Freeman Gold Corp. — Audit Report / Information 2020

Feb 25, 2021

FREEMAN GOLD CORP. (Formerly Lodge Resources Inc.)

CONSOLIDATED FINANCIAL STATEMENTS

For the Year ended November 30, 2020

(Expressed in Canadian dollars)

==> picture [102 x 29] intentionally omitted <==

Crowe MacKay LLP

1100 - 1177 West Hastings St. Vancouver, BC V6E 4T5 Main +1 (604) 687-4511 Fax +1 (604) 687-5805 www.crowemackay.ca

Independent Auditor's Report

To the Shareholders of Freeman Gold Corp. (formerly Lodge Resources Inc.)

Opinion

We have audited the consolidated financial statements of Freeman Gold Corp. (formerly Lodge Resources Inc.) ("the Group"), which comprise the consolidated statement of financial position as at November 30, 2020 and November 30, 2019 and the consolidated statements of loss and comprehensive loss, changes in shareholders' equity and cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at November 30, 2020 and November 30, 2019, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with International Financial Reporting Standards.

Basis for Opinion

We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Material Uncertainty Related to Going Concern

We draw attention to Note 1 to the consolidated financial statements which describes the material uncertainty that may cast significant doubt on the Group's ability to continue as a going concern. Our opinion is not modified in respect of this matter.

Other Information

Management is responsible for the other information. The other information comprises:

• Management's Discussion and Analysis

Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

We obtained the other information prior to the date of this auditor's report. If, based on the work we have performed on this other information, we conclude that there is a material misstatement of this other information, we are required to report that fact in this auditor's report. We have nothing to report in this regard.

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with International Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Group’s financial reporting process.

Auditor's Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Group to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are

responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

The engagement partner on the audit resulting in this independent auditor's report is Pejman Mahlooji.

"Crowe MacKay LLP"

Chartered Professional Accountants Vancouver, Canada February 24, 2021

FREEMAN GOLD CORP. (Formerly Lodge Resources Inc.) CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Expressed in Canadian dollars)

		November 30,	November 30,
	Note	2020	2019
		$	$
ASSETS
Current assets
Cash		5,066,930	541
Receivables	4	108,328	-
Prepaid expenses and deposits	5	121,287	-
Total current assets		5,296,545	541
Non-current assets
Advances for exploration and evaluation activities		40,161	-
Property, plant and equipment	6	238,295	-
Exploration and evaluation assets	7	8,604,289	481,029
		8,882,745	481,029
TOTAL ASSETS		14,179,290	481,570
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities	8	910,792	74,795
Due to former shareholders	9	-	10,000
Total Liabilities		910,792	84,795
SHAREHOLDERS' EQUITY
Share capital	10	21,384,559	432,620
Reserves	10	3,168,691	-
Deficit		(11,284,752)	(35,845)
Total Shareholders' Equity		13,268,498	396,775
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY		14,179,290	481,570

Nature of operations and going concern (Note 1) Subsequent events (Note 14)

Approved by the Board of Directors on February 24, 2021:

“Simon Marcotte” “Ron Stewart” Simon Marcotte, Director Ron Stewart, Director

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

FREEMAN GOLD CORP. (Formerly Lodge Resources Inc.) CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS (Expressed in Canadian dollars, except number of shares)

		Year ended	November 30,
	Note	2020	2019
		$	$
EXPENSES
Bank charges		3,095	178
Consulting	9	670,196	-
General and administrative		25,285	-
Listing expense	3	6,887,417	-
Marketing fees		1,303,963	-
Professional fees		250,060	5,440
Regulatory and filing fees		75,571	-
Share-based compensation	9,10	1,863,721	-
		(11,079,308)	(5,618)
Other items
Impairment of exploration and evaluation assets	7	(169,599)	-
Sale of exploration and evaluation options	7	-	63,169
Loss on sale of marketable securities	7	-	(60,283)
		(169,599)	2,886
Net and comprehensive loss		(11,248,907)	(2,732)
Basic and diluted loss per common share		(0.21)	(0.00)
Weighted average number of common shares outstanding		53,532,923	11,368,329

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

FREEMAN GOLD CORP. (Formerly Lodge Resources Inc.) CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Expressed in Canadian dollars, except number of shares)

Note	Number of shares outstanding Amount Reserves Deficit Total shareholders' equity Share Capital
Balance at November 30, 2018 Issuance of common shares pursuant to private placements 10 Share issuance costs 10 Net loss for theyear	$ $ $ $ 10,500,000 60,000-(33,113) 26,887 5,240,000 389,000 - - 389,000 - (16,380) - - (16,380) - - -(2,732) (2,732)
Balance at November 30, 2019 Issuance of common shares pursuant to private placement 10 Share-based compensation prior to RTO transaction 10 Exercise of stock options prior to RTO transaction 10 Recognition of equity on RTO transaction 10 Finder's shares issued on RTO transaction 10 Elimination of 113BC shares on RTO 10 Replacement of shares of 113BC on RTO 10 Issuance of common shares and warrants pursuant to private placement 10 Issuance of common shares pursuant to private placement 10 Share issuance costs 10 Issuance of finders' warrants 10 Issuance of common shares for acquisition of property rights 10 Finder's shares issued for acquisition of property rights 10 Exercise of stock options 10 Exercise of warrants 10 Share-based compensation 10 Net loss for theyear	15,740,000 432,620 - (35,845) 396,775 15,000,000 750,000 - - 750,000 - - 112,000 - 112,000 3,000,000 262,000 (112,000) - 150,000 14,257,770 5,988,263 504,435 - 6,492,698 3,500,000 1,470,000 - - 1,470,000 (33,740,000) - - - - 33,740,000 - - - - 4,268,911 1,049,652 444,467 - 1,494,119 20,690,000 10,345,000 - - 10,345,000 - (954,800) - - (954,800) - (554,336) 554,336 - - 4,410,273 2,323,342 - - 2,323,342 260,000 135,200 - - 135,200 200,000 95,346 (75,346) - 20,000 73,500 42,272 (10,922) - 31,350 - - 1,751,721 - 1,751,721 - - -(11,248,907) (11,248,907)
Balance at November 30, 2020	81,400,454 21,384,559 3,168,691(11,284,752) 13,268,498

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

FREEMAN GOLD CORP. (Formerly Lodge Resources Inc.) CONSOLIDATED STATEMENTS OF CASH FLOWS (Expressed in Canadian dollars)

	Year ended	November 30,
	2020	2019
	$	$
CASH FLOWS FROM OPERATING ACTIVITIES
Loss for the year	(11,248,907)	(2,732)
Items not affecting cash:
Listing expense	6,887,417	-
Share-based compensation	1,863,721	-
Impairment of exploration and evaluation assets	169,599	-
Loss on sale of marketable securities	-	60,283
Sale of exploration and evaluation options	-	(63,169)
Changes in non-cash working capital items:
Receivables	(95,746)	-
Prepaid expenses and deposits	162,856	-
Due to former shareholders	(10,000)	10,000
Accounts payable and accrued liabilities	(16,475)	10,109
Cash (used in) provided by operating activities	(2,287,535)	14,491
CASH FLOWS FROM INVESTING ACTIVITIES
Cash acquired on RTO transaction	199,821	-
Transaction costs incurred in connection with RTO	(228,101)	-
Expenditures for exploration and evaluation assets	(5,193,008)	(447,876)
Advances for exploration and evaluation activities	(40,161)	-
Proceeds from sale of marketable securities	-	52,217
Purchase ofpropertyand equipment	(254,296)	-
Cash used in investing activities	(5,515,745)	(395,659)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from private placements	12,589,119	389,000
Share issuance costs	(954,800)	(16,380)
Repayment of advances	(266,000)	-
Proceeds from exercise of options	170,000	-
Proceeds from exercise of warrants	31,350	-
Advance received on RTO transaction	1,300,000	-
Cash provided by financing activities	12,869,669	372,620
Change in cash during the year	5,066,389	(8,548)
Cash, beginning of year	541	9,089
Cash, end of year	5,066,930	541
Supplemental Cash Flow Information:
Shares issued in connection with RTO	7,458,263	-
Shares issued for acquisition of property rights and claims	2,458,542	-
Exploration expenditures included in accountspayable	570,100	33,153

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

FREEMAN GOLD CORP. (Formerly Lodge Resources Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS November 30, 2020 and 2019 (Expressed in Canadian dollars, unless otherwise noted)

1. NATURE OF OPERATIONS AND GOING CONCERN UNCERTAINTY

Freeman Gold Corp. (formerly Lodge Resources Inc.) (the "Company") was incorporated in the Province of British Columbia on October 24, 2018, under the Business Corporations Act of British Columbia. The Company is in the business of exploring exploration and evaluation assets. The Company's registered office is Suite 1500 – 1055 W. Georgia Street, Vancouver BC V6E 4N7 and its business office is located at 1570 – 505 Burrard Street, Vancouver, BC V7X 1M5. The Company’s shares are listed on the Canadian Securities Exchange (“CSE”) under the symbol “FMAN”.

On April 16, 2020, (the “Closing Date”), the Company completed a share exchange transaction (the “RTO”) with 1132144 B.C. Ltd. (“113BC”), the parent company of Lower 48 Resources Inc. (“Lower 48 BC”) and Lower 48 Resources (Idaho) LLC (“Lower 48”), whereby the Company acquired all of the issued and outstanding common shares of 113BC through the issuance of 33,740,000 common shares of the Company, subject to escrow terms (see Note 10) to 113BC’s shareholders. Additionally, the Company issued 3,500,000 common shares as finder fee shares to an arm’s length finder that facilitated the RTO. Prior to the Closing Date, 14,257,770 common shares of the Company were outstanding. Following the Closing Date, 51,497,770 common shares of the Company were outstanding, with 66% of the Company’s shares held by shareholders of 113BC.

Management determined that the RTO transaction constituted a reverse acquisition for accounting purposes whereby 113BC acquired the Company. For accounting purposes, 113BC is treated as the accounting acquirer (legal subsidiary), and the Company is treated as the accounting acquiree (legal parent) in these consolidated financial statements. As 113BC was deemed to be the acquirer for accounting purposes, its assets, liabilities and operations since incorporation are included in these financial statements at their historical carrying values. The Company’s results of operations are included from the Closing Date. The comparative figures are those of 113BC prior to the reverse acquisition. See Note 3.

These consolidated financial statements have been prepared on a going concern basis which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. As at November 30, 2020, the Company is not able to finance day to day activities through operations and has an accumulated deficit of $11,284,752. The continuing operations of the Company are dependent upon its ability to develop a viable business and to attain profitable operations and generate funds therefrom. This indicates the existence of a material uncertainty that may cast significant doubt about the Company's ability to continue as a going concern. Management intends to finance operating costs with loans from directors and companies controlled by directors and/or issuance of common shares. If the Company is unable to continue as a going concern, the net realizable value of its assets may be materially less than the amounts on its statement of financial position.

On March 11, 2020, the World Health Organization declared the global outbreak of a novel coronavirus identified as “COVID-19” a global pandemic. In order to combat the spread of COVID-19, governments worldwide have enacted emergency measures including travel bans, legally enforced or self-imposed quarantine periods, social distancing and business and organization closures. These measures have caused material disruptions to businesses, governments and other organizations resulting in an economic slowdown and increased volatility in national and global equity and commodity markets. Central banks and governments, including Canadian federal and provincial governments, have reacted with significant monetary and fiscal interventions designed to stabilize economic conditions. The duration and impact of the COVID-19 outbreak is unknown at this time, as is the efficacy of any interventions. It is not possible to reliably estimate the length and severity of these developments and the impact on the financial results and condition of the Company and its operations in future periods.

9

FREEMAN GOLD CORP. (Formerly Lodge Resources Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS November 30, 2020 and 2019 (Expressed in Canadian dollars, unless otherwise noted)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a) Statement of compliance

The consolidated financial statements of the Company have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") and interpretations of the International Financial Reporting Interpretations Committee ("IFRIC").

These financial statements were approved by the Board of Directors and authorized for issue on February 24, 2021.

b) Basis of presentation

These financial statements have been prepared using the historical cost basis, except for certain financial assets and liabilities which are measured at fair value, as specified by IFRS for each type of asset, liability, income and expense as set out in the accounting policies below.

c) Functional and presentation currency

The presentation and functional currency of the Company and its subsidiaries is considered to be the Canadian dollar. Transactions in currencies other than the Canadian dollar are recorded at the rates of exchange prevailing on the dates of transactions. At the end of each reporting period, monetary assets and liabilities that are denominated in foreign currencies are translated at the rates prevailing at that date. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

d) Basis of consolidation

These financial statements include the accounts of the Company, and its wholly-owned subsidiaries including Lodge Minerals Inc., 113BC, Lower 48 BC and Lower 48 (see Notes 1 and 3). Control exists where the parent entity has power over the investee and is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Subsidiaries are included in the financial statements from the date control commences until the date control ceases. All intercompany balances, transactions, revenues and expenses have been eliminated on consolidation.

e) Exploration, evaluation and development expenditures

Costs incurred before the Company has obtained the legal right to explore are expensed as incurred. Once the legal right to explore has been acquired, the Company capitalizes the costs of acquiring, maintaining its interest in, exploring and evaluating mineral properties until such time as the lease expires, it is abandoned, sold or considered impaired in value. Indirect administrative costs are expensed as incurred. Exploration and evaluation properties are not amortized during the exploration and evaluation stage. At each reporting date the carrying amounts of the Company’s exploration and evaluation 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 value in use. 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 period. For the purposes of impairment testing, exploration and evaluation assets are allocated to cash-generating units to which the exploration activity relates. Each of the Company’s properties is considered to be a separate cash generating unit. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but only to the extent 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 (or cash-generating unit) in prior years. A reversal of an impairment loss is recognized immediately in profit or loss.

10

FREEMAN GOLD CORP. (Formerly Lodge Resources Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS November 30, 2020 and 2019

(Expressed in Canadian dollars, unless otherwise noted)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

f) Financial instruments

The following table sets out the classification of the Company’s financial instruments:

	Classification
Financial Assets
Cash	FVTPL
Receivables	Amortized cost
Financial Liabilities
Accounts payable and accrued liabilities	Amortized cost
Due to former shareholders	Amortized cost

Financial assets and liabilities are recognized when the entity becomes a party to the contractual provision of the instrument. Financial assets and liabilities are derecognized when the rights to receive cash flows have expired or substantially all risks and rewards of ownership have been transferred.

Financial assets are classified and measured either at amortized cost, fair value through other comprehensive income ("FVOCI") or fair value through profit or loss ("FVTPL") based on the business model in which they are held and the characteristics of their contractual cash flows. Financial assets that are held within a business model whose objective is to collect the contractual cash flows, and that have contractual cash flows that are solely payments of principal and interest are measured at amortized cost at the end of the subsequent accounting periods. All other financial assets including equity investments are measured at their fair values at the end of subsequent accounting periods, with any change taken through profit or loss or other comprehensive income.

All financial instruments are initially recognized at fair value on the statement of financial position. Subsequent measurement of financial instruments is based on their classification. Financial assets and liabilities classified at FVTPL are measured at fair value with changes in those fair values recognized in profit or loss for the period. Financial assets and liabilities classified at amortized cost are measured at amortized cost using the effective interest method. An “expected credit loss” impairment model applies which requires a loss allowance to be recognized based on expected credit losses. The estimated present value of future cash flows associated with the asset is determined and an impairment loss is recognized for the difference between this amount and the carrying amount as follows: the carrying amount of the asset is reduced to estimated present value of the future cash flows associated with the asset, discounted at the financial asset’s original effective interest rate, either directly or through the use of an allowance account and the resulting loss is recognized in profit or loss for the period. In a subsequent period, if the amount of the impairment loss related to financial assets measured at amortized cost decreases, the previously recognized impairment loss is reversed through profit or loss to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortized cost would have been had the impairment not been recognized.

g) Property, plant and equipment

Equipment and vehicles are recognized at cost less accumulated depreciation. The cost includes expenditures that are directly attributable to the acquisition of the equipment. Where parts (components) of an item of equipment have different useful lives or for which different amortization rates are appropriate, they are accounted for as separate items of equipment. Estimates of residual values, methods and useful lives of all assets are assessed annually.

Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the group and the

11

FREEMAN GOLD CORP. (Formerly Lodge Resources Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS November 30, 2020 and 2019

(Expressed in Canadian dollars, unless otherwise noted)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

g) Property, plant and equipment (continued)

cost of the item can be measured reliably.

Depreciation of equipment and vehicles is calculated on a straight-line basis over a period of three years to write off the cost of the assets to their residual values over their estimated useful lives. Depreciation that is related to assets used for exploration is included in the costs of exploration and evaluation assets.

h) Impairment of non-financial assets

At the end of each reporting period the carrying amounts of the Company’s long-lived 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 value in use.

Fair value is determined as the amount that would be obtained by the sale of the asset in any arm’s length transaction between knowledgeable and willing parties. Fair value of mineral assets is generally determined as the present value of the estimated cash flows expected to arise from the continued use of the asset, including any expansion projects. Value in use is determined as the present value of the estimated future cash flows expected to arise from the continued use of the asset in its present form and from its ultimate disposal. Impairment is assessed at the level of cash-generating units or “CGUs”, which are identified as the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets.

Non-financial assets that have been impaired are tested for possible reversal of the impairment whenever events or changes in circumstances indicate that the impairment may have reversed. When a reversal of a previous impairment is recorded, the reversal amount is adjusted for depreciation that would have been recorded had the impairment not taken place.

i) Warrants

The proceeds from private placements that include warrants are allocated on a relative fair value basis between the common shares and warrants using the Black-Scholes pricing model. The fair value attributed to warrants is recorded in warrant reserve within equity. If the warrants are converted, the consideration paid, along with the amount previously recognized in warrant reserve, is recorded as an increase to share capital. Upon expiry of warrants, any fair value attributed is reclassified to share capital.

j) Flow-through shares

Proceeds from flow-through issuances are allocated between the offering of shares and the sale of tax benefits based on the difference between the quoted price of the existing shares and the amount the investor pays for the shares. A liability is recognized for this difference and is extinguished by crediting other income when the Company has made the required expenditures and there is a reasonable expectation of the renunciation of these expenditures to the tax authorities.

k) Share-based compensation

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 amount recognized as an expense is adjusted to reflect the number of awards expected to vest. The offset to the recorded cost is to equity settled share-based payments reserve. The fair value of options and finders’ warrants

12

FREEMAN GOLD CORP. (Formerly Lodge Resources Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS November 30, 2020 and 2019

(Expressed in Canadian dollars, unless otherwise noted)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

k) Share-based compensation (continued)

is determined using the Black-Scholes pricing model.

Consideration received on the exercise of stock options is recorded as share capital and the related equity settled share-based payments reserve is transferred to share capital. Charges for options that are forfeited before vesting are reversed from equity settled share-based payment reserve.

l) Loss per share

The Company presents basic and diluted loss per share data for its common shares, calculated by dividing the earnings attributable to common shareholders of the Company by the weighted average number of common shares outstanding during the period. Diluted loss per share does not adjust the loss attributable to common shareholders or the weighted average number of common shares outstanding when the effect is antidilutive.

m) Income taxes

Income tax on the profit or loss for the years presented comprises current and deferred tax. Income tax is recognized in profit or loss except to the extent that it relates to items recognized directly in equity, in which case it is recognized in equity.

Current tax expense is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at year end, adjusted for amendments to tax payable with regards to previous years. Deferred tax is provided for using the statement of financial position liability method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. However, deferred tax liabilities are not recognized if they arise from the initial recognition of goodwill and deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. The amount of deferred tax provided for is based on the expected manner of realization or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at year end applicable to the period of expected realization or settlement.

A deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be available against which the asset can be utilized.

n) Leases

Effective December 1, 2019, the Company adopted all of the requirements of IFRS 16. IFRS 16 specifies how an IFRS reporter will recognize, measure, present and disclose leases. The standard provides a single lessee accounting model, requiring lessees to recognize assets and liabilities for all leases unless the lease term is 12 months or less or the underlying asset has a low value. Lessors continue to classify leases as operating or finance, with IFRS 16’s approach to lessor accounting substantially unchanged from its predecessor, IAS 17. There was no material impact on the Company’s consolidated financial statements upon the adoption of this new standard.

o) Significant accounting estimates and judgments

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 amounts of expenses during the reporting period. Actual outcomes could differ from these estimates.

These financial statements include estimates which, by their nature, are uncertain. The impacts of such estimates are pervasive throughout the financial statements and may require accounting adjustments based on future

13

FREEMAN GOLD CORP. (Formerly Lodge Resources Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS November 30, 2020 and 2019 (Expressed in Canadian dollars, unless otherwise noted)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

o) Significant accounting estimates and judgments (continued)

occurrences. Revisions to accounting estimates are recognized in the period in which the estimate is revised and in 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. Significant assumptions about the future and other sources of estimation uncertainty that management has made at year end that could result in a material adjustment to the carrying amounts of assets and liabilities, in the event that actual results differ from assumptions made, relate to the following:

(i) Critical accounting estimates

Valuation of options and warrants

The fair value of common share purchase options and warrants granted is determined at the issue date using the Black-Scholes pricing model. The fair value of common shares issued for finders’ fees are based on the closing price of the transaction those fees pertain to.

Current and deferred taxes

The determination of tax expense for the period and deferred tax assets and liabilities involves significant estimation and judgment by management. In determining these amounts, management interprets tax legislation in a variety of jurisdictions and make estimates of the expected timing of the reversal of deferred tax assets and liabilities. Management also makes estimates of future earnings which affect the extent to which potential future tax benefits may be used. The Company is subject to assessments by various taxation authorities, which may interpret legislation differently. These differences may affect the final amount or the timing of the payment of taxes. Management provides for such differences where known based on its best estimate of the probable outcome of these matters.

(ii) Critical accounting judgments

Assessment of transactions as asset acquisitions or business combinations

Management has had to apply judgment relating to the reverse takeover transaction between 113BC and the Company with respect to whether the acquisition was a business combination or an asset acquisition. Management applied a three-element process to determine whether a business or an asset was purchased, considering inputs, processes and outputs of each acquisition in order to reach a conclusion.

Going Concern

Presentation of the consolidated financial statements as a going concern assumes that the Company will continue in operation for the foreseeable future, obtain additional financing as required, and will be able to realize its assets and discharge its liabilities in the normal course of operations as they come due.

Functional Currency

In concluding that the Canadian dollar is the functional currency of the parent and its subsidiary company, management considered the currency that mainly influences the cost of providing goods and services in each jurisdiction in which the Company operates. As no single currency was clearly dominant the Company also considered secondary indicators including the currency in which funds from financing activities are denominated and the currency in which funds are retained.

Impairment of exploration and evaluation assets

Management is required to assess impairment in respect to the Company’s intangible mineral property interests. The triggering events are defined in IFRS 6. In making the assessment, management is required to make judgments on the status of each project and the future plans towards finding

14

FREEMAN GOLD CORP. (Formerly Lodge Resources Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS November 30, 2020 and 2019 (Expressed in Canadian dollars, unless otherwise noted)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

o) Significant accounting estimates and judgments (continued)

(ii) Critical accounting judgments (continued)

Impairment of exploration and evaluation assets (continued) commercial reserves. During the year ended November 30, 2020, the Company decided not to proceed further with the purchase of the option on the Comstock property and an impairment of $169,599 was recorded in the consolidated statement of loss and comprehensive loss for the current year.

p) Accounting standards and interpretations issued but not yet adopted

The Company has reviewed new and revised accounting pronouncements that have been issued but are not yet effective. The Company has not early adopted any of these standards and is currently evaluating the impact, if any, that these standards might have on its financial statements. Other accounting standards or amendments to existing accounting standards that have been issued but have future effective dates are either not applicable or are not expected to have a significant impact on the Company's financial statements.

3. REVERSE TAKEOVER TRANSACTION

Pursuant to the RTO transaction, on April 16, 2020, the Company issued 33,740,000 shares in exchange for all the issued and outstanding shares of 113BC, whereby 113BC and its subsidiaries Lower 48 BC and Lower 48 became wholly owned subsidiaries of the Company. For accounting purposes, the acquisition was considered a reverse takeover whereby the Company was deemed to be the acquiree and 113BC the acquirer. The Company did not meet the definition of a business, therefore the acquisition is outside of the scope of IFRS 3 Business Combinations , instead, the RTO was accounted for under IFRS 2 Share‐based Payments . Accordingly, no goodwill or intangible assets were recorded with respect to the RTO transaction.

Under this basis of accounting, the consolidated entity is considered to be a continuation of the Company, with the net identifiable assets of the Company deemed to have been acquired by 113BC at fair value as at April 16, 2020, and the assets, liabilities and operations of 113BC are included in the financial statements at their historical value and include the results of the Company for the period from Closing Date through November 30, 2020.

For purposes of the RTO, the consideration paid and the fair value of the net assets (liabilities) of the Company at April 16, 2020 is as follows:

at April 16, 2020 is as follows:
Net assets(liabilities)of the Companyacquired(assumed)	April 16,2020
	$
Cash	199,821
Prepaid expenses and GST receivable	296,725
Exploration assets	55,208
Receivable from 113BC	1,300,000
Accounts payable and accrued liabilities	(282,372)
Advancespayable	(266,000)
Net assets(liabilities)aquired(assumed)	1,303,382

15

FREEMAN GOLD CORP. (Formerly Lodge Resources Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS November 30, 2020 and 2019

(Expressed in Canadian dollars, unless otherwise noted)

3. REVERSE TAKEOVER TRANSACTION (Continued)

REVERSE TAKEOVER TRANSACTION (Continued)
Considerationpaid
	$
Common shares issued (1)	5,988,263
Finder's shares issued	1,470,000
Warrants and stock options issued	504,435
Total consideration paid	7,962,698
Add: Professional fees incurred for RTO	228,101
Purchaseprice	8,190,799
Listingexpense	6,887,417

• (1) The fair value of common shares of the Company issued as consideration was determined based on the fair value of the 14,257,770 common shares outstanding prior to the RTO Transaction of $0.42 per common share.

4. RECEIVABLES

	November 30,	November 30,
	2020	2019
	$	$
Goods and services tax receivable	102,353	-
Other receivables	5,975	-
Total receivables	108,328	-

5. PREPAID EXPENSES AND DEPOSITS

PREPAID EXPENSES AND DEPOSITS
	November 30,	November 30,
	2020	2019
	$	$
Marketing	89,689	-
Insurance	22,989	-
Other	8,609	-
Total prepaid expenses	121,287	-

16

FREEMAN GOLD CORP. (Formerly Lodge Resources Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS November 30, 2020 and 2019

(Expressed in Canadian dollars, unless otherwise noted)

6. PROPERTY, PLANT AND EQUIPMENT

PROPERTY, PLANT AND EQUIPMENT
	Equipment	Vehicles	Total
	$	$	$
Cost
Balance at November 30, 2019 and 2018	-	-	-
Additions	56,499	197,797	254,296
Balance at November 30,2020	56,499	197,797	254,296
Amortization
Balance at November 30, 2019 and 2018	-	-	-
Additions(Note 7)	2,265	13,736	16,001
Balance at November 30,2020	2,265	13,736	16,001
Net book value
Balance at November 30,2019	-	-	-
Balance at November 30,2020	54,234	184,061	238,295

7. EXPORATION AND EVALUATION ASSETS

The Company’s exploration and evaluation assets for the years ended November 30, 2020 and 2019 are as follows:

follows:
Year ended November 30,2020	Comstock	Lehmi	Total
	$	$	$
Property acquisition costs
Balance at December 1, 2019	-	451,072	451,072
Additions	25,000	4,809,514	4,834,514
Impairment	(25,000)	-	(25,000)
	-	5,260,586	5,260,586
Exploration and evaluation costs
Balance at December 1, 2019	-	29,957	29,957
Costs incurred during year:
Assaying and sampling	-	120,967	120,967
Camp and accommodations	-	71,112	71,112
Amortization of equipment and vehicles	-	16,001	16,001
Drilling	-	2,389,753	2,389,753
Geological	144,599	715,913	860,512
Impairment	(144,599)	-	(144,599)
	-	3,343,703	3,343,703
Balance at November 30,2020	-	8,604,289	8,604,289

17

FREEMAN GOLD CORP. (Formerly Lodge Resources Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS November 30, 2020 and 2019

(Expressed in Canadian dollars, unless otherwise noted)

7. EXPORATION AND EVALUATION ASSETS (Continued)

Year ended November 30,2019	SoapGulch	Lehmi	Total
	$	$	$
Property acquisition costs
Balance at December 1, 2018	39,781	-	39,781
Additions	-	451,072	451,072
Disposal	(39,781)	-	(39,781)
	-	451,072	451,072
Exploration and evaluation costs
Balance at December 1, 2018	9,550	-	9,550
Costs incurred during year:
Geological	-	19,577	19,577
Title renewals	-	10,380	10,380
Disposal	(9,550)	-	(9,550)
	-	29,957	29,957
Balance at November 30,2019	-	481,029	481,029

Comstock Property

The Company’s wholly owned subsidiary, Lodge Minerals Inc., entered into an option agreement (the “Comstock Option”) dated October 31, 2018, with an arm’s-length party to acquire 100% of mineral claims located in British Columbia, known as the Comstock Property. Pursuant to the Comstock Option, the Company, was required to issue common shares and make certain payments and expenditures. The optionor retained a 2% net smelter return royalty (“NSR”) and the Company had the option to acquire 1% of the NSR by paying a one-time sum of $1,000,000 at any time prior to the commencement of commercial production on the property. The Company issued 100,000 common shares with a fair value of $10,000, cash payments of $15,000 and incurred the minimum of $100,000 in exploration expenditures required by the option agreement. During the year ended November 30, 2020, the Company decided not to continue with the purchase of the option and recorded an impairment of $169,599 on the property in the statement of loss and comprehensive loss for the year ended November 30, 2020.

Soap Gulch Property

On November 1, 2017, the Company entered into an option agreement with Battis BLK Group (“BLK Group”), whereby the Company would earn a 100% interest in the Soap Gulch Property, located in Butte-Silver Bow County in Montana, USA (“Soap Gulch Property”). As consideration, the Company made the following payments:

• i) USD $50,000 to BLK Group within seven days of signing this agreement (paid - $64,781) ii) USD $25,000 in year one (paid by Alpha Lithium Corporation)

On December 9, 2017, the Company entered into a non-binding letter of intent (“LOI”) with L2 Cobalt Inc., which was acquired by Alpha Lithium Corporation (collectively, “Alpha Lithium”), to sell its option agreement related to the Soap Gulch Property. Pursuant to the execution of the LOI, Alpha Lithium made a payment of $25,000. On February 26, 2018, the parties executed a definitive agreement, whereby Alpha Lithium was required to make additional payments to the Company.

During the year ended November 30, 2020, the Company received $Nil in consideration (November 30, 2019

18

FREEMAN GOLD CORP. (Formerly Lodge Resources Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS November 30, 2020 and 2019 (Expressed in Canadian dollars, unless otherwise noted)

7. EXPORATION AND EVALUATION ASSETS (Continued)

Soap Gulch Property (continued)

– $112,500 in share consideration) from Alpha Lithium. The consideration received in 2019 was applied against the carrying amount of the Soap Gulch Property and a gain on the sale of the option in the amount of $63,169 was recognized in the statement of loss and comprehensive loss for the year ended November 30, 2019.

During the year ended November 30, 2019, the Company received $52,217 in proceeds for the sale of all of the Alpha Lithium shares and recognized a loss on sale of marketable securities of $60,283 in the statement of loss and comprehensive loss for the year ended November 30, 2019.

On February 1, 2020, the definitive agreement was terminated, and the Company released Alpha Lithium for all outstanding payments. On February 1, 2020, the Company assigned the option agreement to acquire Soap Gulch Property to a company controlled by the CFO of the Company for $1.

Lemhi Property

On October 16, 2019, the Company entered into an option agreement to acquire 100% of the rights and interest in certain mining claims located in Lemhi County, Idaho for USD $1,615,000. As at November 30, 2020, the Company has paid $1,872,002 (USD $1,615,000) to acquire the Lemhi Property.

On August 19, 2019, the Company entered into an option agreement to acquire a 100% interest in an additional 46 unpatented mining claims located in Lemhi County, Idaho. In order to exercise the option, the Company is required to make the following payments:

• i) USD $75,000 within 3 days of the effective date (paid - $101,475);

• ii) USD $50,000 on or before the first anniversary of the effective date (paid – $67,531); iii) USD $50,000 on or before the second anniversary of the effective date;

• iv) USD $50,000 on or before the third anniversary of the effective date;

• v) USD $75,000 on or before the fourth anniversary of the effective date;

• vi) USD $75,000 on or before the fifth anniversary of the effective date;

• vii) USD $75,000 on or before the sixth anniversary of the effective date; and viii) USD $550,000 on or before the seventh anniversary of the effective date.

On September 8, 2020, the Company acquired and extinguished a back-in right from Yamana Gold Inc. (“Yamana”) over the Lemhi Project for the issuance of 4,035,273 common shares with a fair value of $2,098,342. In connection with the transaction the Company issued finder’s fees consisting of 260,000 common shares of the Company with a fair value of $135,200.

On September 15, 2020, Freeman acquired 100% ownership of the Moon #100 and Moon #101 unpatented mining claims (“Moon Claims”), located within the Lemhi project for cash consideration of $199,950 (US $150,000) and the issuance of 375,000 common shares of the Company with a fair value of $225,000.

8. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

	November 30,2020	November 30,2019
	$	$
Accounts payable (Note 9)	859,100	67,863
Accrued liabilities	51,692	6,932
	910,792	74,795

19

FREEMAN GOLD CORP. (Formerly Lodge Resources Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS November 30, 2020 and 2019

(Expressed in Canadian dollars, unless otherwise noted)

9. RELATED PARTY TRANSACTIONS

Key management compensation

Key management personnel 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 members of the Company's Board of Directors and senior corporate officers. The Company entered into the following transactions with related parties during the years ended November 30, 2020 and 2019:

2019:
	November 30,	November 30,
Year ended	2020	2019
	$	$
Consulting fees paid to the former CEO	2,100	-
Consulting fees paid to a company controlled by the CEO	201,417	-
Consulting fees paid to a company controlled by the former CFO	50,000	-
Consulting fees paid to the CFO and to a company controlled by the
CFO	53,000	-
Consulting and equipment rental fees paid to the VP, Exploration	129,950	-
Consulting fees paid to the VP, Development	28,000	-
Consulting fees paid to a company controlled by a director	84,750	-
Share-based compensationpaid to officers and directors	1,205,760	-
	1,754,977	-

During January 2020, the Company (BC113, prior to the RTO) granted 3,000,000 stock options with an exercise price of $0.05 per share to directors, which were exercised during March and April 2020 (see Note 10).

During May 2020, the Company granted 2,050,00 stock options with an exercise price of $0.60 per share to officers and directors (see Note 10).

During October 2020, the Company granted 500,000 stock options with an exercise price of $0.60 per share to an officer and director (see Note 10).

Shareholder loans in the amount of $10,000, outstanding at November 30, 2019, were repaid on December 4, 2019.

Included in accounts payable at November 30, 2020 is $35,556 (November 30, 2019 - $25,144) owing to related parties. Amounts due to related parties are unsecured, non-interest bearing and have no specified terms of repayment.

20

FREEMAN GOLD CORP. (Formerly Lodge Resources Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS November 30, 2020 and 2019

(Expressed in Canadian dollars, unless otherwise noted)

10. SHARE CAPITAL

a) Authorized share capital

Unlimited number of common shares without par value.

b) Common share transactions

Year ended November 30, 2020:

• During December 2019, the Company closed a private placement of 15,000,000 common shares at $0.05 per share for proceeds of $750,000.

• On April 16, 2020, pursuant to the RTO transaction (Note 3), 33,740,000 shares of 113BC were exchanged for 33,740,000 shares of the Company, with the original 14,257,770 shares of the Company remaining in outstanding shares. Pursuant to escrow agreements, the shares are subject to a voluntary release schedule with 17.5% of the shares released on Closing Date, 22.5% released six months after Closing Date, 30% released nine months after Closing Date, and the balance to be released 12 months after Closing Date. As at November 30, 2020, 20,444,273 shares were subject to escrow provisions.

• On April 16, 2020, pursuant to the RTO transaction (Note 3), 3,500,000 shares of the Company with a fair value of $1,470,000 were issued to finders.

• During May 2020, the Company closed a private placement of 4,268,911 units at $0.35 per unit for gross proceeds of $1,494,119 whereby each unit comprised one common share and one common share purchase warrant. Each common share purchase warrant is exercisable for a period of 12 months from the date of issuance and has an exercise price of $0.50. The fair value of the common shares was determined to be $1,049,652 and the fair value of the warrants was determined to be $444,467. In connection with the financing, the Company incurred $31,709 in finders’ fees, $17,766 in other share issuance costs and issued 89,900 finders’ warrants with a fair value of $18,334.

• During July 2020, the Company closed a private placement of 20,690,000 common shares at $0.50 per share for gross proceeds of $10,345,000. In connection with the financing, the Company incurred $896,450 in finders’ fees, $8,875 in other share issuance costs and issued 1,418,650 finders’ warrants with a fair value of $536,002.

• On September 8, 2020, the Company acquired and extinguished a back-in right from Yamana Gold Inc. (“Yamana”) over the Lemhi Project for the issuance of 4,035,273 common shares with a fair value of $2,098,342. In connection with the transaction the Company issued finder’s fees consisting of 260,000 common shares of the Company with a fair value of $135,200.

• On September 15, 2020, Freeman acquired 100% ownership of the Moon #100 and Moon #101 unpatented mining claims (“Moon Claims”), located within the Lemhi project for cash consideration of $199,950 (US $150,000) and the issuance of 375,000 common shares of the Company with a fair value of $225,000.

• During the year ended November 30, 2020, the Company issued 3,200,000 common shares for proceeds of $170,000 pursuant to the exercise of stock options and reclassified $187,346 from reserves to share capital.

• During the year ended November 30, 2020, the Company issued 73,500 common shares for proceeds of $31,350 pursuant to the exercise of 73,500 warrants and reclassified $10,922 from reserves to share capital.

21

FREEMAN GOLD CORP. (Formerly Lodge Resources Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS November 30, 2020 and 2019 (Expressed in Canadian dollars, unless otherwise noted)

10. SHARE CAPITAL (Continued)

b) Common share transactions (continued)

Year ended November 30, 2019:

• On August 21, 2019, the Company closed a private placement of 2,700,000 common shares (with 200,000 closed/issued in October 2019) at $0.05 per share for proceeds of $135,000, of which 500,000 common shares were issued to a director of the Company.

• During October 2019, the Company closed a private placement of 2,540,000 common shares at $0.10 per share for proceeds of $254,000, of which 150,000 common shares were issued to the CFO of the Company.

• During the year ended November 30, 2019, the Company incurred $16,380 in share issuance costs relating to the private placements above.

• During January 2019, the Company executed an escrow agreement (the “Escrow Agreement”), whereby all common shares issued to related parties are subject to escrow requirements. Pursuant to the Escrow Agreement, the shares will be released pro rata to such shareholders as to 10% on the date of final notice and 15% every six months thereafter over a 36-month period. Specifically, escrowed shares may not be sold, assigned, hypothecated, transferred within escrow or otherwise dealt with in any manner without the consent of the CSE. At November 30, 2020, 1,614,000 shares (November 30, 2019 – 2,421,000 shares) were held in escrow.

c) Warrants

The following is a summary of the Company’s warrant transactions for the years ended November 30, 2020 and 2019:

	Number of	Weighted Average
	Warrants	Exercise Price($)
Balance at November 30, 2019 and 2018	-	-
Recognized on RTO (Note 3)	99,380	0.10
Issued	5,777,461	0.50
Exercised	(73,500)	0.43
Balance at November 30,2020	5,803,341	0.49

Pursuant to the RTO (Note 3), the Company recognized $34,395 in warrant reserves related to 99,380 warrants outstanding.

The fair value of warrants issued as part of unit private placements during the years ended November 30, 2020 and 2019 was estimated using the Black-Scholes pricing model with the following assumptions:

	November 30, 2020	November 30, 2019
Risk-free interest rate	0.29%	-
Expected life of warrants	1 year	-
Annualized volatility	125.00%	-
Dividendrate	0%	-

Volatility assumptions for the valuation of warrants were derived by reference to the volatility of

22

FREEMAN GOLD CORP. (Formerly Lodge Resources Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS November 30, 2020 and 2019

(Expressed in Canadian dollars, unless otherwise noted)

10. SHARE CAPITAL (Continued)

c) Warrants (continued)

comparable companies. The weighted average exercise price of all warrants issued during the year ended November 30, 2020 was $0.50.

The fair value of finders’ warrants issued during the years ended November 30, 2020 and 2019 was estimated using the Black-Scholes pricing model with the following assumptions:

	November 30, 2020	November 30, 2019
Risk-free interest rate	0.23%	-
Expected life of warrants	2 years	-
Annualized volatility	125.00%	-
Dividendrate	0%	-

Warrants outstanding at November 30, 2020 are as follows:

Exercise Price ($)	Number of Warrants	Expiry Date
0.50	3,064,011	May 6, 2021
0.50	1,234,800	May 11, 2021
0.10	85,880	November 8, 2021
0.50	1,418,650	July 28, 2022
	5,803,341

The weighted average remaining life of warrants is 0.74 years.

d) Stock Options

The Company has adopted an incentive stock option plan, which provides that the Board of Directors of the Company may from time to time, in its discretion, and in accordance with Exchange policies, grant to directors, officers and technical consultants to the Company, non-transferable options to purchase common shares, provided that the number of common shares reserved for issuance will not exceed 10% of the common shares issued and outstanding from time to time. Such options are non-transferable and are exercisable at a price per share not below the closing traded price on the date of grant for a period of up to ten years from the date of grant.

23

FREEMAN GOLD CORP. (Formerly Lodge Resources Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS November 30, 2020 and 2019 (Expressed in Canadian dollars, unless otherwise noted)

10. SHARE CAPITAL (Continued)

d) Stock Options (continued)

The following is a summary of the Company’s stock option transactions for the years ended November 30, 2020 and 2019:

2020 and 2019:
		Weighted Average
	Number of Options	Exercise Price
		$
Balance at November 30, 2019 and 2018	-	-
Recognized on RTO (Note 3)	1,350,000	0.43
Granted	6,990,000	0.36
Exercised	(3,200,000)	0.05
Balance at November 30, 2020	5,140,000	0.57
Exercisable at November 30, 2020	2,640,000	0.55

Pursuant to the RTO (Note 3), the Company recognized $470,040 of share-based compensation reserve related to 1,350,000 stock options outstanding. Of the stock options granted during the year ended November 30, 2020, 2,500,000 options vest after one year and the remaining options vested upon grant.

Of the options exercised during the current year, 3,000,000 were exercised prior to the RTO and, as such, the weighted average share price is not relevant. For the 200,000 options exercised after the date of the RTO, the weighted average share price on the dates of exercise was $0.58 per share.

The fair value of the stock options granted during the years ended November 30, 2020 and 2019 was estimated using the Black-Scholes pricing model with the following assumptions:

	November 30, 2020	November 30, 2019
Risk-free interest rate	0.90%	-
Expected life of options	5 years	-
Annualized volatility	114%	-
Dividend rate	0%	-

Volatility assumptions for the valuation of options were derived by reference to the volatility of comparable companies.

During the years ended November 30, 2020 and 2019, the Company incurred $1,863,721 and $Nil, in sharebased compensation expense related to the vesting of stock options.

Stock options outstanding at November 30, 2020 are as follows:

Exercise Price	Number of Shares Issuable
($)	on Exercise	ExpiryDate
0.49	1,000,000	January 23, 2025
0.49	150,000	February 3, 2025
0.60	2,690,000	May 27, 2025
0.60	1,300,000	October 6,2025
	5,140,000

The weighted average remaining life of stock options is 4.5 years.

24

FREEMAN GOLD CORP. (Formerly Lodge Resources Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS November 30, 2020 and 2019

(Expressed in Canadian dollars, unless otherwise noted)

11. FINANCIAL INSTRUMENTS

The Company thoroughly examines the various financial instrument risks to which it is exposed and assesses the impact and likelihood of those risks. These risks may include interest rate risk, credit risk, liquidity risk, and currency risk. The carrying value of the Company's financial instruments approximates their fair value due to their short-term nature. Fair value measurements of financial instruments are required to be classified using a fair value hierarchy that reflects the significance of inputs in making the measurements. The levels of the fair value hierarchy are defined as follows:

Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3 – Inputs for the asset or liability that are not based on observable market data.

The fair values of other financial instruments, which include cash and accounts payable, approximate their carrying values due to the relatively short-term maturity of these instruments.

Interest rate risk: Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market interest rates. The Company has no debt or interest-bearing assets and therefore has minimal interest rate risk.

Credit risk: Credit risk is the risk of potential loss to the Company if the counterparty to a financial instrument fails to meet its contractual obligations. The Company's credit risk is primarily attributable to its liquid financial assets including cash, which is held with a high-credit financial institution and amounts receivable from the Government of Canada. As such, the Company’s credit exposure is minimal.

Liquidity risk: Liquidity risk arises from the excess of financial obligations over available financial assets due at any point in time. The Company's objective in managing liquidity risk is to maintain sufficient readily available reserves in order to meet its liquidity requirements. The Company addresses its liquidity through equity financing obtained through the sale of common shares. While the Company has been successful in securing financings in the past, there is no assurance that it will be able to do so in the future.

Currency risk: Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange. At November 30, 2020, the Company has US dollar denominated assets of $25,518 and US dollar denominated liabilities of $643,968. Based on this net US dollar exposure, at November 30, 2020, a 10% change in the Canadian dollar to the US dollar exchange rate would impact the Company’s net gain or loss by $61,845.

The carrying values of the Company's financial assets and liabilities at November 30, 2020 and 2019, approximate their fair values due to their short-term nature.

12. CAPITAL MANAGEMENT

The Company's objectives when managing capital are to safeguard its ability to continue as a going concern in order to pursue its operations and to maintain a flexible capital structure, which optimizes the costs of capital at an acceptable risk. The Company considers its capital for this purpose to be its shareholders' equity. The Company's primary source of capital is through the issuance of equity. The Company manages and adjusts its capital structure when changes in economic conditions occur. To maintain or adjust the capital structure, the Company may seek additional funding. The Company may require additional capital resources to meet its administrative overhead expenses in the long term. The Company believes it will be able to raise capital as required in the long term but recognizes there will be risks involved that may be beyond its control. There are no external restrictions on the management of capital.

25

FREEMAN GOLD CORP. (Formerly Lodge Resources Inc.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS November 30, 2020 and 2019

(Expressed in Canadian dollars, unless otherwise noted)

13. INCOME TAXES

A reconciliation of the Company's expected income tax recovery to actual income tax recovery is as follows:

	2020	2019
	$	$
Net loss	(11,248,907)	(2,732)
Statutory income tax rate	27%	27%
Expected income tax recovery	(3,037,205)	(738)
Non-deductible expenditures	2,539,302	(8,137)
Other	-	(4,423)
Change in unrecognized deductible temporarydifferences	497,903	13,298
Total income tax recovery	-	-

The significant components of the Company’s deferred tax assets and liabilities are as follows:

	2020	2019
	$	$
Deferred tax assets (liabilities)
Exploration and evaluation assets	(2,450)	-
Property, plant and equipment	4,320	-
Share issuance costs	218,957	3,538
Non-capital losses	555,377	18,701
Capital losses	8,138	-
Valuation allowance	(784,342)	(22,239)
Net deferred tax liability	-	-

The Company has non-capital losses of approximately $2,056,951 that expire up to 2040 and may be carried forward to reduce taxable income in future years.

14. SUBSEQUENT EVENTS

The Company issued 52,716 common shares for proceeds of $24,358 in connection with the exercise of warrants.

26