Faraday Copper Corp. — Interim / Quarterly Report 2020

May 28, 2020

Copperbank Resources Corp.

Condensed Consolidated Interim Financial Statements Three Months Ended March 31, 2020 and 2019 (Unaudited - Expressed in Canadian Dollars)

NOTICE TO READERS

In accordance with National Instrument 51-102 released by the Canadian Securities Administrators, the Company discloses that its auditors have not reviewed the accompanying condensed consolidated interim financial statements.

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

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Copperbank Resources Corp.

Consolidated Condensed Interim Statements of Financial Position (Expressed in Canadian dollars)

	Note March 31, 2020 December 31, 2019
	$ $
	Assets
	Current assets
	Cash and cash equivalents 138,611 16,240
	Receivables 45,344 39,490
	Prepaid expenses and deposit 7,383 9,876
	191,338 65,606
	Property and equipment 6 235,560 218,933
	Reclamation deposit 4 8,867 8,446
	Resource properties 4 5,875,594 5,361,729
	Total Assets 6,311,359 5,654,714
	Liabilities
	Current liabilities
	Accounts payable and accrued liabilities 335,135 423,411
	Note payable, current 4 70,936 64,940
	Obligation to issue shares 5 - 70,000
	Due to relatedparties 7 - 51,000
	406,071 609,351
	Convertible debenture 8 263,000 263,000
	669,071 872,351
	Shareholders' Equity
	Share capital 5 25,147,317 24,587,337
	Reserves 24,438,565 23,882,702
	Deficit (43,943,594) (43,687,676)
	5,642,288 4,782,363
	Shareholders' Equity and Liabilities 6,311,359 5,654,714
	Nature of operations and going concern 1
	Subsequent events 11

Approved and authorized for issuance by the Board of Directors on May 26, 2020

	_“Gavin Dirom” _	“Gianni Kovacevic”
	Director	Director
See accompanying notes to the consolidated financial statements

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Copperbank Resources Corp.

Condensed Consolidated Interim Statements of Loss and Comprehensive Loss (Unaudited - Expressed in Canadian dollars)

	Three months ended March 31 2020 2019
	$ $
	EXPENSES
	Amortization 3,362 5,600 Consulting and management fees 95,220 162,423 Filing fees and shareholders' services 2,652 6,922 Insurance 1,500 1,000 Office and administration 14,265 8,680 Professional fees 22,652 9,813 Promotion, advertisement and shareholder relations 35,258 25,744 Rental 8,186 5,088 Share-based compensation 40,809 135,320 Travel 32,014 24,987
	Net loss for the period ( 255,918) ( 385,577)
	Other comprehensive loss:
	Exchange gain(loss) ontranslatingforeignoperations 515,054 (25,371)
	Comprehensive income (loss) for the period 259,136 ( 410,948)
	Lossper share,basic and diluted ( 0.00) ( 0.00)
	Weighted averagenumberofoutstanding shares 301,027,766 279,215,238

See accompanying notes to the condensed consolidated interim financial statements

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Copperbank Resources Corp. Consolidated statements of changes in equity (Unaudited - Expressed in Canadian dollars)

Common shares	Reserves Total
Number Amount Warrants Options Other Accumulated other comprehensive loss Deficit
$	$ $ $ $ $ $
December 31, 2018 278,456,541 23,491,379 2,776,475 1,288,263 16,182,235 3,184,349 (34,581,693) 12,341,008 Share-based compensation – – – 135,320 – – – 135,320 Share issuance for cash 7,656,548 535,958 – – – – 535,958 Shares issued for mineral property option payment 1,000,000 80,000 – – – – – 80,000 Translation from the foreign
subsidiary – – Netloss – –	– – – (25,371) – (25,371) – – – – (385,577) (385,577)
March 31, 2019 287,113,089 24,107,337 2,776,475 1,423,583 16,182,235 3,158,978 (34,967,270) 12,681,338
December 31, 2019 295,113,089 24,587,337	2,776,475 1,695,444 16,182,235 3,228,548 (43,687,676) 4,782,363
Share-based compensation – – – 40,809 – – – 40,809 Share issuance for cash 8,166,333 489,980 – – – – 489,980 Shares issued for debt settlement 1,000,000 70,000 – – – – – 70,000 Translation from the foreign
subsidiary – – Netloss – –	– – – 515,054 – 515,054 – – – – (255,918) (255,918)
March 31, 2020 304,279,422 25,147,317	2,776,475 1,736,253 16,182,235 3,743,602 (43,943,594) 5,642,288

See accompanying notes to the consolidated financial statements

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Copperbank Resources Corp.

Condensed Consolidated Interim Statements of Cash Flows

(Unaudited - Expressed in Canadian dollars)

(Unaudited - Expressed in Canadian dollars)
Three months ended March 31	2020	2019
	$	$
Operating Activities
Net loss for the period	( 255,918)	( 385,577)
Items not involving cash
Amortization	3,362	5,600
Share-based compensation	40,809	135,320
Changes in non-cash working capital
Accounts payable and accrued liabilities	( 8,367)	( 43,403)
Due to related party	(51,000)	32,813
Receivable	(5,854)	( 8,475)
Obligation to issue shares	(70,000)	-
Prepaid expenses and deposits	2,493	2,000
Cash Used inOperating Activities	( 344,475)	(261,722)
Financing Activities
Shares issuance for cash	489,980	535,958
Cash provided by Financing Activities	489,980	535,958
Investing Activities
Expenditure of resource properties	(24,298)	( 33,236)
Cash Used in Investing Activities	( 24,298)	( 33,236)
Effect of change in foreign currency	1,164	(20,832)
Net Increase in Cash	122,371	220,168
Cash, Beginning of Period	16,240	153,399
Cash, End of Period	138,611	373,567

See accompanying notes to the condensed consolidated interim financial statements

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Copperbank Resources Corp. Notes to the Condensed Consolidated Interim Financial Statements Three Months ended March 31, 2020 and 2019 (Unaudited - Expressed in Canadian dollars)

1. NATURE OF OPERATIONS AND GOING CONCERN

Copperbank Resources Corp. (the “Company” or “Copperbank”) was incorporated on October 21, 2014 under the Business Corporations Act (British Columbia). The Company’s registered office is Suite 910 – 800 West Pender St., Vancouver, British Columbia, V6C 2V6. The Company’s head office and principal address is located at 1500-409 Granville St., Vancouver, British Columbia, V6C 1T2. The Company’s shares are traded on the Canadian Securities Exchange (“CSE”) under the symbol “CBK”, and its principal business is the acquisition and development of mineral properties.

Since 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 physical distancing, have caused material disruption to business globally resulting in an economic slowdown. Global equity markets have experienced significant volatility and weakness. The duration and impact of the COVID-19 outbreak 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.

Going concern

These consolidated financial statements have been prepared based on accounting principles applicable to a going concern, which assumes that the Company will be able to 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. Accordingly, these consolidated financial statements do not include any adjustments to the amounts and classification of assets and liabilities that might be necessary should the Company be unable to continue as a going concern.

The Company is a resource exploration stage company, which does not generate any revenue and has been relying on equity-based financing to fund its operations. The Company has recurring losses since inception and had a working capital deficiency of $214,733 as of March 31, 2020. The Company will require additional financing either through equity or debt financing, sale of assets, joint venture arrangements or a combination thereof to meet its administrative costs and to continue to explore and develop its mineral properties. There is no assurance that sufficient future funding will be available on a timely basis or on terms acceptable to the Company. These conditions indicate the existence of material uncertainties that cast significant doubt as to the ability of the Company to meet its obligations as they come due, and accordingly, the appropriateness of the use of accounting principles applicable to a going concern is in significant doubt.

The application of the going concern concept is dependent upon the Company’s ability to generate future profitable operations and maintain an adequate level of financial resources to discharge its ongoing obligations. Management seeks to raise capital, when necessary, to meet its funding requirements and has undertaken available cost-cutting measures. There can be no assurance that management’s plan will be successful, as it is dependent on prevailing capital market conditions and the availability of other financing opportunities. These consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. Such adjustments could be material.

2. STATEMENT OF COMPLIANCE

These condensed consolidated interim financial statements together with the comparative figures herein have been prepared in accordance with International Accounting Standards (“IAS”) 34 “Interim Financial Reporting” (“IAS 34”) using accounting policies consistent with the International Financial Reporting Standards (“IFRS”) issued by the International Accounting Standards Board (“IASB”) and interpretations of the International Financial Reporting Interpretations Committee (“IFRIC”).

These condensed consolidated interim financial statements do not include all the information required of a full annual financial report and is intended to provide users with an update in relation to events and transactions that are significant to an understanding of the changes in financial position and performance of the Company since the end of the last annual reporting period. It is therefore recommended that these condensed interim financial statements be read in conjunction with the audited annual financial statements of the Company for the most recent year ended December 31, 2019.

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Copperbank Resources Corp. Notes to the Condensed Consolidated Interim Financial Statements Three Months ended March 31, 2020 and 2019 (Unaudited - Expressed in Canadian dollars)

3 . SIGNIFICANT ACCOUNTING POLICIES

Basis of preparation

These consolidated financial statements have been prepared on a historical cost basis, except for certain financial instruments carried at fair value. In addition, these consolidated financial statements have been prepared using the accrual basis of accounting, except for cash flow information.

These consolidated financial statements incorporate the accounts of the Company and its wholly owned subsidiaries, Enexco International Inc. (“Enexco US”) (USA), 1016079 B.C Ltd. (Canada), Copperbank Resources Alaska Inc. (USA), Copperbank Royalties Corp. (incorporated in Canada during 2019), Redhawk Resources, Inc. (Canada), Redhawk Copper Inc. (USA), Redhawk Resources (USA), Inc., and Copper Creek Project LLC (USA). A subsidiary is an entity in which the Company has control, where control requires exposure or rights to variable returns and the ability to affect those returns through power over the investees. All intercompany transactions and balances have been eliminated on consolidation.

The Company has not changed its accounting policies since its prior year ended December 31, 2019 and has applied accounting policies consistently for all periods presented.

4. RESOURCE PROPERTIES

The continuity of the mineral properties is as follows:

The continuity of the mineral properties is as follows:
	Pyramid	CopperCreek	Total
	$	$	$
Balance, December 31, 2018	7,569,692	5,064,343	12,634,035
Annual option fees and maintenance of permits	113,533	301,791	415,324
Impairment	( 7,683,225)	-	( 7,683,225)
Effect ofchangein foreignexchangerate	-	(4,405)	(4,405)
Balance, December 31, 2019	-	5,361,729	5,361,729
Annual option fees and maintenance of permits	-	24,298	24,298
Effect ofchangein foreignexchangerate	-	489,567	489,567
March 31,2019	-	5,875,594	5,875,594

Copper Creek Mineral Properties, Arizona

i) The Company acquired 100% of the Copper Creek Project through the acquisition of Redhawk Resources Inc. (“Redhawk”) with a value of $4,955,328 during the third quarter of 2018.

ii) D & G Mining Agreement - In November 2005, Redhawk entered into a lease-to-purchase agreement with a third party for additional property within the Copper Creek boundaries. Redhawk paid US$80,000 in both 2006 and 2007 and was required to pay US$100,000 in November 2008 and annually thereafter until the end of year fifteen. In May 2018, the agreement was amended to reduce the annual payments to US$50,000.

Redhawk has the option to purchase the property for US$3,000,000. Commencing January 1, 2022, 50% of the yearly lease payments made prior to exercising the option to purchase will be applied against the purchase price in the event that Redhawk exercises its property purchase option.

iii) Freeport Mineral Corporation Agreement - In April 2007, Redhawk entered into a purchase agreement with Freeport Mineral Corporation (“Freeport”) to acquire additional mining claims within the Copper Creek boundaries. The additional mining claims are subject to a 1% Net Smelter Return royalty.

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Copperbank Resources Corp. Notes to the Condensed Consolidated Interim Financial Statements Three Months ended March 31, 2020 and 2019 (Unaudited - Expressed in Canadian dollars)

4. RESOURCE PROPERTIES (Continued) Copper Creek Mineral Properties, Arizona (Continued)

In conjunction with Redhawk’s acquisition of mining claims from Freeport, Redhawk entered into a promissory note. The promissory note with the principal amount of US$1,525,594 is repayable over 11 years and bears interest at 5% per annum. On May 30, 2018, Redhawk entered into an amendment to the Fourth Workout Agreement with Freeport. The substance of the amended agreement is a conversion of interest and principal owing to Freeport into production decision royalty payments. The total will be US$3,000,000 paid in six equal annual instalments of US$500,000 per annum. The payments are contingent upon Redhawk or successors achieving a defined commercial production of minerals. As a result of this amendment, no liabilities in connection with this promissory note has been recorded as at March 31, 2020 and December 31, 2019.

iv) Morgan Agreements - In December 2012, Redhawk acquired patented land from two unrelated parties for total consideration of US$1.2 million. As at March 31, 2020, Redhawk is required to pay $70,936 (US$50,000) in 2020.

Contact Property, Nevada

The Company owns a 100% interest in the Contact property located in Elko County, Nevada. This property was fully impaired during fiscal 2015. The Company intends to keep the permit of this resource property in good standing.

As at March 31, 2020, the Company has deposited $8,867 (2019 - $8,446) for the Contact property in Nevada and for the Copper Creek property in Arizona.

5. SHARE CAPITAL

a) Authorized

Unlimited number of common shares without par value.

b) Issued and outstanding

During the three months ended March 31, 2020:

On January 23, 2020, 5,000,000 common shares were issued through private placement at $0.06 per share for gross proceeds of $300,000.

On February 11, 2020, 3,166,333 common shares were issued through private placement at $0.06 per share for gross proceeds of $189,980.

On February 11, 2020, 1,000,000 common shares were issued at $0.07 per share to settle the share issuance obligation of $70,000 recorded on December 31, 2019.

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Copperbank Resources Corp. Notes to the Condensed Consolidated Interim Financial Statements Three Months ended March 31, 2020 and 2019 (Unaudited - Expressed in Canadian dollars)

5. SHARE CAPITAL (Continued)

c) Issued and outstanding (continued)

During the year ended December 31, 2019:

In March 2019 the Company closed a private placement, issuing 7,656,548 common shares at a price of $0.07 per share for net proceeds of $535,958.

In March 2019 the Company issued 1,000,000 common shares at $0.08 per share to Antofagasta Minerals S.A. to satisfy the $80,000 owed for the July 28, 2017 assignment agreement in connection with the Pyramid Property.

In August 2019, the Company closed a private placement, issuing 8,000,000 common shares at a price of $0.06 per share for net proceeds of $480,000.

d) Warrants

As at March 31, 2020 and December 31, 2019, the following warrants were outstanding:

Expiry Date	Exercise Price	Outstanding
August 21, 2022	$ 0.25	5,173,366
		5,173,366
Continuity is as follows:
		Number outstanding	Expiry date	Exercise price
Outstanding and exercisable, December 31, 2018		83,529,558
Expired		(78,356,192)
Outstanding and exercisable, March 31, 2020 and
December 31, 2019		5,173,366

As at March 31, 2020, the weighted average exercise price and remaining life of these warrants was $0.25 per share and 2.39 years.

d) Options

The Company has a “rolling” stock option plan (the “Plan”) that allows the Company to grant options to its employees, directors, consultants and officers for a maximum of 10% of outstanding shares to be issued.

Options have a maximum term of five years and terminate up to 90 days following the date on which an optionee ceases to be an employee, director, consultant or officer, and up to 30 days following the date on which an optionee who is engaged to provide investor relations activities ceases to be engaged to provide such services. In the case of death, the option terminates at the earlier of twelve months after the date of death and the expiration of the option period. During the three months ended March 31, 2020, the Company incurred share-based compensation of $40,809 (2019 - $135,320) in connection with options vested. The Company used Black Scholes option pricing model and the following assumptions to determine the fair values of the stock options granted in the year:

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Copperbank Resources Corp. Notes to the Condensed Consolidated Interim Financial Statements Three Months ended March 31, 2020 and 2019 (Unaudited - Expressed in Canadian dollars)

5. SHARE CAPITAL (Continued)

d) Options (continued)

Options (continued)
	2020	2019
Risk-free interest rate	2.22%	2.22%
Expected life of the option	5 years	5 years
Annualized volatility	230%	230%
Dividend Rate	0.00 %	0.00 %

As at March 31, 2020, the following stock options were outstanding:

Expiry Date	Exercise Price	Outstanding	Exercisable
June 8, 2020	$ 0.10	500,000	500,000
April 11, 2021	$ 0.05	500,000	500,000
February 24, 2022	$0.10	5,750,000	5,750,000
July 28, 2022	$0.13	650,000	650,000
May 10 to May 21, 2023	$0.10	8,600,000	6,450,000
February 28, 2024	$0.10	2,000,000	1,000,000
		18.000,000	14,850,000

Continuity of the option outstanding is as follows:

	Number of Options	Weighted Average Exercise Price
Outstanding, December 31, 2018	22,144,139	$0.11
Expired	(3,344,139)	$0.14
Granted	2,000,000	$0.10
Outstanding, December 31, 2019	20,050,000	$0.10
Expired	(2,050,000)	$0.10
Outstanding, March 31, 2020	18,000,000	$0.10
Exercisable,March31,2020	14,850,000	$0.10

The remaining contractual life of the Company’s options as at March 31, 2020 was 2.38 (2019 – 2.61) years.

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Copperbank Resources Corp. Notes to the Condensed Consolidated Interim Financial Statements Three Months ended March 31, 2020 and 2019 (Unaudited - Expressed in Canadian dollars)

6. PROPERTY AND EQUIPMENT

Continuity of the Property and equipment is as follows:

	Building Land Total
	$ $ $
	Cost
	Balance, December 31, 2019 214,541 32,471 247,012
	Foreignexchange adjustment 19,589 2,965 22,554
	Balance, March 31, 2020 219,429 33,108 269,566
	Amortization
	Balance, December 31, 2019 28,079 - 28,079
	Addition 3,363 - 3,363
	Foreignexchange adjustment 2,564 - 2,564
	Balance, March 31, 2020 25,733 - 34,006
	Net book value
	Balance,December31,2019 186,462 32,471 218,933
	Balance,March31,2020 193,696 33,108 235,560

7. RELATED PARTY TRANSACTIONS

During the three months ended March 31, 2020 and 2019, the Company incurred the following transactions with key management members and the directors of the Company:

		2019	2018
	Nature	$	$
Key management	Management fees	84,000	131,250
Key management and directors	Share-based payments	37,190	99,982

As at March 31, 2020, amount due to related party comprised of amounts owing to key management members of $Nil (2019 - $51,000). Due to related party has the same terms as the Company’s trade payable, which is unsecured and nonin9terest-bearing and due with no specific terms.

8. CONVERTIBLE DEBENTURE

On June 17, 2019 the Company closed a non-brokered private placement of convertible debentures (“CDs”) for gross proceeds of $263,000. Each CD has an issue price of $1,000, a term of two years from the date of issuance and bears an interest at a rate of 15% per annum, calculated monthly and payable monthly in cash with the first payment being due on July 14, 2019 (paid) and will mature and be payable on June 14, 2021. Each Debenture is convertible into common shares of the Company at the option of the holder at any time prior to maturity at a conversion price of $0.07 per common share. The Company will have the option to redeem the CD at a redeemable price equal to their principal amount plus accrued and unpaid interest. The interest rate on the CD is approximately the market interest rate in determining the fair value of the liability component. Thus, no value has been assigned to the equity component.

For three months ended March 31, 2020, the Company has incurred and paid interest expense of $10,143 on the convertible debentures (2019 – $nil).

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Copperbank Resources Corp. Notes to the Condensed Consolidated Interim Financial Statements Three Months ended March 31, 2020 and 2019 (Unaudited - Expressed in Canadian dollars)

9. SEGMENTED INFORMATION

The Company operates primarily in one business segment, which is the exploration and development of resource properties located in the United States. The Company’s non-current assets were $6,120,021 (2019- $5,589,108, which comprised mainly of resource properties, property and equipment, and reclamation bonds that are in the United States.

10. FINANCIAL INSTRUMENTS

The Company’s financial instruments are exposed to several financial and market risks, including credit, interest rate, liquidity and commodity risks. The Company may, or may not, establish from time to time active policies to manage these risks. The Company does not currently have in place any active hedging or derivative trading policies to manage these risks since the Company’s management does not believe that the current size, scale and pattern of cash flow of its operations would warrant such hedging activities.

Fair value of financial instruments

The fair value hierarchy established by IFRS 13 Fair Value Measurement has three levels to classify the inputs to valuation techniques used to measure fair value described as follows:

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 assets or liabilities either directly or indirectly; and Level 3 – Inputs that are not based on observable market data.

The fair values of the Company’s accounts receivable, deposits and accounts payable are equivalent to their carrying values due to their short-term nature.

Credit risk

Credit risk is the risk of potential loss to the Company if the counterparty to a financial instrument fails to meet its contractual obligations.

The financial instruments that potentially subject the Company to a significant concentration of credit risk consist of cash and cash equivalents. The Company mitigates its exposure to credit loss associated with cash and cash equivalents by placing its cash and cash equivalents in major financial institutions. As at March 31, 2020, the Company had cash equivalents of $2,300 in term deposits (2019 - $2,300).

Liquidity risk and fair value hierarchy

Liquidity risk is the risk that the Company may be unable to meet its financial obligations as they fall due or that it will be required to meet them at excessive cost. The Company reviews its working capital position regularly to ensure there is sufficient capital in order to meet short-term business requirements, after taking into account the Company’s holdings of cash. The Company’s cash is invested in business accounts, which are available on demand. The Company manages its liquidity risk mainly through raising funds from private placements and amounts from related parties.

The Company's operating cash requirements are continuously monitored and adjusted as input variables change. As these variables change, liquidity risks may necessitate the need for the Company to pursue equity issuances, obtain project or debt financing, or enter into joint arrangements. There is no assurance that the necessary financing will be available in a timely manner.

Commodity risk

The Company is subject to commodity price risk arising from the fluctuation of metal price beyond the Company's control. The Company may have difficulties to identify and acquire economically viable projects for the Company to invest in if metal prices are depressed for an extended period.

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Copperbank Resources Corp. Notes to the Condensed Consolidated Interim Financial Statements Three Months ended March 31, 2020 and 2019 (Unaudited - Expressed in Canadian dollars)

10. FINANCIAL INSTRUMENTS (Continued)

Interest rate risk

The Company is exposed to the risk that the value of financial instruments will change due to movements in market interest rates. As of March 31, 2020, the Company has exposure to interest rate risk to the convertible debentures and note payable. However, the risk is not significant as the Company has simple and fixed interest rates.

Foreign currency risk

Foreign currency risk is the risk that the fair value of the Company’s assets and liabilities will fluctuate due to changes in foreign exchange rates.

The Company is exposed to foreign currency risk to the extent that monetary assets and liabilities held by the Company are not denominated in its functional currency. The Company does not manage currency risk through hedging or other currency management tools.

As at March 31, 2020 and December 31, 2019, the Company’s net exposure to foreign currency risk on its financial instruments is as follows:

	March 31, 2020	December 31, 2019
Cash	US$ 4,260	US$ 3,258
Canadiandollarequivalent	6,020	$4,232

A 5% change in the US dollar against the Canadian dollar at March 31, 2020 would result in a change of approximately $300 in comprehensive loss.

11. SUBSEQUENT EVENTS

On May 12, 2020, the Company issued 1,350,000 common shares for gross proceeds of $81,000. The Company will use the proceeds for general working capital.

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