands.

The Santa Catalina vein follows an andesitic dyke that may have strong argillic alteration with a stockwork of narrow sulphide veinlets (IAMGOLD, 2020). The wall rocks may be mylonitised in schists, brecciated in schists and sedimentary rocks, or have strong argillic alteration with quartz veinlets. Disseminated sulphides are common in the matrix of sedimentary wall rock and along the foliation of schists.

The low angle veins or mantos typically have a hydrothermal breccia texture with clasts of quartz and wall rock with sericite alteration, and a quartz-sulphide matrix (IAMGOLD, 2020). Another important texture is a stockwork of narrow quartz-sulphide veinlets.

The sub-vertical veins commonly have quartz veins with low sulphidation epithermal textures as described above.

Academic mineralogical studies were published by Gallego et al. (2005), Leal-Mejia (2006), Leal-Mejia et al. (2006) and Gallego & Akasaka (2007, 2009). The veins have early stage, base metal sulphides (pyrite, sphalerite, galena, arsenopyrite) infilled by quartz or quartz-carbonate gangue, with banded textures that are typical of epithermal veins. The minerals, in order of decreasing abundance, are pyrite, galena, arsenopyrite, sphalerite, silver-sulfosalts, bournonite, boulangerite and jamesonite, with minor chalcopyrite, pyrrhotite, native gold or electrum, and native silver (Gallego et al., 2005; Gallego & Akasaka, 2007). The gangue minerals are quartz, calcite and clay minerals. The clay minerals identified are kaolinite, muscovite and sericite.

Gallego & Akasaka (2007) studied the grain size and distribution of native gold, electrum (>20% Ag) and silver minerals. Gold/electrum occur as inclusions in sphalerite, pyrite, arsenopyrite, and may also be partially surrounded by pyrite, arsenopyrite, sphalerite, and tetrahedrite. About 80% of the gold/electrum grains are below 30 microns in size. Much of the gold/electrum occurs as small inclusions of less than 10 microns in pyrite and arsenopyrite, or intergrown with other minerals. A small proportion of gold occurs in fractures in other minerals. A small percentage is coarse grained (>100 microns). The average Au/Ag ratio is 72/28, and varies from 67/33 to 74/26 (Gallego et al., 2005). Native silver occurs in minor amounts as small grains in contact with silver-rich sulfosalts. The silver-bearing sulfosalts identified are argentian tetrahedrite ((Cu,Fe)12As4S13)-freibergite ((Ag,Cu,Fe)12Sb4S13) solid solution, andorite (PbAgSb3S6), miargyrite (AgSbS2), diaphorite (Pb2Ag3Sb3S8) and owyheeite (Pb10Ag3Sb11S28). The lead-antimony sulfosalts identified are bournonite (CuPbSbS3), jamesonite (Pb4FeSb6S14), and boulangerite (Pb5Sb4S11). The FeS content of sphalerite varies from 0.91 molar percentage (mol %) in the early generation to higher FeS in the later stages that show zoning from 4 to 20 mol %, with a dominant range of 9 to 16 mol % FeS.

The temperature of formation of the quartz and sulphide mineralization was estimated as between 134 and >350°C (Gallego & Akasaka, 2007, 2009), and the late tetrahedrite deposition at lower temperatures of about 170 and 220°C (Shaw et al., 2018).

The temperature of mineral deposition decreased from Stage 1 to Stage 2b and was accompanied by an increase in sulfur fugacity, resulting in the deposition of sulphosalts and iron-rich sphalerite, while the gangue mineralogy changed from quartz to carbonate.

Another mineralogical study of the Independencia Mine described a simpler paragenesis of early quartz, pyrite, sphalerite and arsenopyrite followed, after fracturing, by galena, sulphosalts and gold (Leal-Mejia, 2006; Leal-Mejia et al., 2006).

There are occurrences of porphyry-style magnetite±quartz (M type) and quartz±pyrite (A and B type) veining accompanied by potassic alteration overprinted by propylitic alteration in andesite porphyry, diorite and basalt in the western area at La Muriel, Los Chorros and Otra Mina (Redwood, 2012; Gallego, 2014).

The Zancudo deposit is a high-grade gold-silver-quartz vein deposit. The vein mineralization is deep epithermal type with temperatures extending above 300°C into the mesothermal field, with an evolution from low to intermediate sulphidation type. This type of mineralization is considered to be porphyry related. The Cerro Vetas porphyry Au-Cu deposit occurs 3.0 km southwest of the Zancudo deposit (Meldrum, 1998; Kantor & Cameron, 2013, 2016) and may have been the source of the hydrothermal fluids that formed the Zancudo veins. However, the veins lie to the east of the porphyry deposit at a lower altitude and dip to the east, suggesting that the fluid source may be another, undiscovered porphyry deposit at lower elevation to the east of the Zancudo Project.

The Zancudo Project also has potential for porphyry gold-copper mineralization related to porphyry intrusions, and there are occurrences of porphyry-style alteration and veining in the western area (Redwood, 2012; Gallego, 2014).

Epithermal gold and silver deposits of both vein-style and bulk-tonnage style are grouped into high sulphidation, intermediate sulphidation and low sulphidation types based on the sulphidation states of their hypogene sulphide assemblages (Simmons et al., 2005). The sulphidation state describes the sulphur activity (logfS2). High sulphidation deposits contain sulphide-rich assemblages of high sulphidation state, typically pyrite with enargite, luzonite, famatinite, and covellite, hosted by leached silicic rock with a halo of advanced argillic minerals. In contrast, low sulphidation deposits contain the low sulphidation pair pyrite-arsenopyrite, and only minor quantities of sulphides which occur in banded veins of quartz,

chalcedony and adularia plus subordinate calcite. Very minor amounts of copper (usually less than 100 ppm to 200 ppm) are present as chalcopyrite or, less commonly, tetrahedrite-tennantite. Pyrrhotite is present in trace amounts in only some low sulphidation deposits. Intermediate sulphidation deposits possess sulphidation states between those of high and low sulphidation types, typically with stability of chalcopyrite, tetrahedrite-tennantite, and Fe-poor sphalerite, but lacking appreciable arsenopyrite and pyrrhotite.

Porphyry copper systems were reviewed by Sillitoe (2010). Porphyry copper systems may contain porphyry Cu ± Mo ± Au deposits of various sizes from less than 10 million tonnes to 10 billion tonnes. Typical primary porphyry Cu deposits have average grades of 0.5 to 1.5% Cu, <0.01 to 0.04% Mo, and 0.01 to 1.5 ‐ g/t Au, although a few gold only deposits have grades of 0.9 to 1.5 g/t gold but little Cu (<0.1 %). The alteration and mineralization in porphyry Cu systems can have a volume of many cubic kilometers of rock and are zoned outward from stocks or dike swarms, which typically comprise several generations of intermediate to felsic porphyry intrusions. Porphyry Cu ± Au ± Mo deposits are centered on the intrusions. High sulphidation epithermal deposits may occur in lithocaps above porphyry Cu deposits, where massive ‐ sulphide lodes tend to develop in deeper feeder structures and Au ± Ag rich, disseminated deposits within the uppermost 500 m or so. Less commonly, intermediate sulphidation epithermal mineralization, chiefly veins, may develop on the peripheries of the lithocaps. The alteration in porphyry Cu deposits is zoned ‐ ‐ ‐ upward from barren, early sodic calcic through potentially ore grade potassic, chlorite sericite, and sericitic, to advanced argillic, the latter forming the lithocap, which may attain >1 km in thickness if not eroded. Low sulphidation state chalcopyrite ± bornite assemblages are characteristic of potassic zones, whereas higher sulphidation state sulphides are generated progressively upwards as a result of temperature decline and the accompanying greater degrees of hydrolytic alteration, culminating in pyrite ± enargite ± covellite in the shallow parts of the lithocaps. The porphyry Cu mineralization occurs in a distinctive ‐ sequence of quartz bearing veinlets as well as in disseminated form in the altered rock between them. ‐ Magmatic-hydrothermal breccias may form during porphyry intrusion, with some of them containing high grade mineralization because of their intrinsic permeability. In contrast, most phreatomagmatic breccias, ‐ constituting maar diatreme systems, are poorly mineralized because they formed late in the evolution of systems.

DRILLING

Diamond drilling programmes were carried out at the Zancudo Project by CDI in 1999 and 2002-2003 (6 holes for 998.2 m), Gran Colombia and subsidiary Mineros Nacionales S.A. in 2011-2012 (66 holes for 14,121.9 m) and IAMGOLD in 2017-2020 (55 holes for 17,385.6 m) for a total of 32,505.7 m in 127 holes, as summarised in the table below. This includes 33 underground holes drilled in the Independencia Mine by CDI in 2002-2003 (5 holes) and Gran Colombia / Mineros Nacionales in 2012 (28 holes). The IAMGOLD drill programme is ongoing. ESV has not carried out any drilling on the Zancudo Project.

The CDI drilling was at the Independencia Mine with one hole from surface in 1999 and 5 underground holes in 2002-2003.

The Gran Colombia drilling also focused on the Independencia Mine and defining the continuity of the veins by surface drilling in 2011, and by underground drilling with some surface holes in 2012; the second half of the 2012 programme was carried out by subsidiary company Mineros Nacionales. Four holes were drilled on a magnetic anomaly at La Muriel in the western area (DDH-ZG-11-030 to 033).

IAMGOLD commenced drilling at the Zancudo Project in September 2017 and has had one diamond drill rig drilling from surface since that time. The 2017 drilling programme was focused on testing the continuity

along strike and down dip of the stacked mantos and the Santa Catalina vein in the north and west zones of the project.

The objective of the 2018 drilling programme was to test the zone where the stacked mantos merge into the Santa Catalina vein and master fault, which usually shows wider and higher-grade intercepts.

The 2019 programme was aimed at extending a new steeply dipping Porvenir structure in the footwall of the Santa Catalina structure further to the north, and at better delineating the ore shoots outlined on the Manto Antiguo, Manto Inferior and La Miel shallow dipping veins.

The 2020 programme was delayed by the COVID-19 pandemic, with the programme commencing in October 2020. As of the effective date of this Technical Report, 5 holes had been drilled on the Manto Antiguo, El Porvenir and El Ortiz structures in the Albertos Target in the north, and results received for one hole.

Year	Company	Hole No. from	Hole No. to	Total Holes	Length(m)
1999	CDI	CDI-01-1999		1	590.7
2002-2003	CDI	CDI-02-2002	CDI-06-2003	5	407.5
2011	Gran Colombia	DDH-ZG-11-001	DDH-ZG-11-033	33	10,370.7
2012	Gran Colombia	DZ-0034	DZ-0049	16	2,003.5
2012	Mineros Nacionales	DZ-0050	DZ-0066	17	1,747.8
2017	IAMGOLD	17PZ-067	17PZ-077	11	3,905.4
2018	IAMGOLD	17PZ-078	17PZ-095	18	6,416.3
2019	IAMGOLD	17PZ-096	17PZ-116	21	5,903.8
2020	IAMGOLD	17PZ-117	17PZ-121	5	1,160.1
Total				127	32,505.8

Summary of the drill programmes carried out at the Zancudo Project.

All of the drilling programmes were carried out by diamond drilling with wireline core recovery with core diameters mostly of HQ (63.5 mm core diameter), with some NQ (47.6 mm core diameter) and BQ (36.5 mm core diameter). All of the IAMGOLD core was HQ diameter and was oriented.

Gran Colombia / Mineros Nacionales carried out downhole directional surveys using a wireline Reflex multishot instrument. The drill collars were surveyed by total station by a service company using a network of survey points that were surveyed by differential GPS. The underground drill hole collars were surveyed by total station.

IAMGOLD carried out downhole directional surveys with readings at every 50 m depth during drilling using a wireline Reflex RZ-Trac multishot instrument, and corroborated this with a second multishot survey on completion of each hole. The drill collars were surveyed by total station in a closed polygon with to a local network of five survey points surveyed by differential GPS.

The Gran Colombia drilling returned high-grade gold and silver mineralization over a strike of 450 metres and dip length of 170 metres on the newly discovered Santa Catalina vein south of the Independencia Mine. The intercepts included:

2.2 m at 0.5 g/t Au and 599.2 g/t Ag (8.8 g/t AuEq) (DDH-ZG-11-005).

7.8 m at 6.4 g/t Au and 163.2 g/t Ag (8.7 g/t AuEq) (DDH-ZG-11-015).
2.0 m at 8.0 g/t Au and 47.3 g/t Ag (8.6 g/t AuEq) (DDH-ZG-11-020).
3.7 m at 10.9 g/t Au and 24.6 g/t Ag (11.2 g/t AuEq) (DDH-ZG-11-024).
2.8 m at 12.0 g/t Au and 11.4 g/t Ag (12.2 g/t AuEq) (DDH-ZG-11-026).
2.2 m at 21.9 g/t Au and 354.3 g/t Ag (26.9 g/t AuEq) (DZ-0037).
2.4 m at 16.4 g/t Au and 71.6 g/t Ag (17.4 g/t AuEq) (DZ-0042).
4.8 m at 6.8 g/t Au and 106.9 g/t Ag (8.3 g/t AuEq) (DZ-0047).

Significant results from the IAMGOLD drilling are as follows:

Drill hole 17PZ-068 successfully extended the Santa Catalina structure for 300 meters to the north. Intercepts include 6.73 m at 4.14 g/t Au and 681.0 g/t Ag (13.63 g/t AuEq).
In the South Zone, multiple higher-grade intercepts outline potential mineralization shoots on both the Manto Antiguo and Manto Inferior structures. This is corroborated by some high-grade intercepts from the previous drilling campaigns. The intercepts include:
Santa Catalina: 2.70 m at 6.01 g/t Au and 2.9 g/t Ag (6.05 g/t AuEq) (17PZ-075).
Manto Antiguo: 2.50 m at 6.06 g/t Au and 61.3 g/t Ag (6.92 g/t AuEq) (17PZ-073).
Manto Inferior: 5.45 m at 2.75 g/t Au and 89.0 g/t Ag (3.99 g/t AuEq) (17PZ-075).
In the North Zone of the Project, old mining workings on the Manto Antiguo structure were intercepted with the wall rock showing good grades, such as 4.58 m at 5.15 g/t Au and 87.3 g/t Ag (6.37 g/t AuEq) (17PZ-086), which gives a higher level of exploration interest to the North Zone of the Project, despite extensive historical mining.
Wide intercepts were intersected in the sedimentary sequences such as 7.95 m at 3.43 g/t Au and 20.5 g/t Ag (3.72 g/t AuEq) (17PZ-068), and 3.95 m at 3.12 g/t Au and 5.7 g/t Ag (3.20 g/t AuEq) (17PZ-078).
Link-structures in between the stacked mantos were identified, which are interpreted as tensional structures, with intercepts such as 3.80 m at 3.78 g/t Au and 34.0 g/t Ag (4.26 g/t AuEq) (17PZ073).
In the Albertos Target of the North Zone, a new steeply dipping vein named El Porvenir was intersected in the footwall of the Santa Catalina vein, with intersections of 2.00 m grading 2.43 g/t Au and 46.9 g/t Ag (3.10 g/t AuEq) (17PZ-094) and 2.20 m grading 5.66 g/t Au and 23.7 g/t Ag (6.00 g/t AuEq) (17PZ-099).
Also within the Albertos Target, a set of subparallel mineralized veins, named El Ortiz and El Libertador, was discovered in the footwall of the El Porvenir vein and show a similar structural trend. The intercepts include:
El Libertador vein: 2.56 m at 5.58 g/t Au and 57.1 g/t Ag (6.40 g/t AuEq) (17PZ-099);
El Ortiz A vein: 4.33 m at 8.16 g/t Au and 86.5 g/t Ag (9.40 g/t AuEq) (17PZ-099);
El Ortiz B vein: 2.86 m at 7.32 g/t Au and 11.5 g/t Ag (7.50 g/t AuEq) (17PZ-099);
El Ortiz D vein: 2.41 m at 8.88 g/t Au and 88.0 g/t Ag (10.10 g/t AuEq) (17PZ-098).

Drill hole 17PZ-092, located in the El Castaño Target in the North Zone of the Project, successfully extended the Manto Antiguo vein by more than 200 meters to the north. Assays received include 4.25 m at 11.71 g/t Au and 248.4 g/t Ag (15.17 g/t AuEq).
Drilling along strike on the Manto Antiguo vein was successful in extending and better delineating some of the potential high grade shoots outlined by the 2018 drilling campaign. The intercepts include:
2.19 m at 5.48 g/t Au and 124.7 g/t Ag (7.20 g/t AuEq) (17PZ-099).
2.00 m at 6.22 g/t Au and 60.6 g/t Ag (7.07 g/t AuEq) (17PZ-102).
2.89 m at 13.41 g/t Au and 82.9 g/t Ag (14.57 g/t AuEq) (17PZ-103).
In the South Zone, a new northerly-dipping manto vein named La Miel was identified by several intercepts that outline a potential high grade shoot approximately 600 m long by 140 m wide. The most significant interval returned 2.00 m at 6.27 g/t Au and 89.2 g/t Ag (7.50 g/t AuEq) (17PZ114).

The drill targets were veins and the holes were drilled at a high angle to the veins, but usually not orthogonal, so that the intersection width is usually greater than the vein width. The true widths are estimated to be 80 to 90% of the intersection lengths. The true width requires to be calculated by 1) measurement of the true azimuth and dip of the veins in the holes with oriented core and calculation of the true width, and 2) modelling of the veins based on multiple drill holes on sections and using modelling software such as Leapfrog.

SAMPLING, ANALYSIS AND SECURITY OF SAMPLES

It is not known which laboratory CDI used for preparation and analysis of drill core samples, nor the sample preparation and analysis methods, and there are no assay certificates or laboratory reports. The core is stored at Sitio Viejo and could be re-logged and re-sampled.

The Gran Colombia / Mineros Nacionales samples were prepared by SGS at their sample preparation facility in Medellin, Colombia, and were assayed at their laboratory in El Callao, Peru. SGS is certified to ISO 9001:2008.

The IAMGOLD samples were prepared by ALS Minerals at their laboratory in Medellin, Colombia and assayed at their laboratory in El Callao, Peru. ALS Minerals is certified to ISO 9001:2015.

SGS and ALS Minerals are independent of ESV, Gran Colombia, Mineros Nacionales and IAMGOLD.

Programme	Laboratory	Method	Code	Procedure
CDI	Not known	Preparation		Not known
		Au, Ag		Not known
Gran Colombia	SGS, Medellin & Callao, Peru	Preparation	PRP93	Dry, crush to >90% passing 10 mesh, split 250 g and pulverise to >95% passing 140 mesh.
		Au	FAA313	Fire assay30g, AAS
		Au overlimit	FAG303	Fire assay30g,gravimetry

Programme	Laboratory	Method	Code	Procedure
		Multielements	ICP12B	39 elements by nitric and hydrochloric acid digestion, ICP-OES
		Ag, As, Fe, Pb, Zn ore grade	AAS41B	Multiacid digestion, AAS
		S	CSA24V	LECO
IAMGOLD	ALS Minerals, Medellin & Callao, Peru	Preparation	PREP-33D	Dry, crush to >90% passing -2 mm, riffle split 1000 g and pulverise to >95% passing 106 microns.
		Au	Au-AA24	Fire assay50g, AAS
		Au overlimit	Au-GRA22	Fire assay50g,gravimetry
		Multielements	ME-ICP41	35 elements aqua regia digestion, ICP-AES
		Agoverlimit	Ag-GRA22	Fire assay50g,gravimetry
		As, Cu, Zn ore grade	AA46	Aqua regia digestion, AAS

Laboratories used for sample preparation and analysis.

Gran Colombia have written protocols for QA-QC sample insertion, monitoring and investigation of failures. The QA-QC for the Gran Colombia drill programme comprised the insertion of coarse blanks at intervals of 1 in 25 samples, certified standard reference materials (CSRM) at intervals of 1 in 25 samples, field duplicates at intervals of 1 in 25 samples, and coarse preparation duplicates at intervals of 1 in 25 samples. A total of 13% QA-QC samples were inserted with the samples, and a further 10% were sent for check analyses at a secondary laboratory (Bureau Veritas), for a total of 23% QA-QC samples. The QAQC results were evaluated in two ways, firstly by QA-QC reports that were generated on receipt of the results from the laboratory, and flag whether the samples pass or fail based on the performance gates described below, and secondly by cumulative graphic plots.

The CSRM were monitored on charts with reference to performance gates of the recommended value and the standard deviation (SD). A result between ±2SD and ±3SD was a warning, two or more consecutive results between ±2SD and ±3SD were a failure, and results greater than ±3 SD were a failure. For failures the batch was reanalysed.

The coarse blank was quartz bought in Medellin. The blank samples were monitored for Au and Ag by charts with reference to the lower limit of detection (LLD) with a reference line at 5 times the LLD. All samples passed and no contamination was detected

Check and replicate samples are analysed at a second laboratory. Check samples were taken by preparing a second pulp from the coarse reject, and reject samples are reanalyses of the same pulp.

IAMGOLD have written protocols for QA-QC sample insertion, monitoring and investigation of failures. A total of 16% QA-QC samples are inserted with the samples, and a further 4% are sent for check analyses at a secondary laboratory (Bureau Veritas), for a total of 20% QA-QC samples. The actual number of QAQC samples in the 2019 drilling programme was higher at 24.6%.

Type	Code	Material	Position	No. %	Actual No. 2019 %
CSRM	STD	609, 61F, CDN-CM-13, CDN- CM-15, CDN-CM-24, Ocx109, SK62 (5 or 6 per year)	Before mineralised zones	6	6.0
Coarse Blank	BLK	Fresh andesite from Caramanta	After fine blank	2	4.1
Fine Blank	BLK-F	CSRM OREAS 21e	After mineralised samples	2	4.1
Field Duplicate	FDUP	Quarter core	Random	2	2.0
Coarse Duplicate	RDUP	Take second split of coarse reject (-2 mm)	Random	2	2.2
Fine Duplicate	PDUP	Second split ofpulp	Random	2	2.2
Subtotal				16
Check Laboratory	2nd Lab	Second pulp by primary lab analysed at secondary lab.	Random	4	4.1
Total				20	24.6

QA-QC samples used by IAMGOLD.

The CSRM are monitored on charts with reference to performance gates of the recommended value and the standard deviation (SD). Any result greater than ±3 SD is a failure.

The coarse blank is unaltered andesite from an outcrop in Caramanta. The fine blank is a CSRM (OREAS 21e). The blank samples are monitored for Au, Ag and other certified elements by charts with reference to the lower limit of detection (LLD) with warning and failure lines at 2 and 4 times the LLD respectively. In the coarse blank, Cu, Pb and Zn have concentrations above their LLD. For these elements the mean of the data was calculated as 47 ppm, 8 ppm and 66 ppm respectively and warning lines were defined at 2x and 4x the mean. However, the high background values of Cu, Pb and Zn means that the sample has little value as a blank for these elements. The fine blank is a CSRM with certified values below the LLD for Au, Ag, As and Pb, and above the LLD for Cu and Zn. The coarse blank shows nil to low failures for Au and Ag, but a high number of failures for As that may be the result of carry-over in sample preparation due to the high arsenopyrite in many of the mineralised intervals. The fine blank shows no failures for Au, Ag, Cu and Pb, but several failures for Zn in the final samples that need to be investigated, and several failures for As that may indicate carry-over.

The field duplicates consist of a quarter core duplicate sample and a quarter core original sample to leave a half core sample in the box. They are evaluated by scatter charts and plots of relative difference that show that most samples are within the ±30% tolerance limit, the high scatter being the result of geological heterogeneity.

Check samples are analysed at a second laboratory (Bureau Veritas) and are taken by preparing a second pulp from the coarse reject. They are evaluated by scatter charts. Gold and silver show a bias of 2.1% and 0.6% respectively to the second laboratory (2019 drill data) that is considered to show good precision of the primary laboratory.

The accuracy of the Au and Ag analyses was evaluated by the variance or bias of the CSRM by comparing the mean value of the data to the certified values. Gold varies from -2.6 to 4.1%. One CSRM has a bias of 7.5%, but there is only a single analysis. Silver varies from 1.1 to 2.6%. These values indicate good accuracy of the gold and silver analyses that are within the 5.0% accepted industry variance.

MINERAL RESOURCES AND MINERAL RESERVES

There are no mineral resource estimates for the Zancudo Project that are compliant with the current CIM standards and definitions required by the NI 43-101.

EXPLORATION AND DEVELOPMENT

No exploration program and budget is currently recommended for ESV for the Zancudo Project because IAMGOLD is sole funding and carrying out an exploration programme pursuant to the terms of the First Option.

The proposed IAMGOLD exploration programme for 2021 is provided below for informational purposes.

Drilling (6,000 m):
Infill drilling to delimit the known ore-shoots on the Santa Catalina vein;
Follow up drilling of the new drill intercepts on the Manto Antiguo, El Porvenir and El Ortiz structures found in Albertos Target;
Drill the F-Gomez and Alto G targets based on the rock and soil sampling results obtained in 2020;
Drilling to explore the potential of several sub-vertical structures that were exploited partially in La Independencia Mine, namely the Colmena, Platanal and Colombiana Veins.
Drilling to extend the Mantos and La Miel ore-shoot westwards in Las Brisas Target;
o Drilling of the El Mani Target to define the structural behavior of the high grade drill intercepts obtained by Gran Colombia in 2012.
Surface exploration:
Soil sampling to extend the coverage of sampling in the F-Gomez Target in order to establish potential new mineralized zones.
Soil sampling in the new Alejandra and Cateador Targets.
Infill soil sampling infills in La Arabia target in order to define drill targets.

The budget for this programme is approximately US$2.0 million and is detailed in the table below, however, as noted above, ESV will not be required to fund this programme, pursuant to the terms of the First Option.

Item	Unit	Quantity	Unit cost (US$)	Total (U$)
Soil surveys	sample	1000	60	60,000
Drillingcontractor	m	6000	200	1,200,000
Analyses	sample	1500	25	37,500
Transport	day	365	200	73,000
General and administration(geology)				365,000
Contingency15%				260,325
Total				1,995,825

Estimated budget to carry out the IAMGOLD 2021 exploration program at the Zancudo Project.

PART IV - INFORMATION CONCERNING THE RESULTING ISSUER

The following information is presented on a post-Transaction basis and is reflective of the projected business, financial and share capital position of the Resulting Issuer. This section only includes information respecting the Resulting Issuer that is materially different from information provided earlier in this Filing Statement. Following the completion of the Transaction, the Resulting Issuer will carry on the businesses currently carried on by the Guia Antigua Vendor and Gran Colombia Titiribi. Refer to various headings under “Part I – Information Concerning ESV” and “Part II – Information Concerning the Targets” for additional information regarding ESV, the Guia Antigua Vendor and Gran Colombia Titiribi, respectively. Refer also to the Pro Forma Financial Statements of the Resulting Issuer attached here to as Appendix E.

NAME AND INCORPORATION

Following the completion of the Transaction, it is anticipated that the Resulting Issuer will continue to subsist under the BCBCA, under the name “Denarius Silver Corp.”

The Resulting Issuer’s registered and records office will be at 2200 – 885 West Georgia Street, Vancouver, British Columbia, V6C 3E8 and its head office will be located at Suite 3123 – 595 Burrard Street, Vancouver, British Columbia.

INTERCORPORATE RELATIONSHIPS

After giving effect to the Transaction, the Resulting Issuer’s direct and wholly-owned subsidiaries will be Amalco (which will continue to subsist under the BCBCA) and Gran Colombia Titiribi (which will continue to subsist under the laws of Panama).

==> picture [402 x 295] intentionally omitted <==

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

Denarius Silver Corp.
(formerly ESV Resources Ltd.)
( British Columbia, Canada )
100% 100%
1270702 B.C. Ltd. Gran Colombia Gold Titiribi Corp.
(Amalco) ( Panama )
( British Columbia, Canada )
100%
Arcadian Minerals Corp. Gran Colombia Gold Titiribi Sucursal
Colombia
( Panama )
( Colombian Branch )
Industrias Argentum S.A.S.
( Colombia )
----- End of picture text -----

AMALGAMATION AGREEMENT

In connection with the Amalgamation Agreement, upon Closing, ESV will pay to Fiore Management and Advisory Corp., a financial advisory fee equal to 300,000 Resulting Issuer Shares.

SHARE PURCHASE AGREEMENT

As condition for the Gran Colombia Titiribi Shares, ESV will issue to Gran Colombia 27,000,000 Consideration Shares.

NARRATIVE DESCRIPTION OF THE BUSINESS

The Resulting Issuer’s business objectives will be collective business objectives of the Guia Antigua Vendor and Gran Colombia Titiribi, as set forth under the headings “Part II - Information Concerning The Targets” .

Business Objectives

The Resulting Issuer will be a junior mining exploration company anticipated to be listed on Tier 2 of the Exchange. The Resulting Issuer initially plans to conduct exploration work on the Guia Antigua Project. The Resulting Issuer will also maintain a carried interest in the Zancudo Project, pursuant to the terms of the IAMGOLD Option Agreement ( See Part II – Information Concerning the Projects ).

Milestones

Initiating and completing its Phase I and II work program on the Guia Antigua Project ( See Part II – Information Concerning the Projects – The Guia Antigua Project ) is the Resulting Issuer’s primary nearterm milestone.

Exploration and Development

Please refer to “ Part II – Information Concerning the Projects – The Guia Antigua Project ” for a complete discussion of the Resulting Issuer’s intended exploration and development activities in relation to the Guia Antigua Project.

DESCRIPTION OF THE SECURITIES

The share structure of the Resulting Issuer will be the same as the share structure of ESV and the rights associated with each Resulting Issuer Share will be the same as the rights associated with each ESV Share. See “Part I – Information Concerning ESV – Description of Securities”.

Common Shares

The authorized capital of the Resulting Issuer will consist of an unlimited number of common shares with no par value. On Closing, it is anticipated that 93,117,915 Resulting Issuer Shares will be issued and outstanding, as fully paid and non-assessable shares.

The holders of the Resulting Issuer Shares are entitled to dividends, if, as and when declared by the Board of Directors; to one vote per Resulting Issuer Share at meetings of the holders of Resulting Issuer Shares; and, upon liquidation, to share equally in such assets of the Resulting Issuer as are distributable to the holders of Resulting Issuer Shares. All common shares to be outstanding after completion of the Transaction will be fully paid and non-assessable and shall not be subject to any pre-emptive rights, conversion or exchange rights, redemption, retraction, purchase for cancellation or surrender provisions, sinking or purchase fund provisions, provisions permitting or restricting the issuance of additional securities or provisions requiring a shareholder to contribute additional capital.

Preferred Shares

The authorized capital of the Resulting Issuer will also consist of 10,000,000 preferred shares with a par value of $1.00. On Closing, it is anticipated that there will be nil preferred shares issued and outstanding.

Warrants

Upon Closing, there will be 2,375,250 Resulting Issuer Warrants.

Options

Upon Closing, 9,200,000 Resulting Issuer Options will be issued and outstanding. Assuming that 93,117,915 Resulting Issuer Shares will be issued and outstanding upon completion of the Transaction, the Resulting Issuer may grant up to an additional 111,792 Resulting Issuer Options pursuant to the Stock Option Plan.

Holders of Resulting Issuer Warrants and Resulting Issuer Options other than the conversion rights described above, will have no claim to dividend rights, voting rights, rights upon dissolution or windingup of the Resulting Issuer, pre-emptive rights, redemption, retraction, purchase for cancellation or surrender provisions, sinking or purchase fund provisions, or provisions requiring a holder to contribute additional capital (except upon exercise).

PRO FORMA CONSOLIDATED CAPITALIZATION

The following table outlines the expected pro forma share capitalization of the Resulting Issuer on completion of the Transaction.

Designation of Security	Amount Authorized	Amount Outstanding as of Closing
Resulting Issuer Shares(1)	Unlimited	93,117,915
Resulting Issuer Warrants	N/A	2,375,250
Resulting Issuer Options	N/A	9,200,000
TOTAL		104,693,165

Notes:

(1) As of the date of this Filing Statement, ESV has 31,602,862 ESV Shares issued and outstanding. Upon completion of the Transaction, the Resulting Issuer will issue 33,675,053 (which such amount is comprised of 15,000,000 Guia Antigua Vendor Shares issued and outstanding as of the date of this Filing Statement and 18,675,053 Guia Antigua Vendor shares issuable upon satisfaction of the Escrow Release Conditions) Resulting Issuer Shares to holders of the Guia Antigua Vendor Shareholders in exchange for their respective Guia Antigua Vendor Shares and the Resulting Issuer will issue 27,000,000 Resulting Issue Shares to Gran Colombia in connection with Share Purchase Transaction, and 840,000 Resulting Issuer Shares to Fiore Management and Advisory Corp. in respect of the Transaction

Fully Diluted Share Capital

The following table outlines the expected number and percentage of securities of the Resulting Issuer to be outstanding on a fully diluted basis after giving effect to the Transaction:

	Number of the Resulting Issuer Shares	Percentage of Total
Resulting Issuer Shares held by current ESV Shareholders	31,602,862	30.19%
Resulting Issuer Shares to be issued to Guia Antigua Vendor Shareholders(1)	15,000,000	14.33%

	Number of the Resulting Issuer Shares	Percentage of Total
Resulting Issuer Shares issued to the holder of Subscription Receipts	18,675,053	17.84%
Resulting Issuer Shares to be issued to Gran Colombia	27,000,000	25.79%
Resulting Issuer Shares to be issued to an advisor in respect of the Transaction	840,000	0.80%
Resulting Issuer Warrants	2,375,250	2.27%
Resulting Issuer Options	9,200,000	8.78%
Fully-Diluted	104,693,165	100%

Other than as disclosed above, no other securities will be outstanding which are convertible into, or exchangeable for, Resulting Issuer Shares following the completion of the Transaction.

AVAILABLE FUNDS AND PRINCIPAL PURPOSES

	Estimated Amount
Sources of Funds:
Estimated working capital(1)	($684,938)
Gross proceeds from the Concurrent Private Placement	$8,403,774
Total Sources(1)	$7,718,836
Uses of Funds:
Costs related to the Transaction(2)	$300,000
Commission related to Concurrent Private Placement	$197,761
Colombia Site Office and Local Operational Overhead	$600,000

	Estimated Amount
Phase I Work Program for the Guia Antigua Project(4)	$1,168,616
Phase II Work Program for the Guia Antigua Project(4)	$2,569,670
Sourcing and Due Diligence of Future Project Acquisitions	$500,000
Corporate marketing	$500,000
General and administrative expenses(3)	$1,400,000
Unallocated working capital to fund ongoing operations	$482,789
Total Uses	$7,718,836

Notes:

(1) Based on the gross proceeds of the Concurrent Private Placement and the estimated working capital deficit of ESV as at January 31, 2021 in the amount of ($250,000), the estimated working capital deficit of the Guia Antigua Vendor as at January 31, 2021 in the amount of ($472,000) and the estimated working capital of Gran Colombia Titiribi as at January 31, 2021 in the amount of $37,062.
(2) Consisting of legal fees, filing fees, accounting fees and other professional advisory fees related to the Transaction. (3) Comprised of: $750,000 (salaries); $150,000 (non-executive director fees); $60,000 (D&O insurance); $220,000 (audit, accounting and tax related fees); $44,000 (public company maintenance fees); $60,000 (marketing); $66,000 (office, IT and other); and $50,000 (listing and filing fees).
(4) The estimated cost of the Phase I Work Program for the Guia Antigua Project is US$920,460 and the estimated cost for the Phase II Work Program for the Guia Antigua Project is US$2,024,000. Based on the US/CAD Bank of Canada exchange rate as of the date of this Filing Statement (US$1.2696), the estimated cost of Phase I Work Program for the Guia Antigua Project is $1,168,616 and the estimated cost of Phase II Work Program for the Guia Antigua Project is $2,569,670.

Dividends

There will be no restrictions in the Resulting Issuer’s articles or elsewhere which would prevent the Resulting Issuer from paying dividends subsequent to the completion of the Transaction. It is not contemplated that any dividends will be paid on the Resulting Issuer Shares in the immediate future following the completion of the Transaction, as it is anticipated that all available funds will be invested to finance the growth of the Resulting Issuer’s business. The Board of Directors will determine if, and when, dividends will be declared and paid in the future from funds properly applicable to the payment of dividends based on the Resulting Issuer’s financial position at the relevant time. All of the Resulting Issuer Shares are entitled to an equal share in any dividends declared and paid. See “ Forward-Looking Information ”.

PRINCIPAL SECURITYHOLDERS

It is not anticipated that any Person will own of record or beneficially, directly or indirectly, or exercise control or direction over, more than 10% of the Resulting Issuer Shares following the completion of the Transaction, except as set out below.

	The Number and Percent of
Name and Location
	Securities Owned after giving
of Residence	effect to the Transaction(2)
Gran Colombia Toronto, ON	33,666,666 36.15%

Notes:

(1) Percentages shown are based on 93,117,915 Resulting Issuer Shares issued and outstanding immediately following the Closing.

(2) Resulting Issuer Shares held by Gran Colombia are owned both of record and beneficially.

DIRECTORS AND OFFICERS OF THE RESULTING ISSUER

At Closing, the directors and officers of the Resulting Issuer are expected to be the individuals set out below.

Name, Address, Occupation and Security Holdings

			Director of
			ESV, Guia
				Number and Percentage of
			Antigua
			Vendor or	Resulting Issuer Shares
			Gran Colombia	Beneficially Owned, or
Name and Location	Position or	Principal Occupation During
			Titiribi	Controlled or Directed,
of Residence	Office	Past 5 Years	Since(1)	Directly or Indirectly(3)
Frederic Leigh Vancouver, BC	Chief Executive Officer and Director	Mr. Leigh is the principal of a private British Columbia company providing fundraising, investor relations and advisory services.	August 27, 2020	600,000(4) 0.64%
Mike Davies Burlington, Ontario	Chief Financial Officer	Mr. Davies is the Chief Financial Officer of Gran Colombia and Aris Gold Corporation (formerly Caldas Gold Corp.)	N/A	Nil(5) 0.00%
Amanda Fullerton Toronto, Ontario	Corporate Secretary	Ms. Fullerton is the Vice- President, Legal and Secretary of Gran Colombia and Aris Gold Corporation (formerly Caldas Gold Corp.)	N/A	Nil(6) 0.00%
Jeffrey Couch(2) London, UK	Director	Mr. Couch currently works with Orion Resource Partners, a mining focused private equity firm. Prior to that, Mr. Couch was Head of Investment Banking Europe for BMO Capital Markets (Bank of Montreal).	N/A	Nil(7) 0.00%

Paul Sparkes(2) Toronto, Ontario	Director	Mr. Sparkes is President of Otterbury Holdings Inc, founder Global Alternatives Advisory and Managing Partner at Norris Point Capital Inc.	October 6, 2020	155,556 0.16%
Serafino Iacono Panama City, Panama	Director	Executive Chairman or Executive Co-Chairman of the Board to the Gran Colombia since August 20, 2010; Interim Chief Executive Officer of Aris Gold Corporation (formerly Caldas Gold Corp.) from February 25, 2020 to February 4, 2021 (a subsidiary of Gran Colombia); Co-Chairman of the Board of Pacific Exploration & Production Corporation from January 23, 2008 to November 2, 2016; Interim Chief Executive Officer and President of Medoro Resources Ltd. from September 2010 to June 10, 2011.	Director of Gran Colombia since August 20, 2010	Nil(8) 0%
Lombardo Paredes Arenas(2) Medellin, Colombia	Director	Mr. Paredes Arenas has been the Chief Executive Officer of the Gran Colombia since February 1, 2014 and has served as the President of Aris Gold Corporation (formerly Caldas Gold Corp.) from February 25, 2020 to February 4, 2021. Prior to joining Gran Colombia, he worked as an Independent Consultant from 2005 until January 2014. Mr. Paredes Arenas also held a number of positions at Petróleos de Venezuela and its affiliates from 1975 to 1998.	N/A	Nil(9) 0%

Notes:

(1) The term of office of each director of the Resulting Issuer will expire at the next annual general meeting of the shareholders of the Resulting Issuer.

(2) Proposed member of the Resulting Issuer’s audit committee.

(3) Percentages shown are based on 93,117,915 Resulting Issuer Shares issued and outstanding immediately following the Closing.
(4) Frederic Leigh directly holds 200,000 Resulting Issuer Shares and indirectly holds 400,000 Resulting Issuer Shares.
(5) Mike Davies will be issued 500,000 Resulting Issuer Options upon Closing.
(6) Amanda Fullerton will be issued 200,000 Resulting Issuer Options upon Closing.
(7) Jeff Couch will be issued 900,000 Resulting Issuer Options upon Closing.
(8) Serafino Iacono will be issued 900,000 Resulting Issuer Options upon Closing.

(9) Lombardo Paredes Arenas will be issued 900,000 Resulting Issuer Options upon Closing.

Management

On Closing, the management team of the Resulting Issuer is expected to be Frederic Leigh as CEO and Mike Davies as CFO. In connection with the Transaction, Gran Colombia has the right to appoint one director of the Board of Directors of the Resulting, being Lombardo Paredes-Arenas, and the remainder of the Board of Directors of the Resulting Issuer will consist of Jeff Couch, Frederic Leigh, Paul Sparkes and Serafino Iacono.

In addition to the information set out in the table above, following is some information about the proposed members of the Board of Directors and management of the Resulting Issuer:

Frederic Leigh – Chief Executive Officer, Director

Mr. Leigh is the principal of a private British Columbia company providing fundraising, investor relations and advisory services. He has over 10 years of experience with companies in the mining and technology sectors worldwide, acting in an investor relations and advisory role for a number of publicly listed companies.

Mike Davies – Chief Financial Officer

Michael Davies served as the Chief Financial Officer of Aris Gold Corporation (formerly Caldas Gold Corp.) from February 24, 2020 to February 4, 2021. Mr. Davies has served as the Chief Financial Officer of Gran Colombia since August 20, 2010. Mr. Davies is a Charter Professional Accountant, Chartered Accountant and has a Bachelor of Commerce degree from the University of Toronto. For more than the previous twenty years he has gained extensive international and public company experience in financial management, strategic planning and external reporting. Mr. Davies was the Chief Financial Officer of PetroMagdalena Energy Corp. from July 13, 2009 to July 27, 2012. His diverse background also includes senior finance roles with several public companies, including LAC Minerals, IMAX Corporation, Amtelecom Communications, Energentia Resources, Pamour Inc. and Giant Yellowknife Mines.

Amanda Fullerton – Corporate Secretary

Amanda Fullerton served as the Corporate Secretary of Aris Gold Corporation (formerly Caldas Gold Corp.) from February 24, 2020 to February 4, 2021. Ms. Fullerton has served as the Vice-President, Legal & Assistant Secretary of Gran Colombia since March 25, 2019. She was a Vice President, Legal (and prior thereto, Associate, Legal) of Macquarie Capital Markets Canada Ltd. from March 24, 2014 to March 22, 2019. Prior thereto, Ms. Fullerton was an associate with Fasken Martineau DuMoulin LLP from September 2008 to March 2011 and MacLeod Dixon LLP (now Norton Rose Fulbright LLP) from March 2011 to March 2014 and practiced in the areas of corporate finance, mergers and acquisitions and corporate/commercial law focused primarily on the mining industry.

Jeff Couch – Director

Mr. Couch is a financial services executive with extensive experience in the natural resources sector having advised and raised capital for clients globally, with a particular focus in emerging markets. Currently Mr. Couch is working with Orion Resource Partners, a mining focused private equity firm. Orion has over $6 billion under management, and specializes in institutional metals and mining investment strategies in the base and precious metals space. Mr. Couch has worked with several financial services firms in Europe, including being Head of Investment Banking Europe for BMO Capital Markets (Bank of Montreal). Mr. Couch has also had senior investment banking roles with Credit Suisse Europe and Citigroup (Solomon Brothers). He has public board experience in both the London Stock Exchange and Toronto Exchange, and has advised several governments on their natural resources capital requirements. He holds both an undergraduate business degree and a law degree.

Paul Sparkes – Director

Mr. Sparkes is an accomplished business leader and entrepreneur with over twenty five years of experience in media, finance, capital markets and Canada’s political arena. He spent a decade as a leader in the broadcast and media industry as CTVglobemedia’s Executive Vice President, Corporate Affairs. He also held senior positions in public service, including with the Government of Canada as Director of Operations to Prime Minister, Jean Chretien, and as a senior aide to two Premiers of Newfoundland and Labrador. Mr. Sparkes was a co-founder and executive vice chairman at Difference Capital Financial and serves on a number of private and public boards. He is currently President of Otterbury Holdings Inc., and is an advisor and deal maker for growth companies in the private and public markets.

Serafino Iacono – Director

Mr. Iacono is an entrepreneur and business person who has either founded or been the head of several different companies operating in the mining and natural resources sector. He is currently the Executive Chairman of Gran Colombia, Executive Chairman of Aris Gold Corporation (formerly Caldas Gold Corp. (a subsidiary of Gran Colombia)), Chief Executive Officer and Executive Director at NG Energy International Corp. (formerly CruzSur Energy Corp.) and Chairman of Western Atlas Resources, Inc. Mr. Iacono is also on the board of Pacific Infrastructure Ventures, Inc. and Sociedad Portuaria Puerto Bahia SA and Member of Blue Pacific Investments Group Ltd.

Lombardo Paredes-Arenas – Director

Mr. Paredes Arenas currently serves as Chief Executive Officer of Gran Colombia and brings over 20 years of corporate leadership and operations management experience in the resource sector in Latin America. Before becoming an independent consultant on energy and environmental project development, Mr. Paredes Arenas held several roles with within Petroleos de Venezuela (PDVSA). He was responsible for regional planning of investments and social development for Eastern Venezuela, and was Managing Director and a Board Member of Maraven S.A. (an affiliate of PDVSA), with responsibility for the construction and commissioning of the Cardon Refinery Conversion Project in Venezuela, a US$2.6 billion project. He was also General Manager of its Production Operations Division, with 5,000 employees and oil production of 800,000 barrels per day. Mr. Paredes Arenas holds Bachelor of Science in Mechanical Engineering and Master of Economic Analysis and Financial Economics degrees.

PROMOTER CONSIDERATION

The directors of the Resulting Issuer are the promoters of the Resulting Issuer. For a description of the number and percentage of common shares in the Resulting Issuer to be beneficially owned, directly or indirectly, or over which direction or control will be exercised by the directors of the Resulting Issuer see below “Information Concerning the Resulting Issuer – Escrowed Securities” .

CORPORATE CEASE TRADE ORDERS OR BANKRUPTCIES

No proposed director, officer or Promoter of the Resulting Issuer or shareholder anticipated to hold a sufficient number of securities of the Resulting Issuer to affect materially the control of the Resulting Issuer is or has, within the past 10 years, been a director, officer or Promoter of any Person or issuer that, while such Person was acting in that capacity, was the subject of a cease trade or similar order or an order that denied that Person or issuer access to any exemptions under applicable securities legislation for a period of more than 30 consecutive days or became bankrupt, made a proposal under any legislation relating to

bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver-manager or trustee appointed to hold the assets of that Person.

Mr. Iacono was a director of US Oil Sands Inc. (“ US Oil Sands ”) from October 2013 until his resignation in June 2017. On September 14, 2017, the Court of Queen’s Bench, Alberta granted the application of the primary creditor of US Oil Sands to appoint a receiver and manager over all the assets, undertakings and property of US Oil Sands. Such appointment continues as of the date hereof.

Mr. Iacono was also a director and Executive Co-Chairman of Pacific Exploration & Production Corporation, which undertook a comprehensive recapitalization and financing transaction that was implemented pursuant to a proceeding under the Companies Creditors’ Arrangement Act, together with appropriate proceedings in Colombia under Ley 1116 de 2006 and in the United States under chapter 15 of title 11 of the United States Code, ultimately implemented by way of a plan of arrangement and compromise on November 2, 2016. Effective November 2, 2016, Mr. Iacono resigned from the board and effective October 31, 2016, Mr. Iacono retired from his position as Executive Co-Chairman.

PENALTIES AND SANCTIONS

No proposed director, officer or Promoter of the Resulting Issuer or shareholder anticipated to hold a sufficient number of securities of the Resulting Issuer to affect materially the control of the Resulting Issuer or a personal holding corporation of such Persons is or has been subject to any penalties or sanctions imposed by a court relating to securities legislation or by any securities regulatory authority or has entered into a settlement agreement with a securities regulatory authority or been subject to any other penalties or sanctions proposed by a court or regulatory body, including a self-regulatory body, that would be likely to be considered important to a reasonable securityholder making a decision about the Transaction.

PERSONAL BANKRUPTCIES

No proposed director, officer or Promoter of the Resulting Issuer or shareholder anticipated to hold a sufficient number of securities of the Resulting Issuer to affect materially the control of the Resulting Issuer, or a personal holding corporation of such Persons is or has, within the past 10 years, become bankrupt, made a proposal under bankruptcy or insolvency legislation or been subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold their assets.

CONFLICTS OF INTEREST

Some of the individuals proposed for appointment as directors or officers of the Resulting Issuer upon the completion of the Transaction are also directors, officers and/or Promoters of other reporting and nonreporting issuers, including those engaged in mining issuers. As of the date of this Filing Statement and to the knowledge of the directors and officers of ESV, the Guia Antigua Vendor and Gran Colombia Titiribi, there are no existing conflicts of interest between the Resulting Issuer and any of the individuals proposed for appointment as directors or officers following the completion of the Transaction.

OTHER REPORTING ISSUER EXPERIENCE

The following table sets out the proposed directors, officers and Promoters of the Resulting Issuer that are, or have been within the last five years, directors, officers or Promoters of other reporting issuers:

Name	Name and Jurisdiction of Reporting Issuer	Name of Trading Market	Position(s) Held	Term
Frederic Leigh	Hornby Bay Mineral Exploration	TSXV	President and CEO	October 2019 to Present
	K2 Gold Corporation	TSXV	Director	November 2015 to Present
	Golden Harp Resources Inc.	TSXV	Director	August 2016 to Present
	XIB I Capital Corp.	TSXV	Director	March 2018 to Present
Mike Davies	Gran Colombia Gold Corp.	TSX	CFO	August 2010 to Present
	Aris Gold Corporation (formerly Caldas Gold Corp.)	TSXV	CFO	February 2020 to February 2021
Amanda Fullerton	Gran Colombia Gold Corp.	TSX	Vice-President, Legal, Secretary	March 2019 to Present
	Aris Gold Corporation (formerly Caldas Gold Corp.)	TSXV	Vice-President, Legal, Secretary	February 2020 to February 2021
Jeff Couch	Aris Gold Corporation (formerly Caldas Gold Corp.)	TSXV	Director	August 2020 to Present
Paul Sparkes	Thunderbird Entertainment Group Inc.	TSXV	Director	October 2018 to Present
	Antler Gold Inc.	TSXV	Director	November 2016 to Present
	BPLI Holdings Inc.	TSXV	Director	January 2014 to Present
	Invictus MD Strategies Corp.	TSXV	Director (Chairman)	July 2014 to December 2019
	Duckworth Capital Corp.	TSXV	Director	May 2017 to February 2019
	Breaking Data Corp.	TSXV	Director	October 2015 to October 2018
	Ziplocal Inc.	TSXV	Director	December 2015 to November 2016
	Difference Capital Financial Inc.	TSX	Director	May 2012 to July 2014
	Diversified Royalty Corp.	TSX	Director	June 2014 to August 2014
Serafino Iacono	Gran Colombia (British Columbia)	TSX	Executive Chairman	August 20, 2010 to present

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Name	Name and Jurisdiction of Reporting Issuer	Name of Trading Market	Position(s) Held	Term
	Western Atlas Resources Inc. (British Columbia)	TSXV	Chairman	June 15, 2018 to present
	US Oil Sands Inc. (British Columbia)	TSXV	Director	October 17, 2013 to present
	NG Energy International Corp. (formerly CruzSur Energy Corp.) (British Columbia)	TSXV	Director and Interim CEO	June 3, 2019 to present
			Chairman and Executive Director	April 4, 2017 to July 24, 2018
	Pacific Exploration & Production Corporation (British Columbia)	TSX	Co-Chairman	January 23, 2008 to November 2, 2016
	CGX Energy Inc. (Ontario)	TSXV	Executive Co- Chairman	April 26, 2013 to November 30, 2016
	Caribbean Resources Corporation (British Columbia)	TSXV	Executive Co- Chairman	January 6, 2011 to September 8, 2015
Lombardo Paredes- Arenas	Gran Colombia (British Columbia)	TSX	CEO	February 1, 2014 to present
	Gold X Mining Corp. (Formerly Sandspring Resources Ltd.) (Continued into British Columbia)	TSXV	Director	July 20, 2018 to present

PROPOSED EXECUTIVE COMPENSATION

Following is the anticipated compensation, as known, for each of the Resulting Issuer’s Named Executive Officers for the 12 month period after giving effect to the Transaction:

Name and principal position	Annual Salary	Share- based award s	Option- based awards	Non-equity incentive plan compensation	Non-equity incentive plan compensation	Pensio n value	All other compensation	Total Compensation
				Annual Incenti ve Plans	Long- term incentive plans
Frederic Leigh, CEO	Nil	Nil	Nil	Nil	Nil	Nil	Nil	Nil

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Name and principal position	Annual Salary	Share- based award s	Option- based awards	Non-equity incentive plan compensation	Non-equity incentive plan compensation	Pensio n value	All other compensation	Total Compensation
				Annual Incenti ve Plans	Long- term incentive plans
Mike Davies, CFO	Nil	Nil	Nil	Nil	Nil	Nil	Nil	Nil

While the Resulting Issuer has allocated $750,000 to salaries and $150,000 to non-executive director fees (See “ Part IV – Information Concerning the Resulting Issuer - Available Funds and Principal Purposes ), a determination has not yet been made as to the manner in which such funds will be allocated among the Named Executive Officers and other non-executive directors of the Resulting Issuer.

Incentive Plan Awards

Share-based Awards

During the 12 month period post-Transaction, it is not expected that the Resulting Issuer will grant any share-based awards, being awards granted under an equity incentive plan of equity-based instruments that do not have option-like features, including, for greater certainty, common shares, restricted shares, restricted share units, deferred share units, phantom shares, phantom share units, common share equivalent units, and stock. See “Forward-Looking Information” .

Option-based awards

The Resulting Issuer will likely grant future option-based awards, being awards under an equity incentive plan of options, including, for greater certainty, by granting stock options to its directors, officers and employees. The timing, amounts, exercise price of these future option-based awards are not yet determined. Such stock options are expected to be granted under the Stock Option Plan. See “Part I – Information Concerning Trench Solutions - Stock Option Plan” .

Pension Plan Benefits

During the 12 month period post-Transaction, it is not expected that the Resulting Issuer will provide for defined benefit plans or defined contribution plans, being plans that provide for payments or benefits at, following, or in connection with retirement, or provide for deferred compensation plans. See “ ForwardLooking Information” .

TERMINATION AND CHANGE OF CONTROL BENEFITS

The Resulting Issuer does not currently anticipate having any written employment agreements with the Named Executive Officers, nor any plans or arrangements in place with any NEO that provide for payment following or in connection with any termination, resignation, retirement, a change of control of the

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Resulting Issuer or a change in a NEO’s responsibilities. Please see “Part II – Information Concerning the Targets – The Guia Antigua Vendor – Executive Compensation – Termination and Change of Control Benefits” and Part II – Information Concerning the Targets – Gran Colombia Titiribi – Executive Compensation – Termination and Change of Control Benefits” .

COMPENSATION OF DIRECTORS

It is anticipated that the directors of the Resulting Issuer will be paid fees for their services, however, the amounts of such fees will be determined at the discretion of the Board of Directors of the Resulting Issuer following completion of the Transaction.

It is also expected that the Resulting Issuer will grant stock options to directors in recognition of the time and effort that such directors devote to the Resulting Issuer. The timing, amounts, exercise price of these future option-based awards are not yet determined.

INDEBTEDNESS OF DIRECTORS AND OFFICERS

No individual who: (a) is a director or officer of ESV, Subco, the Guia Antigua Vendor or Gran Colombia Titiribi or is proposed to be a director or officer of the Resulting Issuer; (b) at any time during the six months ended September 30, 2020 or the year ended March 31, 2020 for ESV, or the period from incorporation on October 20, 2020 to the date hereof for Subco, or the period of incorporation on June 30, 2020 to November 30, 2020 for the Guia Antigua Vendor, or at any time during the nine months ended September 30, 2020 or the year ended December 31, 2019 for Gran Colombia Titiribi , was a director or officer of ESV, Subco, the Guia Antigua Vendor or Gran Colombia Titiribi or (c) is an Associate of any of the foregoing, is either: (i) indebted to ESV, Subco, the Guia Antigua Vendor or Gran Colombia Titiribi or any of their subsidiaries; or (ii) indebted to another entity with such indebtedness being the subject of a guarantee, support agreement, letter of credit or other similar arrangement or understanding provided by ESV, Subco, the Guia Antigua Vendor or Gran Colombia Titiribi.

INVESTOR RELATIONS ARRANGEMENTS

No oral or written agreement has been entered into with any Person for the provision of investor relations services for the Resulting Issuer.

OPTIONS AND WARRANTS TO PURCHASE SECURITIES

It is anticipated that there will be 9,200,000 Resulting Issuer Options and 2,375,250 Resulting Issuer Warrants outstanding immediately following Closing. Other than the foregoing, no other securities will be outstanding which are convertible into, or exchangeable for, Resulting Issuer Shares following the completion of the Transaction. Please see “Part IV – Information Concerning the Resulting Issuer – Description of Securities – Fully Diluted Share Capital” .

Upon completion of the Transaction, the outstanding Resulting Issuer Options will be held under the Stock Option Plan by:

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Category of Optionee	Number of Resulting Issuer Options	Exercise Price	Market Value on Date of Grant	Expiry Date
Officers of the Resulting Issuer	950,000	$0.45	N/A	10 years after the date of grant
	125,000(1)	$0.10	N/A	August 27, 2030
Directors of the Resulting Issuer (excluding Officers)	3,600,000	$0.45	N/A	10 years after the date of grant
Former Officers and Directors of the Resulting Issuer	750,000	$0.10	N/A	August 27, 2030
Employees	550,000	$0.45	N/A	10 years after the date of grant
Consultants	725,000	$0.10	N/A	August 27, 2030
	1,950,000	$0.45	N/A	10 years after the date of grant
Others	300,000	$0.10	N/A	August 27, 2030
	250,000	$0.45	N/A	10 years after the date of grant
Total	9,200,000	-	-	-

Note:

(1) 125,000 stock options are held by Frederic Leigh.

All of the stock options described in the foregoing table are or will be granted under the Stock Option Plan.

Upon Closing, the following warrants of the Resulting Issuer will be outstanding:

Number of Warrants Number of Resulting Issuer Common Shares to be issued on exercise of the Warrants Expiry Date Exercise Price ($/share) Market Value as at Date of Issuance and Most Recent Month End 2,375,250(1) 2,375,250 August 27, 2021 $0.10 N/A Notes: (1) Comprised of the Resulting Issuer Warrants.	Number of Warrants	Number of Resulting Issuer Common Shares to be issued on exercise of the Warrants	Expiry Date	Exercise Price ($/share)	Market Value as at Date of Issuance and Most Recent Month End
	2,375,250(1)	2,375,250	August 27, 2021	$0.10	N/A

There are no assurances that the options or warrants described above will be exercised in whole or in part.

STOCK OPTION PLAN

The Resulting Issuer’s stock option plan will be the Stock Option Plan pursuant to which the Board may grant options to purchase Resulting Issuer Shares to officers, directors and employees of the Company or

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affiliated corporations and to consultants retained by the Resulting Issuer. A summary of the Stock Option Plan is set forth below:

(a) the Stock Option Plan reserves, for issuance pursuant to the exercise of stock options, a maximum number of common shares of the Resulting Issuer equal to up to a maximum of 10% of the issued common shares of the Resulting Issuer at the time of any stock option grant;
(b) an optionee must either be an Eligible Charitable Organization or a Director, Employee or Consultant of the Resulting Issuer (as defined in the Stock Option Plan) at the time the option is granted in order to be eligible for the grant of a stock option to the optionee;
(c) the aggregate number of options granted to any one Person (and companies wholly owned by that Person) in a 12 month period must not exceed 5% of the issued common shares of the Resulting Issuer calculated on the date an option is granted to the Person (unless the Resulting Issuer has obtained the requisite Disinterested Shareholder Approval;
(d) the aggregate number of options granted to any one Consultant in a 12 month period must not exceed 2% of the issued common shares of the Resulting Issuer, calculated at the date an option is granted to the Consultant;
(e) the aggregate number of options granted to all Persons retained to provide Investor Relations Activities must not exceed 2% of the issued shares of the Resulting Issuer in any 12 month period, calculated at the date an option is granted to any such Person;
(f) options issued to Persons retained to provide Investor Relations Activities must vest in stages over a period of not less than 12 months with no more than 1/4 of the options vesting in any 3 month period;
(g) the minimum exercise price per common share of a stock option must not be less than the Market Price of the common shares of the Resulting Issuer, subject to a minimum exercise price of $0.05;
(h) options can be exercisable for a maximum of 10 years from the date of grant (subject to extension where the expiry date falls within a “blackout period” (see (o) below);
(i) stock options (other than options held by a person involved in investor relations activities) will cease to be exercisable 90 days after the optionee ceases to be a Director (which term includes a senior officer), Employee, Consultant, Eligible Charitable Organization or Management Company Employee otherwise than by death, or for a “reasonable period” after the optionee ceases to serve in such capacity, as determined by the Board of Directors. Stock options granted to persons involved in Investor Relations Activities will cease to be exercisable 30 days after the optionee ceases to serve in such capacity otherwise than by death, or for a “reasonable period” after the optionee ceases to serve in such capacity, as determined by the Board of Directors;
(j) all options are non-assignable and non-transferable;
(k) Disinterested Shareholder Approval will be obtained for any reduction in the exercise price of a stock option if the optionee is an Insider of the Resulting Issuer at the time of the proposed amendment;

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(l) the Stock Option Plan contains provisions for adjustment in the number of common shares or other property issuable on exercise of a stock option in the event of a share consolidation, split, reclassification or other capital reorganization, or a stock dividend, amalgamation, merger or other relevant corporate transaction, or any other relevant change in or event affecting the common shares;
(m) upon the occurrence of an Accelerated Vesting Event (as defined in the Stock Option Plan), the Board of Directors will have the power, at its sole discretion and without being required to obtain the approval of Shareholders or the holder of any stock option, to make such changes to the terms of stock options as it considers fair and appropriate in the circumstances, including but not limited to: (a) accelerating the vesting of stock options, conditionally or unconditionally; (b) terminating every stock option if under the transaction giving rise to the Accelerated Vesting Event, options in replacement of the stock options are proposed to be granted to or exchanged with the holders of stock options, which replacement options treat the holders of stock options in a manner which the Board of Directors considers fair and appropriate in the circumstances having regard to the treatment of holders of common shares under such transaction; (c) otherwise modifying the terms of any stock option to assist the holder to tender into any take-over bid or other transaction constituting an Accelerated Vesting Event; or (d) following the successful completion of such Accelerated Vesting Event, terminating any stock option to the extent it has not been exercised prior to successful completion of the Accelerated Vesting Event. The determination of the Board of Directors in respect of any such Accelerated Vesting Event shall for the purposes of the New Option Plan be final, conclusive and binding;
(n) in connection with the exercise of an option, as a condition to such exercise the Resulting Issuer shall require the optionee to pay to the Resulting Issuer an amount as necessary so as to ensure that the Resulting Issuer is in compliance with the applicable provisions of any federal, provincial or local laws relating to the withholding of tax or other required deductions relating to the exercise of such option; and
(o) a stock option will be automatically extended past its expiry date if such expiry date falls within a blackout period during which the Resulting Issuer prohibits optionees from exercising their options, subject to the following requirements: (a) the blackout period must (i) be formally imposed by the Resulting Issuer pursuant to its internal trading policies; and (ii) must expire upon the general disclosure of undisclosed Material Information; and (b) the automatic extension of an optionee's stock option will not be permitted where the optionee or the Resulting Issuer is subject to a cease trade order (or similar order under applicable securities laws) in respect of the Resulting Issuer's securities.

ESCROWED SECURITIES

Pursuant to the Resulting Issuer Escrow Agreement, 39,422,222 Resulting Issuer Shares will be held in escrow pursuant to the Resulting Issuer Escrow Agreement, with Computershare as escrow agent.

Resulting Issuer Escrow Shares and Exchange Resale Restrictions

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The following table lists the names of the shareholders of the Resulting Issuer who will hold Resulting Issuer Escrow Shares following the completion of the Transaction, which shares will be subject to Value Escrow (as that term is defined in the policies of the Exchange).

Name and Municipality of Residence of Securityholder	Designation of Class	Number of Securities held in escrow	Number of Securities held in escrow	or pooling (percentage of class)	or pooling (percentage of class)
		ESV Shares Prior to giving effect to the Transaction		Resulting Issuer Shares After giving effect to the Transaction
		Number of Securities	Percentage of Total(1)(4)	Number of Securities	Percentage of Total Class(2)
Frederic Leigh Vancouver, BC	Common Shares	500,000(3)	1.58%	600,000	0.64%
	Stock Options	125,000	6.57%	125,000	1.36%
Paul Sparkes Toronto, ON	Common Shares	Nil	0.00%	155,556	0.17%
Gran Colombia Toronto, ON	Common Shares	Nil	0.00%	33,666,666	36.15%
Carrera Capital Management Inc. Toronto, ON	Common Shares	Nil	0.00%	1,485,000	1.59%
SC Strategy Consult AG Herisau, Appenzell Ausserhoden, Switzerland	Common Shares	Nil	0.00%	500,000	0.54%
Jason Zicherman Toronto, ON	Common Shares	Nil	0.00%	1,500,000	1.61%
Ian H. Mann Smiths, Bermuda	Common Shares	Nil	0.00%	1,000,000	1.07%
Robert Zicherman Toronto, ON	Common Shares	Nil	0.00%	515,000	0.55%

Notes:

(1) Based on 31,602,862 ESV Shares issued and outstanding prior to Closing.

(2) Based on 93,117,915 Resulting Issuer Shares issued and outstanding upon Closing.

(3) Mr. Frederic Leigh directly holds 200,000 ESV Shares and indirectly holds 300,000 ESV Shares.

(4) Based on 1,900,000 stock options issued and outstanding prior to Closing;

(5) Based on 9,200,000 Resulting Issuer Options issued and outstanding upon Closing.

Assuming the Resulting Issuer Shares are listed on the Exchange as a Tier 2 Issuer, the schedule of release of the Resulting Issuer Escrow Shares that are Value Shares (as that term is defined in the policies of the Exchange) is as follows:

Release Dates	Percentage of Total Resulting Issuer Escrow Shares to be Released
On March 27, 2021	10%
6 months after the Final Exchange Bulletin	15%

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Release Dates	Percentage of Total Resulting Issuer Escrow Shares to be Released
12 months after the Final Exchange Bulletin	15%
18 months after the Final Exchange Bulletin	15%
24 months after the Final Exchange Bulletin	15%
30 months after the Final Exchange Bulletin	15%
36 months after the Final Exchange Bulletin	15%

Note:

(1) 5,100,000 of the 15,000,000 Voluntary Pooled Guia Antigua Vendor Shares are subject to the Resulting Issuer Escrow Agreement and will be subject to this release schedule.

(2) The 27,000,000 Voluntary Pooled Consideration Shares are subject to the Resulting Issuer Escrow Agreement and will be subject to this release schedule.

Additionally, certain ESV Shareholders holding an aggregate of 25,036,285 ESV Shares, agreed to impose resale restrictions on their Voluntary Pooled ESV Shares, such that twenty-five perfect (25%) would be released on March 27, 2021, twenty-five perfect (25%) would be released on June 27, 2021, twenty-five perfect (25%) would be released on September 27, 2021 and the remaining twenty-five perfect (25%) would be released on December 28, 2021.

Moreover, the Guia Antigua Vendor Shareholders holding 9,900,000 of the 15,000,000 Voluntary Pooled Guia Antigua Vendor Shares are also subject to Exchange mandated seed share resale restrictions which such restrictions have been modified by the voluntary pooling arrangement applicable to the Voluntary Pooled Guia Antigua Vendor Shares, such that the 9,900,000 Guia Antigua Vendor Shares will be released from the resale restriction as follows: (i) twenty percent (20%) of such Guia Antigua Vendor Shares will be released on March 27, 2021; (ii) a further twenty percent (20%) of such Guia Antigua Vendor Shares will be released on May 19, 2021; (iii) a further twenty percent (20%) of such Guia Antigua Vendor Shares will be released on August 19, 2021; (iv) a further twenty percent (20%) of such Guia Antigua Vendor Shares will be released on November 19, 2021; and (v) the remaining twenty percent (20%) of such Guia Antigua Vendor Shares will be released on February 19, 2021.

Transfer of Resulting Issuer Escrow Shares

Where shares subject to escrow are to be held by a company or trust, such company or trust will be required to agree not to carry out, while its shares are in escrow, any transaction that would result in the change of control of the Resulting Issuer. Any such company will be required to further undertake to the Exchange that, to the extent reasonably possible, it will not permit or authorize any issuance or transfer of securities which could reasonably result in a change of control of the Resulting Issuer.

All holders of Resulting Issuer Escrow Shares must obtain Exchange consent to transfer such shares, other than in specified circumstances set out in the Resulting Issuer Escrow Agreement.

AUDITORS

The auditors of the Resulting Issuer will be KPMG LLP located at 333 Bay Street, Suite 4600, Toronto, Ontario M5H 2R2.

TRANSFER AGENT AND REGISTRAR

It is expected that Computershare, which is currently ESV’s registrar and transfer agent, will serve as the Resulting Issuer’s registrar and transfer agent. It is expected that transfers of the securities of the Resulting Issuer may be recorded at registers maintained by Computershare in Vancouver, British Columbia, Canada.

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PART IV - GENERAL MATTERS

SPONSOR

ESV has applied for and received a waiver from the Sponsorship requirements of the Exchange.

OTHER MATERIAL FACTS

There are no other material facts about ESV, Subco, the Guia Antigua Vendor, Gran Colombia, Resulting Issuer or the Transaction that are not disclosed elsewhere in this Filing Statement.

APPROVAL OF THE BOARD OF DIRECTORS

The contents of this Filing Statement have been approved by the Board of Directors of ESV. Where information contained in this Filing Statement rests particularly within the knowledge of a Person other than ESV, the Guia Antigua Vendor or Gran Colombia Titiribi, ESV, the Guia Antigua Vendor or Gran Colombia Titiribi, respectively, has relied upon information furnished by such Person.

APPENDIX A FINANCIAL STATEMENTS OF ESV

Please see attached.

Condensed Interim Financial Statements of

ESV RESOURCES LTD.

(formerly E. S. I. ENVIRONMENTAL SENSORS INC.)

Three and six months ended September 30, 2020 and 2019

(Unaudited – Prepared by Management)

(Expressed in Canadian Dollars)

ESV RESOURCES LTD.

(FORMERLY E. S. I. ENVIRONMENTAL SENSORS INC.)

Condensed Interim Statements of Financial Position (Unaudited – Prepared by Management) (Expressed in Canadian Dollars)

	September 30,	September 30,		March 31,
		2020		2020
Assets
Current assets:
Cash	$	43,787	$	1,668
Receivables		5,542		285
	$	49,329	$	1,953
Liabilities and Shareholders’ Deficiency
Current liabilities:
Trade and other payables	$	78,339	$	1,699,107
Loans payable (Note 4)		-		226,833
		78,339		1,925,940
Shareholders’ deficiency:
Share capital (Note 6)		25,853,888		23,878,935
Contributed surplus		3,600,080		3,503,393
Deficit		(29,482,978)	(29,306,315)
		(29,010)		(1,923,987)
	$	49,329	$	1,953

Nature of operations and going concern (Note 1) Subsequent events (Notes 1,11)

Approved by the Board of Directors and authorized for issue on November 30, 2020:

“Frederic Leigh” Director

“Thomas O’Neill” Director

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

ESV RESOURCES LTD.

(FORMERLY E. S. I. ENVIRONMENTAL SENSORS INC.)

Condensed Interim Statements of Loss and Comprehensive Loss (Unaudited – Prepared by Management) (Expressed in Canadian Dollars)

		Three	months ended	months ended			Six months ended	Six months ended
			September 30,				September 30,
		2020		2019		2020		2019
Operating expenses:
Consulting	$	15,000	$	-	$	15,000	$	-
Office and miscellaneous		5,162		1,267		5,162		5,199
Professional fees		36,744		1,544		43,809		1,899
Share-based compensation (Notes 6 and 7)		96,687		-		96,687		-
Transfer agent and filing fees		15,655		1,650		15,857		5,534
Operating loss		(169,248)		(4,461)		(176,515)		(12,632)
Other items:
Finance expense		101		-		148		-
		(101)		-		(148)		-
Loss and comprehensive loss for theperiod	$	(169,349)	$	(4,461)	$	(176,663)	$	(12,632)
Basic and diluted loss per share	$	(0.01)	$	(0.00)	$	(0.02)	$	(0.00)
Weighted average number of common shares
outstanding (basic and diluted)	13,270,418			2,906,684		8,088,551		2,906,684

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

ESV RESOURCES LTD.

(FORMERLY E. S. I. ENVIRONMENTAL SENSORS INC.)

Condensed Interim Statements of Changes in Shareholders’ Deficiency (Unaudited – Prepared by Management) (Expressed in Canadian Dollars)

						Total
	Number of	Share capital	Contributed	Deficit	shareholders’
	common		surplus			deficiency
	shares
Balance at March 31, 2019	2,906,684	$ 23,878,935	$ 3,503,393	$(29,284,053)	$	(1,901,725)
Loss and comprehensive loss	-	-	-	(12,632)		(12,632)
Balance at September 30, 2019	2,906,684	$ 23,878,935	$ 3,503,393	$(29,296,685)	$	(1,914,357)
Balance at March 31, 2020	2,906,684	$ 23,878,935	$ 3,503,393	$(29,306,315)	$	(1,923,987)
Private placement (Note 6)	21,428,571	1,500,000	-	-		1,500,000
Share issuance costs (Note 6)	-	(27,441)	-	-		(27,441)
Settlement of indebtedness (Note 6)	4,285,714	300,000	-	-		300,000
Share-based compensation (Note 6)	-	-	96,687	-		96,687
Exercise of warrants (Note 6)	2,023,943	202,394	-	-		202,394
Loss and comprehensiveloss	-	-	-	(176,663)		(176,663)
Balance at September 30, 2020	30,644,912	$ 25,853,888	$ 3,600,080	$(29,482,978)	$	(29,010)

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

ESV RESOURCES LTD.

(FORMERLY E. S. I. ENVIRONMENTAL SENSORS INC.)

Condensed Interim Statements of Cash Flows (Unaudited – Prepared by Management) (Expressed in Canadian Dollars) For the six months ended September 30, 2020 and 2019

(FORMERLY E. S. I. ENVIRONMENTAL SENSORS INC.) Condensed Interim Statements of Cash Flows (Unaudited – Prepared by Management) (Expressed in Canadian Dollars) For the six months ended September 30, 2020 and 2019
		2020		2019
Cash provided by (used in):
Operations:
Loss	$	(176,663)	$	(12,632)
Items not involving cash:
Share-based compensation		96,687		-
Changes in non-cash operating working capital:
Receivables		(5,257)		(698)
Trade and other payables		(1,328,209)		(1,701)
Net cashusedinoperating activities		(1,413,442)		(10,233)
Financing activities:
Proceeds on issuance of common shares, net of share issuance costs		1,480,000		-
Proceeds from exercise of warrants		202,394		-
Repayment of loans		(226,833)		-
Net cash provided by financing activities		1,455,561		-
Change in cash and cash equivalents		42,119		(10,233)
Cash and cash equivalents, beginning		1,668		15,419
Cash and cash equivalents,end	$	43,787	$	5,186

Supplemental cash flow information (Note 10)

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

ESV RESOURCES LTD. (FORMERLY E. S. I. ENVIRONMENTAL SENSORS INC.) Notes to the Condensed Interim Financial Statements (Unaudited – Prepared by Management) (Expressed in Canadian Dollars) September 30, 2020 and 2019

1. Nature of Operations and Going Concern:

E.S.I. Environmental Sensors Inc. was incorporated on March 31, 1992, under the laws of the province of British Columbia. On August 27, 2020, it changed its name to ESV Resources Ltd. (the “Company”). The Company’s head office is located at 3123 – 595 Burrard Street, Vancouver, BC, Canada, V7X 1J1. It is a reporting issuer in British Columbia and Alberta and is listed on the NEX (the “NEX”) board of the TSX Venture Exchange (the "TSXV”) under the symbol ESV.H.

In August 2020, the Company consolidated its issued and outstanding share capital on the basis of one (1) new common share for seven (7) outstanding common shares. All information with respect to the number of common shares and issuance price for the time periods prior to this share consolidation was restated to reflect the share consolidation.

On September 24, 2020, the Company announced that it had entered into letters of intent with 1255269 B.C. Ltd. and Gran Colombia Gold Corp. to acquire two silver exploration projects, the Guia Antigua and Zancudo projects, respectively, located in historic mining districts in Colombia (the “Transaction”)(see Note 5). The Company also announced a concurrent non-brokered private placement (the “Concurrent Financing”). On November 9, 2020, the Company announced that it had closed the Concurrent Financing for gross proceeds of $8,403,774 (Note 11). The proceeds of the Concurrent Financing will be held in escrow, pending the Company receiving all applicable regulatory approvals and completing the Transaction. On November 23, 2020, the Company further announced that, pursuant to the Transaction, it had entered into definitive agreements with 1255269 B.C. Ltd. and Gran Colombia Gold Corp (Note 11).

These unaudited condensed interim financial statements have been prepared using the going concern assumption, which assumes that the Company will continue in operation for the foreseeable future and be able to realize its assets and discharge its liabilities and commitments in the normal course of business.

The Company currently has no cash inflows from operations, has experienced significant losses and negative cash flow from operations over a number of years, has an accumulated deficit of $29,482,978 (March 31, 2020 - $29,306,315), a working capital deficiency of $29,010 (March 31, 2020 - $1,923,987), and a shareholders’ deficiency of $29,010 (March 31, 2020 - $1,923,987). Assuming completion of the Transaction, management believes that the Company’s cash position will support operations for the next twelve months.

The Company's ability to meet its obligations in the ordinary course of business is dependent upon its ability to establish profitable operations and positive cash flows from operating activities or to obtain additional funding through public or private equity financing, debt, or collaborative or other arrangements. While the Company has been successful at securing financing in the past, there can be no assurances that financing will be available on terms acceptable to the Company, or at all, in the future. These unaudited condensed interim financial statements do not reflect adjustments that would be necessary if the going concern assumption were not appropriate. If the Company is unable to continue as a going concern, assets and liabilities would require re-measurement on a liquidation basis, which would differ materially from the going concern basis.

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

2. Basis of Preparation and Statement of Compliance:

(a) Statement of compliance:

These unaudited condensed interim financial statements, including comparatives have been prepared using accounting policies consistent with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and Interpretations issued by the International Financial Reporting Interpretations Committee (“IFRIC”) and in accordance with International Accounting Standards (“IAS”) 34.

These unaudited condensed interim financial statements were approved and authorized for issue by the Board of Directors on November 30, 2020.

(b) Basis of presentation:

These unaudited condensed interim financial statements have been prepared on the historical cost basis except for certain financial instruments that have been measured at fair value. In addition, these unaudited condensed interim financial statements have been prepared using the accrual basis of accounting except for cash flow information. These unaudited condensed interim financial statements are presented in Canadian dollars, which is the Company’s functional currency.

(c) Use of judgments:

The preparation of financial statements in conformity with IFRS requires management to make judgments, and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, revenue and expenses. Actual results may differ from these judgments. Information about critical judgments in applying accounting policies with the most significant effect on the amounts recognized in the financial statements relates to the application of the going concern assumption (Note 1).

(d) Use of estimates:

The preparation of financial statements in accordance with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the periods, as well as disclosure of contingent assets and liabilities at the date of the financial statements. Significant areas requiring the use of management estimates related to share-based compensation, warrants, and the recognition of contingent liabilities. Actual results could differ from those estimates used in the financial statements.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

3. Significant Accounting Policies:

The preparation of the financial data is based on accounting principles and practices consistent with those used in the preparation of the audited financial statements as at March 31, 2020. These unaudited condensed interim financial statements should be read in conjunction with the Company’s audited financial statements for the year ended March 31, 2020.

4. Loans Payable:

Loans payable of $226,833 to three arm’s length parties were repaid during the six months ended September 30, 2020. As at September 30, 2020, the Company had loans payable to these three arm’s length parties of $nil (March 31, 2020: $226,833).

5. Reverse Takeover Transaction:

On September 24, 2020, the Company announced that it had entered into letters of intent (collectively, the "LOIs") with 1255269 B.C. Ltd. (the "Guia Antigua Vendor") and Gran Colombia Gold Corp. ("Gran Colombia") to acquire two silver exploration projects, the Guia Antigua and Zancudo projects, respectively, located in historic mining districts in Colombia. The LOIs outline the general terms and conditions by which the Company will concurrently acquire all of the outstanding share capital of the Guia Antigua Vendor which controls the Guia Antigua project, as well as the Zancudo project from Gran Colombia. Each of the Company, Gran Colombia, the Guia Antigua Vendor and all the shareholders of the Guia Antigua Vendor, are at arm’s length to the Company, and the Transaction will constitute a change of business and a reverse-takeover of the Company in accordance with the policies of the TSXV. Assuming completion of the Transaction, it is anticipated that the Company will be listed on the TSXV as a Tier 2 Mining Issuer. In connection with completion of the Transaction, the Company intends to change its name to "Denarius Silver Corp." and is expected to trade under the symbol “DSLV”.

Terms of the Transaction

Under the terms of the Transaction, shareholders of the Guia Antigua Vendor will be issued 15,000,000 common shares of the Company in exchange for all of the outstanding share capital of the Guia Antigua Vendor and, concurrently, Gran Colombia will be issued 27,000,000 common shares of the Company in consideration for the assignment of its interest in the Zancudo project. In addition to any escrow restrictions imposed by the policies of the TSXV, all common shares issued to the shareholders of the Guia Antigua Vendor and to Gran Colombia will be subject to a voluntary pooling arrangement whereby one-quarter of the shares will be released on each of March 27, 2021, June 27, 2021, September 27, 2021, and December 28, 2021.

Shareholder Approval

Approval of the shareholders of the Company will not be required in connection with the Transaction, in accordance with TSXV Policy 5.2, as the Transaction does not involve related parties and no other circumstances exist which may comprise the independence of the Company or other interested parties. The Company is without active operations, is not subject to a cease trade order or trading suspension, and shareholder approval is not required for the Transaction under applicable corporate or securities laws.

Upon completion of the Transaction, Gran Colombia will become a new "control person" of the Company. If required by the policies of the TSXV, the Company will obtain shareholder approval for the creation of a new control person by way of written consent of the majority of the outstanding common shares of the Company prior to completion of the Transaction.

Further Information

5. Reverse Takeover Transaction (continued):

of other customary closing conditions. The Transaction and Concurrent Financing cannot close until the required approvals are obtained. There can be no assurance that the Transaction and Concurrent Financing will be completed as proposed or at all. Except in connection with the Concurrent Financing, no finders’ fees or commissions are payable in connection with completion of the Transaction, and no advances or loans to the Guia Antigua Vendor or Gran Colombia are contemplated prior to completion of the Transaction. An administrative fee of 840,000 common shares is owing to an arm’s length consultant, in consideration for the provision of certain financial and advisory services necessary to complete the Transaction.

In connection with the Transaction, the Guia Antigua Vendor and Gran Colombia have commissioned an updated geological report on the Guia Antigua project. Prior to completion of the Transaction, copies of the Geological Report will be filed and posted on SEDAR. Further information on the Transaction will be available and posted on SEDAR upon completion of a Filing Statement that will be prepared by the Company.

Trading in the common shares of the Company will remain halted pending further filings with the TSXV.

6. Share Capital:

(a) Authorized:

Authorized share capital comprises an unlimited number of common shares without par value and up to 10,000,000 preferred shares with a par value of $1.00. No preferred shares have been issued.

In August 2020, the Company consolidated its issued and outstanding share capital on the basis of one new common share for seven outstanding common shares (Note 1).

(b) Issued and outstanding:

As at September 30, 2020 the Company had 30,644,912 common shares issued and outstanding.

During the six months ended September, 30, 2020, the Company closed a non-brokered private placement for total gross proceeds of $1,500,000, through the issuance of 21,428,571 units at $0.07 per unit. Each unit consists of one common share and one-quarter of one warrant (each whole warrant, a “Warrant”). Each Warrant entitles the holder to acquire an additional common share at a price of $0.10 until August 27, 2021 (Note 6(d)). Cash share issue costs of $27,441 were incurred in relation to this private placement. The company allocated $nil value to the warrants.

In addition to the private placement, the Company also settled outstanding indebtedness of $300,000, owing to certain arm’s length parties, through the issuance of 4,285,714 common shares at a price of $0.07 per share.

(c) A summary of the changes in stock options follows:

The Company has a stock option plan in place under which it is authorized to grant options to executive officers and directors, officers, employees, charities and consultants enabling them to acquire up to 10% of the issued and outstanding common stock of the Company. Under the plan, the option price of any common share in respect of which an option may be granted under the stock option plan shall be fixed by the Board of Directors but shall be not less than the minimum price permitted by the NEX.

6. Share Capital (continued):

Share Capital (continued):
	Number of		Weighted Average
	Options		Exercise Price
Balance, March 31, 2019 and 2020	-	$	-
Granted	1,900,000		0.10
Balance, September30,2020	1,900,000	$	0.10

As at September 30, 2020, the following stock options were outstanding:

Oustanding and			Expiry
Exercisable	Exercise	Price	Date
1,900,000	$	0.10	August27,2030

The stock options granted during the period were fair valued at $96,687, or $0.051 per option, using the BlackScholes valuation model with the following assumptions:

	2020
Risk-free interest rate	0.53%
Expected life	10 years
Annualized volatility	75.00%
Dividend rate	0.00%

(d) A summary of the changes in warrants follows:

	Number of		Weighted Average
	Warrants		Exercise Price
Balance, March 31, 2019 and 2020	-	$	-
Issued	5,357,143		0.10
Exercised	(2,023,943)		0.10
Balance, September30,2020	3,333,200	$	0.10

As at September 30, 2020, the following warrants were outstanding:

Oustanding and			Expiry
Exercisable	Exercise	Price	Date
3,333,200	$	0.10	August27,2021

During the six months ended September 30, 2020, 5,357,143 warrants were issued in relation to a non-brokered private placement (Note 6(b)).

During the six months ended September 30, 2020, 2,023,943 warrants were exercised for total proceeds of $202,394.

Subsequent to September 30, 2020, 957,950 warrants were exercised for total proceeds of $95,795.

7. Related Party Transactions:

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Company.

Included in share-based compensation for the six months ended September 30, 2020, was $44,527 for vested stock options granted to directors and officers of the Company (September 30, 2019 - $nil).

8. Financial Instruments:

Risk disclosures:

a) Credit risk:

Credit risk is the risk of loss resulting from the failure of a customer or counterparty to meet its contractual obligations to the Company. The carrying value of these financial assets represents the Company’s estimate of maximum credit exposure.

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and receivables.

b) Currency risk:

The Company’s functional currency is the Canadian dollar and major purchases are transacted in Canadian dollars. The Company is not exposed to foreign currency risk.

c) Liquidity risk:

Liquidity risk arises through excess of financial obligations over available financial assets due at any point in time. The Company’s objective in managing liquidity risk is to raise sufficient funds through loans and issuance of common shares in order to meet financial obligations. As of September 30, 2020, the Company had a working capital deficiency of $29,010 (March 31, 2020 - $1,923,987).

d) Fair values:

The fair values of the Company’s cash and receivables, trade and other payables and loans payable are estimated to approximate their carrying values due to the immediate or short-term to maturity of these financial instruments.

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

Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities;

Level 2 – Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly; and

Level 3 – Inputs that are not based on observable market data.

e) Interest rate risk:

The Company had outstanding fixed rate debt in the form of loans payable. A 100-basis point change in interest rates did not have a significant impact on net loss.

9. Capital Management:

The Company’s objectives when managing capital are to ensure sufficient liquidity for operations and adequate funding for growth and capital expenditures while maintaining an efficient balance between debt and equity. The capital structure of the Company currently consists of shareholders’ deficiency. The Company makes adjustments to its capital structure upon approval from its Board of Directors, in light of economic conditions and the Company’s working capital requirements. There were no changes in the Company’s approach to capital management during the periods presented. The Company does not presently utilize any quantitative measures to monitor its capital.

10. Supplemental Cash Flow Information:

During the six months ended September 30, 2020, the Company:

Settled $300,000 of outstanding indebtedness through the issuance of 4,285,714 common shares (Note 6)
Included shares issuance costs of $7,441 in trade and other payables
Paid no cash for interest or income taxes

11. Subsequent Events:

Concurrent Financing

As a condition to completing the Transaction, on September 24, 2020 and October 30, 2020, the Company announced its intention to complete the Concurrent Financing to raise up to $8,400,000 through the issuance of up to 18,666,000 subscription receipts of the Guia Antigua Vendor at a price of $0.45 per subscription receipt. On November 9, 2020, the Company announced that it had closed the Concurrent Financing of 18,675,053 subscription receipts at a price of $0.45 per subscription receipt for gross proceeds of $8,403,774. Gran Colombia subscribed for $3,000,000 of the Concurrent Financing.

The proceeds of the Concurrent Financing will be held in escrow, pending the Company receiving all applicable regulatory approvals and completing the Transaction. Upon satisfaction of the escrow conditions, immediately prior to completion of the Transaction, each subscription receipt will automatically convert into one common share of the Guia Antigua Vendor for no additional consideration and will be exchanged for common shares of the Company on a one-for-one basis. If the Transaction is not completed on or before February 28, 2021, the proceeds of the Concurrent Financing will be returned to the subscribers. Finders’ fees of $197,761 are payable to arm’s length parties who introduced subscribers to the Concurrent Financing, and will be paid upon completion of the Transaction. It is anticipated that the proceeds from the Concurrent Financing will be utilized to undertake an exploration program at the Guia Antigua project, and for the general and administrative expenses of the Company.

Following the closing of the Transaction and the Concurrent Financing, the Company expects to have approximately 93,117,915 common shares issued and outstanding.

Letter of Intent – Lomero-Poyatos Project, Spain

On November 12, 2020, the Company announced that it had entered into a binding letter Agreement dated effective November 12, 2020, (the "Agreement"), with Qvartz Capital Partners Inc. ("Qvartz"), which outlines the general terms and conditions by which the Company may acquire a 66.67% interest in the Lomero-Poyatos Project (the “Project”).

11. Subsequent Events (continued):

The Project is comprised of 13 mining concessions over an area of approximately 175 hectares located in the Huelva Province of the Autonomous Community of Andalucía in Southerrn Spain, within the Cerro Andevalo and Cortegana Municipalities, about 500 km south of Madrid, 85 km north-west of Seville and 60 km north-east of the port of Huelva.

Terms of the Agreement

Under the terms of the Agreement, it is contemplated that the Company would acquire 100% of the issued and outstanding share capital (the "Viaggo Shares") of Viaggo Consultores, S.A. ("Viaggo"), a wholly-owned subsidiary of Qvartz, which will control 66.67% of the issued and outstanding shares of Corporación de Recursos Iberia S.A. ("CRI"), which, in turn, owns the mining rights to the Project. In exchange for the Viaggo Shares, the Company will: (i) issue 35,000,000 common shares of the Company (the "Common Shares") to Qvartz, where such Common Shares will be subject to a twelve-month lockup period; and (ii) grant a 2% net smelter returns royalty to Qvartz from the production of minerals attributable to the 66.67% interest in the Project. Additionally, the Company will assume the obligations of Viaggo related to CRI, which include: (i) paying up to €6,500,000 to CRI to satisfy CRI's current liabilities; and (ii) funding exploration work on the Project through to the completion of a feasibility study on the Project.

Closing of the Agreement is subject to a number of conditions including the satisfactory completion of due diligence, the negotiation of and entering into a definitive agreement, receipt of all required shareholder, regulatory and thirdparty consents, including approval of the TSXV, completion of financing on terms acceptable to the Company, and satisfaction of other customary closing conditions. The Agreement cannot close until the aforementioned conditions are satisfied and required approvals are obtained. There can be no assurance that the Agreement will be completed as proposed, or at all.

Definitive Agreements

On November 23, 2020, pursuant to the Transaction, the Company announced that it had entered into definitive agreements, each dated effective November 20, 2020, with the Guia Antigua Vendor, which controls the Guia Antigua project, and with Gran Colombia, which has a carried interest in the Zancudo project (pursuant to the terms of an option agreement with IAMGOLD CORP.).

Financial Statements of

E. S. I. ENVIRONMENTAL SENSORS INC.

Years ended March 31, 2020 and 2019

(Expressed in Canadian Dollars)

INDEPENDENT AUDITOR’S REPORT

To the Shareholders of E.S.I Environmental Sensors Inc.

Opinion

We have audited the accompanying financial statements of E.S.I Environmental Sensors Inc. (the “Company”), which comprise the statements of financial position as at March 31, 2020 and 2019, and the statements of loss and comprehensive loss, changes in shareholders’ deficiency, and cash flows for the years then ended, and notes to the financial statements, including a summary of significant accounting policies.

In our opinion, these financial statements present fairly, in all material respects, the financial position of the Company as at March 31, 2020 and 2019, and its financial performance and its cash flows for the years then ended in accordance with International Financial Reporting Standards (“IFRS”).

Basis for Opinion

We conducted our audits in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained in our audits is sufficient and appropriate to provide a basis for our opinion.

Material Uncertainty Related to Going Concern

We draw attention to Note 1 of the financial statements, which indicates that the Company has an accumulated deficit of $29,306,315 as at March 31, 2020 and, as of that date, the Company’s current liabilities exceeded its current assets by $1,923,987. As stated in Note 1, these events and conditions indicate that a material uncertainty exists that may cast significant doubt on the Company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.

Other Information

Management is responsible for the other information. The other information obtained at the date of this auditor's report includes Management’s Discussion and Analysis.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

We obtained Management’s Discussion and Analysis prior to the date of this auditor’s report. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

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

Management is responsible for the preparation and fair presentation of the financial statements in accordance with IFRS, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

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

Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

The engagement partner on the audit resulting in this independent auditor’s report is Glenn Parchomchuk.

“DAVIDSON & COMPANY LLP”

Vancouver, Canada July 29, 2020

Chartered Professional Accountants

E.S.I. ENVIRONMENTAL SENSORS INC.

Statements of Financial Position (Expressed in Canadian Dollars) As at March 31,

		2020		2019
Assets
Current assets:
Cash	$	1,668	$	15,419
Receivables		285		1,538
	$	1,953	$	16,957
Liabilities and Shareholders’ Deficiency
Current liabilities:
Trade and other payables (note 5)	$	1,699,107	$	1,691,849
Loans payable (note 6 and 13)		226,833		226,833
		1,925,940		1,918,682
Shareholders’ deficiency:
Share capital (note 7)		23,878,935		23,878,935
Contributed surplus (note 8)		3,503,393		3,503,393
Deficit		(29,306,315)	(29,284,053)
		(1,923,987)		(1,901,725)
	$	1,953	$	16,957

Nature of operations and going concern (note 1) Contingent liabilities (note 14) Event after the reporting date (note 16)

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

On behalf of the Board:

“Saf Dhillon” Director

“Allan Glowach”

Director

E. S. I. ENVIRONMENTAL SENSORS INC.

Statements of Loss and Comprehensive Loss (Expressed in Canadian Dollars) For the years ended March 31,

2020	2019
Operating expenses: Consulting fees $ - Management fees (note 13) - Office and miscellaneous 10,135 Professional fees (note 13) 16,999 Transfer agent and filing fees 5,560	$ 180,000 81,000 19,130 145,567 3,013
Operatingloss (32,694)	(428,710)
Other items: Interest and finance expense (230) Extinguishment ofaccounts payable and accruedliabilities (note 5) 10,662	(2,517) 10,239
10,432	7,722
Loss and comprehensive loss for theyear $ (22,262)	$ (420,988)
Basic and diluted loss per share $ (0.00) Weighted average number of common shares outstanding (basic and diluted) 20,346,755	$ (0.02) 20,346,755

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

E. S. I. ENVIRONMENTAL SENSORS INC.

Statements of Changes in Shareholders’ Deficiency (Expressed in Canadian Dollars)

						Total
	Number of	Share capital	Contributed		Deficit	shareholders’
	common			surplus		deficiency
	shares
Balance at March 31, 2018	20,346,755	$ 23,878,935	$	3,503,393	$ (28,863,065)	$ (1,480,737)
Net loss	-	-		-	(420,988)	(420,988)
Balance at March 31, 2019	20,346,755	23,878,935		3,503,393	(29,284,053)	(1,901,725)
Net loss	-	-		-	(22,262)	(22,262)
Balance at March 31, 2020	20,346,755	$ 23,878,935	$	3,503,393	$(29,306,315)	$ (1,923,987)

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

E.S.I. ENVIRONMENTAL SENSORS INC.

Statements of Cash Flows (Expressed in Canadian Dollars) For the years ended March 31,

		2020		2019
Cash provided by (used in):
Operations:
Loss for the year	$	(22,262)	$	(420,988)
Items not involving cash:
Extinguishment of accounts payable and accrued liabilities		(10,662)		(10,239)
Changes in non-cash operating working capital:
Trade receivables		1,253		5,174
Trade and other payables		17,920		1,561,945
Due to related parties		-		(985,016)
Loan payable		-		(179,423)
Net cash used in operating activities		(13,751)		(28,547)
Financing:
Loan payable		-		46,000
Repayment of loans payable		-		(3,000)
Net cash provided by financing activities		-		43,000
Change in cash and cash equivalents		(13,751)		14,453
Cash and cash equivalents, beginning of year		15,419		966
Cash and cash equivalents,end ofyear	$	1,668	$	15,419

Supplemental cash flow information (note 12)

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

Notes to Financial Statements (Expressed in Canadian Dollars) Years ended March 31, 2020 and 2019

E. S. I. ENVIRONMENTAL SENSORS INC.

1. Nature of Operations and Going Concern:

E.S.I. Environmental Sensors Inc. (the “Company” or “ESI”) was incorporated under the laws of British Columbia. The Company’s principal location is 510 – 580 Hornby Street, Vancouver, BC, Canada, V6C 3B6, and is a reporting issuer in British Columbia and Alberta and is listed on the New Securities Stock Exchange (“NEX”) (the “Exchange”) under the symbol ESV.H. The Company is currently reviewing various strategic acquisition opportunities.

These financial statements have been prepared using the going concern assumption, which assumes that the Company will continue in operation for the foreseeable future and be able to realize its assets and discharge its liabilities and commitments in the normal course of operations. The Company has experienced significant losses and negative cash flow from operations over a number of years, has an accumulated deficit of $29,306,315 (2019 - $29,284,053), a working capital deficiency of $1,923,987 (2019 - $1,901,725) and a shareholder’s deficiency of $1,923,987 (2019 - $1,901,725). These conditions raise significant doubt about the Company’s ability to continue as a going concern.

The Company's ability to meet its obligations in the ordinary course of business is dependent upon its ability to establish profitable operations and positive cash flows from operating activities or to obtain additional funding through public or private equity financing, debt, or collaborative or other arrangements. There can be no assurances that financing will be available on terms acceptable to the Company, or at all. These financial statements do not reflect adjustments that would be necessary if the going concern assumption were not appropriate. If the Company is unable to continue as a going concern, assets and liabilities would require remeasurement on a liquidation basis, which would differ materially from the going concern basis.

2. Basis of Preparation and Statement of Compliance:

(a) Statement of compliance:

These financial statements, including comparatives have been prepared using accounting policies consistent with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and Interpretations issued by the International Financial Reporting Interpretations Committee (“IFRIC”).

The financial statements were approved and authorized for issue by the Board of Directors on July 29, 2020.

(b) Basis of presentation:

These financial statements have been prepared on the historical cost basis except for certain financial instruments that have been measured at fair value. In addition, these financial statements have been prepared using the accrual basis of accounting except for cash flow information. These financial statements are presented in Canadian dollars, which is the Company’s functional currency.

Notes to Financial Statements (Expressed in Canadian Dollars) Years ended March 31, 2020 and 2019

E. S. I. ENVIRONMENTAL SENSORS INC.

2. Basis of Preparation and Statement of Compliance (continued):

(c) Use of judgments:

(d) Use of estimates:

The preparation of financial statements in accordance with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the periods, as well as disclosure of contingent assets and liabilities at the date of the financial statements. Significant areas requiring the use of management estimates related to share-based compensation, warrants, and the recognition of contingent liabilities (note 14). Actual results could differ from those estimates used in the financial statements.

3. Significant Accounting Policies:

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

a) Foreign currency translation:

Transactions denominated in foreign currencies are recorded in Canadian dollars at exchange rates in effect at the related transaction dates. Monetary assets and liabilities denominated in foreign currencies are adjusted to reflect period-end exchange rates at the statement of financial position date. The resulting exchange gains and losses are included in profit or loss.

b) Income taxes:

The Company accounts for and measures deferred income tax assets and liabilities in accordance with the liability method under which deferred income tax assets and liabilities are recognized for the future income tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be settled. When the future realization of income tax assets does not meet the test of being more likely than not to occur, a valuation allowance is provided for the amount of the potential future benefit not expected to be realized. The Company has taken a valuation allowance for the full amount of all potential deferred tax assets.

Notes to Financial Statements (Expressed in Canadian Dollars) Years ended March 31, 2020 and 2019

E. S. I. ENVIRONMENTAL SENSORS INC.

3. Significant Accounting Policies (continued):

c) Impairment of long-lived assets:

The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by comparison of their carrying amount to the recoverable amount. The recoverable amount is the higher of the fair value less selling costs or the value in use. Value in use is determined by the present value of the future cash flows from the asset. If the recoverable amount is less than the carrying amount, then there is impairment; where an impairment loss exists the portion of the carrying amount exceeding the recoverable amount is recorded as an expense immediately.

Assets that have been impaired in prior periods are tested for possible reversal of impairment whenever events or changes in circumstance indicate that the impairment has reversed. If the impairment has reversed, the carrying amount of the asset is increased to its recoverable amount but not beyond the carrying amount that would have been determined had no impairment loss been recognized for the asset in prior periods. The reversal is recognized in profit or loss immediately.

d) Share-based compensation:

Obligations for issuance of common shares under the Company's share-based compensation plan are accrued over the vesting period using fair values. Fair values are determined at issuance using the Black Scholes option-pricing model, taking into account a nominal forfeiture rate, and are recognized as share-based compensation with a corresponding credit to reserves. Consideration paid on the exercise of stock options is credited to share capital and the fair value of the options is reclassified from contributed surplus to share capital. In the event that stock options, and agents’ options and warrants, are not exercised, the fair value of those options and warrants is not removed from the contributed surplus.

Stock options granted to non-employees are measured at the fair value of goods or services rendered or at the fair value of the instruments issued, if it is determined that the fair value of the goods or services received cannot be reliably measured. 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. Warrants issued to brokers are measured at their fair value on the vesting date and are recognized as a deduction from equity and credited to contributed surplus. The fair value of stock options and warrants issued to brokers are estimated using the Black-Scholes option pricing model. Any consideration received on the exercise of stock options and/or warrants, together with the related portion of contributed surplus, is credited to share capital.

e) Warrants issued in equity financing transactions:

The Company engages in equity financing transactions to obtain the funds necessary to continue operations and new business ventures. These equity financing transactions may involve the issuance of common shares or units. Each unit comprises a certain number of common shares and a certain number of share purchase warrants (“Warrants”). Depending on the terms and conditions of each equity financing agreement, the Warrants are exercisable into additional common shares at a price prior to expiry as stipulated by the agreement. Warrants that are part of units are valued based on the residual value method. Warrants that are issued as payment for agency fees or other transactions costs are accounted for as share-based payments.

Notes to Financial Statements (Expressed in Canadian Dollars) Years ended March 31, 2020 and 2019

E. S. I. ENVIRONMENTAL SENSORS INC.

3. Significant Accounting Policies (continued):

f) Loss per share:

Basic loss per share is calculated using the weighted average number of common shares issued and outstanding during the period. Diluted loss per share is calculated by adjusting the weighted average number of common shares outstanding by an amount that assumes that the proceeds to be received on the exercise of dilutive stock options and warrants are applied to repurchase common shares at the average market price for the period in calculating the net dilution impact. Diluted and basic loss per share are the same because the effects of potential issuances of common shares under stock options and warrants would be anti-dilutive.

h) New accounting standards and interpretation:

New Accounting Standards Adopted During the year

IFRS 16 – Leases

IFRS 16 specifies how an IFRS reporter will recognize, measure, present and disclose leases. The IASB issued IFRS 16, Leases, in January 2016, which replaces the current guidance in IAS 17. Under IAS 17, lessees were required to make a distinction between a finance lease and an operating lease. IFRS 16 requires lessees to recognize a lease liability reflecting future lease payments and a “right-of-use asset” for virtually all lease contracts. The IASB has included an optional exemption for certain short-term leases and leases of low-value assets. IFRS 16 is effective for annual periods beginning on or after January 1, 2019.

The adoption of IFRS 16 did not impact its financial statements, as the Company is not party to any lease agreement.

4. Note Receivable:

On May 22, 2015, the Company loaned $200,000 to Dycor Technologies Ltd. (“Dycor”). Dycor has provided the Company with a promissory note bearing 12% interest per annum. The loan amount of $200,000, and all interest thereon, was due and payable 90 days from the date of the advance of the funds. Interest is calculated monthly, on the last day of each month. As the collectability of the note is uncertain, an allowance for the principal balance of $200,000 and accrued interest was recorded as at March 31, 2016. During the year ended March 31, 2019, the Company assigned the promissory note to Avis Financial Corporation (“Avis”), a significant shareholder of the Company.

5. Trade and Other Payables:

		March 31,		March 31,
		2020		2019
Trade payables	$	1,684,007	$	1,676,849
Accrued liabilities		15,100		15,000
	$	1,699,107	$	1,691,849

During the year ended March 31, 2020, the Company reviewed certain accounts payable and accrued liabilities with counsel and recorded an extinguishment of current liabilities of $10,662 (2019 - $10,239). During the year ended March 31, 2019, certain vendors of the Company entered into debt assignment agreements with a nonrelated party that included $257,336 from non-related parties.

Notes to Financial Statements (Expressed in Canadian Dollars) Years ended March 31, 2020 and 2019

E. S. I. ENVIRONMENTAL SENSORS INC.

6. Loans Payable:

Total loans payable to an individual who controls a company that is the Company’s majority shareholder amounted to $80,000. The loans were unsecured, bear interest at 6% per annum, and had no specific terms of repayment. The Company had accrued interest of $12,173. During the year ended March 31, 2019, the loan holder assigned the loans and interest payable to a third party. After the loan was assigned, the loan is now non-interest bearing and due on demand.

Total loans payable to a company which is the Company’s majority shareholder amounted to $65,000. The loans were unsecured, bear interest at 6% per annum and had no specific terms of repayment. The Company had accrued interest of $8,607. During the year ended March 31, 2019, the loan holder assigned the loans and interest payable to a third party. After the loan was assigned, the loan is now non-interest bearing and due on demand.

Total loans payable to a company related to the Company’s former Chief Financial Officer was $5,000. The loans were unsecured, bear interest at 6% per annum and had no specific terms of repayment. The Company had accrued interest of $388. During the year ended March 31, 2019, the loan holder assigned the loans and interest payable to a third party. After the loan was assigned, the loan is now non-interest bearing and due on demand.

As of March 31, 2020, total loans payable to a company related to the Company’s former Chief Executive Officer was $5,000. The loans were unsecured, bear interest at 6% per annum and had no specific terms of repayment. The Company had accrued interest of $388. During the year ended March 31, 2019, the loan holder assigned the loans and interest payable to a third party. After the loan was assigned, the loan is now non-interest bearing and due on demand.

Total loans payable to a director of the Company was $5,000. The loans were unsecured, bear interest at 6% per annum and had no specific terms of repayment. The Company had accrued interest of $277. During the year ended March 31, 2019, the loan holder assigned the loans and interest payable to a third party. After the loan was assigned, the loan is now non-interest bearing and due on demand.

During the year ended March 31, 2019, the Company received loans from two arms’ length parties for $45,000. The loans are unsecured, bear no interest, and have no specific terms of repayment.

7. Share Capital:

(a) Authorized:

Authorized share capital comprises an unlimited number of common shares and an unlimited amount of preferred shares. No preferred shares have been issued.

(b) Issued and outstanding:

As at March 31, 2020 the Company had 20,346,755 common shares issued and outstanding.

(c) Stock options:

The Company has a stock option plan in place under which it is authorized to grant options to executive officers and directors, officers, employees and consultants enabling them to acquire up to 10% of the issued and outstanding common stock of the Company. Under the plan, the option price of any common share in respect of which an option may be granted under the stock option plan shall be fixed by the Board of Directors but shall be not less than the minimum price permitted by the Exchange.

E. S. I. ENVIRONMENTAL SENSORS INC.

Notes to Financial Statements (Expressed in Canadian Dollars) Years ended March 31, 2020 and 2019

7. Share Capital (continued):

There are no stock options outstanding at March 31, 2020 and 2019.

(d) Warrants:

There are no warrants outstanding at March 31, 2020 and 2019.

8. Contributed Surplus:

Contributed surplus includes the amounts recorded as share-based compensation and the fair value of warrants issued. As at March 31, 2020, $3,503,393 is recorded as contributed surplus.

9. Segmented Information:

In prior years, the Company’s operations consisted of one reportable operating segment being environmental

sensors. The Company is currently reviewing various strategic acquisition opportunities.

10. Financial Instruments:

Risk disclosures:

a) Credit risk:

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and receivables.

b) Currency risk:

The Company’s functional currency is the Canadian dollar and major purchases are transacted in Canadian dollars. The Company is not exposed to foreign currency risk.

c) Liquidity risk:

Liquidity risk arises through excess of financial obligations over available financial assets due at any point in time. The Company’s objective in managing liquidity risk is to raise sufficient funds through loans and issuance of common shares in order to meet financial obligations. As of March 31, 2020, the Company had a working capital deficiency of $1,923,987 (2019 - $1,901,725).

E. S. I. ENVIRONMENTAL SENSORS INC.

Notes to Financial Statements (Expressed in Canadian Dollars) Years ended March 31, 2020 and 2019

10. Financial Instruments (continued):

d) Fair values:

Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities;

Level 2 – Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly; and

Level 3 – Inputs that are not based on observable market data.

e) Interest rate risk:

The Company had outstanding fixed rate debt in the form of loans payable. A 100-basis point change in interest rates did not have a significant impact on net loss.

11. Capital Management:

The Company’s objectives when managing capital are to ensure sufficient liquidity for operations and adequate funding for growth and capital expenditures while maintaining an efficient balance between debt and equity. The capital structure of the Company currently consists of shareholders’ deficiency. The Company makes adjustments to its capital structure upon approval from its Board of Directors, in light of economic conditions and the Company’s working capital requirements. There were no changes in the Company’s approach to capital management during the period. The Company does not presently utilize any quantitative measures to monitor its capital.

12. Supplemental Cash Flow Information:

There is no supplemental cash flow information for the years ended March 31, 2020 and 2019.

E. S. I. ENVIRONMENTAL SENSORS INC.

Notes to Financial Statements (Expressed in Canadian Dollars) Years ended March 31, 2020 and 2019

13. Related Party Transactions:

Key management compensation:

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Company.

During the year ended March 31, 2020, the Company has recorded $nil (2019 - $36,000) in management fees to a majority shareholder. As at March 31, 2020 and 2019, the amount owed was $nil.

During the year ended March 31, 2020, the Company has recorded $nil (2019 - $45,000) in management fees to a company owned by the former Chief Executive Officer. As at March 31, 2020 and 2019, the amount owed to the company was $nil.

During the year ended March 31, 2020, the Company has recorded $nil (2019 - $40,000) in professional fees for accounting services provided by an accounting firm of which the former Chief Financial Officer is a partner. As at March 31, 2020 and 2019, the amount owed to the firm was $nil.

During the year ended March 31, 2019, certain vendors of the Company entered into debt assignment agreements with a non-related party which included $687,644 from former related parties and $677,954 from related parties. These amounts include loans payable assigned from related parties (note 6).

14. Contingent Liabilities:

(a) Indemnification:

The Company is party to a variety of agreements in the ordinary course of business under which it may be obligated to indemnify a third party with respect to certain matters. The impact on the Company’s future financial results is not subject to reasonable estimation because considerable uncertainty exists as to whether claims will be made and the final outcome of potential claims. To date, the Company has not incurred material costs related to these types of indemnifications.

(b) Government assistance:

Notes to Financial Statements (Expressed in Canadian Dollars) Years ended March 31, 2020 and 2019

E. S. I. ENVIRONMENTAL SENSORS INC.

15. Income Taxes:

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

	2020	2019
Lossforthe year	$ (22,262)	$ (420,988)
Expected income tax recovery	(6,000)	(114,000)
Changes in statutory, foreign tax, foreign exchange rates and other	1,000	1,000
Adjustment to prior years provision versus statutory tax returns and expiry of non-
capital losses	-	-
Change in unrecognized deductible temporary differences	5,000	113,000
Total income tax recovery	$ -	$ -

The significant components of the Company’s deferred tax assets that have not been included on the statements of financial position are as follows:

		2020		2019
Deferred tax assets
Property and equipment	$	92,000	$	92,000
Share issue costs		3,000		7,000
Non-capital losses available for future period		4,571,000		4,562,000
		4,666,000		4,661,000
Unrecognized deferred tax assets		(4,666,000)		(4,661,000)
Net deferred tax assets	$	-	$	-

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

		Expiry Date			Expiry Date
	2020	Range		2019	Range
Temporary Differences
Share issue costs	13,000	2041		27,000	2040 to 2041
Non-capital losses available for futureperiods	$16,931,000	2026 to 2040	$	16,895,000	2026 to 2039

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

Notes to Financial Statements (Expressed in Canadian Dollars) Years ended March 31, 2020 and 2019

E. S. I. ENVIRONMENTAL SENSORS INC.

16. Event after the reporting date:

In July 2020, The Company’s board of directors has approved a consolidation of the Company's common share capital on a one-for-seven basis and a change of name to ESV Resources Ltd. The Company currently has 20,346,755 common shares outstanding and, following completion of the share consolidation, it is expected to have approximately 2,906,680 shares outstanding.

In connection with completion of the share consolidation, the Company intends to offer up to 21,428,570 postshare consolidation units (each, a "Unit") by way of non-brokered private placement (the "Private Placement"). The Units will be offered at a price of $0.07 per share, for gross proceeds of up to $1,500,000. Each Unit will consist of one post-share consolidation common share and one-quarter-of-one transferable share purchase warrant (each whole warrant, a "Warrant"). Each Warrant will entitle the holder to acquire an additional post-share consolidation common share at a price of $0.10 for a period of twelve months.

The Company intends to use the net proceeds of the Private Placement to pay down existing trade payables, to cover the costs associated with the share consolidation and name change, to satisfy continuous disclosure and regulatory obligations, and to evaluate potential strategic acquisition opportunities. In connection with completion of the Private Placement, the Company may pay finders' fees to eligible parties who have assisted in introducing subscribers to the Company.

In addition to the Private Placement, the Company also intends to settle (the "Debt Settlement") outstanding indebtedness of up to $300,000, owing to certain arms-length creditors, through the issuance of up to 4,285,714 post-share consolidation common shares at a price of $0.07 per share.

All securities to be issued in connection with the Private Placement, and the Debt Settlement, will be subject to a four-month-and-one-day statutory hold period in accordance with applicable securities laws and the policies of the TSX Venture Exchange. Completion of the share consolidation, the name change, the Private Placement and the Debt Settlement, remains subject to the approval of the TSX Venture Exchange. Completion of the share consolidation is also subject to the Company meeting certain public distribution requirements prescribed by the TSX Venture Exchange.

Financial Statements of

E. S. I. ENVIRONMENTAL SENSORS INC.

Years ended March 31, 2019 and 2018

(Expressed in Canadian Dollars)

INDEPENDENT AUDITOR’S REPORT

To the Shareholders of E.S.I. Environmental Sensors Inc.

Opinion

We have audited the accompanying financial statements of E.S.I. Environmental Sensors Inc. (the “Company”), which comprise the statements of financial position as at March 31, 2019 and 2018, and the statements of loss and comprehensive loss, changes in shareholders’ deficiency, and cash flows for the years then ended, and notes to the financial statements, including a summary of significant accounting policies.

In our opinion, these financial statements present fairly, in all material respects, the financial position of the Company as at March 31, 2019 and 2018, and its financial performance and its cash flows for the years then ended in accordance with International Financial Reporting Standards (“IFRS”).

Basis for Opinion

Material Uncertainty Related to Going Concern

We draw attention to Note 1 of the financial statements, which indicates that the Company had experienced significant losses and negative cash flow from operations over a number of years, and, as of March 31, 2019, the Company had an accumulated deficit of $29,284,053, a working capital deficiency of $1,901,725 and a shareholders’ deficiency of $1,901,725. As stated in Note 1, these events and conditions indicate that a material uncertainty exists that may cast significant doubt on the Company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.

Other Information

Management is responsible for the other information. The other information obtained at the date of this auditor's report includes Management’s Discussion and Analysis.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

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

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

Auditor's Responsibilities for the Audit of the Financial Statements

As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

The engagement partner on the audit resulting in this independent auditor’s report is Glenn Parchomchuk.

“DAVIDSON & COMPANY LLP”

Vancouver, Canada

Chartered Professional Accountants

July 29, 2019

E.S.I. ENVIRONMENTAL SENSORS INC.

Statements of Financial Position (Expressed in Canadian Dollars) As at March 31, 2019 and 2018

2019	2018
Assets Current assets: Cash $ 15,419 Receivables 1,538	$ 966 6,712
$ 16,957	$ 7,678
Liabilities and Shareholders’ Deficiency Current liabilities: Trade and other payables (note 5) $ 1,691,849 Payable to related parties (note 15) - Loans payable (note 6 and15) 226,833	$ 321,976 985,016 181,423
1,918,682	1,488,415
Shareholders’ deficiency: Share capital (note 7) 23,878,935 Contributed surplus (note 9) 3,503,393 Deficit (29,284,053)	23,878,935 3,503,393 (28,863,065)
(1,901,725)	(1,480,737)
$ 16,957	$ 7,678

Nature of operations and going concern (note 1) Contingent liabilities (note 16)

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

On behalf of the Board:

“Saf Dhillon” Director

“Stan Szary” Director

E. S. I. ENVIRONMENTAL SENSORS INC.

Statements of Loss and Comprehensive Loss (Expressed in Canadian Dollars) For the years ended March 2019 and 2018

2019	2018
Operating expenses: Consulting fees $ 180,000 Management fees (note 15) 81,000 Office and miscellaneous 19,130 Professional fees (note 15) 145,567 Rent - Transfer agent and filing fees 3,013	$ 15,000 324,000 590 118,668 67,113 15,816
Operating loss (428,710)	(541,187)
Other (expenses) income: Interest and finance expense (2,517) Extinguishment of accounts payable and accrued liabilities (note 5) 10,239	(4,288) 483,385
7,722	479,097
Loss and comprehensive loss for theyear $ (420,988)	$ (62,090)
Basic and diluted loss per share $ (0.02) Weighted average number of common shares outstanding (basic and diluted) 20,346,755	$ (0.00) 20,346,755

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

E. S. I. ENVIRONMENTAL SENSORS INC.

Statements of Changes in Shareholders’ Deficiency (Expressed in Canadian Dollars)

						Total
	Number of	Share capital	Contributed		Deficit	shareholders’
	common			surplus		deficiency
	shares
Balance at March 31, 2017	20,346,755	$23,878,935	$	3,503,393	$(28,800,975)	$ (1,418,647)
Net loss	-	-		-	(62,090)	(62,090)
Balance at March 31, 2018	20,346,755	23,878,935		3,503,393	(28,863,065)	(1,480,737)
Net loss	-	-		-	(420,988)	(420,988)
Balance at March 31, 2019	20,346,755	$ 23,878,935	$	3,503,393	$(29,284,053)	$ (1,901,725)

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

E.S.I. ENVIRONMENTAL SENSORS INC.

Statements of Cash Flows

(Expressed in Canadian Dollars) For the years ended March 31, 2019 and 2018

		2019		2018
Cash provided by (used in):
Operations:
Loss for the year	$	(420,988)	$	(62,090)
Items not involving cash:
Extinguishment of accounts payable and accrued liabilities		(10,239)		(483,385)
Management fee to related party		-		324,000
Changes in non-cash operating working capital:
Trade receivables		5,174		(3,010)
Trade and other payables		1,561,945		78,671
Due to related parties		(985,016)		131,530
Loanpayable		(179,423)		-
Net cash used in operating activities		(28,547)		(14,284)
Financing:
Loan payable		46,000		17,000
Repayment of loans payable		(3,000)		(5,000)
Net cashprovided byfinancing activities		43,000		12,000
Change in cash and cash equivalents		14,453		(2,284)
Cashand cashequivalents, beginning ofyear		966		3,250
Cash and cash equivalents,end ofyear	$	15,419	$	966

Supplemental cash flow information (note 14)

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

Notes to Financial Statements (Expressed in Canadian Dollars) Years ended March 31, 2019 and 2018

E. S. I. ENVIRONMENTAL SENSORS INC.

1. Nature of Operations and Going concern:

These financial statements have been prepared using the going concern assumption, which assumes that the Company will continue in operation for the foreseeable future and be able to realize its assets and discharge its liabilities and commitments in the normal course of operations. The Company has experienced significant losses and negative cash flow from operations over a number of years, has an accumulated deficit of $29,284,053 (2018 - $28,863,065), a working capital deficiency of $1,901,725 (2018 - $1,480,737) and a shareholder’s deficiency of $1,901,725 (2018 - $1,480,737). These conditions raise significant doubt about the Company’s ability to continue as a going concern.

The Company's ability to meet its obligations in the ordinary course of business is dependent upon its ability to establish profitable operations and positive cash flows from operating activities or to obtain additional funding through public or private equity financing, debt, or collaborative or other arrangements. There can be no assurances that financing will be available on terms acceptable to the Company, or at all. These financial statements do not reflect adjustments that would be necessary if the going concern assumption were not appropriate. If the Company is unable to continue as a going concern, assets and liabilities would require remeasurement on a liquidation basis, which would differ materially from the going concern basis.

2. Basis of preparation and statement of compliance:

(a) Statement of compliance:

The financial statements were approved and authorized for issue by the Board of Directors on July 29, 2019.

(b) Basis of presentation:

Notes to Financial Statements (Expressed in Canadian Dollars) Years ended March 31, 2019 and 2018

E. S. I. ENVIRONMENTAL SENSORS INC.

2. Basis of preparation and statement of compliance (continued):

(c) Use of judgments:

(d) Use of estimates:

The preparation of financial statements in accordance with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the periods, as well as disclosure of contingent assets and liabilities at the date of the financial statements. Significant areas requiring the use of management estimates related to share-based compensation, warrants, and the recognition of contingent liabilities (note 16). Actual results could differ from those estimates used in the financial statements.

3. Significant accounting policies:

a) Foreign currency translation:

b) Income taxes:

Notes to Financial Statements (Expressed in Canadian Dollars) Years ended March 31, 2019 and 2018

E. S. I. ENVIRONMENTAL SENSORS INC.

3. Significant accounting policies (continued):

c) Impairment of long-lived assets:

d) Share-based compensation:

Obligations for issuance of common shares under the Company's share-based compensation plan are accrued over the vesting period using fair values. Fair values are determined at issuance using the Black Scholes option-pricing model, taking into account a nominal forfeiture rate, and are recognized as sharebased compensation with a corresponding credit to reserves. Consideration paid on the exercise of stock options is credited to share capital and the fair value of the options is reclassified from contributed surplus to share capital. In the event that stock options, and agents’ options and warrants, are not exercised, the fair value of those options and warrants is not removed from the contributed surplus.

e) Warrants issued in equity financing transactions:

E. S. I. ENVIRONMENTAL SENSORS INC. Notes to Financial Statements (Expressed in Canadian Dollars) Years ended March 31, 2019 and 2018

3. Significant accounting policies (continued):

f) Loss per share:

g) Loss per share:

h) New accounting standards and interpretation:

The Company has reviewed new and revised accounting pronouncements that have been issued but are not yet effective. The Company has not early adopted any of these standards.

New accounting policies not yet adopted

New Accounting Standards Issued But Not Yet Effective

IFRS 16 – Leases

The Company does not expect the adoption of IFRS 16 will have any impact on its financial statements, as the Company is not party to any lease agreement.

E. S. I. ENVIRONMENTAL SENSORS INC. Notes to Financial Statements (Expressed in Canadian Dollars) Years ended March 31, 2019 and 2018

3. Significant accounting policies (continued):

New Accounting Standards Adopted During The Year

IFRS 9 – Financial Instruments (“IFRS 9”)

The Company adopted all of the requirements of IFRS 9 Financial Instruments (“IFRS 9”) as of April 1, 2018. IFRS 9 replaces IAS 39 Financial Instruments: Recognition and Measurement (“IAS 39”). IFRS 9 utilizes a revised model for recognition and measurement of financial instruments and a single, forward-looking “expected loss” impairment model. Most of the requirements in IAS 39 for classification and measurement of financial liabilities were carried forward in IFRS 9, so the Company’s accounting policy with respect to financial liabilities is unchanged. As a result of the adoption of IFRS 9, management has changed its accounting policy for financial assets retrospectively, for assets that continued to be recognized at the date of initial application. The change did not impact the carrying value of any financial assets or financial liabilities on the transition date. The main area of change is the accounting for equity securities previously classified as fair value through profit and loss. As the Company has no equity securities classified as fair value through profit and loss, the change had no impact on the Company’s financial statements.

The following is the Company’s new accounting policy for financial instruments under IFRS 9.

Classification

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

The Company completed a detailed assessment of its financial assets and liabilities as at April 1, 2018. The following table shows the original classification under IAS 39 and the new classification under IFRS 9:

			Original classification	New classification
Financial assets/ liabilities			IAS 39	IFRS 9
Cash and cash equivalents			Amortized cost	Amortized cost
Receivables			Amortized cost	Amortized cost
Accounts payable	and	accrued	Amortized cost	Amortized cost
liabilities
Loans payable			Amortized cost	Amortized cost

Notes to Financial Statements (Expressed in Canadian Dollars) Years ended March 31, 2019 and 2018

E. S. I. ENVIRONMENTAL SENSORS INC.

3. Significant accounting policies (continued):

Measurement

Financial assets at FVTOCI

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

Financial assets and liabilities at amortized cost

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

Financial assets and liabilities at FVTPL

Financial assets and liabilities carried at FVTPL are initially recorded at fair value and transaction costs are expensed in the statements of net income (loss). Realized and unrealized gains and losses arising from changes in the fair value of the financial assets and liabilities held at FVTPL are included in the statements of net income (loss) in the period in which they arise. Where management has opted to recognize a financial liability at FVTPL, any changes associated with the Company’s own credit risk will be recognized in other comprehensive income (loss).

Impairment of financial assets at amortized cost

The Company recognizes a loss allowance for expected credit losses on financial assets that are measured at amortized cost.

At each reporting date, the Company measures the loss allowance for the financial asset at an amount equal to the lifetime expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition. If at the reporting date, the financial asset has not increased significantly since initial recognition, the Company measures the loss allowance for the financial asset at an amount equal to the twelve month expected credit losses. The Company shall recognize in the statements of net income (loss), as an impairment gain or loss, the amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognized.

Derecognition

Financial assets

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

Financial liabilities

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

E. S. I. ENVIRONMENTAL SENSORS INC.

Notes to Financial Statements (Expressed in Canadian Dollars) Years ended March 31, 2019 and 2018

4. Note receivable:

On May 22, 2015, the Company loaned $200,000 to Dycor Technologies Ltd. (“Dycor”). Dycor has provided the Company with a promissory note bearing 12% interest per annum. The loan amount of $200,000, and all interest thereon, was due and payable 90 days from the date of the advance of the funds. Interest is calculated monthly, on the last day of each month. As at March 31, 2019 the full balance of the note remained outstanding. As the collectability of the note is uncertain, an allowance for the principal balance of $200,000 and accrued interest was recorded as at March 31, 2016. During the year ended March 31, 2019, the Company assigned the promissory note to Avis Financial Corporation (“Avis”), a significant shareholder of the Company.

5. Trade and other payables:

		March 31,		March 31,
		2019		2018
Trade payables	$	1,676,849	$	306,976
Accrued liabilities		15,000		15,000
	$	1,691,849	$	321,976

During the year ended March 31, 2019, the Company reviewed certain accounts payable and accrued liabilities with counsel and recorded an extinguishment of current liabilities of $10,239 (2018 - $483,385). During the year ended March 31, 2019, certain vendors of the Company entered into debt assignment agreements with a nonrelated party that included $257,336 from non-related parties.

Notes to Financial Statements (Expressed in Canadian Dollars) Years ended March 31, 2019 and 2018

E. S. I. ENVIRONMENTAL SENSORS INC.

6. Loans Payable:

As of March 31, 2019, the total loans payable to an individual who controls a company that is the Company’s majority shareholder amounted to $80,000 (2018 - $80,000). The loans are unsecured, bear interest at 6% per annum, and have no specific terms of repayment. As at March 31, 2019, the Company had accrued interest of $12,173 (2018 - $10,976). During the year ended March 31, 2019, the loan holder assigned the loans and interest payable to a third party. After loan is assigned, the loan is now non-interest bearing and due on demand.

As of March 31, 2019, the total loans payable to a company which is the Company’s majority shareholder amounted to $65,000 (2018 - $65,000). The loans bear interest at 6% per annum are unsecured and have no specific terms of repayment. As at March 31, 2019, the Company had accrued interest of $8,607 (2018 - $7,635). During the year ended March 31, 2019, the loan holder assigned the loans and interest payable to a third party. After loan is assigned, the loan is now non-interest bearing and due on demand.

As of March 31, 2019, the total loans payable to a company related to the Company’s former Chief Financial Officer is $5,000 (2018 - $6,000). The loans bear interest at 6% per annum, are unsecured and have no specific terms of repayment. During the year ended March 31, 2019, the Company repaid $1,000. As at March 31, 2019, the Company had accrued interest of $388 (2018 - $305). During the year ended March 31, 2019, the loan holder assigned the loans and interest payable to a third party. After loan is assigned, the loan is now noninterest bearing and due on demand.

As of March 31, 2019, the total loans payable to a company related to the Company’s former Officer is $5,000 (2018 - $6,000). The loans bear interest at 6% per annum, are unsecured and have no specific terms of repayment. During the year ended March 31, 2019, the Company received loan proceeds of $1,000 and repaid $2,000. As at March 31, 2019, the Company had accrued interest of $388 (2018 - $305). During the year ended March 31, 2019, the loan holder assigned the loans and interest payable to a third party. After loan is assigned, the loan is now non-interest bearing and due on demand.

As of March 31, 2019, the total loans payable to a director of the Company is $5,000 (2018 - $5,000). The loans bear interest at 6% per annum, are unsecured and have no specific terms of repayment. As at March 31, 2019, the Company had accrued interest of $277 (2018 - $202). During the year ended March 31, 2019, the loan holder assigned the loans and interest payable to a third party. After loan is assigned, the loan is now noninterest bearing and due on demand.

During the year ended March 31, 2019, the Company received loans from two arms’ lenth parties for $45,000. The loans are unsecured, bear no interest, and have no specific terms of repayment.

7. Share capital:

During the year ended March 31, 2018, the Company consolidated its common shares on the basis of 10:1. These financial statements reflect this consolidation retroactively.

(a) Authorized:

Authorized share capital comprises an unlimited number of common shares and an unlimited amount of preferred shares. No preferred shares have been issued.

(b) Issued and outstanding:

As at March 31, 2019 the Company had 20,346,755 common shares issued and outstanding.

Notes to Financial Statements (Expressed in Canadian Dollars) Years ended March 31, 2019 and 2018

E. S. I. ENVIRONMENTAL SENSORS INC.

7. Share capital (continued):

(c) The Company has a stock option plan in place under which it is authorized to grant options to executive officers and directors, officers, employees and consultants enabling them to acquire up to 10% of the issued and outstanding common stock of the Company. Under the plan, the option price of any common share in respect of which an option may be granted under the stock option plan shall be fixed by the Board of Directors but shall be not less than the minimum price permitted by the Exchange.

There are no stock options outstanding at March 31, 2019 and March 31, 2018.

8. Warrants:

A summary of the status of the warrants outstanding and changes during the year is presented below:

						Weighted
					Weighted	average
					average	remaining
			Number of		exercise	contractual
		Amount	warrants		price	life
Balance, March 31, 2017	$	90,684	987,335	$	1.50	0.70
Expired		(90,684)	(987,335)		1.50	-
Balance,March 31,2018 and March 31,2019	$	-	-	$	-	-

9. Contributed surplus:

Contributed surplus includes amounts recorded as share-based compensation and the fair value of warrants issued. The components of other paid in capital are as follows:

				Contributed
		Warrants		surplus		Total

Balance at March 31, 2017	$	90,684	$	3,412,709	$	3,503,393
Warrants expired unexercised		(90,684)		90,684		-
Balance at March 31,2018 and March 31,2019	$	-	$	3,503,393	$	3,503,393

10. Segmented information:

In the prior year, the Company’s operations consisted of one reportable operating segment being environmental sensors. The Company is currently reviewing various strategic acquisition opportunities.

E. S. I. ENVIRONMENTAL SENSORS INC.

Notes to Financial Statements (Expressed in Canadian Dollars) Years ended March 31, 2019 and 2018

11. Financial instruments:

Risk disclosures:

a) Credit risk:

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and receivables.

Currency risk:

The Company’s functional currency is the Canadian dollar and major purchases are transacted in Canadian dollars. The Company is not exposed to foreign currency risk.

b) Liquidity risk:

Liquidity risk arises through excess of financial obligations over available financial assets due at any point in time. The Company’s objective in managing liquidity risk is to raise sufficient funds through loans and issuance of common shares in order to meet financial obligations. As of March 31, 2019, the Company had a working capital deficiency of $1,901,725 (2018 - $1,480,737).

c) Fair values:

The fair values of the Company’s cash and receivables, trade and other payables, loans payable, and payable to related party are estimated to approximate their carrying values due to the immediate or shortterm to maturity of these financial instruments.

d) Interest rate risk:

The Company has outstanding fixed rate debt in the form of notes payable. At March 31, 2019, a 100-basis point change in interest rates would not have a significant impact on net loss.

Notes to Financial Statements (Expressed in Canadian Dollars) Years ended March 31, 2019 and 2018

E. S. I. ENVIRONMENTAL SENSORS INC.

12. Income taxes:

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

	2019	2018
(Loss)incomeforthe year	$ (420,988)	$ (62,090)
Expected income tax (recovery) expense	(114,000)	(16,000)
Changes in statutory, foreign tax, foreign exchange rates and other	1,000	(166,000)
Adjustment to prior years provision versus statutory tax returns and expiry of non-
capital losses	-	(327,000)
Change in unrecognized deductible temporary differences	113,000	509,000
Total income tax expense(recovery)	$ -	$ -

The significant components of the Company’s deferred tax assets that have not been included on the statement of financial position are as follows:

		2019		2018
Deferred tax assets
Property and equipment	$	92,000	$	92,000
Share issue costs		7,000		13,000
Non-capital losses available for future period		4,562,000		4,443,000
		4,661,000		4,548,000
Unrecognized deferred tax assets		(4,661,000)		(4,548,000)
Net deferred tax assets	$	-	$	-

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

		Expiry Date		Expiry Date
	2019	Range	2018	Range
Temporary Differences
Share issue costs	-	2019 to 2021	46,000	2019 to 2021
Non-capital losses available for futureperiods	16,895,000	2026 to 2039	16,455,000	2026 to 2038

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

Notes to Financial Statements (Expressed in Canadian Dollars) Years ended March 31, 2019 and 2018

E. S. I. ENVIRONMENTAL SENSORS INC.

13. Capital management:

The Company’s objectives when managing capital are to ensure sufficient liquidity for operations and adequate funding for growth and capital expenditures while maintaining an efficient balance between debt and equity. The capital structure of the Company currently consists of shareholders’ deficiency. The Company makes adjustments to its capital structure upon approval from its Board of Directors, in light of economic conditions and the Company’s working capital requirements. There were no changes in the Company’s approach to capital management during the year. The Company does not presently utilize any quantitative measures to monitor its capital.

14. Supplemental cash flow information:

There is no supplemental cash flow information for the years ended March 31, 2019 and 2018.

15. Related party transactions:

Key management compensation:

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Company. The compensation for key management is as follows:

		Years	ended	March 31,
		2019		2018
Management fees	$	81,000	$	144,000
	$	81,000	$	144,000

During the year ended March 31, 2019, the Company has recorded $36,000 (2018 - $144,000) in management fees to a majority shareholder. As at March 31, 2019, the amount owed was $nil (2018 - $432,000).

During the year ended March 31, 2019, the Company has recorded $45,000 (2018 - $180,000) in management fees to a company owned by the former Chief Executive Officer. As at March 31, 2019, the amount owed to the company was $nil (2018 - $343,000).

During the year ended March 31, 2019, the Company has recorded $40,000 (2018 - $90,000) in general and administrative fees for accounting services provided by an accounting firm of which the former Chief Financial Officer is a partner. As at March 31, 2019, the amount owed to the firm was $nil (2018 - $167,750).

As at March 31, 2018, there was an additional $38,897 owed to a related party and $3,369 to a former related party.

The Company has loans payable to related parties in aggregate of $nil (2018 - $70,000) and $nil (2018 – $92,000) to former related parties. During the year ended March 31, 2019 the Company accrued interest on the loans payable of $nil (2018 - $19,423).

Notes to Financial Statements (Expressed in Canadian Dollars) Years ended March 31, 2019 and 2018

E. S. I. ENVIRONMENTAL SENSORS INC.

16. Contingent liabilities:

(a) Indemnification:

(b) Government assistance:

In 2006 and prior years, the Company received financial assistance from the Government of Canada’s National Research Council under its Technology Partnership Canada Program (“TPC”) administered by the Industrial Research Assistance Program (“IRAP”) and now Industry Canada. Government assistance received totaled $227,119, including $Nil for the year ended March 31, 2019 and 2018 and was applied to reduce related development costs. The assistance received is repayable over a period not exceeding ten years from April 1, 2006 under a royalty arrangement based on the Company’s gross revenue from all products. Repayments will be accrued and reported in the period(s) when sales of said products are recognized or when the liability is determined likely to be repayable. In July 2007, the terms of the agreement were amended whereas the repayment phase was extended an additional 43 months. The assistance will now be repayable up to October 1, 2019. As at March 31, 2019, the Company had made total repayments of $1,760 (2018 - $1,760).

During the year ended March 31, 2019, a termination agreement was signed between IRAP and the Company for consideration of $15,000 to release the liability.

APPENDIX B FINANCIAL STATEMENTS OF 1255629 B.C. LTD.

Please see attached.

Consolidated Financial Statements of

1255269 BC Ltd.

For the period from incorporation on June 30, 2020 to November 30, 2020

(Expressed in Canadian dollars)

INDEPENDENT AUDITOR’S REPORT

To the Director of 1255269 B.C. Ltd.

Opinion

We have audited the accompanying consolidated financial statements of 1255269 B.C. Ltd. (the “Company”), which comprise the consolidated statement of financial position as at November 30, 2020, and the consolidated statements of loss and comprehensive loss, changes in equity, and cash flows for the period from incorporation on June 30, 2020 to November 30, 2020, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the Company as at November 30, 2020, and its financial performance and its cash flows for the period from incorporation on June 30, 2020 to November 30, 2020 in accordance with International Financial Reporting Standards (“IFRS”).

Basis for Opinion

We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained in our audit is sufficient and appropriate to provide a basis for our opinion.

Material Uncertainty Related to Going Concern

We draw attention to Note 1 of the consolidated financial statements, which indicates that the Company incurred a net loss of $52,160 for the five-month period ended November 30, 2020 and, as of that date, the Company’s total deficit was $52,160. As stated in Note 1, these events and conditions indicate that a material uncertainty exists that may cast significant doubt on the Company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.

Other Information

Management is responsible for the other information. The other information obtained at the date of this auditor's report includes Management’s Discussion and Analysis.

Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

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

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with IFRS, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

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

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

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

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Vancouver, Canada February 18, 2021

Chartered Professional Accountants

1255269 BC Ltd. Consolidated Statement of Financial Position

(Expressed in Canadian dollars)

	November 30,	November 30,
		2020
Assets
Current assets
Cash	$	20,728
Cash held in trust		8,403,774
Amounts receivable		6,418
Deposits		2,763
		8,433,683
Exploration and evaluation assets (Note 5)		1,462,565
Total assets	$	9,896,248
Liabilities
Current liabilities
Amounts payable and accrued liabilities	$	474,634
Share receipts payable (Notes 6,7)		8,403,774
Total liabilities		8,878,408
Equity
Share capital (Note 7)		1,070,000
Deficit		(52,160)
Total equity		1,017,840
Total liabilities and equity	$	9,896,248

Nature of operations (Note 1)

Approved by the Board of Directors and authorized for issue on February 18, 2021:

"Paul Sparkes"

Director

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1255269 BC Ltd. Consolidated Statement of Loss and Comprehensive Loss (Expressed in Canadian dollars)

	For the period from incorporation on June	30, 2020 to
	November 30,
		2020
Expenses
Office and administration	$	12,009
Professional fees		40,151
		(52,160)
Loss and comprehensive loss	$	(52,160)
Basic and diluted lossper share	$	(0.00)
Weighted average number of common shares
outstanding-basic and diluted		12,156,863

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1255269 BC Ltd. Consolidated Statement of Changes in Equity (Expressed in Canadian dollars)

	Shares issued Amount Deficit Total equity Share Capital
At June 30, 2020 Private placement (Note 7) Share issue costs (Note 7) Loss and comprehensive loss	- $ - $ - $ - 15,000,000 1,075,000 - 1,075,000 - (5,000) - (5,000) - -(52,160) (52,160)
At November 30, 2020	15,000,000 $1,070,000 $ (52,160) $1,017,840

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1255269 BC Ltd. Consolidated Statement of Cash Flows

(Expressed in Canadian dollars)

For the period from incorporation on June 30, 2020 to November 30, 2020	For the period from incorporation on June 30, 2020 to November 30, 2020	For the period from incorporation on June 30, 2020 to November 30, 2020
Operating activities
Loss	$	(52,160)
Changes in non-cash working capital items:
Amounts receivable		19,088
Deposits		(2,763)
Amounts payable and accrued liabilities		45,098
		9,263
Investing activities
Cash acquired on acquisition of subsidiary (Note 4)		2,207
Acquisition of subsidary (Note 4)		(1,060,742)
		(1,058,535)
Financing activities
Proceeds on shares issued, net of share issuance costs (Note 7)		1,070,000
Subscription receipt financing (Notes 6,7)		8,403,774
		9,473,774
Change in cash and cash held in trust		8,424,502
Cash and cash in trust, beginning		-
Cash and cash in trust, end	$	8,424,502

Supplemental cash flow information (Note 10)

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1255269 BC Ltd. Notes to the Consolidated Financial Statements For the period from incorporation on June 30, 2020 to November 30, 2020 (Expressed in Canadian dollars)

1. NATURE OF OPERATIONS

1255269 BC Ltd. (the “Company”) is a privately-held company incorporated on June 30, 2020, under the laws of the province of British Columbia, and its principal business activity is the acquisition and exploration of mineral properties. The address of the Company’s registered and records office is 595 Howe St, 10th Floor, Vancouver, BC, V6C 2T5.

The Company has not generated significant revenues from operations. As at November 30, 2020, the Company had a working capital deficit of $444,725. The Company recorded a loss of $52,160 for the five-month period ended November 30, 2020, and had an accumulated deficit of $52,160 as at November 30, 2020. The Company does not currently have a recurring source of revenue. Management believes that the Company’s cash position may cast significant doubt on the Company's ability to continue as a going concern.

2. BASIS OF PRESENTATION

(a) Statement of compliance

These consolidated financial statements as at and for the period from incorporation on June 30, 2020 to November 30, 2020, are prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and the International Financial Reporting Interpretations Committee (“IFRIC”).

(b) Basis of measurement

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

(c) Foreign currencies

The presentation and functional currency of the Company and its subsidiaries is the Canadian dollar. All financial information is presented in Canadian dollars unless otherwise noted and all financial information has been rounded to the nearest dollar.

Transactions in currencies other than the functional currency are recorded at the rates of exchange prevailing on the dates of the transactions. At each financial position reporting date, monetary assets and liabilities that are denominated in foreign currencies are translated at the rates prevailing at the date of the statement of financial position. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate as at the date of the initial transaction.

(d) Principles of consolidation

These consolidated financial statements include the financial statements of the Company and its subsidiaries, which are controlled by the Company. Control is achieved when the parent company is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Group controls an investee if, and only if, the Group has all of the following: (i) power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee); (ii) exposure, or rights, to variable returns from its involvement with the investee; and (iii) the ability to use its power over the investee to affect its returns.

The financial statements of the subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. All significant intercompany transactions, balances, income and expenses are eliminated on consolidation.

1255269 BC Ltd. Notes to the Consolidated Financial Statements For the period from incorporation on June 30, 2020 to November 30, 2020 (Expressed in Canadian dollars)

2. BASIS OF PRESENTATION (continued)

These consolidated financial statements incorporate the accounts of the Company and the following subsidiaries as at November 30, 2020:

as at November 30, 2020:
Name ofSubsidiary	IncorporationJurisdiction	Percentage Ownership
Arcadian Minerals Corp.	Panama	100%
IndustriasArgentumS.A.S.	Colombia	100%

(a) Use of judgements

Mineral properties under exploration

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

Income taxes

The measurement of income taxes payable and deferred income tax assets and liabilities requires management to make judgments in the interpretation and application of the relevant tax laws. The actual amount of income taxes only becomes final upon filing and acceptance of the tax return by the relevant authorities, which occurs subsequent to the issuance of the financial statements.

Business combinations

Determination of whether a set of assets acquired and liabilities assumed constitute a business may require the Company to make certain judgments, taking into account all facts and circumstances. A business is presumed to be an integrated set of activities and assets capable of being conducted and managed for the purpose of providing a return in the form of dividends, lower costs or economic benefits. The transaction with Aracadian Minerals Corp. was determined to constitute an acquisition of assets (Note 4).

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Cash

Cash includes deposits held with banks that are available on demand.

(b) Loss per share

Basic loss per share is computed by dividing the net loss for the period by the weighted average number of common shares outstanding during the period. The diluted loss per share reflects the potential dilution of common share equivalents, such as outstanding share options and warrants, in the weighted average number of common shares outstanding during the period. For this purpose, it is assumed that proceeds upon the exercise

1255269 BC Ltd. Notes to the Consolidated Financial Statements For the period from incorporation on June 30, 2020 to November 30, 2020 (Expressed in Canadian dollars)

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(b) Loss per share

of share options and warrants are used to purchase common shares at the average market price during the period.

(c) Financial instruments

Financial assets are classified as measured at: amortized cost; fair value through other comprehensive income (FVOCI) or fair value through profit or loss (FVTPL). The classification of financial assets is generally based on the business model in which a financial asset is managed and its contractual cash flow characteristics. Derivatives embedded in contracts where the host is a financial asset in the scope of the standard are never separated. Instead, the hybrid financial instrument as a whole is assessed for classification. The Company’s financial assets which consist of cash, amounts receivable, and deposits are classified at amortized cost.

All financial assets except those measured at fair value through profit or loss are subject to review for impairment at least at each reporting date. Financial assets are impaired when there is objective evidence of impairment as a result of one or more events that have occurred after initial recognition of the asset and that event has an impact on the estimated future cash flows of the financial asset or the group of financial assets.

Financial liabilities are initially recognized on the date they are originated and are derecognized when the contractual obligations are discharged or cancelled or expire. These financial liabilities are recognized initially at fair value and subsequently are measured at amortized cost using the effective interest method, when materially different from the initial amount. The Company’s financial liabilities which consist of amounts payable and accrued liabilities and share receipts payable are classified at amortized cost.

The Company has no financial instruments measured at FVOCI or FVTPL.

The Company applies an expected credit loss model to all debt financial assets not held at FVTPL, where credit losses that are expected to transpire in future years are provided for, irrespective of whether a loss event has occurred or not as at the statement of financial position date.

Refer to Note 8 for additional disclosures.

(d) Exploration and evaluation assets

Exploration and evaluation expenditures are capitalized to a property once the legal right to explore a property has been acquired, and future economic benefits are more likely than not to be realized. These include the costs of acquiring, maintaining its interest in, and exploring and evaluating mineral properties until such time as it is abandoned, sold, or considered impaired in value. Costs incurred before the Company has obtained the legal right to explore, as well as indirect administrative costs, are expensed as incurred.

At each reporting date the carrying amounts of the Company’s exploration and evaluation assets are reviewed to determine whether there is any indication that those assets are impaired. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment, if any. The recoverable amount is the higher of fair value less costs to sell and value in use. If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount and the impairment loss is recognized in profit or loss for the period.

1255269 BC Ltd. Notes to the Consolidated Financial Statements For the period from incorporation on June 30, 2020 to November 30, 2020 (Expressed in Canadian dollars)

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(e) Impairment of long-lived assets

Long-lived assets, including equipment and intangible assets, are reviewed to determine whether there is any indication that these assets have impairment at each statement of financial position date or whenever events or changes in circumstances indicate that the carrying amount of an asset may exceed its recoverable amount. For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets (the cash-generating unit, or “CGU”). The recoverable amount of an asset or CGU is the higher of its fair value, less costs to sell, and its value in use. If the carrying amount of an asset exceeds its recoverable amount, an impairment charge is recognized immediately in profit and loss by the amount by which the carrying amount of the asset exceeds the recoverable amount. Where an impairment loss subsequently reverses, the carrying amount of an asset is increased to the lesser of the revised estimate of recoverable amount, and the carrying amount that would have been recorded had no impairment loss been recognized previously.

(f) Decommissioning liabilities

The Company is subject to various government laws and regulations relating to environmental disturbances caused by exploration and evaluation activities. The Company records the present value of the estimated costs of legal and constructive obligations required to restore the exploration sites in the period in which the obligation is incurred. The nature of the rehabilitation activities includes restoration, reclamation and re-vegetation of the affected exploration sites. The rehabilitation provision generally arises when the environmental disturbance is subject to government laws and regulations. When the liability is recognized, the present value of the estimated costs is capitalized by increasing the carrying amount of the related mining assets. Discount rates, using a pretax risk-free rate, are used to calculate the present value. Over time, the discounted liability is increased for the changes in present value based on current market discount rates, and may change due to the amount or timing of the underlying cash flows needed to settle the obligation. Additional environmental disturbances or changes in rehabilitation costs will be recognized as additions to the corresponding assets and rehabilitation liability in the period in which they occur.

At November 30, 2020, the Company did not incur any such obligations.

(g) Income taxes

Income tax expense is comprised of current and deferred tax. Current tax and deferred tax are recognized in profit or loss except to the extent that it relates to a business combination or items recognized directly in equity or in other comprehensive income or loss. Current income taxes are recognized for the estimated income taxes payable or receivable on taxable income or loss for the current year and any adjustment to income taxes payable in respect of previous years. Current income taxes are determined using tax rates and tax laws that have been enacted or substantively enacted by the year-end date.

Deferred tax assets and liabilities are recognized where the carrying amount of an asset or liability differs from its tax base, except for taxable temporary differences arising on the initial recognition of goodwill and temporary differences arising on the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction affects neither accounting nor taxable profit or loss. Recognition of deferred tax assets for unused tax losses, tax credits and deductible temporary differences is restricted to those instances where it is probable that future taxable profit will be available against which the deferred tax asset can be utilized.

At the end of each reporting period the Company reassesses unrecognized deferred tax assets. The Company recognizes a previously unrecognized deferred tax asset to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

1255269 BC Ltd. Notes to the Consolidated Financial Statements For the period from incorporation on June 30, 2020 to November 30, 2020 (Expressed in Canadian dollars)

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(h) New accounting policies

Effective June 30, 2020, the Company adopted IFRS 16 – Leases (“IFRS 16”). IFRS 16 replaces IAS 17 – Leases. The new standard eliminates the classification of leases as either operating or finance leases for a lessee. Instead, all leases are capitalized by recognizing the present value of lease payments and recognizing an asset and a financial liability representing an obligation to make future lease payments. The Company does not have any lease arrangements.

4. ASSET ACQUISITION

In August 2020, the Company completed the 100% acquisition of Arcadian Minerals Corp. (“Arcadian”), by purchasing all the issued and outstanding shares of Arcadian from Gold X Mining Corp. in exchange for cash consideration of $1,000,000 (the “Acquisition”). Arcadian holds the rights to a property located in a historic mining district in Colombia (henceforth known as the “Guia Antigua project”).

The Company determined that Arcadian did not qualify as a business at the time of Acquisition; therefore, the transaction was considered an acquisition of the net assets of Arcadian and accounted for using the acquisition method, whereby the purchase consideration was allocated to the estimated fair values of the identifiable assets and liabilities acquired at the date of the Acquisition. The purchase price was allocated to the net assets acquired in the Acquisition as follows:

		Total
Consideration paid:
Cash consideration due on closing	$	1,000,000
Transaction costs		60,742
		1,060,742
Less: Value of net assets acquired:
Cash		2,207
Amounts receivable		25,506
Mineral property		1,337,306
Accounts payable and accrued liabilities		(304,277)
Net assets acquired	$	1,060,742

5. EXPLORATION AND EVALUATION ASSETS

The following table summarizes the capitalized costs associated with the Company’s exploration and evaluation assets:

1255269 BC Ltd. Notes to the Consolidated Financial Statements For the period from incorporation on June 30, 2020 to November 30, 2020 (Expressed in Canadian dollars)

5. EXPLORATION AND EVALUATION ASSETS (continued)

EXPLORATION AND EVALUATION ASSETS(continu	ed)	ed)	ed)
	Guia Antigua
			project
Acquisition costs:
Balance, June 30, 2020	$		-
Additions		1,337,306
Balance,November 30,2020		1,337,306
Exploration costs:
Balance, June 30, 2020			-
Site logistics			99,643
Drilling			25,616
Balance,November 30,2020			125,259
Total costs:
Balance, November 30, 2020	$	1,462,565

6. REVERSE TAKEOVER TRANSACTION

On November 20, 2020, the Company entered into a definitive agreement (the “Agreement”) with ESV Resources Ltd. (“ESV”) for the acquisition by ESV of the Guia Antigua project. The Agreement outlines the general terms and conditions by which ESV will acquire (the "Transaction") all of the outstanding share capital of the Company, which controls the Guia Antigua project. ESV has also entered into a similar Agreement with Gran Colombia Gold Corp. ("Gran Colombia") to acquire its silver exploration project, the Zancudo project, located in a historic mining district in Colombia.

Each of ESV, Gran Colombia, the Company and all the shareholders of the Company, are at arm’s length to ESV, and the Transaction will constitute a change of business and a reverse-takeover of ESV in accordance with the policies of the TSX Venture Exchange (“TSXV”). Assuming completion of the Transaction, it is anticipated that ESV will be listed on the TSXV as a Tier 2 Mining Issuer. In connection with completion of the Transaction, ESV intends to change its name to "Denarius Silver Corp." and is expected to trade under the symbol “DSLV”.

Terms of the Transaction

Under the terms of the Transaction, shareholders of the Company will be issued 15,000,000 common shares of ESV in exchange for all of the outstanding share capital of the Company, and concurrently Gran Colombia will be issued 27,000,000 common shares of ESV in consideration for the assignment of its interest in the Zancudo project. In addition to any escrow restrictions imposed by the policies of the TSXV, all common shares issued to the shareholders of the Company and to Gran Colombia will be subject to a voluntary pooling arrangement whereby one-quarter of the shares will be released on each of March 27, 2021, June 27, 2021, September 27, 2021, and December 28, 2021.

Concurrent Financing

On November 9, 2020, as a condition to completing the Transaction, the parties completed a concurrent financing of 18,675,053 subscription receipts of the Company at a price of $0.45 per subscription receipt for gross proceeds of $8,403,774 (the “Concurrent Financing”)(Note 7). Gran Colombia subscribed for $3,000,000 of the Concurrent Financing.

1255269 BC Ltd. Notes to the Consolidated Financial Statements For the period from incorporation on June 30, 2020 to November 30, 2020 (Expressed in Canadian dollars)

6. REVERSE TAKEOVER TRANSACTION (continued)

additional consideration and will be exchanged for common shares of ESV on a one-for-one basis. If the Transaction is not completed on or before February 28, 2021, the proceeds of the Concurrent Financing will be returned to the subscribers. Finder's fees of $197,761 are payable to arm's length parties who introduced subscribers to the Concurrent Financing, in accordance with the policies of the TSXV. It is anticipated that the proceeds from the Concurrent Financing will be utilized to undertake an exploration program at the Guia Antigua project, and for the general and administrative expenses of ESV.

Following the closing of the Transaction and the Concurrent Financing, ESV expects to have approximately 93,117,915 common shares issued and outstanding.

Shareholder Approval

Approval of the shareholders of ESV will not be required in connection with the Transaction, in accordance with TSXV Policy 5.2, as the Transaction does not involve related parties and no other circumstances exist which may comprise the independence of ESV or other interested parties. ESV is without active operations, is not subject to a cease trade order or trading suspension, and shareholder approval is not required for the Transaction under applicable corporate or securities laws.

Upon completion of the Transaction, Gran Colombia will become a new "control person" of ESV. If required by the policies of the TSXV, ESV will obtain shareholder approval for the creation of a new control person by way of written consent of the majority of the outstanding common shares of ESV prior to completion of the Transaction.

Further Information

Closing of the Transaction is subject to a number of conditions including the satisfactory completion of due diligence, the negotiation of and entering into definitive agreements, the completion of the Concurrent Financing, receipt of all required shareholder, regulatory and third-party consents, including TSXV approval, and satisfaction of other customary closing conditions. The Transaction and Concurrent Financing cannot close until the required approvals are obtained. There can be no assurance that the Transaction and Concurrent Financing will be completed as proposed or at all. Except in connection with the Concurrent Financing, no finder’s fees or commissions are payable in connection with completion of the Transaction, and no advances or loans to the Company or Gran Colombia are contemplated prior to completion of the Transaction. An administrative fee of 840,000 common shares is owing to an arm’s length consultant, in consideration for the provision of certain financial and advisory services necessary to complete the Transaction.

In connection with the Transaction, the Company and Gran Colombia have commissioned an updated geological report on the Guia Antigua project. Prior to completion of the Transaction, copies of the Geological Report will be filed and posted on SEDAR. Further information on the Transaction will be available and posted on SEDAR upon completion of a Filing Statement that will be prepared by ESV. Trading in the common shares of ESV will remain halted pending further filings with the TSXV.

7. SHARE CAPITAL

(a) Authorized

Unlimited number of common shares without par value.

(b) Issued and fully paid

During the period ended November 30, 2020, the Company issued 15,000,000 common shares for proceeds of $1,075,000. Share issue costs of $5,000 were incurred in relation to this issuance.

1255269 BC Ltd. Notes to the Consolidated Financial Statements

For the period from incorporation on June 30, 2020 to November 30, 2020

(Expressed in Canadian dollars)

7. SHARE CAPITAL (continued)

On November 9, 2020, the Company completed the Concurrent Financing of 18,675,053 subscription receipts of the Company at a price of $0.45 per subscription receipt for gross proceeds of $8,403,774. The proceeds of the Concurrent Financing will be held in escrow, pending ESV receiving all applicable regulatory approvals and completing the Transaction (Note 6).

8. FINANCIAL INSTRUMENTS

Financial Risk Management and Fair Value Measurement

The Board of Directors has overall responsibility for the establishment and oversight of the Company’s risk management framework. The Company’s financial instruments consist of cash, amounts receivable, deposits, amounts payable and accrued liabilities, and share receipts payable, all of which are held at carrying value which approximates fair value due to the short-term nature of these instruments.

Fair value measurement

Financial instruments measured at fair value on the statement of financial position are summarized into the following fair value hierarchy levels:

Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities;

Level 2 Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly; and

Level 3 Inputs that are not based on observable market data.

The fair value of the Company’s cash, amounts receivable, deposits, amounts payable and accrued liabilities, and share receipts payable, approximate their carrying value due to their short-term maturities.

Financial Instrument Risk Exposure

The Company is exposed in varying degrees to a variety of financial instrument related risks.

Credit Risk

Credit risk arises from the potential for non-performance by counterparties of contractual financial obligations. The Company is exposed to credit risk on cash and amounts receivable. The Company reduces its credit risk on cash by maintaining its bank account with a large international financial institution. The maximum exposure to credit risk is equal to the carrying value of its cash and amounts receivable.

Liquidity Risk

The Company’s cash is invested in bank accounts which are available on demand. The liquidity risk is the risk that the Company will not be able to meet its financial obligations as they come due. The Company manages its liquidity risk through careful management of its financial obligations in relation to its cash position. Using budgeting processes, the Company manages its liquidity requirements based on expected cash flow to ensure there are adequate funds to meet the short term obligations during the period.

1255269 BC Ltd. Notes to the Consolidated Financial Statements For the period from incorporation on June 30, 2020 to November 30, 2020 (Expressed in Canadian dollars)

8. FINANCIAL INSTRUMENTS

Market Risk

Market risk is the risk of loss that may arise from changes in market factors such as interest rates, foreign currency and price risk.

a) Interest Rate Risk

The Company is nominally exposed to interest rate risk. The Company’s cash earns interest at variable rates. The Company’s future earned interest is exposed to short-term rate fluctuations. Interest rate exposure is considered to be insignificant.

b) Foreign Currency Risk

The Company is not exposed to currency risk as all transactions are denominated in Canadian dollars.

9. MANAGEMENT OF CAPITAL

The Company’s objective when managing capital is to safeguard the Company’s ability to continue as a going concern such that it can continue to provide returns for shareholders and benefits for other stakeholders.

The Company considers the items included in equity as capital. The Company manages the capital structure and makes adjustments to it in light of changes in economic conditions, business opportunity and the risk characteristics of the underlying assets. In order to maintain or adjust its capital structure, the Company may issue new shares or return capital to its shareholders. The Company is not subject to externally imposed capital requirements.

Management reviews its capital management approach on an ongoing basis. There was no change in the Company’s management of capital policies during the period presented.

10. SUPPLEMENTAL CASH FLOW INFORMATION

During the period ended November 30, 2020:

The Company has incurred $125,529 of exploration and evaluation asset costs through amounts payable and accrued liabilities as at November 30, 2020; and
No cash was paid for interest or income taxes.

11. INCOME TAX

The provision for income taxes reported differs from the amounts computed by applying the cumulative Canadian federal and provincial income tax rates to the loss before income taxes due to the following:

		2020
Loss for the period	$	(52,160)
Expected income tax (recovery)		(14,000)
Share issue costs		(1,000)
Change in unrecognized deductible temporary differences		15,000
Total income tax expense(recovery)	$	-

1255269 BC Ltd. Notes to the Consolidated Financial Statements For the period from incorporation on June 30, 2020 to November 30, 2020 (Expressed in Canadian dollars)

11. INCOME TAX (continued)

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

		2020	Expiry Date Range
Temporary Differences
Share issue costs	$	5,000	2040 to 2044
Non-capital losses available for future periods	$	52,000	2032to2040
Canada	$	52,000	2040
Colombia	$	-	2032

12. COVID-19 UNCERTAINTY

APPENDIX C FINANCIAL STATEMENTS OF ARCADIAN MINERALS CORP.

Please see attached.

Condensed interim carve-out combined financial statements of

Arcadian Minerals Corp.

Three and six months ended June 30, 2020 and 2019 (Expressed in Canadian dollars) (Unaudited)

Arcadian Minerals Corp. Condensed Interim Carve-Out Combined Statements of Financial Position

(Expressed in Canadian dollars) (Unaudited)

	As at June 30, 2020	As at June 30, 2020	As at December 31,
			2019
Current assets
Cash	$	3,208	$ 10,205
Amounts receivable(Note 4)		20,442	-
Total assets	$	23,650	$10,205
Current liabilities
Amountspayable	$	28,057	$17,742
Total liabilities		28,057	17,742
Shareholders' deficiency
Share capital (Note 4)		13,037	13,037
Contributed surplus (Note 4)		10,738,552	10,604,583
Deficit		(10,755,996)	(10,625,157)
Total shareholders' deficiency		(4,407)	(7,537)
Total liabilities and shareholders' deficiency	$	23,650	$10,205

Nature of operations and going concern (Note 1) Subsequent events (Note 8)

Approved and authorized for issue on February 18, 2021:

"Jacqueline Ester Hayot Castillo" Director Arcadian Minerals Corp.

The notes are an integral part of these unaudited condensed interim carve-out combined financial statements

Arcadian Minerals Corp.

Condensed Interim Carve-Out Combined Statements of Loss and Comprehensive Loss

(Expressed in Canadian dollars) (Unaudited)

		For the three	months ended	months ended			For the six	months ended	months ended
		June 30, 2020		June 30,	2019		June 30, 2020		June 30,2019
Expenses
Explorationcosts (Note 3)	$	62,513	$	88,722		$	144,719	$	611,104
		(62,513)		(88,722)			(144,719)		(611,104)
Interest income		-			148		-		148
Foreign exchange gain (loss)		8,211		(8,525)			13,880		(7,037)
Loss and comprehensive loss	$	(54,302)	$	(97,099)		$	(130,839)	$	(617,993)
Basic and diluted loss per share	$	(543)	$		(971)	$	(1,308)	$	(6,180)
Weighted average number of common shares
outstanding basic and diluted		100			100		100		100

The notes are an integral part of these unaudited condensed interim carve-out combined financial statements

Arcadian Minerals Corp.

Condensed Interim Carve-Out Combined Statements of Shareholders’ Deficiency (Expressed in Canadian dollars )

(Unaudited)

	Contributed Total shareholders' Shares issued Amount Surplus Deficit deficiency Share capital
At December 31, 2018 (Unaudited) Contributions by Gold X Loss for the period	100 13,037 $ 9,781,299 $ (443,989) $ 9,350,347 $ - - 643,883 - 643,883
	- - - (617,993) (617,993)
At June 30, 2019 Contributions by Gold X Loss for the period	100 13,037 10,425,182 (1,061,982) 9,376,237 - - 179,401 - 179,401
	- - - (9,563,175) (9,563,175)
At December 31, 2019 Contributions by Gold X Loss for the period	100 13,037 10,604,583 (10,625,157) (7,537) - - 133,969 - 133,969
	- - - (130,839) (130,839)
At June 30, 2020	100 13,037 $ 10,738,552 $ (10,755,996) $ (4,407) $

The notes are an integral part of these unaudited condensed interim carve-out combined financial statements

Arcadian Minerals Corp. Condensed Interim Carve-Out Combined Statements of Cash Flows

(Expressed in Canadian dollars)

(Unaudited)

	For the six months ended	For the six months ended
	June 30, 2020	June 30,2019
Operating activities
Loss for the period:	$ (130,839)	$	(617,993)
Changes in non-cash working capital items:
Amounts receivable and prepaids	(20,442)		148
Amounts payable	10,315		(132,327)
Cash used in operatingactivities	(140,966)		(750,172)
Financing activities
Contributions from Gold X	133,969		643,883
Cashprovided byfinancingactivities	133,969		643,883
Net change in cash during the period	(6,997)		(106,289)
Cash, beginning ofperiod	10,205		119,635
Cash, end ofperiod	$ 3,208	$	13,346

The notes are an integral part of these unaudited condensed interim financial statements

Arcadian Minerals Corp. Notes to the Condensed Interim Carve-Out Combined Financial Statements June 30, 2020 and 2019 (Expressed in Canadian dollars) (Unaudited)

1. NATURE OF OPERATIONS AND GOING CONCERN

Arcadian Minerals Corp. (the “Company” or “Arcadian”) is a resource exploration company, incorporated under the laws of Panama. As at June 30, 2020, the Company is a wholly owned subsidiary of Gold X Mining Corp. (“Gold X”) (formerly Sandspring Resources Ltd.). Arcadian, through its subsidiary, Industrias Argentum, S.A.S. (“Argentum”) is focused on the exploration for, and resource expansion of gold and related minerals in Colombia. Arcadian holds the rights to a property located in a historic mining district in Colombia (henceforth known as the “Guia Antigua project”). The registered and records office of Arcadian is located at P.H. Credicorp Bank Panama, 27th Floor, Suites 3-4, 50th and 59th E Streets, P.O. Box 0833-00241, Panama City, Republic of Panama.

On August 28, 2020, Arcadian was acquired by 1255269 B.C. Ltd. (“1255269”) for consideration of $1,000,000, pursuant to the terms of a purchase agreement entered into with Gold X. 1255269 is a privately-held British Columbia corporation, established for the purposes of holding an interest in the Guia Antigua project. Aside from its interest in the Guia Antigua project, 1255269 has no assets or material financial liabilities or obligations (Note 8).

On November 20, 2020, 1255269 entered into an amalgamation agreement with ESV Resources Ltd. (“ESV”) (the “Transaction”). Under the terms of the Transaction, shareholders of 1255269 will be issued 15,000,000 common shares of ESV in exchange for all of the outstanding share capital of 1255269 (Note 8).

These condensed interim carve-out combined financial statements have been prepared for the purposes of the Transaction and reflect the financial position, operations and cash flows of Arcadian derived from the historical accounting records of Gold X. The statements were prepared as if the Company had been operating independently during the periods presented (Note 2(b)).

These condensed interim carve-out combined financial statements have been prepared on a going concern basis, which contemplates that the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities in the normal course of business.

At June 30, 2020, the Company had a working capital deficit of $4,407 (December 31, 2019: $7,537), an accumulated deficit of $10,755,996 (December 31, 2019: $10,625,157), incurred losses at June 30, 2020 amounting to $130,839 (2019: $617,993), and used cash in operating activities during the six months ended June 30, 2020 of $140,966 (2019: $750,172). Although the Company has been successful in the past obtaining financing, there is no assurance that it will be able to obtain adequate financing or that such financing will be on terms that are acceptable to the Company. As at June 30, 2020, management determined the existence of material uncertainties that may cast significant doubt on the Company’s ability to continue as a going concern.

2. BASIS OF PRESENTATION

(a) Statement of compliance

The Company prepares its annual carve-out combined financial statements in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board. These unaudited condensed interim carve-out combined financial statements have been prepared in accordance with IAS 34, Interim Financial Reporting and follow the same accounting policies and methods of application as the Company’s most recent annual carve-out combined financial statements. Accordingly, they should be read in conjunction with the Company’s most recent annual carve-out combined financial statements. These unaudited condensed interim carve-out combined financial statements were approved by the board of directors on February 18, 2021.

Notes to the Condensed Interim Carve-Out Combined Financial Statements June 30, 2020 and 2019 (Expressed in Canadian dollars) (Unaudited)

Arcadian Minerals Corp.

2. BASIS OF PRESENTATION (Continued)

(b) Basis of measurement

The purpose of these carve-out combined financial statements is to provide general purpose historical financial information of the Company for the inclusion in the Filing Statement in connection with the Transaction. Therefore, these carve-out combined financial statements present the historical financial information of those operations making up the Company. These carve-out combined financial statements reflect the financial position, operations and cash flows of Arcadian, combined with Argentum, derived from the historical accounting records of Gold X.

These carve-out combined financial statements have been prepared on a historical cost basis except for financial instruments classified as financial instruments at fair value. In addition, these carve-out combined financial statements have been prepared using the accrual basis of accounting, except for cash flow information.

The following basis of preparation for the carve-out combined statements of financial position, loss and comprehensive loss, shareholders’ deficiency and cash flows of the Company have been applied:

All assets and liabilities directly attributable to the Company have been extracted in these carve-out combined financial statements;
All income and expenses directly attributable to the Company have been extracted in the carve-out combined
financial statements; and
Common expenses have been allocated on a pro-rata basis to the Company based on the level of activities
during the applicable periods.
Income taxes have been calculated as if the Company had been a separate legal entity and had filed a separate tax return for the periods presented.

Management cautions readers of these carve-out combined financial statements that the Company’s results do not necessarily reflect what the results of operations, financial position, or cash flows would have been had the Company been a separate entity. Further, the allocation of income and expenses in these carve-out combined statements of loss and comprehensive loss does not necessarily reflect the nature and level of the Company’s future income and operating expenses.

3. MINERAL PROPERTIES UNDER EXPLORATION

Colombia

In July 2018, Gold X completed the acquisition of 100% of the rights to a land package in Antioquia, Colombia, known as the Guia Antigua Project (formerly the Chicharron Project). Gold X acquired control of 100% of the Guia Antigua Project through a series of transactions that included consideration of the issuance of 36,000,000 Gold X shares (with a value of $7,560,000), a cash payment of US$1,000,000, reimbursement of certain expenses totaling US$124,500 and a best efforts commitment to incur US$1,000,000 in exploration expenses over the next 24 months. Gold X also incurred transaction costs of $230,145 in connection with this acquisition.

The Guia Antigua Project was acquired through a series of transactions that included the acquisition of GA Mine Corp., the parent company of Arcadian, Arcadian and Argentum, which was accounted for as an acquisition of assets and liabilities, as the entities acquired did not meet the definition of a business in accordance with IFRS 3. The acquisition of the 100% interest was by way of 30% from Gran Colombia Gold Corp (“Gran Colombia”) and 70% from certain vendors, including previous joint venture partners of Gran Colombia.

Total consideration of $9,264,027 was allocated to net assets acquired and liabilities assumed; the excess of the fair value of consideration paid over the net assets acquired was allocated to the Guia Antigua resource property.

Arcadian Minerals Corp.

Notes to the Condensed Interim Carve-Out Combined Financial Statements June 30, 2020 and 2019

(Expressed in Canadian dollars) (Unaudited)

3. MINERAL PROPERTIES UNDER EXPLORATION (Continued)

The Guia Antigua Project is subject to a 1% net smelter returns royalty (“NSR”) on 70% of the project, payable in kind or in cash at the election of the royalty holder.

As at December 31, 2019, management of the Company determined that there were indicators of impairment on the Guia Antigua property. As a result, due to management’s decision to curtail exploration operations, Guia Antigua was written down from $9,377,220 to $nil.

The carrying value of mineral properties under exploration represents the cost of acquired properties. All costs related to exploration activities are expensed as incurred. Mineral properties under exploration are not depreciated and will be reclassified once technical feasibility and commercial viability can be demonstrated. The following table sets forth a breakdown of material components of the Company’s exploration expenditures for the periods ended June 30, 2020 and 2019.

sets forth a breakdown of material components of the Company’s exploration June 30, 2020 and 2019.	expenditures for the periods ended
June 30, 2020 June 30, 2019 Three Months Ended	June 30, 2020 June 30, 2019 Six Months Ended
Guia Antigua Project exploration costs	25,250 $ 27,044 $ 35,894 72,675 - 417,709 - 5,513 - 940 3,654 6,653 79,921 79,697 - 873
Camp expenses 10,909 $ 10,876 $ Consulting 11,520 33,711 Drilling - - Engineering studies - 1,045 Lab fees - - Office and administrative costs 871 2,708 Salaries and benefits 39,213 40,267 Travel and accommodation - 115
Total Guia Antigua Project exploration costs 62,513 $ 88,722 $	144,719 $ 611,104 $
Total exploration costs 62,513 $ 88,722 $	144,719 $ 611,104 $

4. EQUITY

The Company is authorized to issue 100 of common shares at a par value of US$100 per share.

As at June 30, 2020, the Company had a total of 100 common shares outstanding, which were acquired by Gold X on July 1, 2018.

Contributed surplus

As at June 30, 2020, the following amounts were contributed by Gold X.

		As at June 30, 2020		As at December 31,2019
Guia Antigua acquisition (Note 3)	$	9,377,220	$	9,377,220
Workingcapital advances		1,361,332		1,227,363
	$	10,738,552	$	10,604,583

Gold X advanced $133,969 to the Company for working capital requirements during the six months ended June 30, 2020 (2019 - $643,883).

As at June 30, 2020, there was $20,442 due to be received from Gold X for working capital requirements. This amount was received in July 2020.

Arcadian Minerals Corp.

Notes to the Condensed Interim Carve-Out Combined Financial Statements June 30, 2020 and 2019 (Expressed in Canadian dollars) (Unaudited)

5. RELATED PARTY TRANSACTIONS

Key management personnel include those persons having the authority and responsibility of planning, directing and executing the activities of the Company. The Company has determined that its key management personnel consist of the Company’s managers and officers.

Key management compensation during the periods ended June 30, 2020 and 2019 include:

		For	the six months ended	the six months ended
		June	30, 2020	June	30,2019
Augusto N. Garcia - President, Argentum	$		65,003	$	63,668

There were no amounts due to related parties as at June 30, 2020 and 2019.

6. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

Financial Risk Management

Cash, amounts receivable, and amounts payable are recorded at amortized cost which approximates fair value due to the short-term nature of these instruments.

Financial Instrument Risk Exposure

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 of financial loss to the Company if the counterparty to a financial instrument fails to meet its contractual obligation. Financial instruments that potentially subject the Company to credit risk consist of cash. The maximum credit risk represented by the Company’s financial assets is represented by their carrying amounts. The Company holds its cash with reputable financial institutions, from which management believes the risk of loss to be minimal.

Liquidity risk

Liquidity risk is the risk that the Company will not have sufficient cash resources to meet its financial obligations as they come due. The Company’s liquidity and operating results may be adversely affected if its access to the capital market is hindered whether as a result of a downturn in stock market conditions generally or as a result of conditions specific to the Company. The Company gains cash primarily through advances from Gold X. At June 30, 2020, the Company had cash of $3,208 (December 31, 2019: $10,205) to settle amounts payable of $28,057 (December 31, 2019: $17,742). The Company regularly evaluates its cash position to ensure preservation and security of capital as well as maintenance of liquidity (Note 1).

Arcadian Minerals Corp. Notes to the Condensed Interim Carve-Out Combined Financial Statements June 30, 2020 and 2019 (Expressed in Canadian dollars) (Unaudited)

6. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (Continued)

Financial Instrument Risk Exposure (Continued)

Fair value measurement

Level 1 — quoted prices in active markets for identical assets and liabilities. Level 2 — observable inputs other than quoted prices in active markets for identical assets and liabilities. Level 3 — unobservable inputs in which there is little or no market data available, which require the reporting entity to develop its own assumptions.

The Company has classified its cash as measured at amortized cost in the carve-out combined statement of financial position. Amounts payable approximate fair value due to the short-term nature of these instruments.

Foreign exchange risk

The Company’s functional currency is the Canadian dollar and major purchases including acquisitions and financings are generally transacted in Canadian dollars. The Company receives funds for certain operations, exploration and administrative expenses in Colombia on a cash call basis using U.S. dollar currency and maintains a Colombian peso bank account. The Company is subject to gains and losses from fluctuations in the U.S. dollar and Colombian peso against the Canadian dollar.

7. CAPITAL MANAGEMENT

The Company manages its capital to ensure that funds are available or are scheduled to be raised to provide adequate funds to carry out the Company’s defined exploration programs and to meet its ongoing administrative costs. As at June 30, 2020, the Company had a working capital deficit of $4,407 (December 31, 2019: $7,537). The Company is not subject to any externally imposed capital requirements.

This capital management is achieved by the Board of Directors’ review and acceptance of exploration budgets that are achievable using existing capital resources and the timely matching and release of the next stage of expenditures with the resources made available from contributions provided by Gold X and ESV.

The Company’s capital management objectives, policies and processes remained unchanged during the period ended June 30, 2020.

8. SUBSEQUENT EVENTS

On August 28, 2020, 1255269 completed the 100% acquisition of Arcadian, by purchasing all the issued and outstanding shares of Arcadian from Gold X in exchange for cash consideration of $1,000,000.

On November 20, 2020, 1255269 entered into an amalgamation agreement with ESV. Under the terms of the Transaction, shareholders of 1255269 will be issued 15,000,000 common shares of ESV in exchange for all of the outstanding share capital of 1255269.

The Transaction will constitute a change of business and a reverse-takeover of ESV in accordance with the policies of the TSX Venture Exchange (“TSXV”). Assuming completion of the Transaction, it is anticipated that ESV will be listed on the TSXV as a Tier 2 Mining Issuer. In connection with completion of the Transaction, ESV intends to change its name to "Denarius Silver Corp." and is expected to trade under the symbol “DSLV”.

Arcadian Minerals Corp.

Notes to the Condensed Interim Carve-Out Combined Financial Statements June 30, 2020 and 2019 (Expressed in Canadian dollars) (Unaudited)

9. COVID-19

During the six months ended June 30, 2020, the outbreak of the novel strain of coronavirus, specifically identified as “COVID-19”, has resulted in governments worldwide enacting emergency measures to combat the spread of the virus. These measures, which include the implementation of travel bans, self-imposed quarantine periods and social distancing, have caused material disruption to Company globally resulting in an economic slowdown. Global equity markets have experienced significant volatility and weakness. Governments and central banks have reacted with significant monetary and fiscal interventions designed to stabilize economic conditions. The duration and impact of the COVID-19 outbreaks is unknown at this time, as is the efficacy of the government and central bank interventions. It is not possible to reliably estimate the length and severity of these developments and the impact on the financial results and condition of the Company in future periods.

Carve-out combined financial statements of

Arcadian Minerals Corp.

Year ended December 31, 2019 and period from July 1, 2018 to December 31, 2018 (Expressed in Canadian dollars)

INDEPENDENT AUDITOR’S REPORT

To the Directors of Arcadian Minerals Corp.

Opinion

We have audited the accompanying carve-out combined financial statements of Arcadian Minerals Corp. (the “Company”), which comprise the carve-out combined statement of financial position as at December 31, 2019, and the carve-out combined statements of loss and comprehensive loss, shareholders’ deficiency, and cash flows for the year ended December 31, 2019, and notes to the carve-out combined financial statements, including a summary of significant accounting policies.

In our opinion, these carve-out combined financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2019, and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards (“IFRS”).

Basis for Opinion

We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Carve-Out Combined Financial Statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the carve-out combined financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained in our audit is sufficient and appropriate to provide a basis for our opinion.

Emphasis of Matter

We draw attention to the basis of preparation of the carve-out combined financial statements, as described in Note 1 to the carve-out combined financial statements. As the Company has not operated as a separate entity, these carve-out financial statements are, therefore, not necessarily indicative of results that would have occurred if the Company had been a separate standalone entity during the year presented. Our opinion is not modified in respect of this matter.

Other Information

Management is responsible for the other information. The other information obtained at the date of this auditor's report includes Management’s Discussion and Analysis.

Our opinion on the carve-out combined financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the carve-out combined financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the carve-out combined financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

Responsibilities of Management and Those Charged with Governance for the Carve-Out Combined Financial Statements

Management is responsible for the preparation and fair presentation of the carve-out combined financial statements in accordance with IFRS, and for such internal control as management determines is necessary to enable the preparation of carveout combined financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the carve-out combined financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

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

Auditor's Responsibilities for the Audit of the Carve-Out Combined Financial Statements

Our objectives are to obtain reasonable assurance about whether the carve-out combined financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these carve-out combined financial statements.

As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the carve-out combined financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the carve-out combined financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the carve-out combined financial statements, including the disclosures, and whether the carve-out combined financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the carve-out combined financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

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Vancouver, Canada February 18, 2021

Chartered Professional Accountants

Arcadian Minerals Corp. Carve-Out Combined Statements of Financial Position

(Expressed in Canadian dollars)

	As at December 31,	As at December 31,	As at December 31,	As at December 31,
		2019		2018
				(Unaudited)
Current assets
Cash	$	10,205	$	119,635
Mineralproperties under exploration(Note 4)		-		9,377,220
Total assets	$	10,205	$	9,496,855
Current liabilities
Amountspayable	$	17,742	$	146,508
Total liabilities		17,742		146,508
Shareholders' equity (deficiency)
Share capital (Note 5)		13,037		13,037
Contributed surplus (Note 5)		10,604,583		9,781,299
Deficit		(10,625,157)		(443,989)
Total shareholders' equity (deficiency)		(7,537)		9,350,347
Total liabilities and shareholders' equity (deficiency)	$	10,205	$	9,496,855

Nature of operations and going concern (Note 1) Subsequent events (Note 10)

Approved and authorized for issue on February 18, 2021:

"Jacqueline Ester Hayot Castillo" Director Arcadian Minerals Corp.

The notes are an integral part of these carve-out combined financial statements

Arcadian Minerals Corp. Carve-Out Combined Statements of Loss and Comprehensive Loss (Expressed in Canadian dollars)

				For the period from
	For the year ended			July 1, 2018 to
	December 31, 2019			December 31, 2018
				(Unaudited)
Expenses
Explorationcosts (Note4)	$	808,175	$	456,501
		(808,175)		(456,501)
Interest income		297		-
Impairment of mineral property (Note 4)		(9,377,220)		-
Foreign exchange gain		3,930		21,049
Loss and comprehensive loss	$	(10,181,168)	$	(435,452)
Basic and diluted loss per share	$	(101,812)	$	(4,355)
Weighted average number of common shares outstanding basic and
diluted		100		100

The notes are an integral part of these carve-out combined financial statements

Arcadian Minerals Corp. Carve-Out Combined Statements of Shareholders’ Deficiency (Expressed in Canadian dollars )

	Total shareholders' Shares issued Amount Contributed surplus Deficit equity (deficiency) Share capital
At June 30, 2018 (Unaudited) Contributions by Gold X Loss for the period	100 13,037 $ - $ (8,537) $ 4,500
	- - 9,781,299 - 9,781,299 - - - (435,452) (435,452)
At December 31, 2018 (Unaudited) Contributions by Gold X Loss for the year	100 13,037 9,781,299 (443,989) 9,350,347 - - 823,284 - 823,284
	- - - (10,181,168) (10,181,168)
At December 31, 2019	100 13,037 $ 10,604,583 $ (10,625,157) $ (7,537) $

The notes are an integral part of these carve-out combined financial statements

Arcadian Minerals Corp. Carve-Out Combined Statements of Cash Flows

(Expressed in Canadian dollars)

				For the period from
		For the year ended		July 1, 2018 to
		December 31, 2019		December 31, 2018
				(Unaudited)
Operating activities
Loss for the period:	$	(10,181,168)	$	(435,452)
Adjusted for:
Impairment of mineral property		9,377,220		-
Changes in non-cash working capital items:
Amounts payable		(128,766)		(10,286)
Cash used in operatingactivities		(932,714)		(445,738)
Financing activities
Contributions from Gold X		823,284		546,662
Cashprovided byfinancingactivities		823,284		546,662
Net change in cash during the period		(109,430)		100,924
Cash, beginning ofperiod		119,635		18,711
Cash, end ofperiod	$	10,205	$	119,635
Supplemental cash flow information
Income taxes paid	$	-	$	-
Interest paid	$	-	$	-
Acquisition of resource asset by Gold X	$	-	$	9,234,637

The notes are an integral part of these unaudited condensed interim financial statements

Arcadian Minerals Corp. Notes to the Carve-Out Combined Financial Statements December 31, 2019 and 2018 (Expressed in Canadian dollars)

1. NATURE OF OPERATIONS AND GOING CONCERN

Arcadian Minerals Corp. (the “Company” or “Arcadian”) is a resource exploration company, incorporated under the laws of Panama. As at December 31, 2019, the Company is a wholly owned subsidiary of Gold X Mining Corp. (“Gold X”) (formerly Sandspring Resources Ltd.). Arcadian, through its subsidiary, Industrias Argentum, S.A.S. (“Argentum”) is focused on the exploration for, and resource expansion of gold and related minerals in Colombia. Arcadian holds the rights to a property located in a historic mining district in Colombia (henceforth known as the “Guia Antigua project”). The registered and records office of Arcadian is located at P.H. Credicorp Bank Panama, 27th Floor, Suites 3-4, 50th and 59th E Streets, P.O. Box 0833-00241, Panama City, Republic of Panama.

These carve-out combined financial statements have been prepared for the purposes of the Transaction and reflect the financial position, operations and cash flows of Arcadian derived from the historical accounting records of Gold X. The statements were prepared as if the Company had been operating independently during the periods presented (Note 2(b)). The Company presents comparative figures for the period from date of acquisition of control by Gold X on July 1, 2018 to December 31, 2018.

These carve-out combined financial statements have been prepared on a going concern basis, which contemplates that the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities in the normal course of business.

At December 31, 2019, the Company had a working capital deficit of $7,537 (December 31, 2018: $26,873), an accumulated deficit of $10,625,157 (December 31, 2018: $443,989), incurred losses at December 31, 2019 amounting to $10,181,168 (2018: $435,452), and used cash in operating activities during 2019 of $932,714 (2018: $445,738). Although the Company has been successful in the past obtaining financing, there is no assurance that it will be able to obtain adequate financing or that such financing will be on terms that are acceptable to the Company. As at December 31, 2019, management determined the existence of material uncertainties that may cast significant doubt on the Company’s ability to continue as a going concern.

2. BASIS OF PRESENTATION

(a) Statement of compliance

These carve-out combined financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and interpretations of the International Financial Reporting Interpretations Committee (“IFRIC”).

The accounting policies applied in these carve-out combined financial statements are based on IFRS issued and in effect as at December 31, 2019, except for newly adopted accounting policies as noted below (Note 3).

These carve-out combined financial statements were authorized for issue by the management of Arcadian on February 18, 2021.

Arcadian Minerals Corp. Notes to the Carve-Out Combined Financial Statements December 31, 2019 and 2018 (Expressed in Canadian dollars)

2. BASIS OF PRESENTATION (Continued)

(b) Basis of measurement

All assets and liabilities directly attributable to the Company have been extracted in these carve-out combined financial statements;
All income and expenses directly attributable to the Company have been extracted in the carve-out combined
financial statements; and
Common expenses have been allocated on a pro-rata basis to the Company based on the level of activities
during the applicable periods.
Income taxes have been calculated as if the Company had been a separate legal entity and had filed a separate tax return for the periods presented.

(c) Significant accounting judgments and estimates

The preparation of carve-out combined financial statements in conformity with IFRS requires management to make estimates and judgements that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the carve-out combined financial statements and the reported amounts of expenses during the reporting period. Actual outcomes could differ from these estimates. These carve-out combined financial statements include estimates which, by their nature, are uncertain. The impacts of such estimates are pervasive throughout the carve-out combined financial statements, and may require accounting adjustments based on future occurrences.

Critical Accounting Estimates

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized prospectively from the period in which the estimates are revised. The following are the key estimate and assumption uncertainties that have a significant risk of resulting in a material adjustment within the next financial year.

Arcadian Minerals Corp. Notes to the Carve-Out Combined Financial Statements December 31, 2019 and 2018 (Expressed in Canadian dollars)

2. BASIS OF PRESENTATION (Continued)

(c) Significant accounting judgments and estimates (Continued)

Impairment of assets

When there are indications that an asset may be impaired, the Company is required to estimate the asset’s recoverable amount. Management considers various factors including overall economic viability of the project, resource prices and long-term forecasts, ability to maintain title and finance the asset, and market capitalization, when evaluating whether there are any indicators of impairment. Recoverable amount is the greater of value in use and fair value less costs of disposal. Determining the value in use requires the Company to estimate expected future cash flows associated with the assets and a suitable discount rate in order to calculate present value. The Guia Antigua Project was written down to $nil, due to management’s decision to curtail exploration operations (Note 4).

Deferred income tax

The provision for income taxes which is included in the carve-out combined statements of comprehensive loss and composition of deferred income tax assets and liabilities included in the carve-out combined statement of financial position.

Critical Accounting Judgments

In the preparation of these financial statements, management has made judgments, aside from those that involve estimates, in the process of applying the accounting policies. These judgments can have an effect on the amounts recognized in the financial statements.

Mineral properties under exploration

Management is required to apply judgment in determining whether technical feasibility and commercial viability can be demonstrated for the mineral properties. Once technical feasibility and commercial viability of a property can be demonstrated, exploration costs will be reclassified to mineral properties under exploration and subject to different accounting treatment. As at December 31, 2019 and 2018, management had determined that no reclassification of exploration expenditures was required, as no positive feasibility has been derived, no planned financing was in place and the Board of Directors had not approved the development of the Guia Antigua Project.

Going Concern

Management is required to apply judgment regarding the going concern assumption of the Company as discussed in Note 1. Management considers various factors including current working capital, budgeted and committed expenditures, discretionary expenditures and available financing opportunities. As at December 31, 2019, management determined the existence of material uncertainties that may cast significant doubt on the Company’s ability to continue as a going concern.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Presentation currency and functional currency

The Company’s presentation and functional currency is the Canadian dollar.

Transactions in currencies other than the functional currency are translated into the functional currency using the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities not denominated in the functional currency are translated at the period end rates of exchange. Foreign exchange gains and losses are recognized in the statement of loss and comprehensive loss. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

Arcadian Minerals Corp. Notes to the Carve-Out Combined Financial Statements December 31, 2019 and 2018 (Expressed in Canadian dollars)

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

(b) Basis of Consolidation

These carve-out combined financial statements include the accounts of the Company and its wholly-owned subsidiary, Argentum. Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Company obtains control, and continue to be consolidated until the date that such control ceases. All inter-company transactions and balances are eliminated in full.

(c) Cash

Cash includes deposits held with banks that are available on demand.

(d) Financial instruments

Financial assets are classified and measured either at amortized cost, fair value through other comprehensive income ("FVOCI") or fair value through profit or loss ("FVTPL") based on the business model in which a financial asset is managed and its contractual cash flow characteristics.

All financial assets not classified at amortized cost or FVOCI are measured at FVTPL. On initial recognition, the Company can irrevocably designate a financial asset at FVTPL if doing so eliminates or significantly reduces an accounting mismatch. A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated at FVTPL:

It is held within the business model whose objective is to hold the financial asset to collect the contractual cash flows associated with the financial asset instead of selling the financial asset for a profit or loss; and
Its contractual terms give rise to cash flows that are solely payments of principal and interest.

All financial instruments are initially recognized at fair value on the carve-out combined statements of financial position. Subsequent measurement of financial instruments is based on their classification. Financial assets and liabilities classified at FVTPL are measured at fair value with changes in those fair values recognized in the carve-out combined statements of loss and comprehensive loss for the period. Financial assets and liabilities classified at amortized cost are measured using the effective interest method.

Impairment of financial assets at amortized cost and expected credit losses

IFRS 9 introduces a new three-stage expected credit loss model for calculating impairment for financial assets. IFRS 9 no longer requires a triggering event to have occurred before credit losses are recognized. The Company is required to recognize expected credit losses when financial instruments are initially recognized and to update the amount of expected credit losses recognized at each reporting date to reflect changes in the credit risk of the financial instruments. In addition, IFRS 9 requires additional disclosure requirements about expected credit losses and credit risk.

The Company recognizes a loss allowance for expected credit losses on financial assets that are measured at amortized cost. At each reporting date, the Company measures the loss allowance for the financial asset at an amount equal to the lifetime expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition. If at the reporting date, the financial asset has not increased significantly since initial recognition, the Company measures the loss allowance for the financial asset at an amount equal to the twelve month expected credit losses. The Company shall recognize in the carve-out combined statement of loss and comprehensive loss, as an impairment gain or loss, the amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognized.

Arcadian Minerals Corp. Notes to the Carve-Out Combined Financial Statements December 31, 2019 and 2018 (Expressed in Canadian dollars)

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

(d) Financial instruments (Continued)

Loss allowances for accounts receivables are always measured at an amount equal to lifetime expected credit losses if the amount is not considered fully recoverable. Losses are recognized in the carve-out combined statement of loss and comprehensive loss and reflected in an allowance account against receivables. When a subsequent event causes the amount of impairment loss to decrease, the decrease in impairment loss is reversed through the carve-out combined statements of loss comprehensive loss. As at December 31, 2019, the Company had no allowance for doubtful accounts.

The following table summarizes the classification and measurement changes under IFRS 9 for each financial instrument:

instrument:
Financial Instrument	Classification
Cash	Amortized Cost
Amounts payable	Amortized Cost

(e) Exploration Expenses and Mineral Properties Under Exploration

Exploration expenditures include the costs of acquiring licenses, and costs associated with exploration and evaluation activities. Exploration expenditures are expensed as incurred except for expenditures associated with the acquisition of exploration and evaluation assets, which are recognized at the fair value at the acquisition date.

Once a project has been established as commercially viable and technically feasible, which management determines to occur when the project has a positive feasibility study, planned financing established, and the Board of Directors has approved a decision to develop the project, subject to an impairment analysis, related exploration and evaluation assets and development expenditures are capitalized. This includes costs incurred in preparing the site for mining operations. Capitalization ceases when the mine is capable of commercial production, with the exception of development costs which give rise to a future benefit.

The carrying value of the Company’s mineral properties under exploration is assessed for impairment, based on guidance in IFRS 6 - Exploration for and Evaluation of Mineral Resources, when indicators of such impairment exist. If such an indication of impairment exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment, if any.

The recoverable amount is the higher of fair value less costs of disposal or value in use. Fair value is determined as the amount that would be obtained from the sale of the asset in an arm’s length transaction between knowledgeable and willing parties. Where that does not exist, fair value less costs of disposal is assessed using discounted cash flow techniques, less an amount for costs of disposal. In assessing value in use, the estimated future cash flows are discounted at a pre ‐ tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount and the impairment loss is recognized in the carve-out combined statement of loss and comprehensive loss.

Arcadian Minerals Corp. Notes to the Carve-Out Combined Financial Statements December 31, 2019 and 2018 (Expressed in Canadian dollars)

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

(f) Income Taxes

Income tax expense comprises current and deferred tax. Current tax and deferred tax are recognized in profit or loss except to the extent that it relates to a business combination, or items recognized directly in equity or in other comprehensive income.

Current tax is the expected tax payable or receivable on the taxable income or loss 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 tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognized for the following temporary differences: the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss, and differences relating to investments in subsidiaries and jointly controlled entities to the extent that it is probable that they will not reverse in the foreseeable future. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realized simultaneously.

A deferred tax asset is recognized for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

(g) 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. Diluted loss per share is determined by adjusting the loss attributable to common shareholders and the weighted average number of common shares outstanding for the effects of all dilutive potential common shares from dilutive instruments such as the assumed exercised common share purchase warrants and options outstanding, and the conversion of convertible debentures, if dilutive. As at December 31, 2019, the Company had no dilutive instruments.

(h) Asset retirement obligations

The Company’s activities may give rise to dismantling, decommissioning and site disturbance re-mediation activities. Provision is to be made for the estimated cost of site restoration, and capitalized in the relevant asset category.

Asset retirement obligations are measured at the present value of management’s best estimate of expenditures required to settle the present obligation at the carve-out combined statement of financial position date. Subsequent to the initial measurement, the obligation is adjusted at the end of each period to reflect the passage of time and changes in the estimated future cash flows underlying the obligation.

The increase in the provision due to the passage of time is recognized as finance costs in the carve-out combined statement of loss and comprehensive loss whereas increases/decreases due to changes in the estimated future cash flows are capitalized. Actual costs incurred upon settlement of the asset retirement obligations are charged against the provision to the extent the provision was established.

As at December 31, 2019, there are no asset retirement obligations identified by the Company.

Arcadian Minerals Corp. Notes to the Carve-Out Combined Financial Statements December 31, 2019 and 2018 (Expressed in Canadian dollars)

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

(i) Recently adopted accounting standards

IFRS 16 – Leases

New standard to establish principles for recognition, measurement, presentation and disclosure of leases with an impact on lessee accounting, effective for annual periods beginning on or after January 1, 2019. Under IFRS 16, as a lessee, the Company is required to recognize all leases in the carve-out combined statement of financial position as a “right-of-use” asset and a lease liability unless the lease term is 12 months or less or the underlying asset has a very low value. The asset is subsequently accounted for in accordance with the cost or revaluation model in IAS 16 Property, Plant and Equipment or as Investment Property under IAS 40 Investment Property. The liability is unwound over the term of the lease giving rise to an interest expense. The Company completed an assessment and concluded that there is no material impact on the carve-out combined financial statements from the adoption of this standard.

4. MINERAL PROPERTIES UNDER EXPLORATION

Colombia

The Guia Antigua Project is subject to a 1% net smelter returns royalty (“NSR”) on 70% of the project, payable in kind or in cash at the election of the royalty holder.

As at December 31, 2019, the carrying amount of the Company’s interest in mineral properties is as follows:

		December 31, 2019		December 31, 2018 (Unaudited)
Guia Antigua - Colombia	$	-	$	9,377,220
Balance	$	-	$	9,377,220

Arcadian Minerals Corp. Notes to the Carve-Out Combined Financial Statements December 31, 2019 and 2018

(Expressed in Canadian dollars)

4. MINERAL PROPERTIES UNDER EXPLORATION (Continued)

		For the year ended		For the period from July 1, 2018 to
		December 31, 2019		December 31, 2018
				(Unaudited)
Guia Antigua Project exploration costs
Camp expenses	$	66,838	$	56,406
Consulting		133,060		91,483
Drilling		428,031		175,461
Engineering studies		5,843		37,256
Lab fees		940		2,227
Office and administrative costs		10,689		6,410
Salaries and benefits		161,084		82,103
Travel and accommodation		1,690		5,155
Total Guia Antigua Project exploration costs	$	808,175	$	456,501
Total exploration costs	$	808,175	$	456,501

5. EQUITY

The Company is authorized to issue 100 common shares at a par value of US$100 per share.

As at December 31, 2019, the Company had a total of 100 common shares outstanding, which were acquired by Gold X on July 1, 2018.

Contributed surplus

As at December 31, 2019 and 2018, the following amounts were contributed by Gold X.

	As at December 31, 2019	As at December 31, 2019		As at December 31, 2018
				(Unaudited)
Guia Antigua acquisition (Note 4)	$	9,377,220	$	9,377,220
Workingcapital advances		1,227,363		404,079
	$	10,604,583	$	9,781,299

Gold X advanced $823,284 to the Company for working capital requirements during the year ended December 31, 2019 (2018 - $404,079).

Arcadian Minerals Corp. Notes to the Carve-Out Combined Financial Statements December 31, 2019 and 2018 (Expressed in Canadian dollars)

6. RELATED PARTY TRANSACTIONS

Key management compensation during the periods ended December 31, 2019 and 2018 include:

		For the year ended		For the period from July 1, 2018 to
		December 31, 2019		December 31, 2018
				(Unaudited)
Augusto N. Garcia - President, Argentum	$	128,671	$	64,500

There were no amounts due to related parties as at December 31, 2019 and 2018.

7. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

Financial Risk Management

Cash and amounts payable are recorded at amortized cost which approximates fair value due to the short-term nature of these instruments.

Financial Instrument Risk Exposure

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

Liquidity risk

Liquidity risk is the risk that the Company will not have sufficient cash resources to meet its financial obligations as they come due. The Company’s liquidity and operating results may be adversely affected if its access to the capital market is hindered whether as a result of a downturn in stock market conditions generally or as a result of conditions specific to the Company. The Company gains cash primarily through advances from Gold X. At December 31, 2019, the Company had cash of $10,205 (December 31, 2018: $119,635) to settle amounts payable of $17,742 (December 31, 2018: $146,508). The Company regularly evaluates its cash position to ensure preservation and security of capital as well as maintenance of liquidity (Note 1).

Fair value measurement

Arcadian Minerals Corp. Notes to the Carve-Out Combined Financial Statements December 31, 2019 and 2018 (Expressed in Canadian dollars)

7. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (Continued)

Financial Instrument Risk Exposure (Continued)

Foreign exchange risk

8. CAPITAL MANAGEMENT

The Company manages its capital to ensure that funds are available or are scheduled to be raised to provide adequate funds to carry out the Company’s defined exploration programs and to meet its ongoing administrative costs. As at December 31, 2019, the Company had a working capital deficit of $7,537 (December 31, 2018: $26,873). The Company is not subject to any externally imposed capital requirements.

The Company’s capital management objectives, policies and processes remained unchanged during 2019.

9. INCOME TAXES

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

		2019		2018
Loss	$	(10,181,168)	$	(435,452)
Expected income tax (recovery)	$	(3,360,000)	$	(144,000)
Permanent differences and other		3,093,000		72,000
Change in unrecognized deductible temporary differences		267,000		72,000
Total income tax expense(recovery)	$	-	$	-

The applicable tax rate used is the Colombia tax rate of 33%, as all of the operations of the Company and future taxable income are expected to be in Colombia.

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

			Expiry Date			Expiry Date
		2019	Range		2018	Range
TemporaryDifferences
Exploration and evaluation assets	$	1,026,000	No expiry date	$	218,000	No expirydate

Arcadian Minerals Corp. Notes to the Carve-Out Combined Financial Statements December 31, 2019 and 2018 (Expressed in Canadian dollars)

10. SUBSEQUENT EVENTS

On August 28, 2020, 1255269 completed the 100% acquisition of Arcadian, by purchasing all the issued and outstanding shares of Arcadian from Gold X in exchange for cash consideration of $1,000,000.

COVID-19

Subsequent to December 31, 2019, the outbreak of the novel strain of coronavirus, specifically identified as “COVID-19”, has resulted in governments worldwide enacting emergency measures to combat the spread of the virus. These measures, which include the implementation of travel bans, self-imposed quarantine periods and social distancing, have caused material disruption to Company globally resulting in an economic slowdown. Global equity markets have experienced significant volatility and weakness. Governments and central banks have reacted with significant monetary and fiscal interventions designed to stabilize economic conditions. The duration and impact of the COVID-19 outbreaks is unknown at this time, as is the efficacy of the government and central bank interventions. It is not possible to reliably estimate the length and severity of these developments and the impact on the financial results and condition of the Company in future periods.

APPENDIX D FINANCIAL STATEMENTS OF GRAN COLOMBIA GOLD TITIRIBI CORP.

Please see attached.

Gran Colombia Gold Titiribi Corp.

Consolidated Financial Statements

For the years ended December 31, 2019 and 2018, and for the three and nine months ended September 30, 2020 and 2019

==> picture [80 x 32] intentionally omitted <==

KPMG LLP Bay Adelaide Centre 333 Bay Street, Suite 4600 Toronto, ON M5H 2S5 Canada Tel 416-777-8500 Fax 416-777-8818

INDEPENDENT AUDITORS’ REPORT

To the Board of Directors of Gran Colombia Gold Titiribi Corp.

Opinion

We have audited the consolidated financial statements of Gran Colombia Gold Titiribi Corp. (the Entity), which comprise:

the consolidated statements of financial position as at December 31, 2019, December 31, 2018, and January 1, 2018
the consolidated statements of operations and comprehensive income for the years ended December 31, 2019 and December 31, 2018
the consolidated statements of equity for the years ended December 31, 2019 and December 31, 2018
the consolidated statements of cash flows for the years ended December 31, 2019 and December 31, 2018
and notes to the consolidated financial statements, including a summary of significant accounting policies

(Hereinafter referred to as the “financial statements”).

In our opinion, the accompanying financial statements present fairly, in all material respects, the consolidated financial position of the Entity as at December 31, 2019, December 31, 2018 and January 1, 2018, and its consolidated financial performance and its consolidated cash flows for the years ended December 31, 2019 and December 31, 2018, in accordance with International Financial Reporting Standards (IFRS).

Basis for Opinion

We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the “ Auditors’ Responsibilities for the Audit of the Financial Statements ” section of our auditors’ report.

We are independent of the Entity in accordance with the ethical requirements that are relevant to our audit of the financial statements in Canada and we have fulfilled our other ethical responsibilities in accordance with these requirements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

KPMG LLP is a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. KPMG Canada provides services to KPMG LLP.

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Material Uncertainty Related to Going Concern

We draw attention to Note 2 in the financial statements, which indicates that the Company has no sources of revenue or cash inflows and has been dependent on the Gran Colombia Gold Corp. and other related parties for the cash needed to maintain operations including exploration activities and payment of operating expenses.

As stated in Note 2 in the financial statements, these events or conditions, along with other matters as set forth in Note 2 in the financial statements, indicate that a material uncertainty exists that casts significant doubt on the Entity's ability to continue as a going concern.

Our opinion is not modified in respect of this matter.

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

Management is responsible for the preparation and fair presentation of the financial statements in accordance with International Financial Reporting Standards (IFRS), and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Entity’s ability to continue as a going concern, disclosing as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Entity or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Entity’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Financial Statements

Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists.

Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements.

As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit.

We also:

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.

The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Entity's internal control.

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Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Entity's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Entity to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
Provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the group Entity to express an opinion on the financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

The engagement partner on the audit resulting in this auditors’ report is Francis L. Klemenchuk

Chartered Professional Accountants, Licensed Public Accountants

Toronto, Canada February 18, 2021

Gran Colombia Gold Titiribi Corp. Consolidated Statements of Financial Position

(Expressed in thousands of U.S. dollars)

Notes September 30, 2020 December 31, 2019	December 31, 2018	January 1, 2018
(Unaudited) ASSETS Current Cash and cash equivalents $ 36 $ 56 Income tax and other receivables 5 6	$ - 6	(Note 2) $ - 6
41 62 Non-current Due from related party 8 15 18 Mining interest 5 - -	6 18 -	6 20 -
Total assets $56 $80	$24	$26
LIABILITIES AND EQUITY Current Accounts payable and accrued liabilities $ 6 $ 1 Non-current Due to related parties 8 5,719 6,755	$ 1 $ 4 9,975 10,839
Total liabilities 5,725 6,756	9,976	10,843
Equity Share capital 6 23,666 23,666 Accumulated other comprehensive loss (19) (1,058) Deficit (29,316) (29,284)	20,516 (1,198) (29,270)	20,516 (2,084) (29,249)
Total equity (5,669) (6,676)	(9,952)	(10,817)
Total liabilities and shareholders’ equity $56 $80	$24	$26

Going concern (Note 2) Subsequent events (Notes 8 and 11)

See accompanying notes to the consolidated financial statements.

Gran Colombia Gold Titiribi Corp. Consolidated Statements of Operations and Comprehensive Income

Years ended December 31, 2019 and 2018 and three and nine months ended September 30, 2020 and 2019

(Expressed in thousands of U.S. dollars, except share amounts)

	Three Months ended September 30, Nine Months ended September 30, Years ended December 31, 2020 2019 2020 2019 2019 2018
	(Unaudited) (Unaudited) (Unaudited) (Unaudited) Expenditures General and administrative $ 5 $ 1 $ 8 $ 2 $ 1 $ 19 Consulting and other services 13 - 23 - - 1
	Total expenditures 18 1 31 2 1 20
	Other expenses Bank charges 2 6 1 9 13 - Wealth tax - - - - - 1
	2 6 1 9 13 1
	Loss before income tax (20) (7) (32) (11) (14) (21) Income tax - - - - - -
	Net loss $(20) $(7) $(32) $(11) $(14) $(21)
	Other comprehensive income: Items that may be reclassified to profit in subsequent periods: Foreign currency translation adjustment (nil tax effect) 182 618 1,039 495 140 886
	Comprehensive income $ 162 $ 611 $ 1,007 $ 484 $ 126 $ 865
	Basic and diluted loss per share $ (40) $ (14) $ (64) $ (22) $ (28) $ (42)
	Weighted average number of common shares outstanding 500 500 500 500 500 500

See accompanying notes to the consolidated financial statements.

Gran Colombia Gold Titiribi Corp. Consolidated Statements of Equity

Years ended December 31, 2019 and 2018 and nine months ended September 30, 2020 and 2019 (Expressed in thousands of U.S. dollars)

		Nine Months ended	Nine Months ended	Years	ended
		September 30,		December 31,
	Notes	2020	2019	2019		2018
		(Unaudited)	(Unaudited)
Share capital
Balance, beginning of period	6	$ 23,666	$ 20,516	$ 20,516	$	20,516
Share capital contributions	6	-	2,150	3,150		-
Balance, end of period		23,666	22,666	23,666		20,516
Accumulated other comprehensive loss
Balance, beginning of period		(1,058)	(1,198)	(1,198)		(2,084)
Foreign currency translation adjustment		1,039	495	140		886
Balance, end of period		(19)	(703)	(1,058)		(1,198)
Deficit
Balance, beginning of period		(29,284)	(29,270)	(29,270)	(29,249)
Net loss		(32)	(11)	(14)		(21)
Balance, end of period		(29,316)	(29,281)	(29,284)	(29,270)
Total equity		$(5,669)	$(7,318)	$(6,676)	$	(9,952)

See accompanying notes to the consolidated financial statements.

Gran Colombia Gold Titiribi Corp. Consolidated Statements of Cash Flows

Years ended December 31, 2019 and 2018 and nine months ended September 30, 2020 and 2019 (Expressed in thousands of U.S. dollars)

		Nine	Months ended	Months ended		Years ended
		September 30,				December 31,
		2020	2019		2019		2018
		(Unaudited)	(Unaudited)
Net loss		$ (32)	$ (11)		$ (14)	$	(21)
Changes in non-cash working capital items:
Income tax and other receivables		1		1	-		-
Accounts payable and accrued liabilities		5		-	-		(3)
		(26)	(10)		(14)		(24)
Operating cash flows before taxes
Income taxes paid		-		-	-		-
		-		-	-		-
Net cash used in operating activities		(26)	(10)		(14)		(24)
Financing Activities
Share capital contributions	6b	-	2,150		3,150		-
Increase (decrease) in amounts due to related parties	8	15	(2,126)		(3,077)		24
Net cash provided from financing activities		15		24	73		24
Impact of foreign exchange rate changes on
cash and cash equivalents		(9)		(6)	(3)		-
(Decrease) increase in cash and cash
equivalents		(20)		8	56		-
Cash and cash equivalents, beginning of period		56		-	-		-
Cash and cash equivalents, end ofperiod		$ 36	$	8	$ 56	$	-

Gran Colombia Gold Titiribi Corp. Notes to the Consolidated Financial Statements

As of December 31, 2019, December 31, 2018, January 1, 2018 and September 30, 2020 and for each of the years in the two-year period ended December 31, 2019 and for the three and nine months ended September 30, 2020 and September 2019. Information as of September 30, 2020 and for the three and nine months ended September 30, 2020 and September 30, 2019 is unaudited.

(Tabular amounts expressed in thousands of U.S. dollars unless otherwise noted)

1. NATURE OF OPERATIONS

Gran Colombia Gold Titiribi Corp. and its Colombian branch, Gran Colombia Gold Titiribi Sucursal Colombia (collectively the “Company”), are engaged in the acquisition, exploration and evaluation of gold properties in Colombia, with its principal operations in the Zancudo project located in the municipality of Titiribi, mining district of Antioquia. The Company, incorporated under the laws of Panama, is a wholly-owned subsidiary of Gran Colombia Gold S.A. (“Parent”), which in turn is a wholly-owned Panamanian subsidiary of Gran Colombia Gold Corp. (“Gran Colombia” or “Ultimate Parent”), a Canadian-listed public company.

2. BASIS OF PRESENTATION

These financial statements, approved by its Board of Directors on February 18, 2021, have been prepared in accordance with International Financial Reporting Standards (“IFRS”). The interim financial statements as at September 30, 2020 and for the three and nine month periods ended September 30, 2020 and September 30, 2019 have been prepared in accordance with International Accounting Standards 34, Interim Financial Reporting.

The financial statements have been prepared under the historical cost basis, except for certain financial assets and liabilities which are measured at fair value, and are presented in U.S. dollars, rounded to the nearest thousand except when otherwise indicated.

First IFRS financial statements

Although the Company had prepared a reporting package in accordance with IFRS for consolidation purposes in connection with the preparation of the annual and interim consolidated financial statements of Gran Colombia, the financial statements as at and for the year ended December 31, 2019, are the first financial statements prepared by the Company under IFRS and, as such, are prepared in accordance with the provisions of IFRS 1 – First Time Adoption of International Financial Reporting Standards and include an opening statement of financial position on its transition date of January 1, 2018. There were no adjustments to the prior financial statements as a result of adoption of IFRS. As permitted by IFRS 1, the Company has applied the following elections in its adoption of IFRS:

i) IFRS 1 permits the measurement of any item of property, plant and equipment at the item’s fair value on the date of transition as the item’s deemed cost. The Company elected to deem the cost of mining interest at its fair value on the date of transition. The mining interest had a fair value on January 1, 2018 that approximated its nominal carrying value on that date and as a result, no transition adjustment was recorded.
ii) The Company has elected to apply the provisions of IFRS 9 in the year of adoption of IFRS (2019) and the comparative periods have not been restated.

Going concern uncertainty

These consolidated financial statements have been prepared on a going concern basis assuming that the Company will be able to realize its assets and discharge its liabilities in the normal course of business as they come due for the foreseeable future. The Company has no sources of revenue or cash inflows and has been and continue to be dependent on its Ultimate Parent and other related parties for the cash needed to maintain operations including exploration activities and payment of operating expenses. The lack of independent financing represents a material uncertainty that casts significant doubt as to the ability of the Company to continue as a going concern. These financial statements do not include adjustments to the recoverability and classifications of recorded assets and liabilities and related expenses that might be necessary should the Company be unable to continue as a going concern. Such adjustments may be material.

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Gran Colombia Gold Titiribi Corp. Notes to the Consolidated Financial Statements

(Tabular amounts expressed in thousands of U.S. dollars unless otherwise noted)

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The significant accounting policies used in the preparation of these financial statements are as follows:

Consolidation

These financial statements comprise the financial results of the Company including its subsidiary. Details regarding the Company and its subsidiary, both of which have a December 31 year end, are as follows:

					Interest as at
Entity	Property/	Registered	Functional	September 30,	December 31,	December 31,
	function		currency(1)	2020	2019	2018
Gran Colombia Gold Titiribi, Corp.	Corporate	Panama	USD
Gran Colombia Gold Titiribi Sucursal	Zancudo
Colombia	Project	Colombia	COP	100%	100%	100%

(1) “USD” = U.S. dollar; “COP” = Colombian peso

Intercompany transactions, balances and unrealized gains and losses on transactions between group companies are eliminated. Accounting policies of subsidiaries and associates have been changed where necessary to ensure consistency with the policies adopted by the Company.

Foreign currency translation

a) Functional and presentation currencies

Items included in the financial statements of each entity consolidated by the Company are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). The functional currencies of the Company and its subsidiary are disclosed in the table under “Consolidation” above. The financial statements are presented in U.S. dollars.

b) Transactions and balances

Foreign currency transactions are translated into the functional currency of the entity using the exchange rates prevailing at the dates of the transactions or revaluation where items are re-measured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in the consolidated statement of operations.

c) Group companies

The results and financial position of the Company’s subsidiary which has a functional currency different from the presentation currency are translated into the presentation currency as follows:

i) assets and liabilities for each statement of financial position presented are translated at the closing rate at the date of that statement of financial position;
ii) income and expenses for each consolidated statement of operations and cash flows for the periods presented are translated at average exchange rates (unless this average is not a reasonable

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Gran Colombia Gold Titiribi Corp. Notes to the Consolidated Financial Statements

(Tabular amounts expressed in thousands of U.S. dollars unless otherwise noted)

approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the rate on the dates of the transactions);
iii) components of equity are translated at the exchange rates at the dates of the relevant transactions or at average exchange rates where this is a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, and are not re-translated; and
iv) all resulting exchange differences are recognized in other comprehensive income (loss).

When a foreign operation is partially disposed of or sold, exchange differences that were recorded in equity are recognized in the consolidated statement of operations as part of the gain or loss on sale.

Segment reporting

Reportable segments are those whose operating results are reviewed by the chief operating decision-maker, identified as the Board of Directors, which is responsible for allocating resources and assessing performance.

The Company currently operates in one reportable operating segment, being the acquisition, exploration and evaluation of gold properties in Colombia.

Cash and cash equivalents

Cash and cash equivalents includes cash on hand, term deposits and other short-term highly liquid investments with original maturities of three months or less. Bank overdrafts are included in liabilities as bank indebtedness.

Accounts receivable

Receivables are measured at amortized cost using the effective interest method less a provision for impairment. Provision is made in the allowance for doubtful accounts based on management’s best estimate of the accounts receivable balances that may not be collectible.

Mining interests and exploration and evaluation (“E&E”) assets

Exploration and evaluation activities involve the search for minerals, the determination of technical feasibility and the assessment of commercial viability of an identified resource. Exploration and evaluation expenditures include costs which are directly attributable to:

researching and analyzing existing exploration data;
conducting geological studies, exploratory drilling and sampling;
examining and testing extraction and treatment methods;
completing pre-feasibility and feasibility studies; and
costs incurred in acquiring mineral rights.

E&E expenditures are capitalized as mining interests and are classified as such until the project demonstrates technical feasibility and commercial viability. Technical feasibility and commercial viability generally coincides with the establishment of proven and probable reserves; however, they may also occur when the Company makes a decision to proceed with development or begins production. Upon demonstrating technical feasibility and commercial viability, and subject to an impairment analysis, capitalized exploration and evaluation costs are transferred to mineral properties within property, plant and equipment.

Current and deferred income tax

The provision for income tax for the year comprises current and deferred income tax. Income tax is recognized in the consolidated statement of operations, except to the extent that it relates to items recognized in other comprehensive income or directly in equity. In this case the tax is also recognized in other comprehensive income or directly in equity, respectively.

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Gran Colombia Gold Titiribi Corp. Notes to the Consolidated Financial Statements

(Tabular amounts expressed in thousands of U.S. dollars unless otherwise noted)

Current income tax is the expected tax payable on the taxable income for the year, using tax rates enacted, at the end of the reporting period, and any adjustment to tax payable in respect of previous years.

Deferred income tax is recognized using the asset and liability method on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. However, deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined on a non-discounted basis using tax rates (and laws) that have been enacted or substantively enacted by the consolidated statement of financial position date and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled.

Deferred income tax assets are recognized to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized.

Deferred income tax is provided on temporary differences arising on investments in subsidiaries, except where the timing of the reversal of the temporary difference is controlled by the Company and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.

Provision for Decommissioning

The provision for decommissioning arises from the development, construction and normal operation of mining property, plant and equipment as mining activities are subject to various laws and regulations governing the protection of the environment. In general, these laws and regulations are continually changing, and the Company has made, and intends to make in the future, expenditures to comply with such laws and regulations.

The estimated present value of reclamation liabilities is recorded in the period in which the liabilities are incurred and the resulting costs are capitalized to the carrying amount of the related asset. The liability will be increased each period to reflect the interest element and will also be adjusted for changes in the discount rates and in the estimates of the amount, timing and cost of the work to be carried out.

As at September 30, 2020, December 31, 2019 and December 31, 2018 the Company has not incurred in such obligations.

Provisions for other liabilities and charges

Provisions are recognized when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated.

Provisions are based on management’s best estimate of the expenditure required to settle the obligation and are generally measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to passage of time is recognized as finance costs.

Earnings per share

Basic earnings per share is computed by dividing net income for the period by the weighted average number of common shares outstanding during the period.

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Gran Colombia Gold Titiribi Corp. Notes to the Consolidated Financial Statements

(Tabular amounts expressed in thousands of U.S. dollars unless otherwise noted)

Financial instruments

The classification and measurement of financial assets is based on the Company's business models for managing its financial assets and whether the contractual cash flows represent solely payments for principal and interest.

The Company has assessed the classification and measurement of its financial assets and financial liabilities as follows:

	Classification category
Cash and cash equivalents Amounts receivable Due to/from related parties Accounts payable and accrued liabilities	Amortized cost Amortized cost Amortized cost Amortized cost

Fair value hierarchy

IFRS requires an entity to classify financial assets and liabilities that are recognized in the statement of financial position at fair value in a hierarchy that is based on significance of the inputs used in making the measurements. The levels in the hierarchy are:

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 (that is, as prices) or indirectly (that is, derived from prices); and
Level 3 - Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs).

Impairment

Financial assets

At each reporting date, the Company assesses whether there is objective evidence that a financial asset is impaired using an expected credit loss impairment model. If such evidence exists, the Company recognizes an impairment loss. The Company’s financial assets are comprised primarily of amounts due from related parties for which there is no history or expectation of default. Impairment losses on financial assets carried at amortized cost are reversed in subsequent periods if the amount of the loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognized.

Non-financial assets

Assets that are subject to amortization are reviewed for impairment, or reversal of impairment, as the case may be, whenever events or changes in circumstances indicate there is a change in the recoverability of the carrying amount. The recoverable amount is the higher of an asset’s fair value less costs of disposal and value in use. For the purpose of assessing impairment, assets are grouped at the lowest level for which there are separately identifiable cash inflows (cash generating units or “CGUs”), which are typically the individual mining projects. The estimates used for impairment reviews are based on detailed mine plans and operating budgets, modified as appropriate to meet the requirements of IAS 36, Impairment of Assets .

Value in use is determined based on discounted cash flow models taking into consideration estimates of the quantities of the reserves and mineral resources, future production levels, future metal prices, and future cash costs of production, capital expenditure, shutdown, restoration and environmental clean-up. Assumptions used are specific to the Company and the discount rate applied in the value in use test is based on the

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Gran Colombia Gold Titiribi Corp. Notes to the Consolidated Financial Statements

(Tabular amounts expressed in thousands of U.S. dollars unless otherwise noted)

Company’s estimated weighted average cost of capital with appropriate adjustment for the risks associated with the relevant cash flows, to the extent that such risks are not reflected in the forecasted cash flows.

When evaluating fair value less costs of disposal, fair value is determined based on the amount that could be obtained in an arm’s length transaction and generally uses a discounted cash flow model based on the present value of estimated future cash flows, including future expansions or development projects. In a fair value less costs of disposal analysis the assumptions used are those that a market participant would be expected to apply.

An impairment charge is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount and is recorded in the consolidated statement of operations. Non-financial assets, other than goodwill, that were previously impaired are reviewed for possible reversal of the impairment at each reporting date when an event warrants such consideration. The reversal is limited to the carrying value that would have been determined, net of any applicable depreciation, had no impairment charge been recognized in prior years.

4. SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS

The preparation of financial statements in conformity with IFRS requires management to use judgment in applying its accounting policies and estimates and assumptions about future events that affect the amounts reported in the financial statements and related notes to the financial statements. Judgments and estimates are continuously evaluated and are based on management’s best knowledge of the relevant facts and circumstances, having regard to prior experience, but actual results may differ significantly from the amounts included in the financial statements.

a) Significant Judgments in the application of accounting policies

Areas of judgment that have the most significant effect on the amounts recognized in the financial statements are as follows:

E&E assets

E&E assets are assessed for impairment or reversal of prior impairment when facts and circumstances suggest that the carrying amount of an exploration and evaluation asset may exceed its recoverable amount or that previous facts and circumstances leading to a prior impairment may have changed. In assessing the facts and circumstances that may indicate impairment or reversal of impairment for E&E assets, the Company is required to apply judgment in considering various factors.

Assets’ carrying values and impairment charges or reversals

Non-financial assets other than E&E assets are tested for impairment when events or changes in circumstances indicate there has been a change in the estimates used to determine the asset’s recoverable amount. Factors which could trigger an impairment review include, but are not limited to, significant industry or economic trends, current, historical or projected losses that demonstrate continuing losses or sufficient data exists to indicate that although development in a specific area is likely to proceed, the carrying amount of the assets is unlikely to be recovered in full from successful development of by sale.

In determining the recoverable amount and impairment charges or reversals, management looks at the higher of value in use and fair value less costs of disposal in the case of assets and at objective evidence, significant or prolonged decline of fair value on financial assets indicating impairment. These determinations and their individual assumptions require that management use judgment when making a decision based on the best available information at each reporting period.

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Gran Colombia Gold Titiribi Corp. Notes to the Consolidated Financial Statements

(Tabular amounts expressed in thousands of U.S. dollars unless otherwise noted)

Income taxes

The Company is subject to income taxes in numerous jurisdictions. Significant judgment is required in determining the consolidated provision for income taxes. There are transactions and calculations for which the ultimate tax determination is uncertain. The Company recognizes liabilities for potential tax exposures based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the current and deferred income tax assets and liabilities in the year in which such determination is made.

At each reporting date, the Company evaluates the likelihood of whether some portion of the deferred tax assets will not be realized. Once the evaluation is completed, if the Company believes that it is probable that some portion of the deferred tax assets will fail to be realized, the Company records only the remaining portion for which it is probable that there will be available future taxable profit against which the temporary differences can be utilized. Assessing the recoverability of deferred income tax assets requires management to make significant judgments.

b) Significant accounting estimates and assumptions

The areas which require management to make significant estimates and assumptions in determining carrying values include:

Impairment

The measurement of the recoverable amount of the Company’s non-financial assets, for the purpose of comparison with the carrying value, is based on numerous assumptions.

The fair values are based, in part, on certain factors that may be partially or totally outside of the Company’s control. This evaluation involves a comparison of the estimated fair values of non-financial assets to their carrying values. The Company’s fair value estimates are based on numerous assumptions including, but not limited to, estimated metal prices, operating costs, recoveries, resources, capital and site restoration expenditures and estimated future foreign exchange rates. The fair value estimates may differ from actual fair values and these differences may be significant and could have a material impact on the Company’s financial position and results of operations. Reserve and resource estimates are the most important variable in the Company’s fair value estimates. A change in the Company’s reserves and resources may result in an impairment charge or reversal of impairment, as the case may be, which could impact the Company’s net income.

Management’s estimates of future cash flows are subject to risk and uncertainties. Therefore, it is reasonably possible that changes could occur with evolving economic conditions, which may affect recoverability of the Company’s non-financial assets.

5. MINING INTEREST

The Company owns the Zancudo Project located in the municipality of Titiribi, in the mining district of Antioquia, Colombia. The carrying amount of the Zancudo project equals its deemed cost of nil upon adoption of IFRS on January 1, 2018.

IAMGOLD Option Agreement

The Company entered into an option agreement dated as of February 27, 2017 with IAMGOLD Corp. (“IAMGOLD”) for the exploration and potential purchase of an interest in the Company's Zancudo Project.

Under the agreement, IAMGOLD has been granted an option to acquire an initial undivided 65% interest (the "First Option") in the Zancudo Project by incurring an aggregate of $10.0 million of mineral exploration expenditures over a six-year period ending in March 2023, subject to meeting specified annual work commitments during the First Option period, of which the first $1.0 million to be incurred within the first year is

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Gran Colombia Gold Titiribi Corp. Notes to the Consolidated Financial Statements

(Tabular amounts expressed in thousands of U.S. dollars unless otherwise noted)

a firm commitment. IAMGOLD has the right to cease its obligations at any time thereafter. From 2017 through 2019, IAMGOLD has completed a total of approximately 16,224 meters of drilling at Zancudo and has incurred over $4.0 million of its exploration commitment. However, due to COVID-19, IAMGOLD has suspended its drilling program thus far in 2020.

IAMGOLD has also been granted an additional option (the "Second Option") to acquire a further 5% undivided interest for an aggregate 70% undivided interest in the Zancudo Project by completing a feasibility study within three years after exercising the First Option. As at September 30, 2020 the Second Option remains available to IAMGOLD as the First Option remains in compliance.

Upon exercise of the First Option or the Second Option, as the case may be, the parties will form a joint venture to hold the Zancudo Project, to advance the exploration and, if feasible, to advance the development and mining of any commercially exploitable ore body.

6. SHARE CAPITAL

a) Authorized

500 common shares with no par value.

b) Issued and fully paid

As at September 30, 2020, December 31, 2019 and December 31, 2018, the Company had 500 common shares issued and outstanding.

During the year ended December 31, 2019, the Parent made cash contributions to share capital in the amount of $3.2 million, without issuing additional common shares, as follows:

March 2019	$ 100
June 2019	600
July 2019	950
August 2019	500
Nine months ended September 30, 2019	2,150
October 2019	1,000
Total share capital contributions	$3,150

7. FINANCIAL RISK MANAGEMENT

a) Credit risk

The exposure to credit risk arises through the failure of a third party to meet its contractual obligations to the Company. The Company’s exposure to credit risk arises primarily from the Company’s cash balances, which are held with highly-rated Colombian financial institutions.

b) Foreign currency risk

The Company is exposed to foreign currency fluctuations in Colombian pesos (“COP”). Such exposure arises primarily from expenditures that are denominated in currencies other than the functional currency. The Company monitors its exposure to foreign currency risks. To reduce its foreign currency exposure associated with operating expenses incurred in COP, the Company may enter into foreign currency derivatives to manage such risks. For the nine months ended September 30, 2020 and the year ended December 31, 2019, the Company did not utilize derivative financial instruments to manage this risk.

Page | 13

Gran Colombia Gold Titiribi Corp. Notes to the Consolidated Financial Statements

(Tabular amounts expressed in thousands of U.S. dollars unless otherwise noted)

The following table summarizes, in USD equivalents, the Company’s major currency exposure in COP:

	September 30,	December 31,	December 31,
	2020	2019	2018
Cash	$ 36	$ 56	$ -
Income tax and other receivables	5	6	6
Net amount due from related parties	(5,704)	(6,737)	(9,957)
Accounts payable and accrued liabilities	(6)	(1)	(1)
Net financial liabilities	$ (5,669)	$ (6,676)	$ (9,952)

Based on the net exposure at September 30, 2020, December 31, 2019 and December 31, 2018 a 10% depreciation or appreciation of the COP against the USD would result in approximately a $0.6 million, $0.7 million and $1.0 million, respectively, decrease or increase in the Company’s other comprehensive income.

c) Liquidity risk

The Company manages its liquidity risk by continuously monitoring forecast cash flow requirements. Since Company has no sources of revenue, cash inflows are dependent on the funding of its Ultimate Parent and/or other related parties. The Company’s financial obligations currently consist of the following:

Accounts payable and accrued liabilities : These arise during the normal course of business and are paid from operating cash flow, and except under certain exceptions, are usually due within no later than one month. The Company from time to time may also enter into payment plans to pay these amounts over extended periods, typically less than 12 months.

The carrying value of accounts payable and accrued liabilities approximates its fair value as they are shortterm in nature.

d) Price risk

Price risk is the risk that the fair value or future cash flows of the Company’s financial instruments will fluctuate because of changes in market prices. Gold and silver prices can be subject to volatile price movements, which can be material and can occur over short periods of time and are affected by numerous factors, all of which are beyond the Company’s control.

e) Fair value risk

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

For financial instruments that are recognized at fair value on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing their classification (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period. The fair values of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities and taxes payable, approximate their carrying values due to the short term maturity of these financial instruments.

f) Capital management

The Company’s objectives, when managing capital, are to safeguard cash as well as maintain financial liquidity and flexibility in order to preserve its ability to meet financial obligations and deploy capital to maintain investor, creditor and market confidence to sustain the future development of the business.

The Company’s financial strategy is designed to maintain a flexible capital structure consistent with the objectives stated above and to respond to business growth opportunities and changes in economic conditions.

Page | 14

Gran Colombia Gold Titiribi Corp. Notes to the Consolidated Financial Statements

(Tabular amounts expressed in thousands of U.S. dollars unless otherwise noted)

In order to maintain or adjust its capital structure, the Company may, from time to time, issue new shares, issue new debt (secured, unsecured, convertible and/or other types of debt instruments), acquire or dispose of assets or adjust its capital spending to manage its ability to continue as a going concern. The Company is not subject to any externally imposed capital requirements.

g) Risks related to COVID-19

Due to the worldwide COVID-19 situation, conditions may come into existence in future that could influence the exploration and evaluation activities on the Company’s Zancudo Project and the ability of the Company to raise capital. Impacts that COVID-19 may have that could impact the Company include:

global gold prices;
the severity and the length of potential measures taken by the Colombian government to manage the spread of the disease and their effect on IAMGOLD’s performance under its Option Agreement due to labour availability and supply lines;
availability of government supplies, such as water and electricity;
local currency purchasing power; or
ability to obtain funding, if needed.

The COVID-19 situation has not significantly impacted the Company as its direct exploration and evaluation activities, in light of the IAMGOLD Option Agreement (Note 5), are currently minor. In response to the COVID19 situation, IAMGOLD has temporarily suspended its exploration and evaluation activities in 2020 on the Zancudo Project. There is risk that a reinstatement of a prolonged period of quarantine in Colombia may adversely impact the Company’s activities, including IAMGOLD’s exploration program.

8. RELATED PARTY TRANSACTIONS

Net amount due to related parties

et amount due to related parties
	September 30,	December 31,	December 31,
	2020	2019	2018
Due from related party
Parent	$ 15	$ 18	$ 18
Due to related parties
Other subsidiaries of Ultimate Parent	(5,719)	(6,755)	(9,975)
Net amount due to relatedparties	$ (5,704)	$ (6,737)	$ (9,957)

The amounts due to and from related parties arise primarily from the parent’s global cash management program to fund the activities of its various subsidiaries in Colombia. The amounts due to and from related parties, all of which are denominated in COP, are non-interest bearing and due on demand. At September 30, 2020, the net amount due to related parties amounted to COP 22.1 billion (December 31, 2019 – COP 22.1 billion; December 31, 2018 – COP 32.4 billion).

During the year ended December 31, 2019, the Parent made capital contributions to share capital amounting to approximately $3.2 million (Note 6b) which were used to repay a portion of the amount due to related parties.

Subsequent to September 30, 2020, on December 29, 2020, the Parent made an additional capital contribution to the share capital of the Company in the amount of $6.4 million, the proceeds of which were used to settle in full the net amount due to related parties amounting to COP 22.2 billion, equivalent to $6.4 million at the exchange rate on the settlement date.

Page | 15

Gran Colombia Gold Titiribi Corp. Notes to the Consolidated Financial Statements

(Tabular amounts expressed in thousands of U.S. dollars unless otherwise noted)

Key management personnel compensation

Key management personnel include those persons having authority and responsibility for planning, directing and controlling the activities of the Company as a whole. The Company has determined that key management personnel consist of the Board of Directors and executive officers of its parent company, Gran Colombia. Gran Colombia does not charge the Company any fees with respect to the services of the key management personnel.

These transactions, occurring in the normal course of operations, are measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties.

10. INCOME TAXES

The provision for the income tax differs from the amount that would have resulted by applying the Colombian statutory income tax rate as provided below:

tatutory income tax rate as provided below:
	Nine months ended	Year ended	Year ended
	September 30,	December 31,	December 31,
	2020	2019	2018
Loss before income tax	$ (32)	$ (14)	$ (21)
Colombian statutory income tax rate	32%	33%	37%
Income tax expense at statutory rate	(10)	(5)	(8)
Change in unrecognized deferred tax asset	10	5	8
Income tax expense	$-	$-	$-

Deductible temporary differences for which no deferred tax assets have been recognized are attributable to the following deductible temporary differences:

	September 30,	December 31,	December 31,
	2020	2019	2018
Colombian income tax losses	$ 1,287	$ 1,523	$ 1,494
Mininginterests	11,063	13,095	13,241
	$ 12,350	$ 14,618	$ 14,735

The income tax losses in Colombia can be carried forward to reduce taxable income in future years. The losses are scheduled to expire as follows:

Year of expiry	Amount
2030	$ 12
2031	35
2032	1
Indefinite	1,239
	$1,287

10. SEGMENT DISCLOSURES

The Company currently operates in one operating segment, being the acquisition, exploration and evaluation of gold properties in Colombia.

Page | 16

Gran Colombia Gold Titiribi Corp. Notes to the Consolidated Financial Statements

(Tabular amounts expressed in thousands of U.S. dollars unless otherwise noted)

As at September 30, 2020, December 31, 2019 and December 31, 2018, all material non-current assets of the Company were located in Colombia.

11. SUBSEQUENT EVENT

On November 20, 2020 the Ultimate Parent and the Parent entered into a Share Purchase Agreement (“SPA”) with ESV Resources Ltd. (“ESV”) whereby ESV will acquire all of the issued and outstanding shares of the Company in a reverse takeover transaction in exchange for 27,000,000 common shares of ESV issued to the Ultimate Parent. Following closing of the acquisition, it is intended that ESV will change its name to Denarius Silver Corp.

The closing of the transaction is subject to several conditions, including approval of the TSX Venture Exchange and the completion of certain concurrent acquisition and financing transactions.

In addition to any escrow restrictions imposed by the policies of the TSX Venture Exchange, all common shares of ESV issued to the Ultimate Parent will be subject to a voluntary pooling arrangement from which one-quarter of the shares will be released on each of March 27, 2021, June 27, 2021, September 27, 2021 and December 28, 2021.

As a condition to completing the acquisition of the Company, ESV announced its intention to complete a nonbrokered private placement financing to raise up to CA$8.4 million through the issuance of subscription receipts. On November 9, 2020 ESV announced that it had closed the subscription receipt financing for gross proceeds of CA$8.4 million where the Ultimate Parent subscribed CA$3.0 million.

The IAMGOLD Option Agreement (Note 5) related to the Zancudo Project will remain in place and ESV has also agreed to be bound by the terms of this option agreement.

Page | 17

APPENDIX E PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS OF THE RESULTING ISSUER

Please see attached.

ESV RESOURCES LTD.

PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) SEPTEMBER 30, 2020 (Presented in Canadian dollars)

ESV RESOURCES LTD.

Unaudited Pro Forma Consolidated Statement of Financial Position As at September 30, 2020 CAD$

	ESV Resources	Titiribi	1255269	*Note 4*	Pro Forma	Consolidated
	(Note 1)	(Note 1)	(Note 1)		Adjustments
Assets
Current assets
Cash	$ 43,787	$ 48,020 $	20,728	a	$ 95,795 $ 8,097,002
				b	(17,341)
				c (vii)	(300,000)
				d	8,403,774
				e	(197,761)
Cash in trust	-	-	8,403,774	d	(8,403,774)	-
Receivables	5,542	6,670	6,418		-	18,630
Prepaid expenses and deposits	-	-	2,763		-	2,763
Total current assets	49,329	54,690	8,433,683		(419,307)	8,118,395
Due from related party	-	20,009	-	b	(20,009)	-
Exploration and evaluation assets	-	-	1,462,565	c(viii)	6,017,160	7,479,725
Total assets	$ 49,329	$ 74,700 $	9,896,248		$ 5,577,844 $ 15,598,120
Liabilities
Current liabilities
Amounts payable and accrued liabilities	$ 78,339	$ 8,005 $	474,634		$ - $ 560,977
Subscription receipts payable	-	-	8,403,774	d	(8,403,774)	-
Total current liabilities	78,339	8,005	8,878,408		(8,403,774)	560,977
Due to related parties	-	7,628,574	-	b	(7,628,574)	-
Total liabilities	78,339	7,636,578	8,878,408		(16,032,348)	560,977
Equity
Share capital	25,853,888	31,568,077	1,070,000	a	95,795	68,734,611
				b	7,611,233
				c (i)	(25,949,683)
				c (iii)	20,971,288
				c (vi)	378,000
				c (viii)	(1,070,000)
				d	8,403,774
				e	(197,761)
Share purchase w arrants	-	-	-	c (iv)	831,982	831,982
Contributed surplus	3,600,080	-	-	c (i)	(3,600,080)	768,313
				c (v)	768,313
Accumulated other comprehensive loss	-	(25,344)	-			(25,344)
Deficit	(29,482,978)	(39,104,612)	(52,160)	b	(20,009)	(55,272,419)
				c (i)	29,482,978
				c (viii)	52,160
				c(ix)	(16,147,798)
Total equity	(29,010)	(7,561,879)	1,017,840		21,610,192	15,037,143
Total liabilities and equity	$ 49,329	$ 74,700 $	9,896,248		$ 5,577,844 $ 15,598,120

Page | 1

The accompanying notes form an integral part of these unaudited pro forma consolidated financial statements

ESV RESOURCES LTD.

Unaudited Pro Forma Consolidated Statement of Net Loss and Comprehensive Loss

For the Nine Months Ended September 30, 2020 CAD$

		ESV Resources	Titiribi	1255269	*Note 4*	Pro Forma	Consolidated
		(Note 1)	(Note 1)	(Note 1)		Adjustments
Expenses
Consulting	$	15,000	$ 13,541 $	-		$	- $ 28,541
Office and miscellaneous		10,055	4,062	14,411			- 28,528
Professional fees		58,909	-	48,181			- 107,090
Share-based compensation		96,687	-	-			- 96,687
Transfer agent and filing fees		13,506	-	-			- 13,506
		(194,157)	(17,603)	(62,592)			- (274,352)
Interest and bank charges		(378)	1,354	-			- 976
Extinguishment of amounts payable and accrued liabilities		10,662	-	-			-10,662
Finance expense
Listingexpense		-	-	-	c(ix)	(16,147,798) (16,147,798)
Net loss	$	(183,873)	$ (16,249) $	(62,592)		$ (16,147,798) $ (16,410,512)
Other comprehensive income:
Items that may be reclassified
to profit in subsequent periods:
Foreign currency translation
adjustment (nil tax effect)		-	1,160,445	-			- 1,160,445
Comprehensive loss	$	(183,873)	$ 1,144,195 $	(62,592)		$ (16,147,798) $ (15,250,068)
Pro forma - basic and diluted loss per share							$ (0.16)
Weighted average common shares outstanding - basic and	diluted						93,117,915

Page | 2

The accompanying notes form an integral part of these unaudited pro forma consolidated financial statements

ESV RESOURCES LTD.

Unaudited Pro Forma Consolidated Statement of Net Loss and Comprehensive Loss For the Year Ended December 31, 2019 CAD$

	ESV Resources	Titiribi	1255269	*Note 4*	Pro Forma	Consolidated
	(Note 1)	(Note 1)	(Note 1)		Adjustments
Expenses
Office and miscellaneous	$ 23,210 $	1,327	$ -			- $ 24,537
Professional fees	44,412	-	-			- 44,412
Transfer agent and filing fees	8,715	-	-			- 8,715
	(76,337)	(1,327)	-			- (77,664)
Interest and bank charges	71	(17,250)	-			(17,179)
Extinguishment of amounts payable and accrued liabilities	408	-	-			- 408
Finance expense
Listing expense	-	-	-	c (ix)	(16,147,798) (16,147,798)
Net loss	$ (75,858) $	(18,577)	$ -		$ (16,147,798) $ (16,242,233)
Other comprehensive income:
Items that may be reclassified
to profit in subsequent periods:
Foreign currency translation
adjustment (nil tax effect)	-	185,768	-			- 185,768
Comprehensive loss	$ (75,858) $	167,191	$ -		$ (16,147,798) $ (16,056,465)
Pro forma - basic and diluted loss per share						$ (0.17)
Weighted average common shares outstanding - basic and diluted						93,117,915

Page | 3

The accompanying notes form an integral part of these unaudited pro forma consolidated financial statements

ESV RESOURCES LTD. Notes to the Unaudited Pro Forma Consolidated Financial Statements As at September 30, 2020

CAD$

1. BASIS OF PRESENTATION

These unaudited pro forma consolidated financial statements of ESV Resources Ltd. (“ESV” or the “Company”) have been prepared to show the effect of the proposed transactions (collectively, the “Transaction”) whereby ESV will (i) amalgamate with 1255269 BC Ltd. (“1255269”) in a share for share exchange and (ii) will concurrently acquire Gran Colombia Gold Titiribi Corp. (“Titiribi”), a wholly-owned indirect subsidiary of Gran Colombia Gold Corp. (“Gran Colombia”). The Transaction is being accounted for as a reverse takeover (“RTO”), whereby Titiribi, based on its relative voting rights and board and management nominees following the Transaction and the Concurrent Financing (Note 2c), is the accounting acquirer and ESV and 1255269 are the accounting acquirees. These unaudited pro forma financial statements have been prepared for inclusion in the Filing Statement of the Company in respect of the RTO.

The Transaction will be executed pursuant to (i) an Amalgamation Agreement dated effective November 20, 2020, among ESV, 1270702 B.C. Ltd. (a wholly-owned subsidiary of ESV) and 1255269 and (ii) a Share Purchase Agreement dated November 20, 2020 among Gran Colombia, Gran Colombia Panama S.A. (“GCG Panama”, a wholly-owned subsidiary of Gran Colombia and parent of Titiribi), Titiribi and ESV pursuant to which ESV will acquire Titiribi in exchange for the issuance of shares to Gran Colombia. Following the Transaction, the continuing listed entity (ESV) that will own 1255269 and Titiribi will be renamed Denarius Metals Corp. (the “Resulting Issuer”).

These unaudited pro forma consolidated financial statements have been prepared using information derived from, and should be read in conjunction with, the financial statements of ESV, Titiribi and 1255269 included in the Company’s Filing Statement. The historical financial statements of ESV, Titiribi and 1255269 were prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board. These unaudited pro forma consolidated financial statements comprise:

a. An unaudited proforma consolidated statement of financial position as at September 30, 2020 combining:
i. The unaudited condensed interim statement of financial position of ESV as at September 30, 2020;
ii. The unaudited condensed consolidated statement of financial position of Titiribi as at September 30, 2020;
iii. The unaudited condensed consolidated statement of financial position of 1255269 as at November 30, 2020; and
iv. The adjustments described in Note 4.
b. An unaudited proforma consolidated statement of net loss and comprehensive loss for the nine months ended September 30, 2020 combining:
i. Information compiled for the nine months ended September 30, 2020 from the unaudited condensed interim statement of loss and comprehensive loss of ESV for the six month period ended September 30, 2020 together with the audited statement of loss and comprehensive loss for the year ended March 31, 2020 and the unaudited statement of loss and comprehensive loss for the nine months ended December 31, 2019;
ii. The unaudited condensed consolidated statement of operations and comprehensive income of Titiribi for the nine months ended September 30, 2020;
iii. The unaudited condensed consolidated statement of loss and comprehensive loss of 1255269 for the period from incorporation on June 30, 2020 to November 30, 2020; and
iv. The adjustments described in Note 4.
c. An unaudited proforma consolidated statement of net loss and comprehensive loss for the year ended December 31, 2019 combining:
i. Information compiled for the year ended December 31, 2019 from the unaudited condensed

Page | 4

The accompanying notes form an integral part of these unaudited pro forma consolidated financial statements

ESV RESOURCES LTD. Notes to the Unaudited Pro Forma Consolidated Financial Statements As at September 30, 2020 CAD$

interim statement of loss and comprehensive loss of ESV for the nine month period ended December 31, 2019 together with the audited statement of loss and comprehensive loss for the year ended March 31, 2019 and the unaudited statement of loss and comprehensive loss for the nine months ended December 31, 2018;

ii. The audited consolidated statement of operations and comprehensive income of Titiribi for the year ended December 31, 2019;
iii. As 1255269 was incorporated on June 30, 2020, it had no corresponding information for the year ended December 31, 2019; and
iv. The adjustments described in Note 4.

The unaudited pro forma consolidated financial statements have been prepared for illustrative purposes only and may not be indicative of the combined entities’ financial position and results of operations that would have occurred if the acquisition had been in effect at the dates indicated or of results which may be obtained in the future.

The unaudited pro forma consolidated financial statements include all adjustments necessary for the fair presentation, in all material respects, of the transactions described in Note 2 in accordance with IFRS applied on a basis consistent with Titiribi’s accounting policies.

The functional and presentation currencies of ESV and 1255269 are the Canadian dollar. The functional and presentation currencies of Titiribi are the U.S. dollar. These unaudited pro forma financial statements have been presented in Canadian dollars. An exchange rate of US$1.00 = CA$1.3339 has been used to translate Titiribi’s historical balance sheet at September 30, 2020 to Canadian dollars. For the unaudited pro forma consolidated statements of net loss and comprehensive loss, exchange rates of US$1.00 = CA$1.3541 and US$1.00 = CA$1.3269 were used to translate Titiribi’s historical income statements for the nine months ended September 30, 2020 and the year ended December 31, 2019, respectively.

2. THE TRANSACTIONS

a. Guia Antigua Project Acquisition

1255269, through its subsidiaries, owns the right for exploration, mining and processing operations and the commercialization of mineral products from the Guia Antigua Project which is located 130 kilometers northeast of Medellin in the Segovia-Remedios mining district, Department of Antioquia, Colombia.

Pursuant to an Amalgamation Agreement, on closing of the RTO, in exchange for all of the outstanding shares of 1255269, the Resulting Issuer will issue 15,000,000 Resulting Issuer shares to the former shareholders of 1255269. In connection with the Amalgamation Agreement, upon Closing, ESV will pay a financial advisory fee to Fiore Management and Advisory Corp. (“Fiore”) equal to 300,000 Resulting Issuer Shares.

b. Zancudo Project Acquisition

Titiribi holds the rights to a property located in a historic mining district in Colombia (the “Zancudo Project”). Titiribi’s rights to the Zancudo Project are subject to an option agreement with IAMGOLD Corp. (the “IAMGOLD Option Agreement”). Pursuant to the IAMGOLD Option Agreement, IAMGOLD may acquire up to a 70% undivided interest in the Zancudo Project upon incurring certain exploration expenditures within certain timelines and completing a feasibility study on the Zancudo Project.

ESV and Titiribi have entered into a Share Purchase Agreement pursuant to which ESV will acquire the 500

Page | 5

The accompanying notes form an integral part of these unaudited pro forma consolidated financial statements

ESV RESOURCES LTD. Notes to the Unaudited Pro Forma Consolidated Financial Statements As at September 30, 2020 CAD$

issued and outstanding common shares of Titiribi from GCG Panama in exchange for the issuance of 27,000,000 Resulting Issuer shares to Gran Colombia. In connection with the Share Purchase Agreement, upon Closing, ESV will pay a financial advisory fee to Fiore equal to 540,000 Resulting Issuer shares.

c. Concurrent Financing

In connection with the Transaction, 1255269 had completed a concurrent subscription receipt financing (the “Concurrent Financing”) for gross proceeds of $8,403,774 by issuing 18,675,053 subscription receipts (each a “Subscription Receipt”) at a price of $0.45 per Subscription Receipt. Immediately prior to closing of the RTO, each Subscription Receipt will automatically convert into one common share of 1255269 for no additional consideration and will be exchanged for common shares of the Resulting Issuer on a one-for-one basis. Gran Colombia subscribed for 6,666,666 Subscription Receipts amounting to $3,000,000 of the Concurrent Financing.

3. ACCOUNTING FOR THE REVERSE TAKEOVER

After the completion of the Transaction and the Concurrent Financing, the shareholder of Titiribi will have acquired approximately 36.5% of the Resulting Issuer and the ESV shareholders and former 1255269 shareholders will retain an approximately 34.2% and 29.3% equity interest, respectively, in the Resulting Issuer. The Transaction is considered to be a reverse acquisition, whereby Titiribi, legally the Company’s wholly-owned subsidiary, is considered to be the accounting acquirer of the assets and liabilities of ESV and 1255269 and is considered to be the continuing entity for accounting purposes. As such, the assets and liabilities of Titiribi are accounted for at cost and the assets and liabilities of ESV and 1255269 will be accounted for at fair value on acquisition.

In the accounting for the reverse takeover acquisition of ESV and 1255269, the consideration is determined by reference to the fair value of the number of shares the legal subsidiary, being Titiribi, would have issued to the shareholders of ESV and 1255269 to obtain the same overall percentage ownership interest of 63.3% in the combined entity, excluding the impact of the Concurrent Financing. As a result, the consideration is measured at the value of the 863 shares that would have been issued by Titiribi if it were the legal parent and acquirer. The excess of the fair value of the acquisition consideration over the estimated fair value of the assets and liabilities of ESV and 1255269 acquired by Titiribi at September 30, 2020 is as follows:

	ESV	1255269	Total
Fair value of the deemed acquisition consideration
Common shares			$ 20,971,288
Warrants honoured			831,982
Stock options honoured			768,313
Advisory fee paid in shares (840,000 Resulting Issuer shares)			378,000
Other RTO transaction costs			300,000
Total consideration			23,249,583
Fair value of assets and liabilities of acquired
Cash, including proceeds from ESV warrants exercised
subsequent to September 30, 2020 and prior to the
RTO transaction (Note 5a)	$ 139,582	$ 20,728	160,310
Other current assets	5,542	9,181	14,723
Exploration and evaluation assets	-	7,479,725	7,479,725
Accounts payable and accrued liabilities	(78,339)	(474,634)	(552,973)
Net assets acquired	$ 66,785	$ 7,035,000	7,101,785
Excess of acquisition consideration over net assets acquired			$16,147,798

Page | 6

The accompanying notes form an integral part of these unaudited pro forma consolidated financial statements

ESV RESOURCES LTD. Notes to the Unaudited Pro Forma Consolidated Financial Statements As at September 30, 2020 CAD$

ESV has a total of 2,375,250 warrants issued and outstanding with an exercise price of $0.10 per share expiring August 27, 2021 that will be honoured by the Resulting Issuer following the RTO. The ESV warrants have an average fair value estimated at $0.35 per warrant determined using a Black-Scholes model including a risk free interest rate of 0.23%, an estimated remaining life of 0.57 years, an expected volatility of 75% and a dividend yield of 0%.

The Resulting Issuer will also honour a total of 1,900,000 existing ESV stock options following the RTO with an exercise price of $0.10 per share expiring August 27, 2030. The ESV stock options have an average fair value estimated at $0.40 per stock option determined using a Black-Scholes model including a risk free interest rate of 0.23%, an estimated remaining life of 9.6 years, an expected volatility of 75% and a dividend yield of 0%.

In addition to the advisory fees (Notes 2a and 2b) to be settled by the issuance of a total of 840,000 Resulting Issuer shares at a deemed cost of $378,000, other cash transaction costs to be incurred in connection with the RTO are estimated to amount to approximately $300,000.

4. PRO FORMA ASSUMPTIONS AND ADJUSTMENTS

a. Exercise of ESV warrants

In October 2020, a total of 957,950 ESV warrants were exercised for cash proceeds of $95,795.

b. Settlement of related party amounts in Titiribi

Subsequent to September 30, 2020, Titiribi wrote off its amount due from related party of $20,009. In addition, Titiribi paid $17,341 due to a related party and the balance of $7,611,233 due to related party was settled through a capital contribution in the share capital of Titiribi, made by GCG Panama, its parent company.

c. RTO Transaction

As outlined in Note 3, the Transaction will be accounted for as a reverse acquisition. Therefore in these pro forma financial statements:

i. ESV’s share capital ($25,949,683), contributed surplus ($3,600,080) and deficit ($29,482,978) at the time of the RTO transaction are eliminated;
ii. The capital structure recognized in the pro forma financial statements is that of ESV, but the dollar amount of the issued share capital in the unaudited pro forma consolidated financial statements prior to the acquisition is that of Titiribi;
iii. An adjustment is recorded in share capital in the amount of $20,971,288 to recognize the fair value of the deemed acquisition consideration to the shareholders of ESV and the former 1255269 shareholders;
iv. An adjustment is recorded in equity in the amount of $831,982 to recognize the fair value of the ESV warrants honoured in the Transaction;
v. An adjustment is recorded in contributed surplus in the amount of $768,313 to recognize the fair value of the ESV stock options honoured in the Transaction;
vi. An adjustment is recorded in share capital in the amount of $378,000 to recognize the fair value of the Resulting Issuer shares issued for advisory fees incurred in connection with the Transaction;
vii. An adjustment is recorded to reflect other cash costs estimated to total approximately $300,000 to be incurred in connection with the Transaction;

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The accompanying notes form an integral part of these unaudited pro forma consolidated financial statements

ESV RESOURCES LTD. Notes to the Unaudited Pro Forma Consolidated Financial Statements As at September 30, 2020

CAD$

viii. Adjustments are recorded in connection with the acquisition of 1255269 to eliminate its share capital ($1,070,000) and deficit ($52,160) and to allocate $6,017,160, representing the excess of the deemed acquisition consideration over the historical amounts of its net assets acquired, to exploration and evaluation assets; and,
ix. The excess of the deemed acquisition consideration over the fair value of the net assets of ESV and 1255269 of $16,147,798 is accounted for as a charge to expense which is also reflected as an adjustment to deficit on the pro forma consolidated statement of financial position.

d. Exchange of 1255269’s Subscription Receipts in conjunction with the Concurrent Financing

The pro forma adjustments include the $8,403,774 fair value of the 18,675,053 Resulting Issuer shares exchanged on a one-for-one basis for 1255269’s Subscription Receipts and the release of the corresponding cash held in trust from the Concurrent Financing.

e. 1255269 share issue costs

An adjustment of $197,761 to share capital to reflect cash payment due on closing of the RTO for finders’ fees incurred in connection with the Concurrent Financing.

5. PRO FORMA EQUITY

	Number of	Share	Share	Contributed	Accumulated	Deficit	Total
	shares	capital	purchase	surplus	other		equity
			warrants		comprehensive
					loss
ESV as at September 30, 2020	30,644,912	$25,853,888	$ -	$ 3,600,080	$ -	$(29,482,978)	$ (29,010)
ESV warrants exercised subsequent to
September 30, 2020	957,950	95,795	-	-	-	-	95,795
	31,602,862	25,949,683	-	3,600,080	-	(29,482,978)	66,785
RTO elimination of historical ESV	-	(25,949,683)	-	(3,600,080)	-	29,482,978	(66,785)
Consideration to ESV shareholders
and former 1255269 shareholders	15,000,000	20,971,288	831,982	768,313	-	(15,754,798)	6,816,785
Acquisition of Titiribi	27,000,000	39,179,310	-	-	(25,344)	(39,124,621)	29,345
RTO transaction costs	840,000	378,000	-	-	-	(393,000)	(15,000)
Shares issued for Concurrent Financing
on a 1-for-1 basis	18,675,053	8,403,774	-	-	-	-	8,403,774
Issue costs related to Concurrent
Financing	-	(197,761)	-	-	-	-	(197,761)
	93,117,915	$68,734,611	$831,982	$768,313	$ (25,344)	$(55,272,419)	$15,037,143

a. Share purchase warrants

Following the RTO, the Resulting Issuer will have a total of 2,375,250 unlisted share purchase warrants issued and outstanding with an exercise price of $0.10 per share expiring August 27, 2021.

b. Stock Options

In conjunction with the RTO, the Resulting Issuer will have 1,900,000 stock options issued and outstanding with an exercise price of $0.10 per share with an expiry date of August 27, 2030. Following the RTO, an aggregate of 7,300,000 stock options will be granted by the Resulting Issuer.

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The accompanying notes form an integral part of these unaudited pro forma consolidated financial statements

APPENDIX F MANAGEMENT’S DISCUSSION AND ANALYSIS OF ESV

Please see attached.

ESV RESOURCES LTD.

(formerly E. S. I. ENVIRONMENTAL SENSORS INC.)

Management’s Discussion and Analysis of Financial Conditions and Results of Operations

For the three and six months ended September 30, 2020 and 2019

Page 1

Management Discussion and Analysis

The following Management Discussion and Analysis (“MD&A”) of ESV Resources Ltd. (formerly ESI Environmental Sensors Inc.) (the “Company”) has been prepared by management, in accordance with the requirements of National Instrument of 51-102 as at November 30, 2020, and should be read in conjunction with the unaudited condensed interim financial statements for the three and six months ended September 30, 2020 and 2019, the audited annual financial statements for the years ended March 31, 2020 and 2019 and the related notes contained therein which have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board. The information contained herein is not a substitute for detailed investigation or analysis on any particular issue. The information provided in this document is not intended to be a comprehensive review of all matters and developments concerning the Company. The Company is presently a “Venture Issuer” as defined in NI 51102. Additional information relevant to the Company’s activities can be found on SEDAR at www.sedar.com. All dollar amounts are quoted in Canadian dollars, the reporting and functional currency of the Company, unless specifically noted.

The Company is a reporting issuer in British Columbia and Alberta and is listed on the NEX board of the TSX Venture Exchange ("TSXV”) under the symbol ESV.H.

Forward-Looking Information

Certain statements made in this MD&A including without limitation, statements relating to the Company’s expectations concerning future revenues and earnings, product development, market conditions and the sufficiency of capital and liquidity, constitute forward-looking statements. These forward-looking statements are subject to risks and uncertainties, many of which are beyond the Company’s control. Actual results or events may differ materially from the Company’s expectations. In such an event, the Company intends to seek additional funding through public or private financings, arrangements with corporate partners, and from other sources. No assurance can be given that additional funding will be available on favourable terms, or at all. If adequate capital is not available, the Company may have to substantially reduce or eliminate expenditures in its operations. The Company does not undertake or accept any obligation to release publicly any updates or revisions to any forward-looking statements to reflect changes in the Company’s expectations, except as required by applicable securities laws. To the extent possible, management implements strategies to reduce or mitigate risks and uncertainties associated with the business.

Reverse Takeover Transaction

Each of the Company, Gran Colombia, the Guia Antigua Vendor and all the shareholders of the Guia Antigua Vendor, are at arm’s length to the Company, and the Transaction will constitute a change of business and a reverse-takeover of the Company in accordance with the policies of the TSXV. Assuming completion of the Transaction, it is anticipated that the Company will be listed on the TSXV as a Tier 2 Mining Issuer. In connection with completion of the Transaction, the Company intends to change its name to "Denarius Silver Corp." and is expected to trade under the symbol “DSLV”.

Terms of the Transaction

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Vendor and to Gran Colombia will be subject to a voluntary pooling arrangement whereby one-quarter of the shares will be released on each of March 27, 2021, June 27, 2021, September 27, 2021, and December 28, 2021.

Concurrent Financing

As a condition to completing the Transaction, on September 24, 2020 and October 30, 2020, the Company announced its intention to complete the Concurrent Financing to raise up to $8,400,000 through the issuance of up to 18,666,000 subscription receipts of the Guia Antigua Vendor at a price $0.45 per subscription receipt. On November 9, 2020, the Company announced that it had closed the Concurrent Financing of 18,675,053 subscription receipts at a price of $0.45 per subscription receipt for gross proceeds of $8,403,774. Gran Colombia subscribed for $3,000,000 of the Concurrent Financing.

Following the closing of the Transaction and the Concurrent Financing, the Company expects to have approximately 93,117,915 common shares issued and outstanding.

Shareholder Approval

Further Information

Closing of the Transaction is subject to a number of conditions including the satisfactory completion of due diligence, the negotiation of and entering into definitive agreements, the completion of the Concurrent Financing, receipt of all required shareholder, regulatory and third-party consents, including TSXV approval, and satisfaction of other customary closing conditions. The Transaction and Concurrent Financing cannot close until the required approvals are obtained. There can be no assurance that the Transaction and Concurrent Financing will be completed as proposed or at all. Except in connection with the Concurrent Financing, no finders' fees or commissions are payable in connection with completion of the Transaction, and no advances or loans to the Guia Antigua Vendor or Gran Colombia are contemplated prior to completion of the Transaction. An administrative fee of 840,000 common shares is owing to an arm’s length consultant, in consideration for the provision of certain financial and advisory services necessary to complete the Transaction.

Trading in the common shares of the Company will remain halted pending further filings with the TSXV.

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Letter of Intent – Lomero-Poyatos Project, Spain

Terms of the Agreement

Closing of the Agreement is subject to a number of conditions including the satisfactory completion of due diligence, the negotiation of and entering into a definitive agreement, receipt of all required shareholder, regulatory and third-party consents, including approval of the TSXV, completion of financing on terms acceptable to the Company, and satisfaction of other customary closing conditions. The Agreement cannot close until the aforementioned conditions are satisfied and required approvals are obtained. There can be no assurance that the Agreement will be completed as proposed, or at all.

Results of Operations

Three months ended September 30, 2020

Loss for the three months ended September 30, 2020, was $169,349, versus $4,461 for the prior period. The increase in loss for the three months ended September 30, 2020, was primarily due to share-based compensation expense of $96,687 (2019 - $nil) relating to options granted during the period, and professional fees of $36,744 (2019 - $1,544) relating primarily to legal and audit fees incurred in the period.

Six months ended September 30, 2020

Loss for the six months ended September 30, 2020, was $176,663, versus $12,632 for the prior period. The increase in loss for the six months ended September 30, 2020, was primarily due to share-based compensation expense of $96,687 (2019 - $nil) relating to options granted during the period, and professional fees of $43,809 (2019 - $1,899) relating primarily to legal and audit fees incurred in the period.

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Selected Quarterly Financial Data

	September 30,	June 30,	March 31,	December 31,
	2020	2020	2020	2019
Loss and comprehensive loss	(169,349)	(7,314)	(7,210)	(2,420)
Basic and fully diluted loss per share	(0.01)	(0.00)	(0.00)	(0.00)
	September 30,	June 30,	March 31,	December 31,
	2019	2019	2019	2018
Loss and comprehensive loss	(4,461)	(8,171)	(120,356)	(101,066)
Basic and fully diluted loss per share	(0.00)	(0.00)	(0.00)	(0.00)

Liquidity, Capital Resources, and Financial Instruments

At September 30, 2020, the Company had a working capital deficiency of $29,010 (March 31, 2020 - $1,923,987) and accumulated deficit of $29,482,978 (March 31, 2020 - $29,306,315).

On November 9, 2020, the Company announced it had closed a non-brokered private placement of $8,403,774. The proceeds of the Concurrent Financing will be held in escrow, pending the Company receiving all applicable regulatory approvals and completing the Transaction.

Related party transactions

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Company.

Included in share-based compensation for the six months ended September 30, 2020, was $44,527 for vested stock options granted to directors and officers of the Company (September 30, 2019 - $nil).

Risks and Uncertainties

The Company operates in a competitive and rapidly changing environment that involves a number of risks. To the extent possible, management implements strategies to reduce or mitigate risks and uncertainties associated with our business.

The Company currently has no revenues from operations. Although the Company has been successful in the past in obtaining financing, there is no assurance that it will be able to obtain adequate financing in the future or that such financing will be on terms acceptable to the Company.

The Company is engaged in the acquisition of mineral properties, an inherently risky business, and there is no assurance that an economic mineral deposit will ever be discovered and subsequently put into production. Most exploration projects do not result in the discovery of commercially mineable ore deposits. The Company will seek to counter these risks to the extent possible by selecting exploration areas on the basis of their recognized geological potential to host economic deposits.

Following are some of the principal risk factors:

Page 5

Cash flow and Liquidity

The Company will manage liquidity risk through raising sufficient funds through the receipt of loans, the issuance of common shares, or the issuance of convertible debt in order to meet financial obligations. Liquidity risk can arise through excess of financial obligations over available financial assets due at any point in time.

Dependence on Key Personnel

The Company’s future success will depend on the quality of its key management. The loss of the services of such persons, or the inability to attract quality personnel, could materially adversely impact the Company’s business operations and prospects.

Covid-19 Uncertainty

Disclosure for Venture Issuers Without Significant Revenue

A breakdown of the Company’s expenses is disclosed in the accompanying unaudited condensed interim financial statements for the period ended September 30, 2020.

Outstanding Shares, Stock Options, and Warrants

As at the date of this report, the Company had the following outstanding:

31,602,862 common shares
1,900,000 stock options outstanding
2,375,250 warrants outstanding

Proposed Transactions

See ‘Reverse Takeover Transaction’ section above.

Critical Accounting Estimates

The preparation of financial statements in accordance with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual reports could differ from management’s estimates.

Internal Controls Over Financial Reporting

Changes in Internal Control over Financial Reporting (“ICFR”)

In connection with National Instrument 52-109, Certification of Disclosure in Issuer’s Annual and Interim Filings (“NI 52-109”) adopted in December 2008 by each of the securities commissions across Canada, the Chief Executive Officer and Chief Financial Officer of the Company will file a Venture Issuer Basic Certificate with respect to financial information contained in the unaudited interim financial statements and the audited annual financial statements and respective accompanying Management’s Discussion and Analysis. The Venture Issue Basic Certification does not include representations relating to the establishment and

Page 6

maintenance of disclosure controls and procedures and internal control over financial reporting, as defined in NI52-109.

Management’s Responsibility for Financial Statements

The information provided in this report, including the financial statements, is the responsibility of management. In the preparation of these statements, estimates are sometimes necessary to make a determination of future values for certain assets or liabilities. Management believes such estimates have been based on careful judgments and have been properly reflected in the financial statements.

Other MD&A Requirements

Additional disclosure of the Company’s technical reports, material change reports, news releases and other information can be obtained on SEDAR at www.sedar.com.

Recent Accounting Policies

There are no recent accounting policies applicable to the accompanying unaudited condensed interim financial statements for the period ended September 30, 2020.

Financial Instruments

Please refer to the accompanying unaudited condensed interim financial statements for the period ended September 30, 2020.

Off-Balance Sheet Arrangements

The Company has no off-balance sheet arrangements.

Page 7

E. S. I. ENVIRONMENTAL SENSORS INC.

Management’s Discussion and Analysis of Financial Conditions and Results of Operations

For the year ended March 31, 2020

Page 1

Introduction

The following Management Discussion and Analysis (“MD&A”) of ESI Environmental Sensors Inc. (the “Company” or “ESI”) has been prepared by management, in accordance with the requirements of National Instrument of 51-102 as at July 29, 2020 and should be read in conjunction with the audited financial statements for the years ended March 31, 2020 and 2019, and the related notes contained therein which have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board. The information contained herein is not a substitute for detailed investigation or analysis on any particular issue. The information provided in this document is not intended to be a comprehensive review of all matters and developments concerning the Company. The Company is presently a “Venture Issuer” as defined in NI 51-102. Additional information relevant to the Company’s activities can be found on SEDAR at www.sedar.com and the Company’s website at www.esica.com. All dollar amounts are quoted in Canadian dollars, the reporting and functional currency of the Company, unless specifically noted.

The Company is a reporting issuer in British Columbia and Alberta and is listed on the NEX board of the TSX Venture Exchange (the “Exchange” or “TSX-V”) under the symbol ESV.H.

Forward-Looking Information

Certain statements made in this MD&A including without limitation, statements relating to ESI’s expectations concerning future revenues and earnings, product development, market conditions and the sufficiency of capital and liquidity, constitute forward looking statements. These forward looking statements are subject to risks and uncertainties, many of which are beyond ESI’s control. Actual results or events may differ materially from ESI’s expectations. In such an event, ESI intends to seek additional funding through public or private financings, arrangements with corporate partners, and from other sources. No assurance can be given that additional funding will be available on favourable terms, or at all. If adequate capital is not available, ESI may have to substantially reduce or eliminate expenditures in its operations. ESI does not undertake or accept any obligation to release publicly any updates or revisions to any forward looking statements to reflect changes in ESI’s expectations, except as required by applicable securities laws.

To the extent possible, management implements strategies to reduce or mitigate risks and uncertainties associated with the business. The Company is not in an industry where bad debts present a major business risk.

Company Overview

ESI’s patented and proprietary technologies are incorporated into a range of products, primarily sensors, accessories and associated hardware and software, which together are used in water management applications. These applications include irrigation control, crop management, turf management, environmental management applications, mining, forestry, silviculture, scientific research, and various civil and municipal engineering applications including slope stability and landfill monitoring. The Company is currently reviewing various strategic acquisition opportunities.

Significant Events

In connection with completion of the share consolidation, the Company intends to offer up to 21,428,570 post-share consolidation units (each, a "Unit") by way of non-brokered private

Page 2

placement (the "Private Placement"). The Units will be offered at a price of $0.07 per share, for gross proceeds of up to $1,500,000. Each Unit will consist of one post-share consolidation common share and one-quarter-of-one transferable share purchase warrant (each whole warrant, a "Warrant"). Each Warrant will entitle the holder to acquire an additional post-share consolidation common share at a price of $0.10 for a period of twelve months.

In March 2020, Stan Szary, has resigned as a director of the Company.

In October 2019, the Company announced that it will not be proceeding with the acquisition of a privately held company involved in professional sports and content creation, and the marketing and distribution of CBD-related products. No funds were advanced by the Company in connection with the proposed acquisition.

Results of Operations

Year ended March 31, 2020

Expenses:

Expenses were $32,694 for the year ended March 31, 2020 versus $428,710 for the prior year. During the current year, the Company recorded consulting fees of $nil (2019 - $180,000). The decrease was the result of the departure of a consultant. During the current year, the Company recorded management fees of $nil (2019 - $81,000). The decrease was the result of the departure of the CEO and the discontinuation of the management agreement for a majority shareholder. During the current year, the Company recorded professional fees $16,999 (2019 - $145,567). The decrease was the result of the departure of the CFO and a decrease in professional services.

Loss for the year:

The net loss for the year ended March 31, 2020 was $22,262 compared with loss of $420,988 in the prior year. During the year ended March 31, 2020, the Company extinguished $10,662 (2019 – $10,239) of accounts payable.

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Three months ended March 31, 2020

Expenses:

Expenses were $17,642 for the three months ended March 31, 2020 versus expenses of $60,835 for the prior period. During the current period, the Company recorded professional fees of $15,100 (2019 - $42,063). The decrease was the result of the departure of the CFO and a decrease in professional services.

Loss for the period:

The net loss for the three months ended March 31, 2020 was $7,210 compared with loss of $120,356 in the prior period.

Liabilities

Trade and other payables were $1,699,107 (2019 - $1,691,849) and loans payable were $226,833 (2019 - $226,833).

Off-Balance Sheet Arrangements

The Company has no off-balance sheet arrangements.

Selected Quarterly Financial Data

	March 31,	December 31,	September 30,	June 30,
	2020	2019	2019	2019
Income (Loss)	(7,210)	(2,420)	(4,461)	(8,171)
Basic and fully diluted earnings (loss) per share	(0.00)	(0.00)	(0.00)	(0.00)
	March 31,	December 31,	September 30,	June 30,
	2019	2018	2018	2018
Income (Loss)	(120,356)	(101,066)	(102,792)	(96,774)
Basic and fully diluted earnings (loss) per share	(0.00)	(0.00)	(0.01)	(0.00)

Selected Annual Information

	Year Ended March 31, 2020	Year Ended March 31, 2019	Year Ended March 31, 2018
Revenue	$ -	$ -	$ -
Loss from operations	$ (32,694)	$ (428,710)	$ (541,187)
Net (Loss) Income - Per common share – Basic and Diluted	$ (22,262) $ (0.00)	$ (420,988) $ (0.02)	$ (62,090) $ (0.00)
Total Assets	$ 1,953	$ 16,957	$ 7,678
Weighted Average Shares Outstanding	20,346,755	20,346,755	20,346,755
Shares Outstandingat Year End	20,346,755	20,346,755	20,346,755

Liquidity, Capital Resources, and Financial Instruments

At March 31, 2020, the Company had a working capital deficiency of $1,923,987 (2019 - $1,901,725) and accumulated deficit of $29,306,315 (2019 - $29,284,053). Cash management has been and continues to be a priority for the Company and every effort is being made to minimize liquidity challenges.

Page 4

The Company’s financial statements have been prepared on a going concern basis which assumes that the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business. There is substantial doubt about the Company’s ability to continue as a going concern because the Company has experienced significant losses and negative cash flow from operations over a number of years and has a working capital deficiency and a deficiency in assets. The Company's ability to meet its obligations in the ordinary course of business is dependent upon its ability to establish profitable operations and positive cash flows from operating activities or to obtain additional funding through public or private equity financing, debt, collaborative or other arrangements. There can be no assurances that financing will be available or be available on reasonable terms. Management is of the opinion that sufficient working capital will be obtained from future cash flows to meet the Company’s liabilities and commitments as they become payable. The financial statements do not reflect adjustments that would be necessary if the going concern assumption were not appropriate. If the Company is unable to continue as a going concern, assets and liabilities would require restatement to a liquidation basis, which would differ materially from the going concern basis.

Related party transactions

Key management compensation:

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Company.

During the year ended March 31, 2020, the Company has recorded $nil (2019 - $36,000) in management fees to a majority shareholder. As at March 31, 2020, the amount owed was $nil (2019 - $nil).

During the year ended March 31, 2020, the Company has recorded $nil (2019 - $45,000) in management fees to a company owned by the former Chief Executive Officer. As at March 31, 2020, the amount owed to the company was $nil (2019 - $nil).

Risks and Uncertainties

Cash flow and Liquidity

Page 5

Financing

The Company will require additional financing in order to continue to operate and make further investments in product development, research and marketing. The ability of the board and management to arrange financing in the future will depend in part upon prevailing capital market conditions, as well as the Company’s business success.

Dependence on Key Personnel

Foreign Exchange Risk

Fluctuations in the exchange rate between Canadian and other foreign currencies, and especially the U.S. dollar, could have a material effect on the Company’s business, financial condition and results of operations. The Company is not exposed to any significant foreign exchange risk.

Disclosure for Venture Issuers Without Significant Revenue

A breakdown of the Company’s expenses is disclosed in the financial statements for the year ended March 31, 2020 to which this MD&A relates.

Outstanding Shares, Stock Options, and Warrants

As at the date of this report, the Company had the following outstanding:

20,346,755 common shares
No stock options outstanding
No warrants outstanding

Proposed Transactions

There are no proposed transactions that have not been disclosed herein.

Critical Accounting Estimates

The preparation of financial statements in accordance with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual reports could differ from management’s estimates.

Contingent liabilities

(a) Indemnification:

Page 6

(b) Government assistance:

(c) Contingencies:

The Company has provided for certain amounts that are in dispute or in the process of being negotiated for settlement.

Internal Controls Over Financial Reporting

Changes in Internal Control over Financial Reporting (“ICFR”)

Management’s Responsibility for Financial Statements

Other MD&A Requirements

Additional disclosure of the Company’s technical reports, material change reports, news releases and other information can be obtained on SEDAR at www.sedar.com.

Recent Accounting Policies

Please refer to the March 31, 2020 financial statements on www.sedar.com

Financial Instruments

Please refer to the March 31, 2020 financial statements on www.sedar.com.

Page 7

APPENDIX G MANAGEMENT’S DISCUSSION AND ANALYSIS OF 1255269 B.C. LTD.

Please see attached.

1255269 BC Ltd. Management’s Discussion and Analysis of Financial Condition and Results of Operations For the period from incorporation on June 30, 2020 to November 30, 2020

The following discussion is management’s assessment and analysis of the results and financial condition of 1255269 BC Ltd. (the “Company”), and should be read in conjunction with the accompanying audited financial statements and related notes. The preparation of financial data is in accordance with International Financial Reporting Standards (“IFRS”) and all figures are reported in Canadian dollars unless otherwise indicated.

Certain information included in this discussion may constitute forward looking statements. Forward looking statements are based on current expectations and entail various risks and uncertainties. These risks and uncertainties could cause or contribute to actual results that are materially different from those expressed or implied. The effective date of this report is February 18, 2021.

Description of Business

The Company is a privately-held company incorporated on June 30, 2020, under the laws of the province of British Columbia, and its business is the acquisition and exploration of mineral properties. The address of the Company’s registered and records office is 595 Howe St, 10th Floor, Vancouver, BC, V6C 2T5.

Property Purchase

In August 2020, the Company completed the 100% acquisition of Arcadian Minerals Corp. (“Arcadian”), by purchasing all the issued and outstanding shares of Arcadian from Gold X Mining Corp. in exchange for cash consideration of $1,000,000. Arcadian holds the rights to a property located in a historic mining district in Colombia (henceforth known as the “Guia Antigua project”).

Reverse Takeover Transaction

Each of ESV, Gran Colombia, the Company and all the shareholders of the Company, are at arm’s length to ESV, and the Transaction will constitute a change of business and a reverse-takeover of ESV in accordance with the policies of the TSX Venture Exchange (“TSXV”). Assuming completion of the Transaction, it is anticipated that ESV will be listed on the TSXV as a Tier 2 Mining Issuer. In connection with completion of the Transaction, ESV intends to change its name to "Denarius Metals Corp." and is expected to trade under the symbol “DSLV”.

Terms of the Transaction

Concurrent Financing

On November 9, 2020, as a condition to completing the Transaction, the parties completed a concurrent financing of 18,675,053 subscription receipts of the Company at a price of $0.45 per subscription receipt for gross proceeds of $8,403,774 (the “Concurrent Financing”). Gran Colombia subscribed for $3,000,000 of the Concurrent Financing.

The proceeds of the Concurrent Financing will be held in escrow, pending ESV receiving all applicable regulatory approvals and completing the Transaction. Upon satisfaction of the escrow conditions, immediately prior to completion of the Transaction, each subscription receipt will automatically convert into one common share of the Company for no additional consideration and will be exchanged for common shares of ESV on a one-for-one basis. If the Transaction is not completed on or before February 28, 2021,

1255269 BC Ltd. Management’s Discussion and Analysis of Financial Condition and Results of Operations For the period from incorporation on June 30, 2020 to November 30, 2020

the proceeds of the Concurrent Financing will be returned to the subscribers. Finder's fees of $197,761 are payable to arm's length parties who introduced subscribers to the Concurrent Financing, in accordance with the policies of the TSXV. It is anticipated that the proceeds from the Concurrent Financing will be utilized to undertake an exploration program at the Guia Antigua project, and for the general and administrative expenses of ESV.

Following the closing of the Transaction and the Concurrent Financing, ESV expects to have approximately 93,117,915 common shares issued and outstanding.

Shareholder Approval

Further Information

Overall Performance and Results of Operations

Total assets increased to $9,896,248 at November 30, 2020, from $nil at June 30, 2020. The primary assets at November 30, 2020, were cash of $20,782 (June 30, 2020: $nil) and cash held in trust of $8,403,774 (June 30, 2020: $nil). The change in cash and cash held in trust during the period ended November 30, 2020, was primarily the result of $1,070,000 received in proceeds on shares issued, net of share issuance costs, and $8,403,774 in subscription receipt proceeds from the Concurrent Financing.

Period ended November 30, 2020

The Company recorded loss and comprehensive loss of $52,160 during the period ended November 30, 2020. The loss for the period was primarily attributable to professional fees of $40,151, consisting mostly of legal fees. As this is the first year of incorporation there are no comparative figures.

Liquidity and Capital Resources

As at November 30, 2020, the Company had a working capital deficit of $444,725. The Company does not currently have a recurring source of revenue. Management believes that the Company’s cash position may cast significant doubt on the Company's ability to continue as a going concern. Although the Company has been successful in the past in obtaining financing, there is no assurance

1255269 BC Ltd. Management’s Discussion and Analysis of Financial Condition and Results of Operations For the period from incorporation on June 30, 2020 to November 30, 2020

that it will be able to obtain adequate financing in the future or that such financing will be on terms that are acceptable to the Company.

The Company has no bank debt or banking credit facilities in place.

Summary of Quarterly Results

The company was recently incorporated and therefore there is no quarterly information available.

Outstanding Share Data

As at November 30, 2020, and the date of this report, there were 15,000,000 common shares issued and outstanding.

Critical Accounting Policies and Estimates

The Company has prepared the accompanying financial statements in accordance with IAS 34, using accounting policies consistent with IFRS. Significant accounting policies, except as described below, are described in Note 3 of the Company’s financial statements as at and for the period ended November 30, 2020.

The preparation of financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual outcomes could differ from these estimates.

New accounting policies

Risks and Uncertainties

Financial Instruments

Please refer to the accompanying financial statements for the period ended November 30, 2020.

Management’s Responsibility for Financial Statements

1255269 BC Ltd.

Management’s Discussion and Analysis of Financial Condition and Results of Operations For the period from incorporation on June 30, 2020 to November 30, 2020

Outlook

The Company is currently working towards completion of the Transaction.

APPENDIX H MANAGEMENT’S DISCUSSION AND ANALYSIS OF ARCADIAN MINERALS CORP.

Please see attached.

Carve-Out Management’s Discussion and Analysis of Financial Condition and Results of Operations Six months ended June 30, 2020

Arcadian Minerals Corp.

The following discussion is management’s assessment and analysis of the results and financial condition of Arcadian Minerals Corp. (the “Company” or “Arcadian”), and should be read in conjunction with the accompanying condensed interim carve-out combined financial statements for the six months ended June 30, 2020 and related notes. The preparation of financial data is in accordance with International Financial Reporting Standards (“IFRS”), including IAS 34, Interim Financial Reporting as issued by the IASB and follows the same accounting policies and methods of application as the Company’s most recent annual financial statements. All figures are reported in Canadian dollars unless otherwise indicated.

The information contained herein is intended to provide investors with a reasonable basis for assessing the financial performance of the carve-out, but not as a substitute for detailed investigation or analysis on any particular issue. The information provided in this document is not intended to be a comprehensive review of all matters and developments concerning the carve-out operation and business.

Transaction

On August 28, 2020, Arcadian was acquired by 1255269 B.C. Ltd. (“1255269”) for consideration of $1,000,000, pursuant to the terms of a purchase agreement entered into with Gold X Mining Corp. (“Gold X”). 1255269 is a privately-held British Columbia corporation, established for the purposes of holding an interest in the Guia Antigua project (as defined below). Aside from its interest in the Guia Antigua project, 1255269 has no assets or material financial liabilities or obligations.

Carve-Out Basis of Preparation

The condensed interim carve-out combined financial statements have been prepared for the purposes of the Transaction and reflect the financial position, operations and cash flows of Arcadian derived from the historical accounting records of Gold X. The statements were prepared as if the Company had been operating independently during the periods presented.

Basis of measurement

The purpose of the condensed interim carve-out combined financial statements is to provide general purpose historical financial information of the Company for the inclusion in the Filing Statement in connection with the Transaction. Therefore, the carve-out combined financial statements present the historical financial information of those operations making up the Company. The carve-out combined financial statements reflect the financial position, operations and cash flows of Arcadian, combined with Argentum, derived from the historical accounting records of Gold X.

The carve-out combined financial statements have been prepared on a historical cost basis except for financial instruments classified as financial instruments at fair value. In addition, the carve-out combined financial statements have been prepared using the accrual basis of accounting, except for cash flow information.

Arcadian Minerals Corp.

Carve-Out Management’s Discussion and Analysis of Financial Condition and Results of Operations Six months ended June 30, 2020

All assets and liabilities directly attributable to the Company have been extracted in the carve-out combined financial statements;
All income and expenses directly attributable to the Company have been extracted in the carve-out combined financial statements; and
Common expenses have been allocated on a pro-rata basis to the Company based on the level of activities during the applicable periods.
Income taxes have been calculated as if the Company had been a separate legal entity and had filed a separate tax return for the periods presented.

Management cautions readers of the carve-out combined financial statements that the Company’s results do not necessarily reflect what the results of operations, financial position, or cash flows would have been had the Company been a separate entity. Further, the allocation of income and expenses in the carve-out combined statements of loss and comprehensive loss does not necessarily reflect the nature and level of the Company’s future income and operating expenses.

Description of Business

Arcadian is a resource exploration company, incorporated under the laws of Panama. As at June 30, 2020, the Company was a wholly owned subsidiary of Gold X. As at the date of this report, the Company is a wholly owned subsidiary of 1255269. Arcadian, through its subsidiary, Industrias Argentum, S.A.S. (“Argentum”) is focused on the exploration for, and resource expansion of gold and related minerals in Colombia. Arcadian holds the rights to a property located in a historic mining district in Colombia (henceforth known as the “Guia Antigua project”). The registered and records office of Arcadian is located at P.H. Credicorp Bank Panama, 27th Floor, Suites 3-4, 50th and 59th E Streets, P.O. Box 0833-00241, Panama City, Republic of Panama.

Mineral Properties

Colombia

The Guia Antigua Project is subject to a 1% net smelter returns royalty (“NSR”) on 70% of the project, payable in kind or in cash at the election of the royalty holder.

Arcadian Minerals Corp.

Carve-Out Management’s Discussion and Analysis of Financial Condition and Results of Operations Six months ended June 30, 2020

June 30, 2020 June 30, 2019 Three Months Ended	June 30, 2020 June 30, 2019 Six Months Ended
Guia Antigua Project exploration costs	25,250 $ 27,044 $ 35,894 72,675 - 417,709 - 5,513 - 940 3,654 6,653 79,921 79,697 - 873
Camp expenses 10,909 $ 10,876 $ Consulting 11,520 33,711 Drilling - - Engineering studies - 1,045 Lab fees - - Office and administrative costs 871 2,708 Salaries and benefits 39,213 40,267 Travel and accommodation - 115
Total Guia Antigua Project exploration costs 62,513 $ 88,722 $	144,719 $ 611,104 $
Total exploration costs 62,513 $ 88,722 $	144,719 $ 611,104 $

Summary of Quarterly Results

Summary of Quarterly Results
		Q2		Q1		Q4		Q3
		June 30,		March 31,	December 31,		September 30,
		2020		2020		2019		2019
Revenue	$	-	$	-	$	-	$	-
Exploration costs		(62,513)		(82,206)		(92,805)		(104,266)
Impairment of mineral property		-		-		(9,377,220)		-
Loss and comprehensive loss		(54,302)		(76,537)		(9,352,690)		(210,485)
Basic and diluted loss per share	$	(543)	$	(765)	$	(93,527)	$	(2,105)
		Q2		Q1		Q4		Q3
		June 30,		March 31,	December 31,		September 30,
		2019		2019		2018		2018
Revenue	$	-	$	-	$	-	$	-
Exploration costs		(88,722)		(522,382)		(395,554)		(60,947)
Loss and comprehensive loss		(97,099)		(520,894)		(374,792)		(60,660)
Basic and diluted loss per share	$	(971)	$	(5,209)	$	(3,748)	$	(607)

Overall Performance and Results of Operations

Total assets increased to $23,650 at June 30, 2020, from $10,205 at December 31, 2019. Cash at June 30, 2020 was $3,208 (December 31, 2019: $10,205). The change in cash during the six months ended June 30, 2020, was primarily the result of $140,966 used in operating activities and $133,969 received from Gold X for working capital contributions.

Six months ended June 30, 2020

During the six months ended June 30, 2020, the Company had loss and comprehensive loss of $130,839 (2019: $617,993). Loss and comprehensive loss was primarily due to $144,719 of exploration costs related to the Guia Antigua Project (2019: $611,104).

Arcadian Minerals Corp.

Carve-Out Management’s Discussion and Analysis of Financial Condition and Results of Operations Six months ended June 30, 2020

Three months ended June 30, 2020

During the three months ended June 30, 2020, the Company had loss and comprehensive loss of $54,302 (2019: $97,099). Loss and comprehensive loss was primarily due to $62,513 of exploration costs related to the Guia Antigua Project (2019: $88,722).

Liquidity and Capital Resources

The Company manages its capital to ensure that funds are available or are scheduled to be raised to provide adequate funds to carry out the Company’s defined exploration programs and to meet its ongoing administrative costs The Company is not subject to any externally imposed capital requirements. The Company has no bank debt or banking credit facilities in place.

The Company’s capital management objectives, policies and processes remained unchanged during the six months ended June 30, 2020.

Outstanding Share Data

The Company is authorized to issue 100 common shares at a par value of US$100 per share.

As at June 30, 2020 and the date of this report, the Company had a total of 100 common shares outstanding, which were acquired by Gold X on July 1, 2018 and acquired by 1255269 on August 28, 2020.

Critical Accounting Policies and Estimates

The Company has prepared the accompanying condensed interim carve-out combined financial statements in accordance with IAS 34, using accounting policies consistent with IFRS. Significant accounting policies, except as described below, are described in Note 3 of the Company’s audited carve-out combined financial statements as at and for the year ended December 31, 2019.

Risks and Uncertainties

The Company currently has no revenues from operations. Although the Company has been successful in the past in obtaining financing from contributions from Gold X or ESV, there is no assurance that it will be able to obtain adequate financing in the future or that such financing will be on terms acceptable to the Company.

Arcadian Minerals Corp.

Carve-Out Management’s Discussion and Analysis of Financial Condition and Results of Operations Six months ended June 30, 2020

Further risks factors can be found in the Filing Statement dated February 18, 2021, available on SEDAR at www.sedar.com.

Financial Instruments

Financial Risk Management

Cash and amounts payable are recorded at amortized cost which approximates fair value due to the short-term nature of these instruments.

Financial Instrument Risk Exposure

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

Liquidity risk

Fair value measurement

Foreign exchange risk

Arcadian Minerals Corp.

Carve-Out Management’s Discussion and Analysis of Financial Condition and Results of Operations Six months ended June 30, 2020

expenses in Colombia on a cash call basis using U.S. dollar currency and maintains a Colombian peso bank account. The Company is subject to gains and losses from fluctuations in the U.S. dollar and Colombian peso against the Canadian dollar.

Management’s Responsibility for Financial Statements

Outlook

The Company is currently working towards completion of the Transaction.

Carve-Out Management’s Discussion and Analysis of Financial Condition and Results of Operations Year ended December 31, 2019

Arcadian Minerals Corp.

The following discussion is management’s assessment and analysis of the results and financial condition of Arcadian Minerals Corp. (the “Company” or “Arcadian”), and should be read in conjunction with the accompanying audited carve-out combined financial statements for the year ended December 31, 2019 and related notes. The preparation of financial data is in accordance with International Financial Reporting Standards (“IFRS”) and all figures are reported in Canadian dollars unless otherwise indicated.

Transaction

On August 28, 2020, Arcadian was acquired by 1255269 B.C. Ltd. (“1255269”) for consideration of $1,000,000, pursuant to the terms of a purchase agreement entered into with Gold X Mining Corp. (“Gold X”). 1255269 is a privately-held British Columbia corporation, established for the purposes of holding an interest in the Guia Antigua project (as defined below). Aside from its interest in the Guia Antigua project, 1255269 has no assets or material financial liabilities or obligations.

Carve-Out Basis of Preparation

The carve-out combined financial statements have been prepared for the purposes of the Transaction and reflect the financial position, operations and cash flows of Arcadian derived from the historical accounting records of Gold X. The statements were prepared as if the Company had been operating independently during the periods presented. The Company presents comparative figures for the period from date of acquisition of control by Gold X on July 1, 2018 to December 31, 2018.

Basis of measurement

The purpose of the carve-out combined financial statements is to provide general purpose historical financial information of the Company for the inclusion in the Filing Statement in connection with the Transaction. Therefore, the carve-out combined financial statements present the historical financial information of those operations making up the Company. The carve-out combined financial statements reflect the financial position, operations and cash flows of Arcadian, combined with Argentum, derived from the historical accounting records of Gold X.

Arcadian Minerals Corp.

Carve-Out Management’s Discussion and Analysis of Financial Condition and Results of Operations Year ended December 31, 2019

All assets and liabilities directly attributable to the Company have been extracted in the carve-out combined financial statements;
All income and expenses directly attributable to the Company have been extracted in the carve-out combined financial statements; and
Common expenses have been allocated on a pro-rata basis to the Company based on the level of activities during the applicable periods.
Income taxes have been calculated as if the Company had been a separate legal entity and had filed a separate tax return for the periods presented.

Description of Business

Arcadian is a resource exploration company, incorporated under the laws of Panama. As at December 31, 2019, the Company was a wholly owned subsidiary of Gold X. As at the date of this report, the Company is a wholly owned subsidiary of 1255269. Arcadian, through its subsidiary, Industrias Argentum, S.A.S. (“Argentum”) is focused on the exploration for, and resource expansion of gold and related minerals in Colombia. Arcadian holds the rights to a property located in a historic mining district in Colombia (henceforth known as the “Guia Antigua project”). The registered and records office of Arcadian is located at P.H. Credicorp Bank Panama, 27th Floor, Suites 3-4, 50th and 59th E Streets, P.O. Box 0833-00241, Panama City, Republic of Panama.

Mineral Properties

Colombia

The Guia Antigua Project was acquired through a series of transactions that included the acquisition of GA Mine Corp., the parent company of Arcadian, Arcadian and Argentum, which was accounted for as an acquisition of assets and liabilities as the entities acquired did not meet the definition of a business in accordance with IFRS 3. The acquisition of the 100% interest was by way of 30% from Gran Colombia Gold Corp (“Gran Colombia”) and 70% from certain vendors, including previous joint venture partners of Gran Colombia.

The Guia Antigua Project is subject to a 1% net smelter returns royalty (“NSR”) on 70% of the project, payable in kind or in cash at the election of the royalty holder.

Arcadian Minerals Corp.

Carve-Out Management’s Discussion and Analysis of Financial Condition and Results of Operations Year ended December 31, 2019

As at December 31, 2019, the carrying amount of the Company’s interest in mineral properties is as follows:

		December 31, 2019		December 31, 2018 (Unaudited)
Guia Antigua - Colombia	$	-	$	9,377,220
Balance	$	-	$	9,377,220

		For the year ended		For the period from July 1, 2018 to
	December 31, 2019			December 31, 2018
				(Unaudited)
Guia Antigua Project exploration costs
Camp expenses	$	66,838	$	56,406
Consulting		133,060		91,483
Drilling		428,031		175,461
Engineering studies		5,843		37,256
Lab fees		940		2,227
Office and administrative costs		10,689		6,410
Salaries and benefits		161,084		82,103
Travel and accommodation		1,690		5,155
Total Guia Antigua Project exploration costs	$	808,175	$	456,501
Total exploration costs	$	808,175	$	456,501

Selected Annual Information

Selected Annual Information
		For the year		For the period
		ended	from July 1, 2018
		December 31,	to	December 31,
		2019		2018
Total assets,December 31	$	10,205	$	9,496,855
Exploration costs	$	(808,175)	$	(456,501)
Impairment of mineralproperty	$	(9,377,220)	$	-
Loss and comprehensive loss	$	(10,181,168)	$	(435,452)
Basic and diluted lossper share	$	(101,812)	$	(4,355)

Arcadian Minerals Corp.

Carve-Out Management’s Discussion and Analysis of Financial Condition and Results of Operations Year ended December 31, 2019

Summary of Quarterly Results

Summary of Quarterly Results
		Q4		Q3		Q2		Q1
	December 31,		September 30,			June 30,		March 31,
		2019		2019		2019		2019
Revenue	$	-	$	-	$	-	$	-
Exploration costs		(92,805)		(104,266)		(88,722)		(522,382)
Impairment of mineral property		(9,377,220)		-		-		-
Loss and comprehensive loss		(9,352,690)		(210,485)		(97,099)		(520,894)
Basic and diluted loss per share	$	(93,527)	$	(2,105)	$	(971)	$	(5,209)
		Q4		Q3
	December 31,		September 30,
		2018		2018
Revenue	$	-	$	-
Exploration costs		(395,554)		(60,947)
Loss and comprehensive loss		(374,792)		(60,660)
Basic and diluted loss per share	$	(3,748)	$	(607)

Overall Performance and Results of Operations

Total assets decreased to $10,205 at December 31, 2019, from $9,496,855 at December 31, 2019, primarily due to the impairment of $9,377,220 of the mineral property during the year ended December 31, 2019. The primary asset at December 31, 2019 was cash of $10,205 (December 31, 2018: $119,635). The change in cash during the year ended December 31, 2019, was primarily the result of $932,714 used in operating activities and $823,284 received from Gold X for working capital contributions.

Year ended December 31, 2019

During the year ended December 31, 2019, the Company had loss and comprehensive loss of $10,181,168. Loss and comprehensive loss was primarily due to $808,175 of exploration costs related to the Guia Antigua Project and impairment of mineral property of $9,377,220. As at December 31, 2019, management of the Company determined that there were indicators of impairment on the Guia Antigua property. As a result, due to management’s decision to curtail exploration operations, Guia Antigua was written down from $9,377,220 to $nil.

Three months ended December 31, 2019

During the three months ended December 31, 2019, the Company had loss and comprehensive loss of $9,352,690. Loss and comprehensive loss was primarily due to $92,805 of exploration costs related to the Guia Antigua Project and impairment of mineral property of $9,377,220. As at December 31, 2019, management of the Company determined that there were indicators of impairment on the Guia Antigua property. As a result, due to management’s decision to curtail exploration operations, Guia Antigua was written down from $9,377,220 to $nil.

Liquidity and Capital Resources

Arcadian Minerals Corp.

Carve-Out Management’s Discussion and Analysis of Financial Condition and Results of Operations Year ended December 31, 2019

the existence of material uncertainties that may cast significant doubt on the Company’s ability to continue as a going concern.

The Company manages its capital to ensure that funds are available or are scheduled to be raised to provide adequate funds to carry out the Company’s defined exploration programs and to meet its ongoing administrative costs The Company is not subject to any externally imposed capital requirements. The Company has no bank debt or banking credit facilities in place.

The Company’s capital management objectives, policies and processes remained unchanged during 2019.

Outstanding Share Data

The Company is authorized to issue 100 common shares at a par value of US$100 per share.

As at December 31, 2019 and the date of this report, the Company had a total of 100 common shares outstanding, which were acquired by Gold X on July 1, 2018 and acquired by 1255269 on August 28, 2020.

Critical Accounting Policies and Estimates

The Company has prepared the accompanying carve-out combined financial statements in accordance with IAS 34, using accounting policies consistent with IFRS. Significant accounting policies, except as described below, are described in Note 3 of the Company’s carve-out combined financial statements as at and for the year ended December 31, 2019.

New accounting policies

IFRS 16 – Leases

New standard to establish principles for recognition, measurement, presentation and disclosure of leases with an impact on lessee accounting, effective for annual periods beginning on or after January 1, 2019. Under IFRS 16, as a lessee, the Company is required to recognize all leases in the statement of financial position as a “right-of-use” asset and a lease liability unless the lease term is 12 months or less or the underlying asset has a very low value. The asset is subsequently accounted for in accordance with the cost or revaluation model in IAS 16 Property, Plant and Equipment or as Investment Property under IAS 40 Investment Property. The liability is unwound over the term of the lease giving rise to an interest expense. The Company completed an assessment and concluded that there is no material impact on the carve-out combined financial statements from the adoption of this standard.

Risks and Uncertainties

Arcadian Minerals Corp.

Carve-Out Management’s Discussion and Analysis of Financial Condition and Results of Operations Year ended December 31, 2019

Company to predict the duration or magnitude of the adverse results of the outbreak and its effects on the Company’s business or results of operations at this time.

Further risks factors can be found in the Filing Statement dated February 18, 2021, available on SEDAR at www.sedar.com.

Financial Instruments

Financial Risk Management

Cash and amounts payable are recorded at amortized cost which approximates fair value due to the short-term nature of these instruments.

Financial Instrument Risk Exposure

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

Liquidity risk

Liquidity risk is the risk that the Company will not have sufficient cash resources to meet its financial obligations as they come due. The Company’s liquidity and operating results may be adversely affected if its access to the capital market is hindered whether as a result of a downturn in stock market conditions generally or as a result of conditions specific to the Company. The Company gains cash primarily through advances from Gold X. At December 31, 2019, the Company had cash of $10,205 (December 31, 2018: $119,635) to settle amounts payable of $17,742 (December 31, 2018: $146,508). The Company regularly evaluates its cash position to ensure preservation and security of capital as well as maintenance of liquidity.

Fair value measurement

Foreign exchange risk

Arcadian Minerals Corp.

Carve-Out Management’s Discussion and Analysis of Financial Condition and Results of Operations Year ended December 31, 2019

Management’s Responsibility for Financial Statements

Outlook

The Company is currently working towards completion of the Transaction.

APPENDIX I

MANAGEMENT’S DISCUSSION AND ANALYSIS OF GRAN COLOMBIA GOLD TITIRIBI CORP.

Please see attached.

GRAN COLOMBIA GOLD TITIRIBI CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE INTERIM PERIODS ENDED SEPTEMBER 30, 2020 AND THE YEARS ENDED DECEMBER 31, 2019 AND 2018 FEBRUARY 18, 2021

The following discussion and analysis of the results of operations and financial condition (“MD&A”) for Gran Colombia Gold Titiribi Corp. (the “Company” or “Titiribi”) should be read in conjunction with the consolidated financial statements and related notes thereto as at September 30, 2020, December 31, 2019, December 31, 2018 and January 1, 2018, and for the three and nine month periods ended September 30, 2020 and for the years ended December 31, 2019 and 2018 (the “Titiribi Financial Statements”) which are included in this Filing Statement. Readers are encouraged to read the Cautionary Note Regarding Forward Looking Information included on page 5 of this MD&A and the Filing Statement of ESV Resources Ltd. (“ESV”) dated as of February 18, 2021. The financial information in this MD&A is derived from the Titiribi Financial Statements prepared in accordance with International Financial Reporting Standards (“IFRS”) and with respect to interim periods in accordance with International Accounting Standards (“IAS”) 34, Interim Financial Reporting. All figures contained herein are expressed in United States dollars (“USD”), except as otherwise stated.

Description of Business

The Company, through its Colombian branch, Gran Colombia Gold Titiribi Sucursal Colombia, is engaged in the acquisition, exploration and evaluation of gold properties in Colombia, with its principal operations in the Zancudo Project located in the municipality of Titiribi, mining district of Antioquia. The Company, incorporated under the laws of Panama, is a wholly-owned subsidiary of Gran Colombia Gold S.A. (“Parent”), which in turn is a wholly-owned Panamanian subsidiary of Gran Colombia Gold Corp. (“Gran Colombia” or “Ultimate Parent”), a Canadian-listed public company.

Selected Financial Information

Selected Financial Information
	Third Quarter			Nine Months			Years
	2020		2019	2020	2019		2019	2018
($000’s, except per share amounts)
Revenue	$ -	$	-	$ -	$	-	$ -	$ -
Net loss	(20)		(7)	(32)		(11)	(14)	(21)
Per share – basic and diluted	(40)		(14)	(64)		(22)	(28)	(42)

	September 30,	December 31,	December 31,
	2020	2019	2018
Balance sheet($000’s):
Cash and cash equivalents	$ 36	$ 56	$ -
Total assets	56	80	24

IAMGOLD Option Agreement

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Subsequent Event - ESV Reverse Takeover Transaction

On November 20, 2020 the Ultimate Parent and the Parent entered into a Share Purchase Agreement (“SPA”) with ESV whereby ESV will acquire all of the issued and outstanding shares of the Company in a reverse takeover transaction in exchange for 27,000,000 common shares of ESV issued to the Ultimate Parent. Following closing of the acquisition, it is intended that ESV will change its name to Denarius Silver Corp.

The closing of the transaction is subject to several conditions, including approval of the TSX Venture Exchange and the completion of certain concurrent acquisition and financing transactions.

The IAMGOLD Option Agreement related to the Zancudo Project will remain in place and ESV has also agreed to be bound by the terms of this option agreement.

Outlook

From 2017 through 2019, IAMGOLD completed a total of approximately 16,224 meters of drilling at the Zancudo Project and has incurred over $4 million of its exploration commitment. However, due to COVID-19, IAMGOLD suspended its drilling program in 2020. The Company expects that following the ESV Reverse Takeover Transaction, IAMGOLD will, at some point, resume its exploration activities at the Zancudo Project pursuant to the terms of the IAMGOLD Option Agreement.

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Issued and Outstanding Securities

At September 30, 2020, December 31, 2019 and December 31, 2018, the Company had 500 common shares issued and outstanding.

Results of Operations and Overall Performance

The Company does not have any active business operations. Its sole purpose is to hold a carried investment in the Zancudo Project and fulfil its obligations under the IAMGOLD Option Agreement. As such, the Company’s expenditures are limited primarily to costs and expenses associated with the ongoing administration and maintenance of the Company and its Colombian branch.

Three and Nine Months ended September 30, 2020 versus Three and Nine Months ended September 30, 2019

The Company reported a net loss for the third quarter of 2020 of $20,000 ($40 per share), up from $7,000 ($14 per share) in the third quarter last year. For the first nine months of 2020, the Company reported a net loss of $32,000 ($64 per share) compared with a net loss of $11,000 ($22 per share) in the first nine months last year. The year-over-year increase in the net loss results from additional expenses related to consulting and other services and general and administrative expenditures incurred in connection with the Zancudo Project.

Year ended December 31, 2019 versus Year ended December 31, 2018

The Company reported a net loss for 2019 of $14,000 ($28 per share) compared with $21,000 ($42 per share) in 2018.

Liquidity and Capital Resources

At September 30, 2020, the Company had working capital of $35,000 compared with $61,000 at December 31, 2019 and $5,000 at December 31, 2018.

The Company has no sources of revenue or cash inflows and has been and continues to be dependent on its Ultimate Parent and other related parties for the cash needed to maintain operations including exploration activities and payment of operating expenses. The lack of independent financing represents a material uncertainty that casts significant doubt as to the ability of the Company to continue as a going concern. The Titiribi Financial Statements have been prepared on a going concern basis assuming that the Company will be able to realize its assets and discharge its liabilities in the normal course of business as they come due for the foreseeable future. The Titiribi Financial Statements do not include adjustments to the recoverability and classifications of recorded assets and liabilities and related expenses that might be necessary should the Company be unable to continue as a going concern. Such adjustments may be material.

At September 30, 2020, the Company had an amount due to related party of COP 22.1 billion, equivalent to $5.7 million (December 31, 2019 – COP 22.1 billion, equivalent to $6.8 million; December 31, 2018 – COP 32.4 billion, equivalent to $10.0 million). Subsequent to September 30, 2020, on December 29, 2020, the Parent made an additional capital contribution to the share capital of the Company in the amount of $6.4 million, the proceeds of which were used to settle in full the net amount due to related parties amounting to COP 22.2 billion, equivalent to $6.4 million at the exchange rate on the settlement date.

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Related Party Transactions

During the year ended December 31, 2019, the Parent made capital contributions to share capital amounting to approximately $3.2 million which were used to repay a portion of the amount due to related parties.

Key management personnel include those persons having authority and responsibility for planning, directing and controlling the activities of the Company as a whole. The Company has determined that key management personnel consist of the Board of Directors and executive officers of its Ultimate Parent. Gran Colombia does not charge the Company any fees with respect to the services of the key management personnel.

Financial Instruments

The carrying value of accounts payable and accrued liabilities approximate their fair values as they are shortterm in nature.

Off-Balance Sheet Arrangements

The Company has no off-balance sheet arrangements.

Critical Accounting Policies and Estimates

The preparation of the consolidated financial statements requires management to use judgment in applying its accounting policies and estimates and assumptions about the future. Judgments and estimates are continuously evaluated and are based on management’s best knowledge of the relevant facts and circumstances, having regard to prior experience, but actual results may differ significantly from the amounts included in the consolidated financial statements.

The critical judgments and estimates applied in the preparation of the Titiribi Financial Statements are consistent with those applied and disclosed in Notes 3 and 4 to the Titiribi Financial Statements for the year ended December 31, 2019, including:

Exploration and evaluation assets;
Assets’ carrying values and impairment charges;
Income taxes; and
Impairment;

Recent Accounting Pronouncements

Accounting Standards Not Yet Adopted

There are no IFRSs or IFRIC interpretations that are not yet effective that would be expected to have a material impact on the financial statements of the Company.

Risks and Uncertainties

Exploration, development and mining of precious metals involve numerous inherent risks as a result of the economic conditions in the various areas of operation. As such, the Company is subject to several financial, operational and political risks that could have a significant impact on its profitability and levels of operating

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cash flows. Although the Company assesses and minimizes these risks by applying high operating standards, including careful management and planning of its facilities, hiring qualified personnel and developing their skills through training and development programs, these risks cannot be eliminated.

Readers are encouraged to read and consider the risk factors which are more specifically described under the caption “Risk Factors” in the Filing Statement of ESV. Such risk factors could materially affect the future operating results of the Company and could cause actual events to differ materially from those described in forward-looking statements relating to the Company.

Risks related to COVID-19

global gold prices;
the severity and the length of potential measures taken by the Colombian government to manage the spread of the disease and their effect on IAMGOLD’s performance under its Option Agreement due to labor availability and supply lines;
availability of government supplies, such as water and electricity;
local currency purchasing power; or
ability to obtain funding, if needed.

The COVID-19 situation has not significantly impacted the Company as its direct exploration and evaluation activities, in light of the IAMGOLD Option Agreement, are currently minor. In response to the COVID-19 situation, IAMGOLD has temporarily suspended its exploration and evaluation activities on the Zancudo Project. There is risk that a reinstatement of a prolonged period of quarantine in Colombia may adversely impact the Company’s activities, including IAMGOLD’s exploration program.

Cautionary Note Regarding Forward Looking Statements

Certain statements in this MD&A constitute forward-looking information. Often, but not always, forwardlooking statements use words or phrases such as: "expects", "does not expect" or "is expected", "anticipates" or "does not anticipate", "plans" or "planned", "estimates" or "estimated", "projects" or "projected", "forecasts" or "forecasted", "believes", "intends", "likely", "possible", "probable", "scheduled", "positioned", "goal", "objective" or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Such forward-looking statements, including but not limited to statements with respect to anticipated business plans or strategies, IAMGOLD’s exploration activities and the ESV Reverse Takeover Transaction, involve known and unknown risks, uncertainties and other factors which may cause the actual actions, events and results to be materially different from estimated actions, events or results expressed or implied by such forward-looking statements. The Company believes the expectations reflected in these forward-looking statements are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking statements should not be unduly relied upon. Factors that could cause actual results to differ materially from those anticipated in these forward-looking statements are described under the caption “ Risk Factors ” in the Filing Statement of ESV. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results not to be anticipated, estimated or intended. The Company undertakes no obligation to update

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forward-looking statements if circumstances or management’s estimates or opinions should change except as required by applicable securities laws.

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CERTIFICATE OF ESV

The foregoing document constitutes full, true and plain disclosure of all material facts relating to the securities of ESV assuming completion of the Transaction.

DATED February 18, 2021 “ Frederic Leigh ” “ Michelle Borthwick ” _____ _____ Frederic Leigh, Chief Executive Officer Michelle Borthwick, Chief Financial Officer

ON BEHALF OF THE BOARD OF DIRECTORS OF ESV

“ Bernadette D’Silva ” “ Thomas O’Neill ” _______ ______ Bernadette D’Silva, Director Thomas O’Neill, Director

CERTIFICATE OF THE GUIA ANTIGUA VENDOR

The foregoing document as it relates to the Guia Antigua Vendor constitutes full, true and plain disclosure of all material facts relating to the securities of Guia Antigua Vendor.

DATED February 18, 2021

“ Paul Sparkes ”

_______ Paul Sparkes, Sole Director

CERTIFICATE OF GRAN COLOMBIA TITIRIBI

The foregoing document as it relates to Gran Colombia Titiribi constitutes full, true and plain disclosure of all material facts relating to the securities of Gran Colombia Titiribi.

DATED February 18, 2021

“ Michael Davies ” “ Lombardo Paredes ” ____ ____ Michael Davies, Secretary Lombardo Paredes, President

ON BEHALF OF THE BOARD OF DIRECTORS OF GRAN COLOMBIA TITIRIBI

“ Michael Davies ” “ Lombardo Paredes ” ____ ____ Michael Davies, Director Lombardo Paredes, Director

“ Federico Restrepo ”

_______ Federico Restrepo, Director

ACKNOWLEDGEMENT – PERSONAL INFORMATION

“Personal Information” means any information about an identifiable individual, and includes information contained in any Items in the attached filing statement that are analogous to Items 4.2, 11, 13.1, 16, 18.2, 19.2, 24, 25, 27, 32.3, 33, 34, 35, 36, 37, 38, 39, 41 and 42 of the Exchange Form 3D2, as applicable.

The undersigned hereby acknowledges and agrees that it has obtained the express written consent of each individual to:

(a) the disclosure of Personal Information by the undersigned to the TSX-V (as defined in Appendix 6B) pursuant to the Form 3D2; and
(b) the collection, use and disclosure of Personal Information by the TSX-V for the purposes described in Appendix 6B or as otherwise identified by the TSX-V, from time to time.

ON BEHALF OF ESV

“ Frederic Leigh ”

Frederic Leigh, CEO, Director

AI assistant

Denarius Metals — M&A Activity 2021

44279_rns_2021-02-18_1a9ccb0f-f211-483f-a50b-0a4b813e9625.pdf

FILING STATEMENT

OF

ESV RESOURCES LTD. (to be renamed “Denarius Silver Corp.”)

TABLE OF CONTENTS

FORWARD LOOKING INFORMATION

INTRODUCTION

MARKET DATA

INFORMATION RELATING TO THE GUIA ANTIGUA VENDOR AND GRAN COLOMBIA TITIRIBI

CURRENCY

GENERAL

GLOSSARY OF TERMS

SUMMARY OF FILING STATEMENT

THE COMPANIES

CONCURRENT PRIVATE PLACEMENT

AMALGAMATION AGREEMENT

SHARE PURCHASE AGREEMENT

NAME CHANGE

INTERESTS OF INSIDERS

ARM’S LENGTH PARTY TRANSACTION

AVAILABLE FUNDS AND PRINCIPAL PURPOSES

PROPOSED DIRECTORS AND OFFICERS OF THE RESULTING ISSUER

SELECTED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION

Pro Forma Consolidated Balance Sheet

MARKET FOR SECURITIES AND MARKET PRICE

CONFLICTS OF INTEREST

INTEREST OF EXPERTS AND OTHERS

AUDITORS

RISK FACTORS

CONDITIONAL APPROVAL OF EXCHANGE

RISK FACTORS

RISK FACTORS RELATED TO THE TRANSACTION

Completion of the Transaction

Following Completion of the Transaction, the Resulting Issuer may Issue Additional Equity Securities

Change of Shareholder Influence

GENERAL RISKS

Limited Operating History

Negative Operating Cash Flow and Dependence on Third Party Financing

Uncertainty of Additional Funding

Competitive Conditions

Reliance Upon Management

Title to Properties

Conflicts of Interest

Permits and Licences

Environmental and other Regulatory Requirements

Changes in Legislation

Economic and Political Factors – Colombia

Emerging Market Country

Economic and Political Developments

Exchange Controls

Decline in Economic Growth

Seizure or Expropriation of Assets

Protection of Mining Rights

Local Legal and Regulatory Systems

Colombia – Less Developed Country

Sanctions by the United States Government

Guerilla and other Criminal Activity

Risk of Global Outbreaks of Contagious Diseases

Volatility of Share Price

Liquidity

Dividends

Repatriation of Earnings

Enforcement of Civil Liabilities

MINING RELATED RISKS

No Known Mineral Reserves or Mineral Resources

Exploration Risks

PART I - INFORMATION CONCERNING ESV

NAME AND INCORPORATION

GENERAL DEVELOPMENT OF BUSINESS

History

Amalgamation Agreement

Share Purchase Agreement

Existing Business

SELECTED FINANCIAL INFORMATION AND MANAGEMENT’S DISCUSSION AND ANALYSIS

Selected Financial Information

Management’s Discussion and Analysis

DESCRIPTION OF SECURITIES

Common Shares

Denarius Metals M&A Activity 2021