Eastfield Resources Ltd. — Interim / Quarterly Report 2021

Jan 29, 2021

EASTFIELD RESOURCES LTD.

Condensed Interim Financial Statements For the Three and Nine Months Ended November 30, 2020 and 2019 (Unaudited – Expressed in Canadian dollars)

110-325 Howe Street, Vancouver, B.C. V6C 1Z7 Tel: (604) 681-7913 Fax: (604) 681-9855

NOTICE TO READER:

These condensed interim financial statements have not been reviewed by the Company's external auditors. These statements have been prepared by and are the responsibility of the Company's management.

Eastfield Resources Ltd. Condensed Interim Statements of Financial Position

(Unaudited – Expressed in Canadian dollars)

	November 30, 2020			February 29, 2020
ASSETS
Current
Cash and cash equivalents	$	369,390	$	271,396
Accounts receivable		13,442		17,348
Receivable from related parties (Note 9)		18,032		64,464
		400,864		353,208
Investments (Note 3)		2,833,878		538,942
Exploration and evaluation assets (Note 4)		1,073,277		1,083,710
Equipment		5,889		5,701
Right-of-use asset (Note 5)		139,908		162,798
Investment in sub-leases (Note 5)		305,785		342,670
Project deposits (Note 4)		119,146		119,146
	$	4,878,747	$	2,606,175
LIABILITIESCurrentAccounts payable and accrued liabilitiesPayable to related parties (Note 9)Lease obligations - current (Note 5)	$	80,6163,10076,276	$	75,4618,21576,276
		159,992		159,952
Lease obligations – long term(Note 5)		385,683		437,728
		545,675		597,680
SHAREHOLDERS' EQUITY
Share capital (Note 6)		4,309,072		4,309,072
Warrant reserve (Note 6)		57,168		57,168
Options reserve (Note 6)		829,352		829,352
Accumulated other comprehensive income (loss)Deficit		1,715,859(2,578,379)		(702,367)(2,484,730)
		4,333,072		2,008,495
	$	4,878,747	$	2,606,175

Nature and continuance of operations (Note 1)

Eastfield Resources Ltd. Condensed Interim Statements of Loss and Comprehensive Loss

For the Three and Nine Months Ended November 30, 2020 and 2019

(Unaudited – Expressed in Canadian dollars)

	Three Months Ending			Nine Months Ending
		November 30,		November 30,		November 30,		November 30,
		2020		2019		2020		2019
Expenses
Bank charges	$	313	$	349	$	1,273	$	1,458
Consulting		4,050		3,050		12,150		9,400
Depreciation		7,630		-		22,890		-
Dues and licenses		463		613		483		1,132
Investor relations		6,022		15,418		14,438		33,348
Legal and audit		-		-		-		2,954
Office		911		1,385		3,430		7,315
Rent		-		9,232		-		25,742
Salaries and benefits		6,525		6,374		18,870		17,850
Telephone		679		980		1,973		2,203
Transfer and filing fees		1,871		1,203		7,620		5,736
		28,464		38,604		83,127		107,138
Other (income)/expense
Interest income		(138)		(660)		(3,352)		(16,312)
Gain on sale of investments		-		(26,860)		-		(45,730)
Loss on settlement of debt		-		92,725		-		92,725
Interest income on sub-leases		(6,900)		-		(20,700)		-
Interest expense on lease obligations		11,525		-		34,574		-
NET LOSS	$	32,951	$	103,810	$	93,649	$	137,821
OTHER COMPREHENSIVE LOSS
Items that will not be reclassified to net income
or loss
Change in the fair value of equity investments
(Note 3)		(1,359,225)		251,439		(2,418,226)		417,968
COMPREHENSIVE (INCOME) LOSS		$ (1,326,274)	$	355,249		$ (2,324,577)	$	555,789
BASIC AND DILUTED LOSS PER SHARE
(Note 8)	$	0.001	$	0.002	$	0.002	$	0.003
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING –
basic and diluted		46,694,919		46,694,919		46,694,919		46,001,101

Eastfield Resources Ltd.Condensed Interim Statements of Changes in Shareholders' Equity

(Unaudited – Expressed in Canadian dollars)

	fNubemr oCommonShares	ShareCailtap(6)Note	WRe(	tarranserve6)Note	(	OpiontsReserve6)Note	AcComInco	ladtecumuOtherheivprense/()Lomess	ficiDet	To	italEqtyu
BalaFebr28,2019nce,uaryPrivaPlacf shaisstet,t otsemennereuecoshainfairluefinv()CNo3tmtstengevaoesenNelofoheiodtr tssper	44,894,9191,800,000--	$4,220,27288,800--	$	57,168---	$	815,352---	$	84,920-()417,968-	$()2,563,063--(137,821)	$	2,614,64988,800()417,968(137,821)
30,2019BalaNobence,vemrha-bd cionStreaseompensaChainfairluefinvtmtsngevaoesenRelasificaionf rlized gindispltcsoeaaonosafinvtmtsoesenNelofoheiodtr tssper	46,694,919----	$4,309,027----	$	16857,----	$	81325,514,000---	$	(333,048)-(98,414)(20,90)75-	$(2,00,884)7--20,9075(54,751)	$	2,146607,14,000(98,414)-(54,751)
BalaFebr29,2020nce,uaryChainfairluefinv(3)NotmtstengevaoesenNelofoheiodtr tssperBalaNobe30,2020nce,vemr	46,694,919--46,694,919	$4,309,072--$4,309,072	$$	57,168--57,168	$$	829,352--829,352	$$	(702,367)2,418,226-1,715,859	$(2,484,730)-(93,649)$(2,578,379)	$$	2,008,4952,418,226(93,649)4,333,072

Eastfield Resources Ltd. Condensed Interim Statements of Cash Flows

For the Nine Months Ended November 30, 2020 and 2019

(Unaudited – Expressed in Canadian dollars)

Cash provided by (used in)	2020	2019
Operating activities
Net (loss)	$(93,649)	$(137,821)
Adjustments to reconcile cash to net loss from operating activities:
Depreciation	22,890	-
Gain on sale of investments	-	(45,730)
Interest income on sub-leases	(20,700)	-
Interest expense on lease obligations	34,574	-
	(56,885)	(183,551)
Changes in non-cash working capital components
Accounts receivable	3,906	(7,741)
Receivable from related parties	46,432	21,720
Payable to related parties	(5,115)	(43,807)
Accounts payable and accrued liabilities	5,155	(6,924)
	(6,507)	(220,303)
Investing activities
Purchase of equipment	(188)	-
Mineral property acquisition costs	-	(338)
Mineral property Option Proceeds	57,670	50,000
Mineral property exploration expenditures	(47,237)	(107,776)
Promissory note receivable	-	300,237
Investments received from debt settlement	-	(370,902)
Exercise of warrants	-	(60,588)
Project deposits	-	8,500
Sale of investments	123,291	68,480
	133,536	(112,387)
Financing activities
Private placement	-	88,800
Net lease payments	(29,035)	-
	(29,035)	88,800
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	97,994	(243,890)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	271,396	471,465
CASH AND CASH EQUIVALENTS, END OF PERIOD	$369,390	$227,574

1. NATURE AND CONTINUANCE OF OPERATIONS

Eastfield Resources Ltd. (the "Company") was incorporated in the Province of British Columbia. Its principal business activities are the acquisition and exploration of gold, copper and other precious and base metal properties in Canada. The Company is in the process of actively exploring its mineral properties and has not yet determined whether these properties contain ore reserves that are economically recoverable. The Company is considered to be in the exploration stage and does not have operating cash flows.

The Company's shares are listed for trading on the TSX Venture Exchange (the "Exchange") under the symbol ETF. Its registered office is located at 110-325 Howe Street, Vancouver, British Columbia V6C 1Z7.

These financial statements have been prepared on the basis of accounting principles applicable to a going concern which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of operations. The ability of the Company to fund its potential future operations and commitments is dependent upon the ability of the Company to obtain additional financing. There is a risk that additional financing will not be available on a timely basis or on terms acceptable to the Company. These financial statements do not reflect the adjustments or reclassifications that would be necessary if the Company were unable to continue operations. Such adjustments and reclassifications could be material.

2. BASIS OF PREPARATION

Summary of Significant Accounting Policies

The Company prepares its interim financial statements in accordance with International Financial Reporting Standards ("IFRS") applicable to the preparation of interim financial statements, as issued by the International Accounting Standards Board, including International Accounting Standard 34 – Interim Financial Reporting. These condensed interim financial statements should be read in conjunction with the Company's annual financial statements for the year ended February 29, 2020.

The accounting policies applied in these condensed interim consolidated financial statements are based on IFRS effective for the year ended February 29, 2020, as issued and outstanding on January 29, 2021, the date the Board of Directors approved these financial statements.

Basis of Measurement

These consolidated financial statements have been prepared on a historical cost basis, except for certain financial instruments classified as fair value through profit or loss or fair value through other comprehensive income that have been measured at fair value and are presented in Canadian dollars, the Company's reporting currency and the functional currency of all of its operations.

Accounting estimates and judgments

The preparation of these consolidated financial statements required management to make estimates, judgments and assumptions that affect the reported amounts and other disclosures in these consolidated financial statements. The estimates and assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

The estimates, judgments and assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both the current and future periods.

2. BASIS OF PREPARATION (continued)

Critical accounting estimates are estimates, judgments and assumptions made by management that may result in material adjustments to the carrying amount of assets and liabilities within the next financial year. Critical estimates used in the preparation of these consolidated financial statements include, among others, the recoverability of accounts receivable, determination of realizable amounts of deferred tax assets and liabilities, impairment of the carrying value of non-financial assets, estimation of provisions, measurement of the fair value of tax benefits sold and measurement of equity instruments and share-based compensation.

Critical accounting judgments are accounting policies that have been identified as being complex or involving subjective judgments or assessments. Critical accounting judgments include the expected economic lives of and the estimated future operating results and net cash flows from equipment, the classification of financial instruments, and the recognition of deferred tax assets and liabilities.

3. INVESTMENTS

The Company has the following investments in equity instruments:

	November 30, 2020			February 29, 2020
	Number ofShares	Cost	Fair Value	Number ofShares	Cost	Fair Value
Cariboo Rose Resources Ltd.	208,000	$14,925	$14,560	208,000	$14,925	$10,400
Consolidated Woodjam Copper
Corp.	11,751,805	624,897	2,291,602	12,501,805	815,127	437,563
Consolidated Woodjam Copper
Corp. (warrants, exercise price
$0.08, expiry date June 24, 2022)	3,250,000	16,250	373,750	-	-	-
Consolidated Woodjam Copper
Corp. (warrants, exercise price
$0.10, expiry date September 15,
2020)	-	-	-	350,000	3,500	-
Prophecy Potash	243,369	24,336	27,987	-	-	-
GK Resources	333,333	33,333	35,000	-	-	-
Sun Metals Corp.	866,462	384,633	90,979	866,462	384,633	90,979
		1,098,374	2,833,878		1,218,185	538,942
Less: current portion		-	-		-	-
		$1,098,374	$2,833,878		$ 1,218,185	$ 538,942

The Company has irrevocably designated these investments in equity instruments as measured at FVOCI rather than FVTPL as they are not held for trading and the FVOCI classification is considered more appropriate for these strategic investments. The fair value of these equity investments is based on quoted market prices at the reporting dates. The current portion relates to those investments which the Company is reasonably likely to sell within the next 12 months.

4. EXPLORATION AND EVALUATION ASSETS

Acquisition and exploration expenditures incurred on mineral properties for the nine months ended November 30, 2020 are:

	Indata	Zymo	Other*	Total
ACQUISITION COSTS
Balance, beginning of the period	$141,513	$311,506	$52,014	$505,033
Incurred during the period	-	-	-	-
Balance, end of the period	141,513	311,506	52,014	505,033
EXPLORATION EXPENDITURES
Expenditures for the period:
Professional fees and field crews	5,408	5,040	26,424	36,872
Fees and Permits	-	63	-	63
Food and accommodations	-	-	1,031	1,031
Rental of vehicles and equipment	4	5,145	479	5,628
Transportation and fuel			215	215
Communications	375	-	-	375
Assaying	43	-	3,010	3,053
	5,830	10,248	31,159	47,237
Balance, beginning of the period	170,350	554,064	745,846	1,470,260
Balance, end of the period	176,180	564,312	777,005	1,517,497
OPTION PROCEEDS
Balance, beginning of the period	(251,250)	(461,000)	(179,333)	(891,583)
Proceeds received during the period	(24,337)	-	(33,333)	(57,670)
Balance, end of the period	(275,587)	(461,000)	(212,666)	(949,253)
	$42,106	$414,819	$616,353	$1,073,277

* Other properties include Iron Lake, Hidden One, Hedge Hog, Antler Gold, and CR.

4. EXPLORATION AND EVALUATION ASSETS (continued)

Acquisition and exploration expenditures incurred on mineral properties for the nine months ended November 30, 2019 are:

	Indata	Zymo	Other*	Total
ACQUISITION COSTS
Balance, beginning of the period	$141,513	$311,506	$51,676	$504,695
Incurred during the period	-	-	338	338
Balance, end of the period	141,513	311,506	52,014	505,033
EXPLORATION EXPENDITURES
Expenditures for the period:
Professional fees and field crews	12,000	26,000	50,400	88,400
Rental of vehicles and equipment	-	5,856	988	6,844
Transport and fuel		179	722	901
Communications	346	-	721	1,067
Geological	-	793	-	793
Food and accommodation		469	1,625	2,094
Freight	-	-	126	126
Assaying	-	719	6,832	7,551
	12,346	34,016	61,414	107,776
Balance, beginning of the period	150,436	498,232	631,199	1,279,867
Balance, end of the period	162,782	532,248	692,613	1,387,643
OPTION PROCEEDS
Balance, beginning of the period	(231,250)	(461,000)	(137,833)	(830,083)
Proceeds received during the period	(20,000)	-	(30,000)	(50,000)
Balance, end of the period	(251,250)	(461,000)	(167,833)	(880,083)
	$53,045	$382,754	$576,794	$1,012,593

* Other properties include Iron Lake, Hidden One, Hedge Hog, Antler Gold, CR and Howell.

Indata Property, Omineca Mining Division, British Columbia

The Company has a 91.5% interest in the Indata property. Imperial Metals Corporation ("Imperial Metals"), owns the remaining 8.7% interest. This interest will be reduced if Imperial Metals fails to make its proportionate share of exploration and other payments on the property.

On June 20, 2018, the Company entered into an option agreement with Prophecy Potash Corp. ("Prophecy Potash") whereby Prophecy Potash may earn a 60% interest in the Indata property by making $250,000 in cash payments, issuing $150,000 in shares and completing $2,000,000 in exploration work over a five-year period ending June 20, 2023. $20,000 was received upon signing the option agreement.

Zymo Property, Skeena Mining Division, British Columbia

The Company holds a 100% interest in the Zymo property.

4. EXPLORATION AND EVALUATION ASSETS (continued)

Other Properties

Iron Lake Property, Clinton Mining Division, British Columbia

The Company acquired 100% of the Iron Lake property from Canevex Resources Ltd. Canevex Resources Ltd. is owned by two directors of the Company. The Company has reserved a 1.5% net smelter royalty for the vendors.

On June 20, 2018, the Company entered into an option agreement with GK Resources Ltd. ("GK Resources") whereby GK Resources may earn a 60% interest in the Iron Lake property by making $400,000 in cash payments, issuing $250,000 in shares and completing $3,000,000 in exploration work over a five-year period ending June 20, 2023. $20,000 was received upon signing the option agreement.

In August 2020 the Company and GK Resources agreed to amend the terms of the option agreement. To date, the company has paid a total of $50,000, representing the cash payment to be paid upon signing of the original agreement and on the first anniversary of the original agreement. The company has agreed to issue $50,000 in common shares on the second anniversary of the original agreement and pay $50,000 in cash on the third anniversary of the original agreement. The company will pay $100,000 in cash and issue $80,000 in payment shares on the fourth anniversary of the original agreement, and pay $200,000 in cash and issue $90,000 in payment shares on the fifth anniversary of the original agreement. In addition, the company has agreed to incur an additional $100,000 by the third anniversary of the original agreement (of which $50,000 is to be spent by Oct. 31, 2020), an additional $1-million to be spent by the fourth anniversary of the original agreement and an additional $1,851,213 to be spent by the fifth anniversary of the original agreement. To date, the company has incurred $49,042 exploration expenditures.

Big Valley Project

The Company owns a 100% interest in the Hedge Hog, Antler Gold, CR properties (collectively referred to as the Big Valley project).

In December 2020, the Company optioned a 60-per-cent interest in its Hedge Hog copper, gold, silver, cobalt project located in the Cariboo mining division, British Columbia, to privately controlled West Oak Gold Corp. To earn its interest, West Oak must make payments (cash and/or shares) totaling $377,500 and complete $1.75-million in exploration over a four-year term. Upon completion of the earn-in, Eastfield will retain a 40-per-cent working interest and a 0.5-per-cent net smelter return royalty.

Project Deposits

$28,646 in deposits provided to the Ministry of Energy and Mines of British Columbia ("the Ministry") and $90,500 in term deposits, bearing interest at rates ranging from 0.30% to 1.25% and maturing between May 25, 2020 and May 12, 2021, are provided as reclamation bonds for the above mineral properties. The term deposits will continue to be renewed to comply with the Ministry's requirements. As these reclamation bonds are required to be in place whilst the Company has ownership of these mineral properties, they are recorded as non-current assets.

5. RIGHT-OF-USE ASSET AND LEASE OBLIGATIONS

The Company leases office space under a lease agreement which expires on June 30, 2025. The Company's right-ofuse asset and estimated future lease payments over the remaining term of the lease are:

				Carrying Amount
				-
				162,798
				162,798
				22,890
$192,042	$	52,134	$	139,908
531,197
(69,238)
461,959
(76,276)
$385,683
$$$	Cost-192,042192,042-10,500479,63441,063	$$	AccumulatedDepreciation-29,24429,24422.890	$$

The Company sub-leases a portion of its office space to two companies, Cariboo Rose Resources Ltd. and Consolidated Woodjam Copper Corp., with directors and officers in common. These sub-lease agreements have the same lease term as the head lease described above.

Investment in Office Sub-leases

Balance, February 28, 2019Additions	$342,670-
Sub-lease payments receivedInterest income	342,670(57,585)20,700
Balance, November 30, 2020	$305,785

6. SHARE CAPITAL

Authorized

Unlimited common shares without par value Unlimited preferred shares without par value

Share Purchase Options

The Company issues options to directors, officers, and employees of the Company, and persons who provide ongoing services to the Company, under an incentive stock option plan. Share option terms issued under this stock option plan are at the discretion of the Board of Directors and generally include contractual lives of five years and exercise prices based on the fair market value of the common shares at the grant date. Options will normally vest entirely on the date of grant for directors, officers and employees and at the rate of 25% on the date of the grant and 25% every three months thereafter for consultants.

6. SHARE CAPITAL (continued)

Share Purchase Options (continued)

A summary of changes in common share purchase options for the nine months ended November 30, 2020 and 2019 are:

	November 30, 2020			November 30, 2019
	Weighted					Weighted
	Number of		Average	Number of	Average Exercise
	Shares		Exercise Price	Shares		Price
Balance, beginning of the period	3,275,000	$	0.08	3,340,000	$	0.08
Cancelled/Expired	-		-	(495,000)		0.08
Options exercisable, end of the period	3,275,000	$	0.08	2,845,000	$	0.08

The following common share purchase options are outstanding at November 30, 2020:

		Options Outstanding		Options Exercisable
	Number of	Exercise price	WeightedAverageRemaining	Number of	Exercise price
Expiry Date	shares	($)	Life (Years)	shares	($)
July 31, 2021	780,000	0.13	0.67	780,000	0.13
April 30, 2023	350,000	0.10	2.42	350,000	0.10
September 26, 2023	300,000	0.05	2.73	300,000	0.05
November 24, 2024	545,000	0.05	3.99	545,000	0.05
December 19, 2024	700,000	0.05	4.05	700,000	0.05
January 17, 2027	100,000	0.10	6.14	100,000	0.10
October 10, 2027	500,000	0.05	6.87	500,000	0.05
	3,275,000		3.44	3,275,000

Share Purchase Warrants

The Company has warrants outstanding entitling the holders to purchase of 1,800,000 common shares at a price of $0.10 per share until June 13, 2021.

7. SEGMENTED DISCLOSURES

The Company operates in one industry segment, the acquisition and exploration of mineral properties, within one geographical area, Canada. For the nine months ended November 30, 2020 and 2019 all income was earned and all expenses were incurred in Canada and all non-current assets were held in Canada.

8. LOSS PER SHARE

The Company's diluted loss per share is equal to its basic loss per share. Outstanding share purchase options and warrants could potentially dilute basic loss per share in the future but were not included in the calculation of diluted loss per share because they are antidilutive for the three and nine months ended November 30, 2020 and 2019.

9. RELATED PARTY DISCLOSURES

Related party transactions are recorded at the exchange amount agreed to by the parties.

The Company is related to Cariboo Rose Resources Ltd. ("Cariboo Rose") and Consolidated Woodjam Copper Corp. ("Woodjam") through common directors and officers. In the normal course of business, the Company will enter into transactions with Cariboo Rose and Woodjam for the use of equipment, services and rental of office space. During the nine months ended November 30, 2020, recoveries of rent, salaries, telephone, office, consulting, convention and travel costs were $85,220 (2019 - $74,694) from Cariboo Rose and $82,802 (2019 - $74,832) from Woodjam. At November 30, 2020, accounts receivable included $9,374 (February 29, 2020 - $11,138) receivable from Cariboo Rose and $8,995 (February 29, 2020 - $53,328) receivable from Woodjam.

During the nine months ended November 30, 2020 payments of $36,450 (2019 - $37,500) were made to the Chief Financial Officer, who is also a director of the Company, for accounting services. Of the amounts paid in 2020, $24,300 (2019 - $30,300) were recovered from Cariboo Rose and Woodjam.

During the nine months ended November 30, 2020, geological services amounting to $47,923 (nine months ended November 30, 2019 - $112,133) were provided to the Company by Mincord Exploration Consultants Ltd. ("Mincord"), a geological service company owned by two directors of the Company. Mincord's relationship with the Company is nonexclusive and without retainer and on a project-by-project basis. Services provided include the hiring of field and professional personnel, rental of vehicular, camp and technical equipment, transportation and mobilization costs. At November 30, 2020, accounts payable included $3,100 (February 29, 2020 - $4,413) payable to Mincord.

On November 15, 2019, the Company received 9,272,560 common shares of Woodjam at a deemed price of $0.05 per share to settle the outstanding promissory note, accrued interest and accounts receivable totaling $463,628.

10. RISK MANAGEMENT AND FINANCIAL INSTRUMENTS

The Company's financial instruments are exposed to certain risks, which include credit, liquidity, and market risk. The risks related to financial instruments are managed by the senior management of the Company under policies and directions approved by the Board of Directors.

Credit Risk

Credit risk is the risk of an unexpected loss if a customer or third party to a financial instrument fails to meet its contractual obligations. The Company's cash is held at large Canadian financial institutions. The Company's receivables consist mostly of Goods and Services Tax due from the federal government of Canada and mineral exploration tax credit receivable from the Government of British Columbia. As such, the Company considers the risk of these receivables to be minimal and has not recognized an expected credit loss allowance on these financial instruments. The Company's promissory notes receivable is due from a related, publicly traded mineral exploration company (Note 11). As at November 30, 2020 and 2019, none of the Company's financial instruments subject to credit risk were past due or impaired.

The Company has determined that the expected credit losses on its accounts receivable and project deposits are not significant and accordingly has not recognized an allowance for expected credit losses as at November 30, 2020 and 2019.

Liquidity Risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. Accounts payable and accrued liabilities and payable to related parties are due within the current operating period. The Company's lease obligations are due as set out in Note 5. The Company manages liquidity risk through the management of its capital structure (Note 11) and financial leverage.

10. RISK MANAGEMENT AND FINANCIAL INSTRUMENTS (continued)

Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. The Company's market risk is comprised of two types of risk: interest rate risk, and equity price risk.

• (i) Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is exposed to interest rate risk when holding fixed rate short term deposits of varying maturities. The risk that the Company will realize a loss as a result of a decline in the fair value of the cash equivalents investments is limited because these investments are generally highly liquid securities with short-term maturities. As at November 30, 2020 and 2019, the Company considers its exposure to interest rate risk to be minimal.
• (ii) Equity risk is the uncertainty associated with the valuation of assets arising from changes in equity markets. The Company is exposed to this risk through its investment in equity instruments. All of the Company's listed equity investments (Note 3) are common shares of companies listed on the Toronto Stock Exchange and the Toronto Stock Exchange's Venture Exchange and are monitored by management with decisions on sale taken at the board level.
• (iii) Foreign currency risk is the risk that a variation in exchange rates between the Canadian dollar and US dollar or other foreign currencies will affect the Company's operations and financial results. The Company does not have significant exposure to foreign exchange rate fluctuation as it has a limited number of transactions denominated in foreign currencies.

11. MANAGEMENT OF CAPITAL

The Company's objectives when managing capital are to safeguard the Company's ability to continue as a going concern in order to pursue the exploration and development of its mineral property interests, and to maintain a flexible capital structure which optimizes the costs of capital at an acceptable risk. The Company considers its capital for this purpose to be its shareholders' equity.

The Company manages the capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. To maintain or adjust the capital structure, the Company may issue new shares or debt, acquire or dispose of assets or adjust the amount of cash and investments.

In order to facilitate the management of its capital requirements, the Company prepares annual expenditure budgets that are updated as necessary depending on various factors, including successful capital deployment and general industry conditions. The annual and updated budgets are approved by the Board of Directors.

In order to maximize ongoing development efforts, the Company does not pay out dividends.

The Company's investment policy is to invest its surplus cash in highly liquid short-term interest-bearing investments with maturities 90 days or less from the original date of acquisition, selected with regard to the expected timing of expenditures from continuing operations. The Company currently has sufficient capital resources to meet its administrative overhead expenses through its current operating period and it is confident it can raise additional funds to undertake all of its planned business activities. Actual funding requirements may vary from those planned due to a number of factors. Management believes it will be able to raise capital as required in the long term, but recognizes that there will be risks involved that may be beyond its control.

12. COVID 19 PANDEMIC

On March 11, 2020, the World Health Organization declared the COVID-19 coronavirus outbreak a pandemic. The spread of COVID-19 has created significant volatility in the Canadian and world markets and has the potential to have a significant and far-reaching effect on the Canadian and world economies, interest rates, and other financial measures. The Company will continue to monitor the ongoing developments regarding the COVID-19 pandemic and the potential impact on the Company's financial statements.