Finlay Minerals Ltd. — Interim / Quarterly Report 2021

Aug 31, 2021

FINLAY MINERALS LTD.

Condensed Interim Financial Statements Second Quarter ended June 30, 2021

(Expressed in Canadian Dollars)

(Unaudited)

1

NOTICE OF NO AUDITOR REVIEW OF INTERIM FINANCIAL STATEMENTS

These interim financial statements of the Company for the period ending June 30, 2021 have been prepared by management and have not been subject to review by the Company's auditors.

2

FINLAY MINERALS LTD. Condensed Interim Statement of Financial Position

AS AT JUNE 30, 2021

See accompanying notes to the condensed interim financial statements

All values expressed in Canadian dollars

ASSETS Current Assets Cash and cash equivalents GST receivable Investment in NorthWest Copper Corp. Prepaid expenses Reclamation deposits Exploration and evaluation assets(Note 5) LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Accounts payable and accrued liabilities Due to Related Parties(Note 7) Non-Current Liabilities Deferred income taxes Shareholders' Equity Share capital(Note 8) Contributed surplus Share subscriptions received Investment revaluation reserve Deficit	June 30 2021 $ 201,013 11,799 42,830 6,170 261,812 91,500 9,013,671 9,366,983 786 71,517 72,303 1,621,568 1,693,871 9,453,099 1,395,838 153,028 35,711 (3,364,564) 7,673,112 9,366,983	December 31 2020 $ 226,086 18,140 66,553 14,584
		325,363 91,500 8,822,787
		9,239,650
		11,186 4,489
		15,675 1,639,930
		1,655,605
		9,370,241 1,436,196 - 34,871 (3,257,263)
		7,584,045
		9,239,650

Approved by the Board of Directors and authorized for issue on August 30, 2021.

"Robert F Brown" , Director "Richard T Dauphinee" , Director

UNAUDITED

3

FINLAY MINERALS LTD. Condensed Interim Statement of Comprehensive Loss

FOR THE QUARTER ENDED JUNE 30, 2021

See accompanying notes to the condensed interim financial statements

All values expressed in Canadian dollars

Operating Costs and Expenses Advertising and promotion Bank charges and interest Insurance Legal and accounting Office and administration Rent Salaries and benefits Telephone Travel and accomodation Trust and filing fees Loss before other items Flow-through recovery Part XII.6 tax Interest Income Loss before income tax Deferred income tax (expense) recovery Net loss for the period Other comprehensive income items that may not be reclassified subsequently to profit or loss: Net change in fair value of investment in NorthWest Copper Corp. Net loss and comprehensive loss for the period Weighted average number of common shares Basic and diluted loss per share Realized gain on sale of shares in NorthWest Copper Corp.	Three Months Ended June 30, 2021 $ 56,839 205 3,603 10,752 2,037 3,450 5,035 87 - 5,427 87,435 (87,435) - - 333 (87,102) 11,546 (75,556) (4,826) - (80,382) 93,398,324 0.00	Three Months Ended June 30, 2020 $ 18,282 113 2,986 9,571 1,354 6,129 2,050 216 - 4,090 44,791 (44,791) 26,245 - 1,169 (17,377) (11,335) (28,712) 14,189 - (14,523) 93,274,991 0.00	Six Months Ended June 30, 2021 $ 69,849 271 7,604 12,377 2,927 6,900 8,820 71 - 13,439 122,258 (122,258) - (3,958) 553 (125,663) 18,362 (107,301) (4,223) 5,063 (106,461) 93,398,324 0.00	Six Months Ended June 30, 2020 $ 18,540 180 5,972 9,571 1,397 12,257 4,069 543 179 10,301
				63,009
				(63,009) 52,490 - 1,855
				(8,664) (24,419)
				(33,083) 10,135 -
				(22,948)
				93,274,991
				0.00

UNAUDITED

4

FINLAY MINERALS LTD. Condensed Interim Statement of Cash Flow

FOR THE QUARTER ENDED JUNE 30, 2021

See accompanying notes to the interim financial statements

All values expressed in Canadian dollars

CASH PROVIDED BY (USED FOR): Operating Activities Net loss for the period Add (deduct) non-cash items Flow-through recovery Deferred income tax recovery Changes in non-cash working capital GST receivable Prepaid expenses Accounts payable and accrued liabilities Due to related parties Investing Activities Mineral property costs Proceeds from sale of shares in NorthWest Copper Corp. Financing Activities Stock options exercised Share subscriptions received DECREASE IN CASH POSITION Cash position, beginning of the period CASH POSITION, END OF PERIOD Cash position includes cash and short term investments. Cash Short-term deposits Term deposit and high interest savings account	Six Months Ended June 30, 2021 $ (107,301) - (18,362) (125,663) 6,341 8,414 (70,290) 67,028 (114,170) (130,993) 24,562 (106,431) 42,500 153,028 195,528 (25,073) 226,086 201,013 188,092 12,921 - 201,013	Six Months Ended June 30, 2020 $ (33,083) (52,490) 24,419
		(61,154) (2,829) 5,972 (9,019) (5,879)
		(72,909)
		(161,495) -
		(161,495)
		- -
		-
		(234,404) 1,059,035
		824,631
		10,920 112,813 700,898
		824,631

UNAUDITED

5

FINLAY MINERALS LTD. Interim Statement of Changes in Equity FOR THE QUARTER ENDED JUNE 30, 2021

See accompanying notes to the interim financial statements

All values expressed in Canadian dollars

Number of Shares December 31, 2020 93,274,991 Stock options exercised 850,000 Share subscriptions received - Other comprehensive income for the period - Net loss for the period - June 30, 2021 94,124,991 December 31, 2019 93,274,991 Other comprehensive income for the period - Net loss for the period - June 30, 2020 93,274,991	Share Capital $ 9,370,241 82,858 - - - 9,453,099 9,370,241 - - 9,370,241	Contributed Surplus $ 1,436,196 (40,358) - - - 1,395,838 1,436,196 - - 1,436,196	Share Subscriptions Received $ - - 153,028 - - 153,028 - - - -	Investment Revaluation Reserve $ 34,871 - - 840 - 35,711 (1,836) 10,135 - 8,299	Deficit $ (3,257,263) - - - (107,301) (3,364,564) (3,209,719) - (33,083) (3,242,803)	Total Equity $ 7,584,045 42,500 153,028 840 (107,301)
						7,673,112
						7,594,882 10,135 (33,083)
						7,571,934

UNAUDITED

6

FINLAY MINERALS LTD. Notes to the Interim Financial Statements FOR THE QUARTER ENDED JUNE 30, 2021

All values expressed in Canadian dollars

1) NATURE AND CONTINUANCE OF OPERATIONS

The Company was incorporated under the Business Corporations Act (British Columbia) and its principal business activity is the acquisition and exploration of resource properties. The properties of the Company are without a known economically feasible ore body. The exploration programs undertaken and proposed constitute an exploratory search. There is no assurance that the Company will be successful in its search. The business of exploring for minerals and mining involves a high degree of risk. Few properties that are explored are ultimately developed into producing mines. Major expenses may be required to establish ore reserves, to develop metallurgical processes, and to construct mining and processing facilities at a particular site. It is not possible to ensure that the current exploration programs planned by the Company will result in a profitable commercial mining operation.

Although the Company has taken steps to verify title to resource properties in which it has an interest, in accordance with industry standards for the current stage of exploration of such properties, these procedures do not guarantee the Company’s title. Property title may be subject to unregistered prior agreements and noncompliance with regulatory requirements.

These financial statements have been prepared on a going-concern basis, which assumes the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business. Several adverse conditions cast substantial doubt on the validity of this assumption. The Company has incurred operating losses since inception with a comprehensive loss for the six months ended June 30, 2021 of $107,301, has limited financial resources, no source of operating cash flow, and no assurances that sufficient funding, including adequate financing, will be available to conduct further exploration and development of its mineral property projects.

The application of the going-concern concept is dependent upon the Company’s ability to generate future profitable operations and receive continued financial support from its creditors and shareholders. These financial statements do not give effect to any adjustments that might be required should the Company be unable to continue as a going-concern and therefore, be required to realize its assets and discharge its liabilities in other than the normal course of business and at amounts differing from those reflected in the financial statements.

Management plans to continue to pursue equity or debt financing to support operations. Management believes this plan will be sufficient to meet the Company’s liabilities and commitments as they become payable over the next twelve months. There can be no assurance that management’s plan will be successful. Failure to maintain the support of creditors and obtain additional external equity financing will cause the Company to curtail operations and the Company’s ability to continue as a going-concern will be impaired. The outcome of these matters cannot be predicted at this time.

2) SIGNIFICANT ACCOUNTING POLICIES

a) Statement of Compliance

These condensed interim financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) applicable to the preparation of interim financial statements, including IAS 34, Interim Financial Reporting. Accordingly, these Financial Statements do not include all of the information and footnotes required by IFRS for complete financial statements for year-end reporting purposes. These financial statements should be read in conjunction with the Company’s financial statements for the year ended December 31, 2020, which have been prepared in accordance with IFRS as issued by the IASB.

Basis of preparation

These financial statements have been prepared on the historical cost basis. The presentation and functional currency of the Company is the Canadian dollar.

UNAUDITED

7

FINLAY MINERALS LTD. Notes to the Interim Financial Statements

FOR THE QUARTER ENDED JUNE 30, 2021

All values expressed in Canadian dollars

2) SIGNIFICANT ACCOUNTING POLICIES (continued)

Cash and cash equivalents

Cash and cash equivalents are comprised of cash on hand, deposits in banks and highly liquid investments having terms to maturity of 90 days or less when acquired.

Significant accounting judgments, estimates and assumptions

The preparation of the Company's financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities and contingent liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Estimates and assumptions are continuously 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. However, actual outcomes can differ from these estimates. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

Critical judgments in applying accounting policies:

The following are critical judgments that management has made in the process of applying accounting policies and that have the most significant effect on the amounts recognized in the financial statements:

• the determination that the Company will continue as a going-concern for the next year; and

• • the determination that there have been no events or changes in circumstances that indicate the carrying amount of exploration and evaluations assets may not be recoverable.

Exploration and evaluation expenditures

Once a license to explore an area has been secured, expenditures on mineral properties are capitalized to exploration and evaluation assets.

Exploration and evaluation expenditures relate to the initial search for deposits with economic potential and to detailed assessments of deposits or other projects that have been identified as having economic potential.

All capitalized exploration and evaluation expenditures are monitored for indications of impairment. Where a potential impairment is indicated, assessments are performed for each area of interest. To the extent that exploration and evaluation expenditures are not expected to be recovered they are charged to operations.

Share Capital

The Company records proceeds from share issuances net of issue costs and any tax effects. Common shares issued for consideration other than cash are valued based on their market value at the date the agreement to issue shares was concluded.

Impairment of non-financial assets

At the end of each reporting year, and when relevant triggering events and circumstances occur, the carrying amounts of the Company's non-financial assets are reviewed to determine whether there is any indication that those assets are impaired. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment, if any. The recoverable amount is the higher of fair value less costs to sell and the value in use. Fair value is determined as the amount that would be obtained from the sale of the asset in an arm's length transaction between knowledgeable and willing parties. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount and the impairment loss is recognized in profit or loss for the year.

UNAUDITED

8

FINLAY MINERALS LTD. Notes to the Interim Financial Statements FOR THE QUARTER ENDED JUNE 30, 2021

All values expressed in Canadian dollars

2) SIGNIFICANT ACCOUNTING POLICIES (continued)

Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset in prior years. A reversal of an impairment loss is recognized immediately in profit or loss.

Income taxes

The Company uses the statement of financial position method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using substantively enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred income tax assets also result from unused loss carry forwards, resource related pools and other deductions. A deferred tax asset is recognized for unused tax losses, tax credits and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

Flow-through shares

The Company has issued common shares as flow-through shares, whereby the investor may claim the tax deductions arising from the related resource expenditures. When flow-through shares are issued, the sale of the tax deduction is valued (using the residual method) and deferred as a flow-through liability. When resource expenditures are renounced to the investors and the Company has reasonable assurance that the expenditures will be completed, the flow-through liability is reversed, and a deferred income tax liability is recognized.

Previously unrecognized deferred income tax assets may be used to reduce the deferred income tax liability amount recognized, and the Company will recognize a future income tax recovery to this extent.

Share-based payments

The Company's Stock Option Plan allows employees and consultants to acquire shares of the Company. Share-based payments to employees are measured at the fair value of the instruments issued and amortized over the vesting periods. Share-based payments to non-employees are measured at the fair value of the goods or services received or the fair value of the equity instruments issued, if it is determined the fair value of the goods or services cannot be reliably measured, and are recorded at the date the goods or services are received. The fair value of the share-based payment is measured using the Black-Scholes option pricing model. The fair value of the share-based payment is recognized as an expense or capitalized to exploration and evaluation assets with a corresponding increase in contributed surplus. Consideration received on the exercise of stock options is recorded as share capital and a corresponding amount is transferred to share capital from contributed surplus.

Loss per share

Basic loss per share is calculated by dividing the loss available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted loss per share is calculated by the treasury stock method. Under the treasury stock method, the weighted average number of common shares outstanding for the calculation of diluted loss per share assumes that the proceeds to be received on the exercise of dilutive share options and warrants are used to repurchase common shares at the average market price during the period. Where the effects of including all outstanding options and warrants would be anti-dilutive, no dilution is calculated and the diluted loss per share is presented as the same as basic loss per share.

UNAUDITED

9

FINLAY MINERALS LTD. Notes to the Interim Financial Statements

FOR THE QUARTER ENDED JUNE 30, 2021

All values expressed in Canadian dollars

2) SIGNIFICANT ACCOUNTING POLICIES (continued)

Reclamation deposits

The Company maintains cash deposits as required by regulatory bodies as assurance for the funding of reclamation costs. These funds are restricted to that purpose and are not available to the Company until the reclamation obligations have been fulfilled. Reclamation deposits are classified as non-current assets.

Mineral Exploration Tax Credit ("METC")

The Company recognizes METC amounts when the Company's METC application is approved by the Canada Revenue Agency or when the amount to be received can be reasonably estimated and collection is reasonably assured.

Financial instruments

The Company recognizes financial assets and liabilities on the statement of financial position when it becomes a party to the contractual provisions of the instrument.

Financial assets

Cash and cash equivalents are classified as subsequently measured at amortized cost.

Investment in NorthWest Copper Corp. is irrevocably classified, at the Company’s election, as subsequently measured at fair value through other comprehensive income. Investment transactions are recognized on the trade date with transaction costs included in the underlying balance. Fair values are determined by reference to quoted market prices at the statement of financial position date.

Reclamation deposits are classified as subsequently measured at amortized cost.

Financial liabilities

Trade payables are non-interest bearing if paid when due and are recognized at face amount, except when fair value is materially different. Trade payables are subsequently measured at amortized cost.

Due to related parties is subsequently measured at amortized cost.

3) NEW ACCOUNTING STANDARDS AND RECENT PRONOUNCEMENTS

The Company has not adopted any new IFRS pronouncements as at January 1, 2021 as any new standards are not applicable to the Company’s financial statements.

4) INVESTMENT IN NORTHWEST COPPER CORP.

At June 30, 2021, the Company owned 60,324 (2020 – 202,706) shares of NorthWest Copper Corp. (formerly Serengeti Resources Inc.), the shares of which are traded on the TSX Venture Exchange.

	Six Months Ended	Year Ended
	June 30, 2021	December 31, 2020
	$	$
Marketable securities -- fair value	42,830	66,553
Marketable securities -- cost	38,014	53,769

On March 5, 2021, Serengeti Resources Inc. and Sun Metals Corp. announced the completion of their merger along with a change of name to NorthWest Copper Corp. In conjunction with the merger and name change, NorthWest Copper also completed a consolidation of its issued and outstanding shares on a 2:1 basis. Hence, the Company’s premerger/consolidation 120,648 Serengeti shares were consolidated and converted to 60,324 NorthWest Copper shares.

UNAUDITED

10

FINLAY MINERALS LTD. Notes to the Interim Financial Statements FOR THE QUARTER ENDED JUNE 30, 2021

All values expressed in Canadian dollars

5) EXPLORATION AND EVALUATION ASSETS

Omineca Mining Division British Columbia

Silver Hope Claims

The Company has a 100% interest in 40 mineral tenures, eight of which are subject to a 1½% Net Smelter Returns royalty (“NSR”), and were acquired during 2006 by the issue of two million common shares. One half of the NSR (3/4%) is purchasable prior to a production decision for one million dollars.

PIL-Gold Claims

The Company has a 100% interest in 39 mineral tenures (formerly 376 mineral claim units) of which 23 mineral claims were acquired from a private company controlled by a director of the Company with consideration for the issuance to that private company of nine million common shares (post subdivision) and a 3% NSR. The Company is also obligated to issue a further two million shares to this private company when the property is put into commercial production and may also, prior to that date, purchase a 1½ % NSR (½ of the 3% NSR) for two million dollars.

ATTY Claims

The Company has a 100% interest in 12 mineral tenures which are all in good standing until 2030.

UNAUDITED

11

FINLAY MINERALS LTD. Notes to the Interim Financial Statements

FOR THE QUARTER ENDED JUNE 30, 2021

All values expressed in Canadian dollars

5) EXPLORATION AND EVALUATION EXPENDITURES (continued)

evaluation expenditures Royalty buyback payment Equipment rental Acquisition Assay Tenure management PIL Claims Camp and travel Assay Road construction Tenure management Equipment rental Silver Hope Claims Assay Drilling Drilling Recovery Geological and geophysical Field office BCMETC refund Geological and geophysical ATTY Claims Tenure management BCMETC refund Acquisition BRITISH COLUMBIA Camp and travel Acquisition Geological and geophysical Camp and travel Field office Equipment rental Field office Road construction Total exploration and	December 31 2019 166,873 182,175 118,747 1,274,952 33,565 13,132 961,479 45,239 45,325 (19,495) 2,821,992 28,536 245,966 797,963 1,466,687 106,303 104,981 1,363,004 392,273 35,215 (64,018) 4,476,910 540 38,606 331,714 27,158 12,674 529,541 20,135 (125,000) (10,000) 825,368 8,124,270	Net Additions - 31,843 48,269 138,434 1,570 2,000 217,568 - 4,701 - 444,385 - 16,952 90,127 - 4,304 100 162,599 10,000 - (30,170) 253,912 - 220 - - - - - - - 220 698,517	December 31 2020 166,873 214,018 167,016 1,413,386 35,135 15,132 1,179,047 45,239 50,026 (19,495) 3,266,377 28,536 262,918 888,090 1,466,687 110,607 105,081 1,525,603 402,273 35,215 (94,188) 4,730,822 540 38,826 331,714 27,158 12,674 529,541 20,135 (125,000) (10,000) 825,588 8,822,787	Net Additions - 32,153 23,302 - 8,100 - 94,192 - 1,591 - 159,338 - - 1,134 - - - 11,529 - - - 12,663 - - - - - 18,883 - - - 18,883 190,884	June 30 2021 166,873 246,171 190,318 1,413,386 43,235 15,132 1,273,239 45,239 51,617 (19,495)
					3,425,715
					28,536 262,918 889,224 1,466,687 110,607 105,081 1,537,132 402,273 35,215 (94,188)
					4,743,485
					540 38,826 331,714 27,158 12,674 548,424 20,135 (125,000) (10,000)
					844,471
					9,013,671

UNAUDITED

12

FINLAY MINERALS LTD. Notes to the Interim Financial Statements FOR THE QUARTER ENDED JUNE 30, 2021

All values expressed in Canadian dollars

5) EXPLORATION AND EVALUATION EXPENDITURES (continued)

On March 1, 2018, the Company entered into an option agreement (the “OA”) with NorthWest Copper Corp. (“NorthWest”) and Electrum Resource Corp. (the “RH”) to grant NorthWest the exclusive right and option to acquire a 100% interest in and to the ATTY claims, among other things.

On June 24, 2020, NorthWest terminated the OA.

On March 1, 2018, in connection with entering into the OA, the Company and the RH entered into an amending agreement to amend the purchase agreement between the Company and the RH dated as of July 29, 1999 (the "PA") so that (i) certain clauses only apply to the ATTY claims and not the PIL claims; and (ii) to provide for a separate royalty agreement between the Company and the RH relating to the PIL claims. The PA was amended as follows:

l As additional consideration for the original purchase, the Company will issue 500,000 shares of the Company to the RH immediately following an ATTY Project Production Decision (as defined in the OA); and

l Prior to an ATTY Project Production Decision (as defined in the OA), the Company may, at its sole discretion, purchase one half (1.5%) of the NSR from RH by paying $1 million.

On March 1, 2018, the Company and the RH entered into a royalty agreement (the “RA”) in respect of the PIL claims. The RA incorporates the mineral claims acquired under the Purchase Agreement with the RH dated as of October 1, 2001, as well as the rights and interest pertaining to the PIL claims, into the RA, and terminates the 2001 Purchase Agreement. As additional consideration for the purchase of the PIL claims, the Company:

l Will issue 1 million shares of the Company to RH immediately following a PIL Project Production Decision (as defined in the RA);

l Will pay an NSR of 3% to the RH; and

l May, at its sole discretion, and prior to a PIL Project Production Decision, purchase one half (1.5%) of the NSR from RH by paying $2 million.

6) RELATED PARTY TRANSACTIONS

Mineral property geological consulting:

	Six Months Ended	Six Months Ended
	June 30, 2021	June 30, 2020
	$	$
Key management personnel compensation:
Mineral property geological consulting	2,283	9,559
Wages and benefits	8,820	6,788

7) DUE TO RELATED PARTIES

At June 30, 2021, the Company owes $33,689 (December 31, 2020 - $1,000) to an officer of the Company. At June 30, 2021, the Company owes $37,828 (December 31, 2020 - $3,489) to a company related to an officer of the Company. The amounts are unsecured, do not bear interest and have no fixed terms of repayment.

UNAUDITED

13

FINLAY MINERALS LTD. Notes to the Interim Financial Statements

FOR THE QUARTER ENDED JUNE 30, 2021

All values expressed in Canadian dollars

8) SHARE CAPITAL

a) The authorized share capital of the Company consists of:

an unlimited number of common shares. 100,000,000 Class A preference shares 100,000,000 Class B preference shares

On May 25, 2021 the Company issued 200,000 common shares pursuant to a stock option exercise by a Company director. On June 24, 2021, the Company issued 650,000 common shares pursuant to a stock option exercise by three Company directors; all the stock options were exercised at $0.05. The Company reclassified $40,358 from Contributed surplus to Share capital in connection with the exercise of these options.

Issued for: Options exercised Opening balance Ending Balance	Number of Shares $ 93,274,991 9,370,241 850,000 82,858 94,124,991 9,453,099 Six Months Ended June 30, 2021	Number of Shares $ 93,274,991 9,370,241 - - 93,274,991 9,370,241 Year Ended December 31, 2020	Number of Shares $ 93,274,991 9,370,241 - - 93,274,991 9,370,241 Year Ended December 31, 2020
			9,370,241

b) Share purchase options

The following is a summary of the changes in the Company’s outstanding stock options:

Exercised Expired Balance, beginning of the period Exercisable, end of the period Balance, end of the period Weighted average years to expiry	Weighted Number of Average Options Exercise Price $ 3,750,000 0.07 (200,000) 0.05 (850,000) 0.05 2,700,000 0.08 2,700,000 0.08 1.28 June 30, 2021 Six Months Ended	Weighted Number of Average Options Exercise Price $ 3,750,000 0.07 - - - - 3,750,000 0.07 3,750,000 0.07 1.48 Year Ended December 31, 2020	Weighted Number of Average Options Exercise Price $ 3,750,000 0.07 - - - - 3,750,000 0.07 3,750,000 0.07 1.48 Year Ended December 31, 2020
			0.07
			0.07
			1.48

1 700,000 stock options were exercised subsequent to period end and 450,000 stock options expired subsequent to period end. See Note 13.

UNAUDITED

14

FINLAY MINERALS LTD. Notes to the Interim Financial Statements

FOR THE QUARTER ENDED JUNE 30, 2021

All values expressed in Canadian dollars

8) SHARE CAPITAL (continued)

c) Share purchase warrants

The continuity of share purchase warrants is as follows:

Six Months Ended Year Ended June 30, 2021 December 31, 2020

Expired Balance, beginning of the period Weighted average years to expiry Balance, end of the period	Number of Warrants 16,207,166 - 16,207,166	Weighted Average Exercise Price $ 0.19 - 0.19 2.05	Number of Warrants 16,278,595 (71,429) 16,207,166	Weighted Average Exercise Price $ 0.10 0.05
				0.19
				2.55

d) Contributed surplus

Contributed surplus records the fair value of share-based payments, agent options and agent warrants until such time that the options and warrants are exercised, at which time the corresponding amount will be transferred to share capital.

9) CAPITAL MANAGEMENT

The Company’s objectives for the management of capital are to safeguard the Company’s ability to continue as a goingconcern, including the preservation of capital, and to achieve reasonable returns on invested cash after satisfying the objective of preserving capital.

The Company considers its cash and cash equivalents to be its manageable capital. The Company’s policy is to maintain sufficient cash and deposit balances to cover operating and exploration costs over a reasonable future period. The Company accesses capital markets as necessary and may also acquire additional funds where advantageous circumstances arise.

The Company currently has no externally-imposed capital requirements except to maintain sufficient cash and deposit balances to meet exploration commitments.

10) FINANCIAL INSTRUMENT RISKS

The Company's financial instruments are exposed to the following risks:

Credit Risk

The Company's primary exposure to credit risk is the risk of illiquidity of cash and cash equivalents, amounting to $201,013 at June 30, 2021 (December 31, 2020 - $226,086). As the Company's policy is to limit cash holdings to instruments issued by major Canadian banks, or investments of equivalent or better quality, the credit risk is considered by management to be negligible.

UNAUDITED

15

FINLAY MINERALS LTD. Notes to the Interim Financial Statements

FOR THE QUARTER ENDED JUNE 30, 2021

All values expressed in Canadian dollars

10) FINANCIAL INSTRUMENT RISKS continued

Liquidity Risk

Liquidity risk is the risk that the Company will not be able to pay financial instrument liabilities as they come due. The Company's liquidity risk from financial instruments is its need to meet accounts payable and accrued liabilities and related party balance obligations. The Company maintained sufficient cash and cash equivalent balances to meet these needs at June 30, 2021.

Interest Rate Risk

The Company has cash balances and only fixed interest-bearing guaranteed investment certificates. The Company's current policy is to invest excess cash in investment-grade short-term deposit certificates issued by its banking insititutions. The Company periodically monitors the investments it makes and is satisfied with the credit ratings of its banks.

Fair Value of Financial Instruments

The fair value of the Company's financial assets and liabilities approximates the carrying amount. Financial instruments measured at fair value are classified into one of three levels in the fair value hierarchy according to the relative reliability of the inputs used to estimate the fair values. The three levels of the fair value hierarchy are:

• l Level 1 - Unadjusted quoted prices in active markets for identical assets or liabilities;

• l Level 2 - Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly; and l Level 3 - Inputs are not based on observable market data.

The fair value classification of the company's financial instruments as at June 30, 2021 and December 31, 2020 is as follows:

		Six Months Ended	Year Ended
		June 30, 2021	December 31, 2020
		Fair value	Fair value
	Fair	through	through
	value	other	other
	level	comprehensive	comprehensive
		income	income
		$	$
Financial assets:
Investment in NorthWest Copper Corp.	1	42,830	66,553

During the quarter ended June 30, 2021 and year ended December 31, 2020, there were no transfers between level 1, level 2, and level 3 classified assets and liabilities.

UNAUDITED

16

FINLAY MINERALS LTD. Notes to the Interim Financial Statements FOR THE QUARTER ENDED JUNE 30, 2021

All values expressed in Canadian dollars

11) LIABILITY AND INCOME TAX EFFECT ON FLOW-THROUGH SHARES

Funds raised through the issuance of flow-through shares are expected to be expended on qualified Canadian mineral exploration expenditures, as defined pursuant to Canadian income tax legislation. The flow-through gross proceeds less the qualified expenditures made to date represent the funds received from flow-through share issuances that have not been spent and are held by the Company for such expenditures.

12) SUPPLEMENTARY CASH FLOW INFORMATION

	Six Months	Six Months	Six Months
	Ended	Ended
	June 30, 2021	June 30,	2020
	$	$
Exploration and evaluation assets included in accounts payable	56,482		-
and accrued liabilities

See Note 5.

13) SUBSEQUENT EVENTS

On July 12, 2021, the Company completed a non-brokered private placement financing for total proceeds of $2,643,777. The Private Placement consisted of the issuance of: (i) a total of 17,653,081 non-flow through units (the “NFT Units”) for gross proceeds of $1,588,777, at price of $0.09 per NFT Unit, with each NFT Unit comprising one common share of the Company and one common share purchase warrant (each, a “Unit Warrant”); and (ii) a total of 8,791,667 flow through units (each, a “FT Unit”), at a price of $0.12 per FT Unit for gross proceeds of $1,055,000, with each FT Unit comprising one common share of the Company which qualifies as a “flow-through share” within the meaning of the Income Tax Act (Canada) and one Unit Warrant. Each Unit Warrant entitles the holder thereof to acquire one additional common share of the Company (each, a “Warrant Share”) at an exercise price of $0.135 per Warrant Share for a period of twenty-four months from the issuance of each such Unit Warrant. At June 30, 2021 $153,028 of the proceeds are reported on the financial statements as Share subscriptions received.

In connection with the closing of the Private Placement, the Company: (i) issued an aggregate of 1,511,323 finder’s compensation options (the “Compensation Options”) and (ii) issued 232,000 finder’s units (the “Finder’s Units”). Each Compensation Option entitles the holder to purchase one Unit at a price of $0.09 or $0.12, as applicable, for a period of twenty-four months expiring on July 9, 2023. All of the Units issuable on exercise of each Compensation Option and the Finder’s Units have the same terms as the Units issued to the subscribers of the Private Placement.

On July 13, 2021 pursuant to the Company’s Stock Option Plan, 700,000 stock options were exercised at an exercise price of $0.05 by two directors and 700,000 common shares of the Company were issued in regards to the aforementioned stock option exercise.

On July 28, 2021, 350,000 stock options expired unexercised.

On July 29, 2021, 100,000 stock options expired unexercised.

On August 3, 2021, the Company issued 1,591,666 common shares pursuant to the exercise of 1,591,666 warrants at an exercise price of $0.10.

UNAUDITED

17