Fireweed Metals Corp. — Interim / Quarterly Report 2021

May 26, 2021

FIREWEED ZINC LTD.

(An Exploration Stage Company) (Unaudited - Expressed in Canadian Dollars) Financial Statements

March 31, 2021 and 2020

Index

Interim Statements of Financial Position Interim Statements of Loss and Comprehensive Loss Interim Statements of Cash Flows

Interim Statements of Changes in Shareholders’ Equity Notes to the Condensed Interim Financial Statements

Notice of non-review of condensed interim financial statements

In accordance with National Instrument 51-102 Continuous Disclosure Obligations of the Canadian Securities Administrators, notice is given that the attached condensed interim financial statements for the three-month period ended March 31, 2021 have not been reviewed by the Company’s auditors.

FIREWEED ZINC LTD.

Statements of Financial Position as at

(Expressed in Canadian Dollars)

Note(s)	March 31, 2021 December 31, 2020
Assets Current assets: Cash Receivables Prepaid expenses	$ 1,668,839 $ 2,264,206 50,406 233,491 98,616 110,140
Equipment 6 Reclamation bond Explorationand evaluationassets 4,5	1,817,861 2,607,837 105,814 113,937 39,596 39,596 11,960,325 11,458,395
	$ 13,923,596 $ 14,219,765
Current liabilities: Accounts payable and accrued liabilities 7,11	$ 231,605 $ 229,863
Long-term loan payable 8 Rehabilitation provisions 9	231,605 229,863 40,000 40,000 236,968 236,572
	508,573 506,435
Shareholders' equity: Capital stock 10 Options reserve 10 Warrants reserve 10 Deficit	37,212,507 36,486,333 1,860,417 1,797,596 187,001 197,013 (25,844,902) (24,767,612)
	13,415,023 13,713,330
$	$ 13,923,596 $ 14,219,765
Nature and continuance of operations (Note 1) Commitment (Note 15) Subsequent events (Note 16) On behalf of the Board: “Brandon Macdonald” Director	“George Gorzynski” Director

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

FIREWEED ZINC LTD.

Statements of Loss and Comprehensive Loss (Expressed in Canadian Dollars)

			Three Months	Three Months	Ended
					March 31, 2020
	Note(s)		March 31, 2021		Restated (Note 4)
Expenses
Consulting and management	11	$	128,660	$	105,878
Depreciation	6		8,123		1,140
Director and committee fees	11		30,750		36,750
Exploration and evaluation	4,5		698,240		250,407
Investor relations and corporate
development	11		81,651		65,680
Insurance expense			3,750		3,500
Office and payroll expenses			5,877		10,015
Professional fees			15,766		32,715
Rent			16,341		11,419
Share-based compensation	10,11		62,821		47,495
Transfer agent and filing fees			24,565		13,843
Travel			690		7,912
			(1,077,234)		(586,754)
Accretion on rehabilitation provision	9		(396)		(1,168)
Foreign exchange			(3,627)		(118)
Interest income			3,927		3,073
Loss and comprehensive loss for
the period		$	(1,077,290)	$	(584,967)
Loss per share –basic and diluted		$	(0.02)	$	(0.02)
Weighted average number of common	shares
outstanding –basic and diluted			56,708,997		37,797,129

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

Statements of Cash Flows (Expressed in Canadian Dollars)

FIREWEED ZINC LTD.

	Three Months Ended March 31, 2021 March 31, 2020 Restated (Note 4)
	OPERATING ACTIVITIES Loss for the period $ (1,077,290) $ (584,967) Adjustment for items not affecting cash: Accretion on rehabilitation provision 396 1,168 Depreciation 8,123 1,140 Share-based compensation 62,821 47,495 Change in non-cash working capital items: Receivables 183,085 5,241 Prepaid expenses 11,524 59,440 Accounts payable and accrued liabilities 1,742 54,891
	(809,599) (415,592) INVESTING ACTIVITIES Exploration and evaluation assets (1,930) (2,830)
	(1,930) (2,830) FINANCING ACTIVITIES Proceeds from warrants exercised 216,162 -
	216,162 - Increase (decrease) in cash (595,367) (418,422) Cash, beginning of the period $ 2,264,206 $ 783,789
	Cash, end of the period $ 1,668,839 $ 365,367
	Supplemental disclosures with respect to cash flows:
	Non-cash investing and financing activities:
	Fair value of shares issued for property $ 500,000 $ - Fair value of exercised finders’warrants $ 10,012 $ -

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

FIREWEED ZINC LTD.

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

FIREWEED ZINC LTD. Statements of Changes in Shareholders’ Equity (Expressed in Canadian Dollars)
	Capital Stock Shares Amount Warrants reserve Options reserve Deficit	Total
Balance at December 31, 2019, as previously stated Effect of change in accounting policy	37,797,129 $ 26,879,253 $ 133,910 $ 1,532,985 $ (4,505,778) (14,621,236)	$ 24,040,370 (14,621,236)
Balance at December 31, 2019 (Restated – Note 4) Share-based compensation Lossforthe period	37,797,129 $ 26,879,253 $ 133,910 $ 1,532,985 $ (19,127,014) - - - 47,495 - - - - - (584,967)	$ 9,419,134 47,495 (584,967)
Balance at March 31, 2020	37,797,129 $ 26,879,253 $ 133,910 $ 1,580,480 $ **(19,711,981) **	$ 8,881,662
Balance at December 31, 2020 Shares issued for resource property Share-based compensation Warrants exercised Loss for the period	56,057,112 $ 36,486,333 $ 197,013 $ 1,797,596 $ (24,767,612) 500,000 500,000 - - - - - - 62,821 - 293,510 226,174 (10,012) - - - - - - (1,077,290)	$ 13,713,330 500,000 62,821 216,162 (1,077,290)
Balance at March 31, 2021	56,850,622$ 37,212,507 $ 187,001 $ 1,860,417 $ (25,844,902)	$ 13,415,023

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

Notes to the Condensed Interim Financial Statements for the Three Months Ended March 31, 2021 and 2020 (Expressed in Canadian Dollars)

FIREWEED ZINC LTD.

1. Nature and Continuance of Operations

Fireweed Zinc Ltd. (the “Company”) was incorporated under the Business Corporations Act of the Yukon in Canada on October 20, 2015. The Company is a mineral exploration and development company and is engaged in the acquisition and exploration of mineral assets. Currently the Company has one project, the Macmillan Pass Project, which includes the Tom and Jason claims and zinc-lead-silver deposits, the Nidd claims and large blocks of adjacent claims (Mac, MC, MP, Jerry, BR, NS, Oro, Sol, Bach Ben, NC and Stump) in Yukon, Canada (collectively, the “Project”). The Company is listed on the TSX Venture Exchange and trades under the symbol FWZ.

The Company’s head office and principal address is Suite 1020 – 800 West Pender Street, Vancouver, British Columbia, Canada V6C 2V6. The registered and records office is 3081 3[rd] Avenue, Whitehorse, Yukon, Canada Y1A 4Z7.

The Company’s ability to continue operations is not assured and is dependent upon the ability to obtain necessary financing to meet its liabilities and commitments as they become due, and the ability to generate future profitable production or operations or obtain sufficient proceeds from the disposition thereof. The outcome of these matters cannot be predicted at this time. These financial statements do not include adjustments to amounts and classifications of assets and liabilities that might be necessary should the Company be unable to continue operations. As at March 31, 2021, management estimates that the Company does not have sufficient working capital to maintain its operations and activities for the next twelve months and will need to raise additional capital in order to further fund its operations. These material uncertainties may cast significant doubt as to the Company’s ability to continue as a going concern.

In March 2020 the World Health Organization declared coronavirus COVID-19 a global pandemic. This contagious disease outbreak, which has continued to spread, and related adverse public health developments, have adversely affected workforces, economies, and financial markets globally, leading to an economic downturn. To date there have been no adverse effects on the Company’s business or ability to raise funds.

The financial statements for the period ended March 31, 2021 have been prepared by management, reviewed by the Audit Committee and authorized for issue by the Board of Directors on May 25, 2021.

2. Basis of Presentation and 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”) for interim information, specifically International Accounting Standards (“IAS”) 34 - Interim Financial Reporting. In addition, these condensed interim financial statements have been prepared using interpretations issued by the International Financial Reporting Interpretation Committee (“IFRIC”) in effect at March 31, 2021 and the same accounting policies and methods of their application as the most recent annual financial statements of the Company. These condensed interim financial statements do not include all disclosures normally provided in the annual financial statements and should be read in conjunction with the Company’s audited financial statements for the year ended December 31, 2020. In management’s opinion, all adjustments necessary for fair presentation have been included in these condensed interim financial statements. Interim results are not necessarily indicative of the results expected for the year ending December 31, 2021.

The financial statements have been prepared on a historical cost basis, except for financial instruments classified as fair value through profit or loss, which are stated at their fair value. All dollar amounts presented are in Canadian dollars unless otherwise specified. In addition, the financial statements have been prepared using the accrual basis of accounting, except for cash flow information.

Page 7 of 18

Notes to the Condensed Interim Financial Statements for the Three Months Ended March 31, 2021 and 2020 (Expressed in Canadian Dollars)

FIREWEED ZINC LTD.

3. Significant Accounting Policies

The accounting policies in preparation of these condensed interim financial statements are consistent with those applied and disclosed in the Company’s audited financial statements for the year ended December 31, 2020.

Critical accounting estimates, judgments, and assumptions

The preparation of these financial statements requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amount of expenses during the reporting period. Actual outcomes could differ from these estimates. These financial statements include estimates that, by their nature, are uncertain. The impacts of such estimates are pervasive throughout the financial statements and may require accounting adjustments based on future occurrences. Revisions to accounting estimates are recognized in the period in which the estimate is revised and future periods if the revision affects both current and future periods. These estimates are based on historical experience, current and future economic conditions, and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Information about significant areas of estimation uncertainty in applying accounting policies that have the most significant effect on the amounts recognized in the financial statements are noted below with further details of the assumptions contained in the relevant note.

The preparation of these financial statements requires management to make judgments regarding the going concern of the Company as discussed in Note 1.

Key sources of estimation uncertainty

Carrying value and recoverability of exploration and evaluation assets

The carrying amount of the Company’s exploration and evaluation assets do not necessarily represent present or future values, and the Company’s exploration and evaluation assets have been accounted for under the assumption that the carrying amount will be recoverable. Recoverability is dependent on various factors, including the discovery of economically recoverable reserves, the ability of the Company to obtain the necessary financing to complete the development and upon future profitable production or proceeds from the disposition of the mineral properties themselves.

Additionally, there are numerous geological, economic, environmental and regulatory factors and uncertainties that could impact management’s assessment as to the overall viability of its properties or to the ability to generate future cash flows necessary to cover or exceed the carrying value of the Company’s exploration and evaluation assets.

Share-based compensation

Share-based compensation expense is measured by reference to the fair value of the stock options at the date at which they are granted. Estimating fair value for granted stock options requires determining the most appropriate valuation model which is dependent on the terms and conditions of the grant. This estimate also requires determining the most appropriate inputs to the valuation model including the expected life of the option, volatility, dividend yield, and rate of forfeitures and making assumptions about them. The value of the sharebased compensation expense for the three months ended March 31, 2021 and 2020 are disclosed in Note 11.

Environmental rehabilitation obligation

The Company recognizes statutory, contractual or other legal obligations related to the retirement of its exploration and evaluation assets and its tangible long-lived assets when such obligations are incurred, if a reasonable estimate of fair value can be made. These obligations are measured initially at the net present value of estimated future cash flows and the resulting costs are expensed to the statement of loss and comprehensive loss.

Page 8 of 18

Notes to the Condensed Interim Financial Statements for the Three Months Ended March 31, 2021 and 2020 (Expressed in Canadian Dollars)

FIREWEED ZINC LTD.

3. Significant Accounting Policies (cont’d…)

Environmental rehabilitation obligation (cont’d…)

In subsequent periods, the liability is adjusted for any changes in the amount or timing and for the discounting of the underlying future cash flows. The capitalized asset retirement cost is amortized to operations over the life of the asset.

4. Changes in Accounting Policies

The Company’s previous accounting policy was to capitalize exploration and evaluation expenditures. The new policy is to expense such expenditures as incurred.

The Company believes that the information provided by this policy change will be more useful to readers because it provides better comparability of our financial position, changes in financial position, and results of operations with those of our current and future peer groups. Consequently, the revised treatment results in more relevant and no less reliable information than was previously presented. We have applied this change in accounting policy retrospectively, in accordance with IAS 8 - Accounting Policies, Changes in Accounting Estimates and Errors.

Due to the change in accounting policy, the Company has restated the comparative financial information on the statements of financial position as at March 31, 2020 and the comparative financial information on the statements of loss and comprehensive loss, cash flows and changes in shareholders’ equity for the period ended March 31, 2020. The Company will continue to reflect an asset for the initial acquisition costs related to the mineral property.

Effects on Statements of Financial Position

		As at March 31, 2020
Assets:	Previously stated	Adjustments	As Restated
Exploration and evaluation assets	$24,690.686	($15,745,643)	$8,945,043
Total assets	$25,233,187	($15,745,643)	$9,487,544
Shareholders’ equity:
Deficit	($4,840,338)	($14,871,643)	($19,711,981)
Total shareholders’ equity (deficit)	$23,753,305	($14,871,643)	$8,881,662

Effects on Statements of Loss and Comprehensive Loss

	For the period ended March 31, 2020	For the period ended March 31, 2020	For the period ended March 31, 2020
Expenses:	Previously stated	Adjustments	As restated
Exploration and evaluation expenditures	-	$250,407	$250,407
Loss	($334,560)	($250,407)	($584,967)
Weighted number of shares outstanding	37,797,129	-	37,797,129
Basic and diluted loss per share	($0.01)		($0.02)

Page 9 of 18

FIREWEED ZINC LTD.

Notes to the Condensed Interim Financial Statements for the Three Months Ended March 31, 2021 and 2020 (Expressed in Canadian Dollars)

4. Changes in Accounting Policies (cont’d…)

Effects on Statements of Cash Flows

		As at March 31, 2020	As at March 31, 2020
	Previously stated	Adjustments	As restated
Operating activities:
Loss for the year	($334,560)	($250,407)	($584,967)
Total operating activities	($133,419)	($282,173)	($415,592)
Investing activities:
Exploration and evaluation assets	($285,003)	$282,173	($2,830)
Total investing activities	($285,003)	$282,173	($2,830)

5. Exploration and Evaluation Assets and Expenditures

Exploration and Evaluation Assets

Macmillan Pass Project		Three Months Ended		Fiscal Year Ended
(Yukon, Canada)		March 31, 2021		December 31, 2020
Acquisition and maintenance costs:
Opening Balance	$	11,458,395	$	8,942,213
Additions during the year:
Change in rehabilitation provision		-		(29,123)
Cash payments		1,930		559,805
Shares issued		500,000		1,985,500
		501,930		2,516,182
Acquisition costs, closing balance	$	11,960,325	$	11,458,395
Exploration and Evaluation Expenditures
Macmillan Pass Project		Three Months Ended		Three Months Ended
(Yukon, Canada)		March 31, 2021		March 31, 2020
Assaying	$	178,106	$	35,675
Camp and field		74,427		16,619
Engineering		19,138		16,190
Geological Consulting		335,004		150,964
Insurance and other		3,292		3,406
Permitting		62,166		13,860
Reporting		24,606		10,251
Travel & Support		1,501		3,442
Total exploration expenditures	$	698,240	$	250,407

Page 10 of 18

Notes to the Condensed Interim Financial Statements for the Three Months Ended March 31, 2021 and 2020 (Expressed in Canadian Dollars)

FIREWEED ZINC LTD.

5. Exploration and Evaluation Assets and Expenditures (cont’d…)

Macmillan Pass Project, Yukon, Canada

Property Acquisitions and Option Agreements

In February 2018, the Company exercised its option with Hudbay Minerals Inc. (“Hudbay”) and acquired a 100% interest in the Tom and Jason zinc-lead-silver property and associated assets through the payment of $1,000,000 and 3,565,406 shares as well as incurring exploration expenditures of $1,250,000. The Jason claims have a third party underlying 3% net smelter return royalty (“NSR”) which can be bought out at any time for $5,250,000. There are no underlying royalties on the Tom claims.

In November 2018, Company purchased 100% interest in the claims of the Nidd property which includes the Boundary Zone, from Teck Metals Ltd. and Teck Mining Worldwide Holdings Ltd. (“Teck”) through the payment of 1,500,000 shares with a fair value of $1,350,000. Teck retains a 1% NSR royalty and a right of first offer to purchase future production concentrates from the Nidd property.

In October 2020, the Company exercised its option and acquired 100% interest in the claims of the Mac property from Maverix Metals Inc. (“Maverix”) through staged payments totaling $292,500 and 320,000 shares. Maverix retains production royalties of 0.25% NSR on base metals and other non-precious minerals, 1% NSR on silver and other precious metals excluding gold, and 3% NSR on gold produced from the Mac property.

In September 2020, the Company exercised its option and acquired 100% interest in the MC, MP and Jerry claims from joint venture partners Epica Gold Inc. (“Epica”) and Carlin Gold Corporation (“Carlin”) through staged payments totaling $275,000 and 750,000 shares. Epica and Carlin together retain production royalties of 0.5% NSR on base metals and silver, and 2% NSR on all other metals including gold produced from the MC, MP and Jerry claims, and are entitled to one additional payment of $750,000 or equivalent in Fireweed shares at the Company’s option, upon receiving a resource calculation of at least 2.0 million tonnes of indicated (or better) resource on any part of the MC, MP or Jerry claims. Fireweed maintains a right of first refusal on the sale of any NSR royalty from these claims by Epica and/or Carlin.

On November 20, 2020, the Company entered into a purchase and sale agreement with QuestEx Gold & Copper Ltd. (“QuestEx”) to acquire a 100% interest in the Sol Property as well as several small nearby separate claim blocks, which extends the Company’s Macmillan Pass Project to the northwest. Under this agreement, the Company made a cash payment of $100,000 and issued 350,000 common shares to QuestEx. The total fair value of the shares issued was determined to be $353,500, based on the market price at the date of the issuance.

QuestEx retains a 0.5% NSR on all base metals and silver and a 2% NSR on all other metals including gold, which may be mined from the property. There is an additional private third-party royalty consisting of a 2% NSR on production from the Sol Property, of which 1% may be extinguished for $2,000,000.

On November 20, 2020, the Company entered in a one-year option agreement with Cathro Resources Corp. (“Cathro”) and Cazador Resources Ltd. (“Cazador”) to acquire a number of claims (“Oro Property”) in the Macmillan Pass area for an aggregate consideration of $500,000 in cash and 1,000,000 common shares of the Company, payable as indicated in the table below. Each cash payment and share issuance will be made equally between each of the property owners.

Due Date	Cash	Common Shares
On or before January 18, 2021	$250,000 (paid)	500,000 (issued)
On or before January 13, 2022	$250,000	500,000
TOTAL	$500,000	1,000,000

The vendors retain a 0.5% NSR on all base metals and silver and a 2% NSR on all other metals including gold, which may be mined from the property.

Page 11 of 18

FIREWEED ZINC LTD.

Notes to the Condensed Interim Financial Statements for the Three Months Ended March 31, 2021 and 2020 (Expressed in Canadian Dollars)

6. Equipment

		Exploration		Computer		Vehicles
		Equipment		Hardware		(Trucks)		Total
Cost
As at December 31, 2019 and 2020	$	38,026	$	3,603	$	107,940	$	149,569
Acquisition		-		-		-		-
Balance as at March 31, 2021		38,026		3,603		107,940		149,569
Accumulated Depreciation
As at December 31, 2019		(16,583)		(3,004)		-		(19,587)
Depreciation expense		(3,978)		(227)		(11,840)		(16,045)
As at December 31, 2020		(20,561)		(3,231)		(11,840)		(35,632)
Depreciation expense		(874)		(42)		(7,207)		(8,123)
Balance as at March 31, 2021		(21,435)		(3,273)		(19,047)		(43,755)
Net book value
As at December 31, 2020	$	17,465	$	372	$	96,100	$	113,937
As at March 31, 2021	$	16,591	$	330	$	88,893	$	105,814

7. Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities mainly consist of payables to management and to vendors for work completed on the Company’s project as well as accrual of professional and director fees. The breakdown of accounts payable and accrued liabilities are as follows:

		March 31, 2021		December 31, 2020
Payable to related parties (Note 13)	$	16,848	$	15,044
Payable to vendors		214,757		214,819
Total Accounts Payable and Accrued Liabilities	$	231,605	$	229,863

8. Loan Payable

In May 2020, the Company secured a $40,000 interest-free operating line of credit after applying for the government-sponsored Canada Emergency Business Account (“CEBA”) under the Government of Canada COVID-19 relief program.

Terms of the CEBA agreement:

• i. The CEBA funds are intended for non-deferrable operating expenses, including but not limited to payroll, rent and insurance,

• ii. the balance currently outstanding has been converted into a 2-year interest-free term loan effective January 1st, 2021,

iii. If $30,000 is repaid by December 31, 2022, $10,000 of the operating line will be forgiven,

9. Rehabilitation Provisions

The Company has estimated that the present value of future rehabilitation costs required to remediate the Tom Jason property based on its current state. The Company did not have any rehabilitation provisions prior to the acquisition of the Tom Jason property.

Page 12 of 18

Notes to the Condensed Interim Financial Statements for the Three Months Ended March 31, 2021 and 2020 (Expressed in Canadian Dollars)

FIREWEED ZINC LTD.

9. Rehabilitation Provisions (cont’d…)

Although the ultimate amount of the rehabilitation liability is uncertain, the best estimate of these obligations is based on information currently available. Current significant closure and rehabilitation activities include dismantling and removing camp facilities, roads reclamation and mobile equipment removal costs.

The total amount of estimated undiscounted cash flow required to settle the Company’s estimated obligation as at March 31, 2021 was $234,596. The calculation of present value of estimated future cash flows assumed a discount rate of 0.67% and an inflation rate of 0.62%. Rehabilitation costs are estimated to be settled at various dates during 2028.

Balance, December 31, 2019	$	261,023
Accretion		4,672
Change in estimate		(29,123)
Balance, December 31, 2020	$	236,572
Accretion		396
Balance, March 31, 2020	$	236,968

10. Capital Stock and Reserves

The authorized capital stock of the Company consists of an unlimited number of common shares without nominal or par value. As at March 31, 2021, the Company had 56,850,622 (December 31, 2020 – 56,057,112) common shares issued and outstanding.

Transactions for the three months ended March 31, 2021

On January 13, 2021, the Company issued 250,000 common shares to Cathro and 250,000 common shares to Cazador totalling 500,000 common shares as part of the payment for the Oro Property. The fair value of the common shares at the time of issuance was $500,000 (Note 5).

During the period ended, March 31, 2021, 293,510 warrants were exercised for gross proceeds of $216,162. In connection with the issuance, a total of $10,012 was re-allocated from reserves to capital stock.

Transactions for the three months ended March 31, 2020

There was no capital activity during the three months ended March 31, 2020.

Escrow shares

As of March 31, 2021, Nil (March 31, 2020 – 1,713,811) common shares are held in escrow. The common shares issued in connection with IPO and held in escrow were released as to 10% on the listing date and the balance in equal 15% tranches were released every six months from the listing date.

Stock options

The Company adopted a stock option plan (“the Plan”) whereby it can grant options to directors, officers, employees, and technical consultants of the Company. The maximum numbers of shares that may be reserved for issuance under the Plan is limited to 10% of the issued common shares of the Company at any time and are exercisable within a maximum of ten (10) years. The vesting period for all options is at the discretion of the directors. The exercise price will be set by the directors at the time of grant and cannot be less than the discounted market price of the Company’s common shares.

There were no new options granted during the period ended March 31, 2021.

Page 13 of 18

FIREWEED ZINC LTD.

Notes to the Condensed Interim Financial Statements for the Three Months Ended March 31, 2021 and 2020 (Expressed in Canadian Dollars)

10. Capital Stock and Reserves (cont’d…)

Stock options (cont’d…)

The following is a summary of the Company’s stock option activity:

	Number of	Weighted Average
	Options	Exercise Price
Balance as at December 31, 2018	2,445,000	$0.86
Granted	250,000	$0.65
Balance as at December 31, 2019	2,695,000	$0.86
Granted	1,100,000	$0.65
Forfeited	(305,000)	$0.72
Balance as at December 31, 2020 and March 31, 2021	3,490,000	$0.79

Share-based compensation relating to options vested during the quarter ended March 31, 2021 using the BlackScholes option pricing model were $62,821 (2020 - $47,495), which was recorded as reserves on the statements of financial position and as share-based compensation expense on the statement of loss and comprehensive loss.

The associated share-based compensation expense for the options granted was calculated based on the following weighted average assumptions:

	March 31, 2021	December 31, 2020
Risk-free interest rate	-	0.37%
Expected life of options	-	5 years
Annualized volatility	-	72.90%
Dividend rate	-	0.00%
Forfeiture rate	-	0.00%
Weighted average share price on grant date	-	$0.61
Weighted average fair value of options granted	-	$0.65

As at March 31, 2021, the Company had outstanding stock options exercisable as follows:

	Number of	Number of
Expiry date	Options	Options	Weighted Average	Weighted Average
(mm/dd/yyyy)	Outstanding	Exercisable	Remaining life in Years	Exercise Price
04/26/2022	1,180,000	1,180,000	1.07	$0.50
10/27/2022	30,000	30,000	1.58	$0.70
12/06/2022	120,000	120,000	1.68	$0.83
03/14/2023	810,000	648,000	1.95	$1.45
07/11/2024	250,000	150,000	3.28	$0.65
06/10/2025	820,000	164,000	4.20	$0.59
08/25/2025	160,000	32,000	4.41	$0.71
09/18/2025	120,000	24,000	4.47	$0.99
	3,490,000	2,348,000	2.46	$0.79

Page 14 of 18

Notes to the Condensed Interim Financial Statements for the Three Months Ended March 31, 2021 and 2020 (Expressed in Canadian Dollars)

FIREWEED ZINC LTD.

10. Capital Stock and Reserves (cont’d…)

Share purchase warrants and agents’ warrants

The share purchase warrants, agents’ warrants and options activities are summarized below:

	Number of	Weighted Average
	Warrants	Exercise Price
Balance as at December 31, 2019	284,744	$1.27
Exercised	(226,320)	$0.61
Expired	(250,064)	$1.32
Issued	8,344,641	$0.73
Balance as at December 31, 2020	8,153,001	$0.73
Exercised	(293,510)	$0.74
Expired	(18,830)	$0.95
Balance as at March 31, 2021	7,840,661	$0.73

As at March 31, 2021, the Company had outstanding share purchase and agents’ warrants as follows:

Expiry date	Warrants	Weighted Average	Weighted Average
(mm/dd/yyyy)	Outstanding	Remaining life in Years	Exercise Price
04/14/2024	3,622,003	3.04	$0.60
04/14/2021	54,136	0.04	$0.40
08/06/2022	2,156,087	1.35	$0.80
08/06/2022	28,302	1.35	$0.80
08/06/2021	85,800	0.35	$0.76
08/06/2021	45,432	0.35	$0.60
08/06/2021	71,054	0.35	$0.65
09/04/2022	1,638,647	1.43	$0.95
09/04/2021	139,200	0.43	$0.70
	7,840,661	2.10	$0.73

During the period ended March 31, 2021, 18,830 agents’ warrants expired unexercised. In addition, 293,510 common shares of the Company were issued upon the exercise of agents’ warrants for gross proceeds of $216,162, while affair value of exercised warrants of $10,012 was re-allocated from reserves to capital stock.

During the three months ended March 31, 2020, 250,064 agents’ warrants expired unexercised.

11. Related Party Transactions

Related party transactions mainly include management and consulting fees, director and committee fees as well as share-based compensation. The related parties are represented by the key management personnel, which include those persons having authority and responsibility for planning, directing and controlling the activities of the Company as a whole. The Company has determined that key management personnel consist of executive and non-executive members of the Company’s Board of Directors and corporate officers. Related parties also include companies, controlled by officers and/or directors.

The remuneration to directors and key management personnel during the quarters ended March 31, 2021 and 2020 was as follows:

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FIREWEED ZINC LTD.

Notes to the Condensed Interim Financial Statements for the Three Months Ended March 31, 2021 and 2020 (Expressed in Canadian Dollars)

11. Related Party Transactions (cont’d…)

		Three months ended		Three months ended
Nature of the transaction		March 31, 2021		March 31, 2020
Director and committee fees	$	30,750	$	36,750
Investor relations and corporate development		1,667		-
Management and consulting fees		100,009		82,178
Management and consulting fees
related to exploration and evaluation*		2,829		9,940
Share-based compensation		32,576		16,209
Total compensation	$	167,831	$	145,077

• Management and consulting fees related to exploration and evaluation were previously capitalized but due to the accounting policy change (Note 4) are expensed as incurred.

The following amounts were owed to directors and key management personnel or companies controlled by them. These payables are unsecured, non-interest bearing and are expected to be repaid under normal trade terms.

			March 31,		December 31,
			2021		2020
Directors	Director and committee fees	$	-	$	-
Key management	Management fees and expense recoveries		16,848		15,044
		$	16,848	$	15,044

12. Segmented Information

The Company operates in one reportable segment, being the acquisition and exploration of mineral projects. All of the Company’s operations are within the mineral exploration sector in Canada.

13. Capital Management

The Company manages its capital structure and makes adjustments to it, based on the funds available to the Company, in order to support the acquisition and exploration of exploration and evaluation assets. In the management of capital, the Company includes components of shareholders’ equity. The Board of Directors does not establish quantitative return on capital criteria for management, but rather relies on the expertise of the Company’s management to sustain future development of the business. The properties in which the Company currently has an interest are in the exploration stage, as such the Company is dependent on external financing to fund activities. In order to carry out planned exploration and pay for administrative costs, the Company will spend its existing working capital and raise additional funds as needed. The Company may continue to assess new properties and seek to acquire an interest in additional properties if it feels there is sufficient geologic or economic potential and if it has or feels it can raise adequate financial resources to do so. The Company is not subject to any externally imposed capital requirements and there were no changes to management’s approach to capital manager during the period ended March 31, 2021.

14. Financial Instruments and Risk Management

The Company has classified its financial instruments as follows:

Financial instrument	IFRS 9 Classification
Cash	Fair value through profit or loss
Receivables	Financial asset measured at amortized cost
Reclamation bond	Financial asset measured at amortized cost
Loan payable	Financial liability measured at amortized cost
Accounts payable and accrued liabilities	Financial liability measured at amortized cost

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Notes to the Condensed Interim Financial Statements for the Three Months Ended March 31, 2021 and 2020 (Expressed in Canadian Dollars)

FIREWEED ZINC LTD.

14. Financial Instruments and Risk Management (cont’d…)

Fair Value

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

Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities; Level 2 – Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly; and Level 3 – Inputs that are not based on observable market data.

The fair value of the Company’s receivables, reclamation bond, loan payable and accounts payable and accrued liabilities, approximate carrying value, which is the amount recorded on the statements of financial position. The fair value of the Company’s other financial instruments, cash, under the fair value hierarchy are based on level 1 quoted prices in active markets for identical assets and liabilities.

The Company’s risk exposures and the impact on the Company’s financial instruments are summarized below:

Credit risk

Credit risk is the risk of loss associated with a counterparty’s inability to fulfill its payment obligations. Receivables of $50,406 primarily consist of Goods and Services Tax (“GST”) recoverable from the Federal Government of Canada. The Company believes its exposure to credit risk is equal to the carrying value of this balance. The Company has exposure to credit risk with respect to its cash as it places most of its cash in one financial institution in Canada. The Company believes its exposure is limited as it banks with a large Canadian institution.

Liquidity risk

The Company’s approach to managing liquidity risk is to ensure that it will have sufficient liquidity to meet liabilities when due. As at March 31, 2021, the Company had a cash balance of $1,668,839 to settle current liabilities of $231,605. The Company believes it has sufficient funds to meet its current liabilities as they become due.

The Company is dependent on obtaining regular financings in order to continue as a going concern. Despite previous success in acquiring these financings, there is no guarantee of obtaining future financings.

Interest rate risk

The interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. As at March 31, 2021, the Company is not exposed to significant interest rate risk.

Price risk

The Company is exposed to price risk with respect to commodity and equity prices. Equity price risk is defined as the potential adverse impact on the Company’s earnings due to movements in individual equity prices or general movements in the level of the stock market. Commodity price risk is defined as the potential adverse impact on profit or loss and economic value due to commodity price movements and volatilities. The Company closely monitors commodity prices of resources, individual equity movements, and the stock market to determine the appropriate course of action to be taken by the Company.

Foreign currency risk

The Company operates predominately in Canada and is not exposed to any significant foreign currency risk.

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FIREWEED ZINC LTD.

Notes to the Condensed Interim Financial Statements for the Three Months Ended March 31, 2021 and 2020 (Expressed in Canadian Dollars)

15. Commitment

On December 19, 2016, the Company granted but did not issue, 1,000,000 performance shares to each of four founders/directors for a total of 4,000,000 shares, in recognition of services to date and as incentive for continuing services in advancing the project and increasing shareholder value. Each founder/director will receive, upon request and confirmation, the following performance shares upon achievement of the following milestones:

Number of shares to be issued	Milestone
300,000	Preparation of a positive preliminary economic assessment of the Tom and Jason zinc- lead-silver deposits(or any part of thispropertythereof).
300,000	Increasing the mineral resources contained within the Tom and Jason property by at least 50% over the current stated mineral resources as stated in the 2007 Technical Report by D. Rennie (either by additional tonnage or increased total zinc+lead+silver content at similar or higher grade).
Balance(1)	Preparation of a positive Pre-Feasibility Study of the Tom and Jason deposits (or any part thereof).
Balance(1)	The effective disposition of greater than 50% of the Tom and Jason deposits or of the Company, whether by way of sale, business combination, joint venture or other similar form of transaction,demonstratinga value of at least$10,000,000.

(1) Balance of the 1,000,000 performance shares which have not been previously issued will be issued upon the achievement of either one or the other of these two milestones.

Under the terms of the performance shares agreement above, the Company issued 300,000 performance shares to a former director on May 14, 2020, following his resignation in April 2020 .

16. Subsequent Events

Subsequent to the quarter ended March 31, 2021, the following events have taken place:

• On May 20, 2021, the Company closed a non-brokered $5,000,000 private placement financing with one strategic investor for 6,250,000 common shares at $0.80 per share.

• A total of 57,136 warrants were exercised for gross proceeds of $23,604.

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