Fidelity Minerals Corp. — Interim / Quarterly Report 2021

Jun 30, 2021

RE: CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED) FOR THE NINE MONTHS ENDED APRIL 30, 2021

Third quarter financial statements for the three and nine months ended April 30, 2021 and 2020 have not been reviewed by the auditors of Fidelity Minerals Corp.

Fidelity Minerals Corp.

“Anthony Balic” Anthony Balic Chief Financial Officer

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Fidelity Minerals Corp.

Condensed Consolidated Interim Financial Statements For three and nine months ended April 30, 2021 and 2020 (Unaudited - expressed in Canadian dollars, except where indicated)

Fidelity Minerals Corp. Condensed Consolidated Interim Statements of Financial Position

(Amounts expressed in Canadian dollars, except where indicated)

	Note	April 30, 2021	July 31, 2020
Assets Current assets Cash Other receivables Prepaid expenses Cerro Doradoproceeds receivable	5	$ 786,510 16,538 158,497 651,662	$ 52,827 3,024 - 1,246,057
Exploration and evaluationproperties	6	1,613,207 4,110,184	1,301,908 3,682,348
Total assets		$ 5,723,391	$ 4,984,256
Liabilities Current liabilities Accounts payable and accrued liabilities Loan payable Promissorynotes and advances	8 7	$ 444,993 - -	$ 689,767 102,411 36,830
		444,993	829,008
Shareholders’ equity Share capital Reserves Deficit	9 9	11,923,107 5,723,437 (12,368,146)	10,945,181 4,883,202 (11,673,135)
Total shareholders’ equity		5,278,398	4,155,48
Total liabilities and shareholders’ equity		$ 5,723,391	$ 4,984,256

Nature of operations and going concern (note 1) Commitments (note 14)

Approved by the Board of Directors

__”Ian Graham”_ Director __”John Byrne”__ Director

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

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Fidelity Minerals Corp.

Condensed Consolidated Interim Statements of Loss and Comprehensive Loss

(Amounts expressed in Canadian dollars, except where indicated)

		Three months ended	Three months ended	Nine months ended	Nine months ended
		April 30,		April 30,
		2021	2020	2021	2020
	Note
General and administration expenses Administrative fees Gain on sale of Cerro Dorado Consulting fees Foreign exchange Investor communications Share-based compensation Legal andprofessional fees	10	$ (29,302) - (83,195) 42,489 (237,604) (29,308) (22,162)	$ (2,270) - (48,485) 3,363 (37,500) - (45,941)	$ (55,074) - (182,164) (60,365) (237,604) (119,803) (60,001)	$ (84,432) 165,210 (226,001) 49,788 (127,000) (82,821) (118,052)
		(359,082)	(130,833)	(715,011)	(423,308)
Other expense Finance cost – interest expense Gain on settlement of accounts payable		- -	- 64,342	- 20,000	(3,230) 68,282
Loss for theyear		$(359,082)	$(66,491)	$(695,011)	$(358,256)
Other comprehensive (loss) income (“OCI”) Cumulative translation adjustment Cumulative translation adjustment		- -	- -	- -	13,768 27,500
Loss and comprehensive loss for the		$ (359,082)	$ (66,491)	$ (695,011)	$ (316,988)
Loss per share Basic and diluted Weighted average shares outstanding Basic and diluted		$ (0.01) 51,669,246	$ (0.00) 31,752,164	$ (0.01) 49,682,420	$ (0.01) 29,056,363

Fidelity Minerals Corp.

Condensed Consolidated Interim Statements of Changes in Shareholders’ Equity (Amounts expressed in Canadian dollars, except where indicated)

		Shares	Share	Contingent	Foreign
	Notes				currency	Reserves	Deficit	Total equity
		(note 1,9)	capital	Shares	Translation
					reserves
Balance as at July 31, 2020 Share issuance – private placement Share issuance costs Stock based compensation Warrants exercised Net loss for the period	9 9 10 9	41,438,830 17,564,841 - - 800,000 -	$ 10,945,181 980,977 (62,927) - 59,876 -	$ 154,000 - - - - -	$ - - - - - -	$ 4,729,202 715,841 18,667 119,803 (14,076) -	$ (11,673,135) - - - - (695,011)	$ 4,155,248 1,696,818 (44,260) 119,803 45,800 (695,011)
Balance as at April 30, 2021		59,803,371	$ 11,923,107	$ 154,000	$ -	$ 5,569,437	$ (12,368,146)	$ 5,278,398

		Shares	Share	Contingent	Foreign
	Notes				currency	Reserves	Deficit	Total equity
		(note 1,9)	capital	Shares	Translation
					reserves
Balance as at July 31, 2019 Cumulative translation adjustment Cumulative translation adjustment recognized on sale of Cerro Dorado Share issuance – private placement Share issuance costs Share-based compensation Shares for debt Net loss for the year	9 9 9	26,245,230 - - 5,213,600 - - 300,000 -	$ 10,607,706 - - 178,334 3,680 - 9,000 -	$ 154,000 - - - - - - -	$ (41,268) 13,768 27,500 - - - - -	$ 4,295,803 - - 117,706 - 82,821 - -	$ (10,728,220) - - - - - - (358,256)	$ 4,288,021 13,768 27,500 296,040 3,680 82,821 9,000 (358,256)
Balance as at April 30, 2020		31,458,830	$ 10,798,720	$ 154,000	$ -	$ 4,496,330	$ (11,086,476)	$ 4,362,574

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

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Fidelity Minerals Corp. Condensed Consolidated Interim Statement of Cash Flows

(Amounts expressed in Canadian dollars, except where indicated)

		For three months ended	For three months ended	For three months ended	For three months ended	For nine months ended	For nine months ended	For nine months ended
		April 30,				April 30,
	Note	2021		2020		2021		2020
Cash used in operating activities Net loss for the period Items not affecting cash Amortization Share-based compensation Foreign exchange Gain on sale of Cerro Dorado Gain on settlement of accounts payable Change in non-cash working capital Decrease (Increase) in other receivables Decrease (Increase) in prepaid expenses Increase(Decrease)in accountspayable and accrued liabilities	10	$ (359,082) - 29,308 27,544 - - (12,820) (131,476) 14,849		$ (66,491) - - - - - 9,331 24,907 (58,798)		$ (695,011) - 119,803 79,154 - (20,000) (13,766) (158,497) (133,476)		$ (358,256) - 82,821 (41,677) (165,210) - 19,008 (18,379) (109,218)
Net cash used in operatingactivities		(431,67	7)	(91,05	1)	(821,79	3)	(590,911)
Cash flows from financing activities Proceeds from private placements Proceeds of promissory notes and advances Proceeds from exercise of warrants Repayment of loanpayable	9 7 9 8	1,197,465 - 22,800 (67,320)		- 4,985 - -		1,524,431 - 45,800 (100,919)		119,820 4,985 - -
Net cashprovided byfinancingactivities		1,152,945		4,985		1,469,312		124,805
Cash flows used in investing activities Exploration and evaluation property Proceeds received on sale of Cerro Dorado		(161,356) 189,000		(15,765) -		(427,836) 514,000		(35,459) 307,459
Net cash used in investingactivities		27,644		(15,765)		86,164		272,000
Effect of exchange rate changes on cash		-		(987)		-		13,033
Increase (decrease) in cash Cash - beginning ofperiod		748,912 37,598		(102,818) 125,891		733,683 52,827		(181,073) 204,146
Cash - end ofperiod		$ 786,510		$ 23,073		$ 786,510		$ 23,073

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For the three and nine months ended April 30, 2021 and 2020 (Amounts expressed in Canadian dollars, except where indicated)

Fidelity Minerals Corp. Notes to Condensed Consolidated Interim Financial Statements

1 Nature of operations and going concern

Fidelity Minerals Corp. was incorporated under the Business Corporations Act of the Province of Ontario, Canada, on March 7, 2003. The Company continued to British Columbia on June 7, 2018 and changed its name to Fidelity Minerals Corp. (“the Company") on January 24, 2019.

The head office of the Company is located at Suite 1201 – 1166 Alberni St., Vancouver, BC, V6E 3Z3 Canada and the registered office of the Company is located at Suite 800 – 885 West Georgia Street, Vancouver, British Columbia, V6C 1H2.

The Company is in the process of exploring its resource properties and has not determined whether these properties contain mineral reserves which are economically recoverable. The recoverability of amounts shown for exploration and evaluation expenditures is dependent upon the discovery of economically recoverable reserves, the ability of the Company to obtain necessary financing to complete the development and future profitable production from the property or proceeds from its disposition.

On December 13, 2019, the Company completed a 5:1 consolidation of the common shares of the Company. All share and per share information has been retrospectively restated in these consolidated financial statements to reflect this share consolidation.

Going concern

At April 30, 2021, the Company had working capital of $1,168,214 and had not yet achieved profitable operations. In addition the Company had accumulated losses of $12,368,146 since its inception and expects to incur further losses in the development of its business, all of which casts significant doubt about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing to conduct its planned work program on its mineral properties, meet its on-going levels of corporate overhead and commitments, keep its properties in good standing and discharge its liabilities as they come due. These consolidated financial statements have been prepared on a going concern basis which assumes that the Company will be able to realize its assets and discharge liabilities in the normal course of business. In the past, the Company has been successful in obtaining financing, although there is no assurance that it will be able to obtain adequate financing in the future or that such financing will be on terms advantageous to the Company. Accordingly, it does not give effect to adjustments, if any that would be necessary should the Company be unable to continue as a going concern and, therefore, be required to realize its assets and liquidate its liabilities in other than the normal course of business and at amounts which may differ from those shown in these consolidated financial statements.

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, has 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 presentation

These unaudited condensed consolidated interim financial statements have been prepared in accordance with IAS 34 – Interim Financial Reporting as issued by the International Accounting Standards Board (“IASB”). Accordingly, certain disclosures included in annual financial statements prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the IASB have been condensed or omitted and these unaudited condensed consolidated interim financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended July 31, 2020.

The Company’s management makes judgments in its process of applying the Company’s accounting policies in the preparation of its unaudited condensed consolidated interim financial statements. In addition, the preparation of the financial data requires that the Company’s management make assumptions and estimates of the effects of uncertain future events on the carrying amounts of the Company’s assets and liabilities at the end of the reporting period and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates as the estimation process is inherently uncertain. Estimates are reviewed on an ongoing basis based on historical experience and other factors that are considered to be relevant under the circumstances. Revisions to estimates and the resulting effects on the carrying amounts of the Company’s assets and liabilities are accounted for prospectively. The critical judgments and estimates applied in the preparation of the Company’s unaudited condensed consolidated interim financial

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Fidelity Minerals Corp. Notes to Condensed Consolidated Interim Financial Statements

For the three and nine months ended April 30, 2021 and 2020 (Amounts expressed in Canadian dollars, except where indicated)

statements are consistent with those applied and disclosed in the Company’s consolidated financial statements for the year ended July 31, 2020.

The Board of Directors approved these condensed consolidated interim financial statements on June 29, 2021.

These unaudited condensed consolidated interim financial statements have been prepared on a historical cost basis except for certain financial instruments which are measured at fair value.

3 Estimates, risks and uncertainties

The preparation of financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. The Company’s management makes judgments in its process of applying the Company’s accounting policies in the preparation of its consolidated financial statements. In addition, the preparation of the financial data requires that the Company’s management make assumptions and estimates of the effects of uncertain future events on the carrying amounts of the Company’s assets and liabilities at the end of the reporting period and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates as the estimation process is inherently uncertain. Estimates are reviewed on an ongoing basis based on historical experience and other factors that are considered to be relevant under the circumstances. Revisions to estimates and the resulting effects on the carrying amounts of the Company’s assets and liabilities are accounted for prospectively.

Significant judgments in applying accounting policies

The critical judgments that the Company’s management has made in the process of applying the Company’s accounting policies, apart from those involving estimations, that have the most significant effect on the amounts recognized in the Company’s consolidated financial statements are as follows:

(i) Impairment of property, plant and equipment

The carrying value of property, plant and equipment is reviewed each reporting period to determine whether there is any indication of impairment. If the carrying amount of an asset exceeds its recoverable amount, the asset is impaired and an impairment loss is recognized in profit or loss. The assessment of fair values, including those of the cash-generating units, require the use of estimates and assumptions for recoverable production, long-term commodity prices, discount rates, foreign exchange rates, future capital requirements and operating performance. Changes in any of the assumptions or estimates used in determining the fair value of assets could impact the impairment analysis.

(ii) Economic recoverability and probability of future economic benefits of exploration and evaluation assets

Management has determined that exploratory drilling and evaluation costs incurred which have been capitalized are economically recoverable. Management uses several criteria in its assessments of economic recoverability and probability of future economic benefit including geologic and metallurgic information, history of conversion of mineral deposits to proven and probable reserves, scoping and feasibility studies, accessible facilities, existing permits and life of mine plans.

(iii) Functional currency

The functional currency for each of the Company’s subsidiaries, is the currency of the primary economic environment in which the entity operates. Determination of functional currency may involve certain judgments to determine the primary economic environment and the Company reconsiders the functional currency of its entities if there is a change in events and conditions which determined the primary economic environment.

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Fidelity Minerals Corp. Notes to Condensed Consolidated Interim Financial Statements

For the three and nine months ended April 30, 2021 and 2020 (Amounts expressed in Canadian dollars, except where indicated)

(iv) Stage of development

The Company has determined that all are properties held should be classified as exploration and evaluation assets. In making this determination, the Company must assess whether or not the properties meet the criteria for technical feasibility and commercial viability to be recognized as development stage assets.

Key sources of Estimation Uncertainty

The preparation of the Company’s consolidated financial statements in conformity with IFRS requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates and assumptions are continually evaluated and are based on management’s experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Actual results could materially differ from these estimates. The areas which require management to make significant estimates and assumptions in determining carrying values include, but are not limited to:

(i) Depreciation and depletion

Plants and other facilities used directly in mining activities are depreciated using the units-of-production (“UOP”) method over a period not to exceed the estimated life of the ore body based on recoverable ounces to be mined from proven and probable reserves and a portion of measured and indicated and inferred resources. Mobile and other equipment are depreciated, net of residual value, on a straight-line basis, over the useful life of the equipment to the extent that the useful life does not exceed the related estimated life of the mine based on mineral reserves.

The calculation of the UOP rate, and therefore the annual depreciation and depletion expense, could be materially affected by changes in the underlying estimates. Changes in estimates can be the result of actual future production differing from current forecasts of future production, expansion of mineral reserves through exploration activities, differences between estimated and actual costs of mining and differences in gold price used in the estimation of mineral reserves.

Significant judgment is involved in the determination of useful life and residual values for the computation of depreciation and depletion and no assurance can be given that actual useful lives and residual values will not differ significantly from current assumptions.

(ii) Share-based payments

Share-based payments are determined using the Black‐Scholes option pricing model based on estimated fair values of all share‐ based awards at the date of grant and is expensed to profit or loss over each award’s vesting period. The Black‐Scholes option pricing model utilizes subjective assumptions such as expected price volatility and expected life of the option. Changes in these input assumptions can significantly affect the fair value estimate.

(iii) Deferred taxes

In assessing the probability of realizing income tax assets recognized, management makes estimates related to expectations of future taxable income, expected timing of reversals of existing temporary differences and the likelihood that tax positions taken will be sustained upon examination by applicable tax authorities. Estimates of future taxable income are based on forecasted cash flows from operations and the application of existing tax laws in each jurisdiction. Forecasted cash flows from operations are based on life

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Fidelity Minerals Corp. Notes to Condensed Consolidated Interim Financial Statements

For the three and nine months ended April 30, 2021 and 2020 (Amounts expressed in Canadian dollars, except where indicated)

of mine projections internally developed and reviewed by management. The likelihood that tax positions taken will be sustained upon examination by applicable tax authorities is assessed based on individual facts and circumstances of the relevant tax position evaluated in light of all available evidence. Where applicable tax laws and regulations are either unclear or subject to ongoing varying interpretations, it is reasonably possible that changes in these estimates can occur that materially affect the amounts of income tax assets recognized. At the end of each reporting period, the Company reassesses unrecognized income tax assets.

(iv) Decommissioning and restoration provision

The Company assesses its reclamation provisions at each reporting date. Significant estimates and assumptions are made in determining the provision for mine rehabilitation as there are numerous factors that will affect the ultimate amount payable. These factors include estimates of the extent, cost, and timing of rehabilitation activities, technological changes, regulatory changes, cost increases as compared to the inflation rate, and changes in discount rates. These uncertainties may result in future expenditures differing from the amounts currently provided.

(v) Contingent consideration

For asset acquisitions, contingent share consideration is an estimate of the fair value of the contingent amounts expected to be payable in the future. (Note 6)

4 Financial instruments

The Company’s financial instruments consist of cash, other receivables, Cerro Dorado proceeds receivable, accounts payable and accrued liabilities, loan payable and promissory notes and advances. The fair value of these financial instruments approximates the carrying value due to the short maturity or current market rate associated with these instruments.

Financial instruments disclosure requires a statement of the inputs to fair value measurements, including their classification within a hierarchy that prioritizes the inputs to fair value measurement. The three levels of fair value are:

Level 1 Unadjusted quoted prices in active markets for identical assets and 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

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. Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and other receivables. The Company’s cash is held through large Canadian financial institutions and other receivables are primarily related to tax credits receivable from the government of Canada.

Liquidity Risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company manages liquidity risk through the management of its capital structure as described in Note 13. The accounts payable and loans are due within the current operating period. The Company is exposed to liquidity risk.

Market Risk

The Company’s market risk is the risk of loss that may arise from changes in market factors such as interest rates, foreign exchange rates and commodity prices.

Interest Rate Risk

Interest rate risk is the risk that the fair value of future cash flows from a financial instrument will fluctuate because of changes to market interest rates. The Company is not exposed to significant interest rate risk. A 1% change in market interest rates would result in no significant change in value of cash and other financial instruments.

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Fidelity Minerals Corp. Notes to Condensed Consolidated Interim Financial Statements

For the three and nine months ended April 30, 2021 and 2020 (Amounts expressed in Canadian dollars, except where indicated)

Foreign Exchange Risk

Currency risk is the risk of a loss due to the fluctuation of foreign exchange rates and the effects of those fluctuations on the Company’s foreign currency denominated monetary assets and liabilities. The Company currently operates in Canada and Peru. Certain costs and expenses are incurred in US dollars and Peruvian sol. The Company attempts to mitigate currency risk through the preparation of short and long term expenditure budgets in the foreign currencies and planning for the conversion of Canadian dollars into foreign currencies whenever exchange rates are favourable.

The Company’s financial assets and liabilities as at April 30, 2021 are denominated in United States Dollars, Canadian Dollars, and Peruvian Soles, and are set out in the following table:

	Canadian Dollars	US Dollars	Total
Financial assets Cash Other receivables Cerro Dorado proceeds receivable	$ 764,641 16,538 -	$ 21,869 - 651,662	$ 786,510 16,538 651,662
Financial liabilities Accounts payables and accrued liabilities	781,179 (241,339)	673,531 (203,654)	1,454,710 (444,993)
Net financial (liabilities) assets	$ 539,840	$ 469,877	$ 1,009,717

The Company’s financial assets and liabilities as at July 31, 2020 are denominated in United States Dollars, Canadian Dollars, and Peruvian Soles, and are set out in the following table:

	Canadian Dollars	US Dollars	Peruvian Soles	Total
Financial assets Cash Other receivables Cerro Dorado proceeds receivable	$ 52,827 3,024 -	$ - - 1,246,057	$ - - -	$ 52,827 3,024 1,246,057
Financial liabilities Accounts payables and accrued liabilities Loan payable Promissory notes and advances	55,851 (357,543) - (36,830)	1,246,057 (324,381) (102,411) -	- (7,843) - -	1,301,908 (689,767) (102,411) (36,830)
Net financial (liabilities) assets	$ (338,522)	$ 819,265	$ (7,843)	$ 472,900

The Company’s reported results will be affected by changes in the US dollar to Canadian dollar and US dollar to Peruvian Sol exchange rate. As of April 30, 2021, a 10% appreciation of the Canadian dollar relative to the US dollar would have decreased net financial liabilities by approximately $46,988 (July 31, 2020 - $81,927). A 10% appreciation of the US Dollar relative to the Canadian dollar would have had the equal but opposite effect. A 10% appreciation of the Peruvian Sol relative to the CAD dollar would have increased net financial liability by approximately $nil (July 31, 2020 - $784) and a 10% depreciation of the Peruvian Sol would have had an equal but opposite effect. The Company has not entered into any agreements or purchased any instruments to hedge possible currency risk.

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Fidelity Minerals Corp. Notes to Condensed Consolidated Interim Financial Statements

For the three and nine months ended April 30, 2021 and 2020 (Amounts expressed in Canadian dollars, except where indicated)

5 Sale of Cerro Dorado

On October 1, 2019, the Company entered into a binding agreement with certain private Peruvian interests ("the Purchasers"), to sell Cerro Dorado which includes all the property, plant and equipment and Rey Salomon concessions in Arequipa, Peru. The transaction involves staged payments to the Company and will conclude with the final transfer of the Cerro Dorado SAC subsidiary to the Purchaser, at completion. Cerro Dorado SAC holds title to four mineral concessions, including the Rey Salomon mine and the Cerro Dorado gold plant.

The binding agreement commits the Purchasers to perform certain capital improvements to the plant, including the purchase and installation of a weigh-scale, metallurgical and assay laboratory, tailings liner and other production related improvements, and to make quarterly payments to the Company over a twelve month period. The total Cerro Dorado cash consideration for the sale of Cerro Dorado SAC is US$1,430,000.

For the year ended July 31, 2020, the loss on sale of Cerro Dorado was as follows:

Proceeds USD $1,430,000 Accounts payable assumed Plant property and equipment disposed (Note 8) Mineral property disposed (Note 8) Cumulative translation adjustment recognized on sale Cash disposed	$ 1,898,096 (333,198) (581,482) (1,047,832) 27,126 (4,619)
Loss on sale	$(41,909)

On October 13, 2020, the Company revised payment terms in relation to the sale of its Cerro Dorado gold plant, further to the US$1.43 million sale agreement announced on October 1, 2019 total payments made by the Purchaser totalled US$500,000, meeting the conditions of the sale through to March 2020. As a result of COVID-19 related regulatory delays and disruptions the Company has been working with the Purchaser to negotiate amended payment terms for the remaining US$930,000. On October 9, 2020, the Company executed an addendum to the original sale purchase agreement. On April 22, 2021the payment schedule was further amended.

The revised payment terms for the outstanding balance, is outlined below:

• US$100,000 on October 10, 2020 (received)

• US$100,000 on November 25, 2020 (received)

• US$100,000 on January 25, 2021 (received)

• US$100,000 on April 23, 2021(received)

• US$100,000 on May 28, 2021(received subsequent to period end)

• US$100,000 on June 25, 2021

• US$330,000 on July 24, 2021

• US$930,000 TOTAL

As at April 30, 2021, the Company has received payments totaling $1,170,063 (USD $900,000) with $651,662 (USD $530,000) remaining to be received.

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Fidelity Minerals Corp. Notes to Condensed Consolidated Interim Financial Statements

For the three and nine months ended April 30, 2021 and 2020 (Amounts expressed in Canadian dollars, except where indicated)

6 Exploration and evaluation properties

	Rey	L	Copper project	Cerro El Bronce and Las Brujas Projects	Total
	Salomon	as i
	(Note 5)	Huaqullas
Balance as at July 31, 2019 Additions Movement in foreign exchange Disposed on sale of Cerro Dorado	$ 1,042,667 - 5,165 (1,047,832)	$ 3,418,077 6,112 -	$ 212,573 - -	$ - 45,586 -	$ 4,673,317 51,698 5,165 (1,047,832)
Balance at July 31, 2020	$ -	$ 3,424,189	$ 212,573	$ 45,586	$ 3,682,348
Additions Movement in foreign exchange	- -	76,585 -	12,238 -	339,013 -	266,479 -
Balance at April 30, 2021	$ -	$ 3,500,774	$ 224,811	$ 384,599	$ 4,110,184

a) Rey Salomon property

Exploration and evaluation properties are comprised of certain concessions located in the district of Arequipa, province of Caravelí, Peru. During the year ended July 31, 2020, the Company entered into a binding agreement with certain private Peruvian interests ("the Purchasers"), to sell Cerro Dorado which includes the Rey Salomon concessions see note 5.

b) Las Huaquillas

The Las Huaquillas project is a precious and base metal project in northern Peru that is 44.5% held by the Company. The concessions are located to the immediate south of the border with Ecuador.

c) Porphyritic Copper project

The Porphyritic Copper Project comprises three contiguous concessions 100% held by the Company located in La Libertad, Northern Peru.

On May 22, 2019, the Company completed the acquisition of a 100% interest in the Porphyritic Copper project located in the district of La Libertad, Northern Peru, by issuing 800,000 in common shares, and by making a payment of US$7,000 in cash. Further Milestone Payments of C$500,000 and C$250,000 are payable if, within 5 years, a NI 43-101 compliant resource of >500,000T of contained copper is published by Fidelity Minerals (Milestone 1), and/or a transaction exceeding C$5,000,000 is consummated (Milestone 2), respectively. Management has determined that Milestone 1 and 2 are unlikely and therefore allocated a 0% probability of achieving them.

d) Cerro El Bronce and Las Brujas Projects

The Las Brujas project consists of four concessions 100% held by the Company located in the Cajamarca province of Peru.

The Cerro El Bronce project consists of 2 concessions 100% held by the Company located in the Ancash province of Peru.

In the event the Company sells the concessions to an unrelated third party in the future, the vendors will receive 10% of the cash profits generated from the sale. The determination of cash profits essentially consists of the sale proceeds minus total expenditures made by the Company on the project up to the time of the sale, including transaction costs and taxes and duties related to the sale transaction.

In the event the Company makes a decision to mine at the Las Brujas project, the Company will establish a 75:25 unincorporated JV with the vendors, where the majority interest in the JV is owned by the Company. In the event that the Las Brujas project is sold, any right by the Vendors to participate in a JV will expire.

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Fidelity Minerals Corp. Notes to Condensed Consolidated Interim Financial Statements

For the three and nine months ended April 30, 2021 and 2020 (Amounts expressed in Canadian dollars, except where indicated)

7 Promissory notes and advances

	Advances (a)	Promissory Note (b)	**Total **
Balance July 31, 2019 Additional lending Settlement in shares	$ 9,000 - (9,000)	$ 111,634 29,985 (104,789)	$ 120,634 29,985 (113,789)
Balance July 31, 2020	$ -	$ 36,830	$ 36,830
Settlement in shares	-	(36,830)	(36,830)
April 30, 2021	$ -	$ -	$ -

• (a) The advances are unsecured, are non-interest bearing and have no repayment term. During the year ended July 31, 2019, $14,985 was repaid. During the year ended July 31, 2020, $9,000 was settled in shares.

• (b) On December 5, 2017, the Company entered into an unsecured promissory note with Lions Bay Capital Inc. (“Lions Bay”). The loan accrues interest at a rate of 6% per annum. The principal and interest were due on December 5, 2018 and are now payable on demand. During the period ended April 30, 2021 the advances per the promissory note totaled $nil (July 31, 2020 - $29,985). During the period ended April 30, 2021, $36,830 was settled in shares (July 31, 2020 - $104,789). During the period ended April 30, 2021 $nil (2020 - $1,560) was recorded as interest expense.

8 Loan payable

As part of the Cerro Dorado acquisition in fiscal 2017, the Company acquired a secured loan payable to M&F Minera Ofir S.A.C. (“OFIR”). The total amount owing to OFIR was USD $453,968 with an effective interest rate of 2.6% per annum which was to be repaid in 24 equal monthly installments of USD $18,915 commencing January 25, 2017 and ending December 25, 2018. During the period ended April 30, 2021, $nil (July 31, 2020- $nil) was recorded as interest expense as the loan ceased to accrue interest when it became due. During the period ended April 30, 2021, the Company repaid $33,599 (July 31, 2020 – $100,919). During the year ended July 31, 2019 the Company restructured the loan to transfer the liability and security to Lions Bay, a company with common directors and officers.

	April 30, 2021	July 31, 2020
Opening balance, beginning of year Repayment Foreign exchange	$ 102,411 (100,919) (1,492)	$ 201,690 (100,919) 1,640
Closing balance, end of period	$ -	$ 102,411

During the year ended July 31, 2020, the Company entered into an agreement to sell Cerro Dorado and repay this amount as part of the sale. (See note 5).

14

Fidelity Minerals Corp. Notes to Condensed Consolidated Interim Financial Statements

For the three and nine months ended April 30, 2021 and 2020 (Amounts expressed in Canadian dollars, except where indicated)

9 Share capital

The Company’s authorized share capital consists of an unlimited number of common shares without par value.

On December 13, 2019, the Company completed a 5:1 consolidation of the common shares of the Company. The share data in these financial statements are presented on a post-consolidated basis.

Fiscal 2021

• a) On August 10, 2020, the Company issued 7,668,121 units at $0.06 per unit for a reduction in accounts payable of $128,127 and gross proceeds of $331,960. Each unit consists of one common share and one transferable share purchase warrant with each warrant exercisable into one additional share at $0.07 per share for two (2) years following the closing date. The fair value of the warrants issued was calculated as $0.04 per warrant and was determined using the relative fair value method on the date of the issuance using the Black-Scholes option pricing model with the following weighted average assumptions: 0.27% risk free interest rate, expected life of 2 year, 175% annualized volatility and 0% dividend rate. The value of the share was determined to be $0.06. The share purchase warrant’s relative fair value of $199,711 was allocated to the warrant and recorded in reserves. The Company incurred share issuance costs of $5,694 related to the financing.

• b) On April 16, 2021 the Company issued 9,896,720 units at $0.125 per unit for gross proceeds of $1,237,090. Each unit consists of one common share and one transferable share purchase warrant with each warrant exercisable into one additional share at $0.15 per share for two (2) years following the closing date. The fair value of the warrants issued was calculated as $0.05 per warrant and was determined using the relative fair value method on the date of the issuance using the Black-Scholes option pricing model with the following weighted average assumptions: 0.29% risk free interest rate, expected life of 2 year, 159% annualized volatility and 0% dividend rate. The value of the share was determined to be $0.07. The share purchase warrant’s relative fair value of $516,130 was allocated to the warrant and recorded in reserves.

Finders’ fees of $30,713 cash, and 208,600 broker warrants each exercisable into one additional common share at $0.15 for two (2) years were paid . The fair value of the warrants issued was calculated as $0.09 per warrant and was determined using the Black-Scholes option pricing model with the following weighted average assumptions: 0.29% risk free interest rate, expected life of 2 year, 159% annualized volatility and 0% dividend rate. The fair value of $18,667 was recorded as share issuance costs. The Company incurred total share issuance costs of $57,233 related to the financing.

• c) During the period ended April 30, 2021, the Company issued 800,000 common shares as a result of warrants exercises for gross proceeds of $45,800.

Fiscal 2020

• d) On September 4, 2019, Company issued 213,600 units at $0.25 per unit for a reduction of $53,400 in accounts payable. Each unit consists of one common share and one half transferable share purchase warrant with each warrant exercisable into one additional share at $0.30 per share for one (1) year following the closing date. The fair value of the warrants issued was calculated as $0.03 per warrant and was determined using the relative fair value method on the date of the issuance using the Black-Scholes option pricing model with the following weighted average assumptions: 1.33% risk free interest rate, expected life of 1 year, 145% annualized volatility and 0% dividend rate. The value of the share was determined to be $0.10. The share purchase warrant’s relative fair value of $8,808 was allocated to the warrant and recorded in reserves.

• e) On December 20, 2019, the Company issued 5,000,000 units at $0.05 per unit for gross proceeds of $122,250 and $127,750 in reduction of accounts payable. Each unit consists of one common share and one transferable share purchase warrant with each warrant exercisable into one additional share at $0.06 per Share for two (2) years following the closing date. The fair value of the warrants issued was calculated as $0.04 per warrant and was determined using the relative fair value method on the date of the issuance using the Black-Scholes option pricing model with the following weighted average assumptions: 1.65% risk free interest rate, expected life of 2 years, 176% annualized volatility and 0% dividend rate. The value of the share was determined to be $0.02. The share purchase warrant’s relative fair value of $108,898 was allocated to the warrants and recorded in reserves. The Company incurred share issuance costs of $3,680 related to the financing.

• f) On February 26, 2020, the Company issued 300,000 common shares at a value of $9,000 and paid AUD $20,000 in cash in order to settle certain obligations totaling AUD $100,000 recording a gain on settlement of accounts payable of $60,985 in the statement of loss.

15

Fidelity Minerals Corp. Notes to Condensed Consolidated Interim Financial Statements

For the three and nine months ended April 30, 2021 and 2020 (Amounts expressed in Canadian dollars, except where indicated)

• g) On June 3, 2020, the Company issued 9,680,000 units at $0.025 per unit for gross proceeds of $92,000 and $150,000 in reduction of accounts payable. Each unit consists of one common share and one transferable share purchase warrant with each warrant exercisable into one additional Share at $0.05 per share until December 17, 2021. The fair value of the warrants issued was calculated as $0.02 per warrant and was determined using the relative fair value method on the date of the issuance using the Black-Scholes option pricing model with the following weighted average assumptions: 0.32% risk free interest rate, expected life of 1.5 years, 178% annualized volatility and 0% dividend rate. The value of the share was determined to be $0.02. The share purchase warrant’s relative fair value of $92,829 was allocated to the warrants and recorded in reserves. The Company incurred share issuance costs of $2,710 related to the financing.

The following is a summary of the share purchase warrants outstanding as at April 30, 2021 and July 31, 2020:

			April 30, 2021				July 31, 2020
			Number of warrants	Weighted average exerciseprice			Number of warrants	Weighted average exerciseprice
Outstanding - beginning of year Issued Expired Exercised			18,870,889 17,773,441 (191,800) (800,000)	$ 0.21 0.12 0.30 0.06			9,843,049 14,786,800 (5,758,960) -	$ 0.49 0.06 0.30 -
Outstanding– as at end of theperiod			35,652,530	$ 0.17			18,870,889	$ 0.21
Number of warrants			Exercise price per warrant				Expiry	date
544,666 622,757 206,666 2,625,000 4,620,000 9,360,000 7,568,121 10,105,320			$1.50 $1.50 $1.50 $0.40 $0.06 $0.05 $0.07 $0.15				October 27, 2021 December 15, 2021 January 13, 2022 February 8, 2024 December 19, 2021 December 17, 2021 August 10, 2022 April 16, 2023
35,652,530

As at April 30, 2021, the weighted average exercise price of the warrants outstanding was $0.17 (July 31, 2020 - $0.21) with a weighted average remaining contractual life of 1.30 years (July 31, 2020 – 1.67 years).

10 Share based compensation

The Company adopted a stock option plan (the “Stock Option Plan”) under which it can grant options to directors, officers, employees, and consultants for up to 10% of the issued and outstanding common shares.

On January 24, 2020, the Company granted an aggregate of 1,725,000 incentive stock options to certain directors, officers and consultants at an exercise price of $0.075 per share for a period of 5 years. The fair value of $82,821 for these stock option was determined using the Black-Scholes option pricing model using the following assumptions: expected life of 5 years, volatility of 190%, annual rate of dividends of 0.00% and risk free rate of 1.46%.

On July 6, 2020, the Company granted an aggregate of 1,950,000 incentive stock options to certain directors, officers and consultants at an exercise price of $0.075 per share for a period of 5 years. The fair value of $140,043 for these stock option was determined using the Black-Scholes option pricing model using the following assumptions: expected life of 5 years, volatility of 181%, annual rate of dividends of 0.00% and risk free rate of 0.38%.

16

Fidelity Minerals Corp. Notes to Condensed Consolidated Interim Financial Statements

For the three and nine months ended April 30, 2021 and 2020 (Amounts expressed in Canadian dollars, except where indicated)

On August 12, 2020, the Company granted an aggregate of 900,000 incentive stock options to certain directors, officers and consultants at an exercisable price of $0.105 per share for a period of 5 years. The fair value of $90,495 for these stock option was determined using the Black-Scholes option pricing model using the following assumptions: expected life of 5 years, volatility of 181%, annual rate of dividends of 0.00% and risk free rate of 0.41%.

On March 9, 2020, the Company granted an aggregate of 250,000 incentive stock options to the Chief Executive Officer at an exercise price of $0.15 per share for a period of 5 years. The fair value of $29,308 for these stock option was determined using the Black-Scholes option pricing model using the following assumptions: expected life of 5 years, volatility of 170%, annual rate of dividends of 0.00% and risk free rate of 0.87%.

The following is a summary of the stock options outstanding as at April 30, 2021 and July 31, 2020:

	April 30, 2021		July 31, 2020
	Number of stock options	Weighted average exerciseprice	Number of stock options	Weighted average exerciseprice
Outstanding - beginning of year Granted Cancelled or expired	3,784,999 1,150,000 -	$ 0.11 -	1,743,986 3,675,000 (1,633,987)	$ 0.44 0.075 0.37
Outstanding- end ofyear	4,934,999	$ 0.12	3,784,999	$ 0.12

Number of stock option	Number of stock option	Exercise price per	Exercise price per
				Expiry date
outstanding and vested		**stock option **
99,999 10,000 1,725,000 1,950,000 900,000 250,000		$1. $1. $0.0 $0.0 $0.1 $0.	50 05 75 75 05 15	August 2, 2021 January 17, 2022 January 24, 2025 July 6, 2025 August 12, 2025 March 9, 2026
4,934,999		$0.12

As at April 30, 2021, the weighted average exercise price of the stock options outstanding was $0.12 (July 31, 2020 - $0.12) with the weighted average remaining contractual life of 4.24 years (July 31, 2020 – 4.61 years). The average fair value of options issued during the period ended January 31, 2021 was $0.11 (July 31, 2020 - $0.06).

11 Related party transactions

The Company’s related parties include its subsidiaries, associates over which it exercises significant influence, and key management personnel. Key management personnel are those persons having the authority and responsibility for planning, directing and controlling the activities of the Company, directly or indirectly. Key management personnel include officers, directors or companies with common directors of the Company.

The remuneration of the Company’s directors and other key management personnel during the period ended January 31, 2021 and 2020 are as follows:

	April 30, 2021	April 30, 2020
Consulting fees Professional fees Share-basedpayments	$ 123,300 18,000 89,638	$ 138,995 22,500 64,817

17

Fidelity Minerals Corp. Notes to Condensed Consolidated Interim Financial Statements

For the three and nine months ended April 30, 2021 and 2020 (Amounts expressed in Canadian dollars, except where indicated)

As at April 30, 2021 the Company had amounts payable of $61,244 (July 31, 2020 - $117,142) to these parties. These amounts are unsecured and non-interest bearing.

On December 5, 2017, the Company entered into an unsecured promissory note with Lions Bay. The loan accrues interest at a rate of 6% per annum. The principal and interest were due on December 5, 2018 and are now payable on demand. During the period ended January 31, 2021 the advances per the promissory note totaled $nil (July 31, 2020 - $29,985). During the period ended April 30, 2021, $36,830 was settled in shares (July 31, 2020 - $104,789). During the period ended April 30, 2021 $nil (July 31, 2020 - $5,773) was recorded as interest expense.

12 Segment disclosures

The Company operates in two geographical and two operating segments. The operating segments are managed separately based on the nature of operations. Exploration and development relates to the recently acquired exploration projects in Peru. Other selected financial information by geographical segment is as follows

The Company operates in two operating segments in two countries, with corporate in Canada and exploration in Peru. The Company’s assets by country are:

	As at April 30, 2021			As	at July 31, 2020
	Canada	Peru	Total	Canada	Peru	Total
Assets Exploration and evaluation properties	$ -	$ 4,110,184	$ 4,110,184	$ -	$ 3,682,248	$ 3,682,248

13 Capital management

The Company’s objectives for capital management are to safeguard its ability to support the Company’s normal operating requirement on an ongoing basis, continue the development and exploration of its mineral properties and support any expansionary plans.

The Company and its subsidiary are not subject to any capital requirements imposed by a lending institution or regulatory body, other than of the TSX Venture Exchange (“TSXV”) which requires adequate working capital or financial resources of the greater of (i) $50,000 and (ii) an amount required in order to maintain operations and cover general and administrative expenses for a period of 6 months.

The Company manages its capital structure and makes adjustments in light of changes in its economic environment and the risk characteristics of the Company’s assets. To effectively manage the entity’s capital requirements, the Company has in place a planning, budgeting and forecasting process to help determine the funds required to ensure the Company has the appropriate liquidity to meet its operating and growth objectives.

14 Commitments

On January 17, 2017, the Company completed the acquisition of Cerro Dorado S.A.C. (“Cerro Dorado”), a Peruvian Company. As part of the acquisition the Company has the following contingent consideration:

1. Issue 133,333 common shares of the Company upon the sale of 1,000 oz gold-contained ore or dore from either the mine or the plant.

2. Issue 133,333 common shares of the Company upon the sale of an additional 2,000 oz of gold-contained ore or dore (3,000 oz total) from either the mine or the plant.

On May 22, 2019, the Company completed the acquisition of a 100% interest in the Porphyritic Copper project located in the district of La Libertad, Northern Peru, by issuing 800,000 in common shares, and by making a payment of US$7,000 in cash. Further Milestone Payments of C$500,000 and C$250,000 are payable if, within 5 years, a NI 43-101 compliant resource of >500,000T of contained copper is published by Fidelity Minerals (Milestone 1), and/or a transaction exceeding C$5,000,000 is consummated (Milestone 2), respectively. Management has determined that Milestone 1 and 2 are unlikely and therefore allocated a 0% probability of achieving them.

18