First Andes Silver Ltd. — Interim / Quarterly Report 2020

Nov 25, 2020

Montage Gold Corp

Condensed Interim Consolidated Financial Statements For the three and nine months ended September 30, 2020 and 2019

Montage Gold Corp. Condensed Interim Consolidated Statements of Financial Position (All amounts expressed in Canadian Dollars, unless otherwise indicated)

ASSETS Current assets Cash and cash equivalents Receivables and other assets (Note 3) Equipment (Note 4) Mineral properties (Note 5) Other assets LIABILITIES Current liabilities Accounts payable and accrued liabilities EQUITY Equity attributed to common shareholders Share capital Contributed surplus Accumulated other comprehensive income Deficit Non-controlling interest (Note 12)		September 30, 2020 $ 4,689,625 553,480 5,243,105 411,295 12,591,137 23,020 $ 18,268,557 $ 1,167,027 32,783,085 584,360 (472,834) (15,490,188) 17,404,423 (302,893) 17,101,530 $ 18,268,557	December 31, 2019
			$ 9,590,300 116,738
			9,707,038 468,411 11,734,994 24,460
			$ 21,934,903
			$ 863,400 32,783,085 148,820 (1,201,459) (10,687,123)
			21,043,323 28,180
			21,071,503
			$ 21,934,903

Subsequent Events (note 14)

Approved by the Board of Directors

(signed) “XXXXX” (signed) “XXXXX” Director Director

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

Montage Gold Corp Condensed Interim Consolidated Statements of Loss and Comprehensive Loss (All amounts expressed in Canadian Dollars, unless otherwise indicated) (Unaudited)

Administration costs (Note 8) Exploration and project investigation costs (Note 9) Foreign exchange (gain) / loss Interest income Net loss for the period Net loss for the period attributed to: Common shareholders of the Company Non-controlling interest (Note 12) Net loss for the period Items that may be subsequently reclassified to net loss: Loss (gain) on translation to presentation currency Comprehensive loss for the period Comprehensive loss for the period attributed to: Common shareholders of the Company Non-controlling interest (Note 12) Basic and diluted loss per common share Basic and diluted weighted average number of shares outstanding	Three months ended September 30, 2020 2019	Three months ended September 30, 2020 2019	Nine months ended September 30, 2020 2019 $ 1,577,604 $ 1,166,189 3,795,613 1,604,716 (137,729) 3,285 (101,350) (20,718)
	$ 823,652 1,550,981 (116,393) (28,262)	$ 585,979 468,415 12,741 (20,719) $ 1,046,416 1,018,733 27,683 $ 1,046,416 $ 1,046,417 (7,326) $ 1,039,091 $ 1,011,408 27,683 $ 1,039,091 $ 0.02 47,958,660
	$ 2,229,978		$ 5,134,138 $ 2,753,471
	2,189,266 40,712		4,803,065 2,725,788 331,073 27,683
	$ 2,229,978		$ 5,134,138 $ 2,753,471
	$ 2,229,978 (149,081)		$ 5,134,138 $ 2,753,471 (728,625) -
	$ 2,080,897		$ 4,405,513 $ 2,753,471
	$ 1,722,045 358,852		$ 4,074,439 2,725,788 331,074 27,683
	$ 2,080,897		$ 4,405,513 $ 2,753,471
	$0.03		$0.07 $ 0.07
	73,476,374		73,476,374 38,041,014

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

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Montage Gold Corp Condensed Interim Consolidated Statements of Cash Flows (All amounts expressed in Canadian Dollars, unless otherwise indicated) (Unaudited)

Cash flows for operating activities Net loss for the period Add non-cash items Depreciation of equipment (Note 5) Stock-based compensation expense (Note 9) Changes in non-cash working capital items Receivables and other assets Accounts payable and accrued liabilities Cash flows from investing activities Purchase of equipment Cash acquired through Avant Minerals acquisition Cash flows from financing activities Proceeds from Private placement Private placement transaction costs Funding provided by Orca Gold Inc Foreign exchange on cash and cash equivalents Decrease in cash and cash equivalents Cash and cash equivalents, beginning of period Cash and cash equivalents, end of period Supplemental information Interest received	Nine months ended September 30, 2020 2019
	$ (5,134,138) $ (2,753,471) 100,492 19,328 435,540 172,942
	(4,598,106) (2,561,201) (415,755) 29,807 171,511 318,348
	(4,842,350) (2,213,046)
	- (143,626) - 3,754,546
	- 3,610,920
	- 8,033,085 - (357,791) - 1,802,023
	- 9,477,317
	(58,325) 39,677
	(4,900,675) 10,914,868 9,590,300 201,971
	$ 4,689,625 $ 11,116,839
	$ 73,088 $ -

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

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Montage Gold Corp Condensed Interim Consolidated Statements of Changes in Equity For the three and nine months ended September 30, 2020 and 2019 (All amounts expressed in Canadian Dollars, unless otherwise indicated) (Unaudited)

Equity Attributed to Common Shareholders

	Number of shares issued and outstanding Share Capital Contributed Surplus Other Capital Reserves Deficit Accumulated Other Comprehensive Income Total Non- Controlling Interest **Total **
Balance January 1, 2020 Net loss and other comprehensive loss Stock based compensation expense (Note 9) Gain (loss) on translation to presentation currency	73,476,374 $ 32,783,085 $ 148,820 - $ (10,687,123) $ (1,201,459) $ 21,043,323 $ 28,180 $ 21,071,503 - - - - (4,803,065) - (4,803,065) (331,073) (5,134,138) - - 435,540 - - - 435,540 - 435,540 - - - - - 728,625 728,625 728,625
Balance September 30, 2020	73,476,374 $ 32,783,085 $ 584,360 - $ (15,490,188) $ (472,834) $ 17,404,423 $ (302,893) $ 17,101,530
Balance January 1, 2019 Net loss and other comprehensive loss Funding and expenses paid by Orca Gold Shares issued to acquire Orca Gold assets Montage acquisition of Orca Gold Inc assets Shares issued pursuant to Avant acquisition Proceeds from private placement Share based compensation	- - - $ 19,772,176 $ (12,833,366) $ (1,257,439) $ 5,681,371 - $ 5,681,371 - - - - (2,696,082) 15,312 (2,680,770) (27,683) (2,708,453) - - - 1,802,023 - 1,802,023 1,802,023 33,000,000 14,850,000 - (14,850,000) - - - - - - - (6,878,841) 6,878,841 - - - 22,000,000 9,900,000 - - - 9,900,000 301,514 10,201,514 18,476,374 8,033,085 - - - 8,033,085 - 8,033,085 - - 18,300 154,642 - 172,942 - 172,942
Balance September 30, 2019	73,476,374 $32,783,085 18,300 - $ (8,650,607) $ (1,242,127) $ 22,908,651 273,831 $ 23,182,482

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

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Montage Gold Corp Notes to Condensed Interim Consolidated Financial Statements For the three and nine months ended September 30, 2020 and 2019 (All amounts expressed in Canadian Dollars, unless otherwise indicated) (Unaudited)

1. NATURE OF OPERATIONS

Montage Gold Corp. (“Montage” or the “Company”) is a resource company engaged in the acquisition and exploration of mineral properties in Africa and has not yet determined whether these properties contain mineral reserves that are economically recoverable. The continued operations of Montage and the recoverability of the amounts shown for mineral properties is dependent upon the existence of economically recoverable reserves, the ability of Montage to obtain necessary financing to complete the exploration and development of such properties and upon future profitable production from or disposition of such properties

On October 23, 2020, Montage completed its initial public offering of an aggregate of 27,272,728 common shares at a price of $1.10 per share for total proceeds of $30 million and commenced trading on the TSXV (“MAU”) (see subsequent event note 14).

On October 30, 2020 the underwriters fully exercised their over-allotment option to acquire an additional 4,090,909 shares at the offering price resulting in additional aggregate gross proceeds of approximately $4.5 million.

Montage was incorporated as a wholly owned subsidiary of Orca Gold Inc. (“Orca”) under the Business Corporations Act (British Columbia) on July 4, 2019 and its registered office is located at Suite 2000, 885 West Georgia Street, Vancouver, British Columbia, Canada, V6C3E8.

2. BASIS OF PRESENTATION

These condensed interim consolidated 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. As such, certain disclosures included in the annual financial statements prepared in accordance with IFRS have been condensed or omitted. Accordingly, these condensed interim consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2019. In preparation of these condensed interim consolidated financial statements, the Company has consistently applied the same accounting policies as disclosed in Note 4 to the audited consolidated financial statements for the year ended December 31, 2019.

The condensed interim financial statements for the three and nine months ended September 30, 2019 have been prepared on a continuity of interest basis of accounting. Prior to the July 13, 2019 acquisition of assets from Orca, the assets, liabilities, results of operations and cash flows of Montage are presented on a ‘carveout’ basis from the consolidated financial statements and accounting records of Orca, in accordance with the financial reporting framework specified in subsection 3.11(6) of National Instrument 52-107, Acceptable Accounting Principles and Auditing Standards, for carve-out financial statements.

The preparation of the September 30, 2019 condensed interim financial statements pursuant to the carveout basis of accounting required the identification and allocation of pre-acquisition assets, liabilities, results from operations and cash flows of Orca, which are deemed to be attributable to the Company. In performing the allocation, management was required to make certain judgments, including that the use of relative levels of exploration activity during any given period is a reasonable basis to allocate common expenses.

These condensed interim financial statements were authorized for issuance by the Board of Directors of the Company on November 25, 2020.

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Montage Gold Corp Notes to Condensed Interim Consolidated Financial Statements For the three and nine months ended September 30, 2020 and 2019 (All amounts expressed in Canadian Dollars, unless otherwise indicated) (Unaudited)

3. RECEIVABLES AND OTHER ASSETS

RECEIVABLES AND OTHER ASSETS
	September 30,	December 31,
	2020	2019
Prepaid expenses	501,133	57,706
Other receivables	52,347	59,032
Total receivables and other assets	553,480	116,738

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Montage Gold Corp Notes to Condensed Interim Consolidated Financial Statements For the three and nine months ended September 30, 2020 and 2019 (All amounts expressed in Canadian Dollars, unless otherwise indicated) (Unaudited)

4. EQUIPMENT

. EQUIPMENT
			Vehicles and	Field and
	Computer	Office Furniture and	Mobile	Camp
Cost	Equipment	Equipment	Equipment	Equipment	Total
As at January 1, 2019	3,842	357	-	64,749	68,948
Additions	8,783	1,982	16,375	134,302	161,442
Avant acquisition	8,979	2,581	256,593	344,327	612,480
Effects of foreign exchange
on translation to presentation
currency	(1,267)	(58)	4,053	2,478	5,206
As at December 31, 2019	20,337	4,862	277,021	545,856	848,076
Effects of foreign exchange
on translation to presentation
currency	4,309	167	20,211	28,867	53,554
As at September 30, 2020	24,646	5,029	297,232	574,723	901,630
Accumulated depreciation
As at January 1, 2019	(1,661)	(15)	-	(3,642)	(5,318)
Depreciation	(4,096)	(1,172)	(20,939)	(22,186)	(48,393)
Burkina Faso impairment	(8,979)	(2,581)	-	(318,953)	(330,513)
Effects of foreign exchange
on translation to presentation
currency	1,180	959	3,774	(1,354)	4,559
As at December 31, 2019	(13,556)	(2,809)	(17,165)	(346,135)	(379,665)
Depreciation	(5,232)	(618)	(72,141)	(22,501)	(100,492)
Effects of foreign exchange
on translation to presentation
currency	(491)	266	(3,420)	(6,533)	(10,178)
As at September 30, 2020	(19,279)	(3,161)	(92,726)	(375,169)	(490,335)
Net book amount
As at December 31, 2019	6,781	2,053	259,856	199,721	468,411
As at September 30, 2020	5,367	1,868	204,506	199,554	411,295

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Montage Gold Corp Notes to Condensed Interim Consolidated Financial Statements For the three and nine months ended September 30, 2020 and 2019 (All amounts expressed in Canadian Dollars, unless otherwise indicated) (Unaudited)

5. MINERAL PROPERTIES

MINERAL PROPERTIES
	Côte
Cost	d’Ivoire
As at January 1, 2019	5,422,916
Avant acquisition	6,192,590
Effects of foreign exchange on translation to presentation currency	119,488
As at December 31, 2019	11,734,994
Effects of foreign exchange on translation to presentation currency	856,143
As at September 30, 2020	12,591,137

On August 27 2019 Montage acquired from Avant Minerals Inc (“Avant”) permits in Côte d’Ivoire and Burkina Faso with a mineral property valuation of $6.2 million. The mineral properties property valuation of $6.2 million is for the permits in Côte d’Ivoire. There was no value attributed to the Burkina Faso permits (see subsequent event note 14)

6. SHARE CAPITAL

The Company has authorized an unlimited number of voting common shares without par value.

The Company’s issued and outstanding share purchase warrants and stock options were not included in the calculation of diluted earnings per share as they are anti-dilutive for the three and nine months ended September 30, 2020.

7. STOCK OPTIONS

Stock option plan

Montage has a stock option plan in which common shares of Montage have been made available for Montage to grant incentive stock options to certain directors, officers, employees and consultants of Montage. Under this stock option plan, the total number of options outstanding at any given point in time cannot exceed 10% of Montage’s issued and outstanding common shares. Vesting and terms of the option agreements are at the discretion of the Montage Board of Directors.

Stock options outstanding

On September 17, 2019 Montage granted an aggregate 5,150,000 incentive stock options to certain officers, directors and other eligible officers of the Company. The options are exercisable, subject to vesting provisions over a period of three years at a price of $0.45 per share.

For the three and nine months to September 30, 2020, share based compensation as presented in the consolidated statement of comprehensive loss was $0.1 million (2019: $0.1 million) and $0.4 million (2019: $0.1 million), respectively. Share based compensation includes $0.1 million relating to the share options granted and vested as allocated from Orca prior to the Montage transaction pursuant to the continuity of interest accounting for the nine months to September 30, 2019.

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Montage Gold Corp Notes to Condensed Interim Consolidated Financial Statements For the three and nine months ended September 30, 2020 and 2019 (All amounts expressed in Canadian Dollars, unless otherwise indicated) (Unaudited)

Movements in the number of share options outstanding and their related weighted average exercise prices are as follows:

s follows:
Number of shares (In thousands)	Weighted average exercise price CDN$
Outstanding at January 1, 2019 - Granted 5,150 Outstanding at December 31, 2019 5,150 Granted 100 Outstanding atSeptember30, 2020 5,250	- $0.45
	$0.45
	$0.55
	$0.45

The following summarizes information about the stock options outstanding and exercisable at September 30, 2020:

Exercise prices (CDN$) $0.45 $0.55	Outstanding options Number of options outstanding (In thousands) Weighted average remaining contractual life (Years) Weighted average exercise price (CDN$) 5,150 1.96 $0.45 100 2.96 $0.55 5,250 1.98 $0.45	Exercisable options
		Number of options exercisable (In thousands) Weighted average remaining contractual life (Years)
		1,717 1.96 - 2.96 1,717 1.98

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Montage Gold Corp Notes to Condensed Interim Consolidated Financial Statements For the three and nine months ended September 30, 2020 and 2019 (All amounts expressed in Canadian Dollars, unless otherwise indicated) (Unaudited)

8. ADMINISTRATION COSTS

Three months ended		Nine months ended
September 30, 2020 2019		September 30,
		2020 2019
Management and consulting fees 176,500 308,671 Office and administration 43,812 50,234 Professional fees 465,689 23,462 Salaries and benefits 7,362 10,549 Stock based compensation expense 93,148 116,612 Travel andpromotion 37,141 76,451
		460,086 528,478
		102,523 134,519
		574,032 93,641
		22,334 73,097
		294,100 172,942
		124,529 163,512
Total administration costs $823,652 $585,979		$ 1,577,604 $ 1,166,189

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Montage Gold Corp Notes to Condensed Interim Consolidated Financial Statements For the three and nine months ended September 30, 2020 and 2019 (All amounts expressed in Canadian Dollars, unless otherwise indicated) (Unaudited)

9. EXPLORATION AND PROJECT INVESTIGATION COSTS

Three months ended September 30,	Côte d’Ivoire
		Burkina Faso Total
2020 2019	Depreciation 33,644 Drilling 986,924 Exploration support and administration 116,283 Field operation and consumables 41,129 Geological consulting 8,243 Permitting and licensing fees 1,131 Salaries and benefits 153,862 Sampling, geological and other evaluation costs 114,178 Stock-based compensation expense 13,739 Travel and accommodation 11,694	- 33,644
		- 986,924
		6,818 123,101
		- 41,129
		3,286 11,529
		32,685 33,816
		20,035 173,897
		- 114,178
		- 13,739
		7,330 19,024
	Total exploration and project investigation costs 1,480,827	70,154 1,550,981
	Depreciation 6,393 Drilling 44,185 Exploration support and administration 42,713 Field operation and consumables 82,538 Geological consulting 11,016 Permitting and licensing fees 9,735 Salaries and benefits 171,574 Sampling, geological and other evaluation costs 25,986 Travel and accommodation 17,794
		5,124 11,517
		- 44,185
		15,263 57,976
		656 83,194
		- 11,016 - 9,735 33,720 205,294 453 26,439 1,265 19,059
	Total exploration and project investigation costs 411,934	56,481 468,415

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Montage Gold Corp Notes to Condensed Interim Consolidated Financial Statements For the three and nine months ended September 30, 2020 and 2019 (All amounts expressed in Canadian Dollars, unless otherwise indicated) (Unaudited)

Nine months ended September 30,	Côte d’Ivoire Burkina Faso Total
2020 2019	Depreciation 100,631 - 100,631 Drilling 1,739,152 - 1,739,152 Exploration support and administration 272,747 113,022 385,769 Field operation and consumables 121,419 - 121,419 Geological consulting 18,808 23,449 42,257 Permitting and licensing fees 13,003 37,083 50,086 Salaries and benefits 541,744 467,615 1,009,359 Sampling, geological and other evaluation costs 164,744 - 164,744 Stock-based compensation expense 141,441 - 141,441 Travel and accommodation 17,854 22,901 40,755
	Total exploration and project investigation costs 3,131,543 664,070 3,795,613
	Depreciation 13,942 5,124 19,066 Drilling 130,774 - 130,774 Exploration support and administration 90,937 15,263 106,200 Field operation and consumables 212,555 656 213,211 Geological consulting 33,336 - 33,336 Permitting and licensing fees 145,890 - 145,890 Salaries and benefits 555,051 33,720 588,771 Sampling, geological and other evaluation costs 299,170 453 299,623 Travel and accommodation 66,580 1,265 67,845
	Total exploration and project investigation costs 1,548,235 56,481 1,604,716

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Montage Gold Corp Notes to Condensed Interim Consolidated Financial Statements For the three and nine months ended September 30, 2020 and 2019 (All amounts expressed in Canadian Dollars, unless otherwise indicated) (Unaudited)

10. RELATED PARTY TRANSACTIONS

The related party with which the Company has transacted during the three and nine months ended September 30, 2020, was Geodex Consultants Ltd. (“Geodex”). Geodex is related by virtue of their proprietor being a director and officer of the Company. Related party transactions occur and are recorded at the amounts agreed between the parties.

a) Services received from related parties

Three months ended September 30, Related party 2020 2019 Geological consulting Geodex 6,173 4,632 Total related party costs 6,173 4,632	Nine months ended September 30, 2020 2019
	17,993 22,370
	17,993 22,370

The Company did not have any amounts due to related parties as at September 30, 2020.

Key management compensation

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Company, directly or indirectly. Key management personnel include the Company’s directors and executive officers.

The remuneration of key management personnel is as follows:

Three months ended September 30, 2020 2019 Salaries and management fees 109,427 129,996 Short term benefits 4,039 2,090 Director fees 33,857 31,661 Stock-based compensation 48,606 103,478 Total key management compensation 195,929 267,225	Nine months ended September 30, 2020 2019 403,227 297,955 11,490 7,603 100,837 57,312 218,487 129,861 734,041 492,731

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Montage Gold Corp Notes to Condensed Interim Consolidated Financial Statements For the three and nine months ended September 30, 2020 and 2019 (All amounts expressed in Canadian Dollars, unless otherwise indicated) (Unaudited)

11. SEGMENT INFORMATION

The Company is principally engaged in the acquisition, exploration and development of mineral properties in Africa. The information regarding mineral properties and exploration and project investigation costs presented in Notes 5 and 9, respectively, represent the manner in which management reviews its business performance. The Company’s mineral properties and exploration and project investigation costs were located in Côte d’Ivoire and Burkina Faso as at September 30, 2020. On November 3, 2020, the Company completed its sale of its interests in Burkina Faso (see subsequent event note 14). The Company owns four permits and nine permit applications in Côte d’Ivoire. Materially all of the Company’s administrative costs are incurred by Montage’s Canadian legal entities, where materially all of the Company’s cash is held in the normal course of business until it is required to be deployed to the Company’s operating subsidiaries in support of ongoing and planned work programs.

			Burkina	Corporate &	Total
		Côte d’Ivoire	Faso	Other
September 30,	Current assets	1,075,848	13,045	4,154,212	5,243,105
2020	Equipment	411,295	-		411,295
	Mineral
	properties	12,591,137	-		12,591,137
	Other assets	23,020		-	23,020
	Total Assets	14,101,300	13,045	4,154,212	18,268,557
	Current
	liabilities	602,193	1,756	563,078	1,167,027
December 31,	Current assets	102,442	119,419	9,485,177	9,707,038
2019	Equipment	468,411	-	-	468,411
	Mineral		-
	properties	11,734,994		-	11,734,994
	Other assets	24,460			24,460
	Total Assets	12,330,307	119,419	9,485,177	21,934,903
	Current
	liabilities	679,623	15,267	168,510	863,400

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Montage Gold Corp Notes to Condensed Interim Consolidated Financial Statements For the three and nine months ended September 30, 2020 and 2019 (All amounts expressed in Canadian Dollars, unless otherwise indicated) (Unaudited)

	Three months ended September 30, Côte d’Ivoire Burkina Faso	Corporate & Other Total - 1,550,981 678,997 678,997 678,997 2,229,978 - 468,415 578,001 578,001 578,001 1,046,416
	2020 Exploration and project investigation 1,480,827 70,154
	General administration and other items - -
	Net loss 1,480,827 70,154
	2019 Exploration and project investigation 411,934 56,481
	General administration and other items - -
	Net loss 411,934 56,481
	Nine months ended September 30, Côte d’Ivoire Burkina Faso	Corporate & Other Total
	2020 Exploration and project investigation 3,131,543 664,070 - 3,795,613
	General administration and other items - - 1,338,525 1,338,525
	Net loss 3,131,543 664,070 1,338,525 5,134,138
	2019 Exploration and project investigation 1,548,235 56,481 - 1,604,716
	General administration and other items - - 1,148,755 1,148,755
	Net loss 1,548,235 56,481 1,148,755 2,753,471

12. NON-CONTROLLING INTEREST

Following the acquisition of Avant, Montage had a 51% equity interest in its subsidiaries which hold the Burkina Faso properties, with Predictive Discovery Limited owning 49%. The Predictive Discovery Limited ownership is reported as non-controlling interest. The Company did not attribute any value to the mineral properties acquired in Burkina Faso and impaired its fixed assets in Burkina Faso at December 31, 2019,

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Montage Gold Corp Notes to Condensed Interim Consolidated Financial Statements For the three and nine months ended September 30, 2020 and 2019 (All amounts expressed in Canadian Dollars, unless otherwise indicated) (Unaudited)

including site infrastructure, containers and equipment. The impairments reflected the deteriorating conditions in the country and the current operating conditions at its permit areas in Burkina Faso. On November 3, 2020, the Company completed its sale of its interests in Burkina Faso (see subsequent event note 14).

13. FINANCIAL INSTRUMENTS

The Company’s financial instruments consist of cash and cash equivalents and accounts payable. The carrying amounts reported in the consolidated statements of financial position for cash and cash equivalents, other receivables, and accounts payable approximate their fair value because of the immediate or shortterm maturity of these financial instruments.

The Company’s financial instruments are exposed to certain financial risks, including currency, credit and liquidity risk.

a) Currency risk

Foreign currency risk can arise when the Company or its subsidiaries transact in currencies other than their functional currencies or have net financial assets or liabilities which are denominated in currencies other than their respective functional currencies.

As at September 30, 2020, the Company did not have any material foreign currency risk exposure at its operations in Cote d’Ivoire or Burkina Faso.

b) Credit risk

Credit risks associated with cash is minimal as the Company deposits the majority of its cash with a large Canadian financial institution that has a strong investment grade rating.

c) 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’s financial liabilities are comprised of accounts payable and accrued liabilities. The Company frequently assesses its liquidity position by reviewing the timing of amounts due and the Company’s current cash flow position to meet its obligations. The Company manages its liquidity risk by maintaining sufficient cash and cash equivalents balances to meet its anticipated operational needs. The Company’s accounts payable and accrued liabilities arose as a result of exploration and development of its exploration and evaluation assets and other corporate expenses.

14. SUBSEQUENT EVENTS

On October 23, 2020, Montage completed its initial public offering of an aggregate of 27,272,728 common shares at a price of $1.10 per share for total proceeds of $30 million and commenced trading on the TSXV (“MAU”). Montage had granted the underwriters an over-allotment option exercisable in whole or in part at the sole discretion for a period of 30 days following the closing of the offering, to purchase up to an additional 15% of the common shares at the offering price issued as part of Montage’s initial public offering.

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Montage Gold Corp Notes to Condensed Interim Consolidated Financial Statements For the three and nine months ended September 30, 2020 and 2019 (All amounts expressed in Canadian Dollars, unless otherwise indicated) (Unaudited)

On October 30, 2020 the underwriters fully exercised their over-allotment option to acquire an additional 4,090,909 shares at the offering price resulting in additional aggregate gross proceeds of approximately $4.5 million.

On November 3, 2020, the Company completed the sale of its interests in Burkina Faso, which amounted to a 51% joint-venture stake in a series of companies holding a collection of exploration permits located in the eastern region of the country. The transaction was completed as a sale agreement of the Company’s holdings in a joint-venture company. The Company received consideration of approximately A$240,000 through the issuance of 4,028,477 common shares of Predictive Discovery Limited. With the completion of this sale, the Company no longer holds any property interests in Burkina Faso.

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