Giant Mining Corp. — Audit Report / Information 2023

Oct 30, 2023

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MAJUBA HILL COPPER CORP.

Consolidated Financial Statements Years Ended June 30, 2023 and 2022 (Expressed in Canadian dollars)

SHIM & Associates LLP Chartered Professional Accountants Suite 900 – 777 Hornby Street Vancouver, B.C. V6Z 1S4 T: 604 559 3511 | F: 604 559 3501

S H I M

INDEPENDENT AUDITOR’S REPORT

To the Shareholders of Majuba Hill Copper Corp.

Opinion

We have audited the accompanying consolidated financial statements of Majuba Hill Copper Corp. (the “Company”), which comprise the consolidated statement of financial position as at June 30, 2023, and the consolidated statements of operations and comprehensive loss, changes in equity and cash flows for the year ended June 30, 2023 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 Company as at June 30, 2023, and its consolidated financial performance and cash flows for the year ended June 30, 2023 in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (IFRS).

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 Company 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.

Other Matter

The consolidated financial statements of the Company as at June 30, 2022, and for the year ended June 30, 2022 were audited by another auditor who expressed an unmodified opinion on those statements on October 14, 2022.

Material Uncertainty Related to Going Concern

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

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements for the year ended June 30, 2023. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Except for the matter described in the Material Uncertainty Related to Going Concern section, we have determined that there are no key audit matters to communicate in our auditors’ report.

Other Information

Management is responsible for the other information. The other information comprises the information included in the 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, 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.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. 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 IFRS, 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 Company’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 Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company’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 scepticism 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 Company’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 Company’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 Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the 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 Company 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 Dong H. Shim.

“SHIM & Associates LLP”

CHARTERED PROFESSIONAL ACCOUNTANTS

Vancouver, Canada October 30, 2023

MAJUBA HILL COPPER CORP.

Consolidated Statements of Financial Position

(Expressed in Canadian dollars)

June 30, 2023 $	June 30, 2022 $
Assets Current assets Cash 305,339 GST receivable - Prepaid expenses and deposits 121,447	1,044,966 180,319 289,166
Total current assets 426,786	1,514,451
Non-current assets Exploration and evaluation assets (Note 3) 7,446,571	4,763,483
Total assets 7,873,357	6,277,934
Liabilities and shareholders’ equity Current liabilities Accounts payable and accrued liabilities (Note 4) 196,663	489,680
Total current liabilities 196,663	489,680
Shareholders’ equity Share capital (Note 5) 38,473,296 Reserves (Note 6, 7 & 8) 3,988,479 Deficit (34,785,081)	31,359,954 4,117,862 (29,689,562)
Totalshareholders’equity 7,676,694	5,788,254
Total liabilities and shareholders’ equity 7,873,357	6,277,934

Nature and continuance of operations (Note 1) Contingencies (Note 11) Subsequent Events (Note 14)

Approved and authorized for issuance by the Board of Directors on October 30, 2023:

/s/“David Greenway” David Greenway, Director	/s/“Yari Nieken”
	Yari Nieken, Director

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

4

MAJUBA HILL COPPER CORP.

Consolidated Statements of Operations and Comprehensive Loss

(Expressed in Canadian dollars)

Year ended June 30, 2023 $	Year ended June 30, 2022 $
Expenses Consulting fees (Note 4) 699,920 General and administrative 28,125 General exploration 20,551 Investor relations 1,717,013 Management fees (Note 4) 492,000 Professional fees 83,459 Rent – Share-based payments (Notes 7, 8) 1,687,268 Transfer agent and filing fees 55,943 Travel 22,014	479,502 150,724 - 2,118,924 964,000 215,881 26,400 3,788,337 47,824 95,973
Total expenses 4,806,293	7,887,565
Other items Provision for Sale Tax payable 289,226	-
Net loss and comprehensive loss (5,095,519)	(7,887,565)
Basic and diluted lossper share (0.12)	(0.53)
Weighted average shares outstanding 41,433,384	14,953,248

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

5

MAJUBA HILL COPPER CORP.

Consolidated Statements of Changes in Equity

(Expressed in Canadian dollars)

	Share capital Reserves $ Deficit $ Total shareholders’ equity $ Number Amount $
Balance, June 30, 2021 Shares issued for cash Share issuance costs Shares issued for mineral properties Shares issued for warrants exercised Restricted share units granted Shares issued for restricted share units settled Fair value of stock options granted Net loss for the year	8,774,456 20,299,798 5,534,630 (21,801,997) 4,032,431 7,368,974 5,494,941 – – 5,494,941 – (27,435) – – (27,435) 750 1,050 – – 1,050 454,700 386,495 – – 386,495 – – 3,425,750 – 3,425,750 3,330,000 5,205,105 (5,205,105) – – – – 362,587 – 362,587 – – – (7,887,565) (7,887,565)
Balance, June 30, 2022 Shares issued for debt settlement Shares issued for cash Shares issued for stock options exercised Shares issued for restricted share units settled Restricted share units granted Fair value of stock options granted Net loss for the year	19,928,880 31,359,954 4,117,862 (29,689,562) 5,788,254 666,667 100,000 – – 100,000 26,030,496 4,765,266 – – 4,765,266 2,035,000 672,076 (240,651) – 431,425 4,080,588 1,576,000 (1,576,000) – – – – 1,430,500 – 1,430,500 – – 256,768 – 256,768 – – – (5,095,519) (5,095,519)
Balance,June 30,2023	52,741,631 38,473,296 3,988,479 (34,785,081) 7,676,694

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

6

MAJUBA HILL COPPER CORP. Consolidated Statements of Cash Flows

(Expressed in Canadian dollars)

Year ended June 30, 2023 $	Year ended June 30, 2022 $
Operating activities Net loss (5,095,519) Items not involving cash: Share-based payments 1,687,268 Provision for Sale Tax payable 289,226 Changes in non-cash working capital items: GST receivable (108,907) Prepaid expenses and deposits 167,719 Accounts payable and accruedliabilities (193,017)	(7,887,565) 3,788,337 - (106,713) 454,638 159,606
Net cashusedinoperating activities (3,253,230)	(3,591,697)
Investing activities Exploration and evaluation asset expenditures (2,683,088)	(2,275,214)
Net cash used in investing activities (2,683,088)	(2,275,214)
Financing activities Proceeds from issuance of common shares 4,765,266 Proceeds from stock options exercised 431,425 Share issuance costs –	5,881,436 - (27,435)
Net cash provided by financing activities 5,196,691	5,854,001
Change in cash (739,627) Cash, beginning ofyear 1,044,966	(12,910) 1,057,876
Cash,end ofyear 305,339	1,044,966
Non-cash investing and financing activities: Shares issued pursuant to mineral property option agreements – Fair value of stock options transferred from reserves 240,651 Shares issued for restricted share units transferred from reserves 1,576,000	1,050 – 5,205,105
Cash paid: Interest – Income taxes –	– –

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

7

MAJUBA HILL COPPER CORP. Notes to the Consolidated Financial Statements Years Ended June 30, 2023 and 2022 (Expressed in Canadian dollars)

1. Nature and Continuance of Operations

Majuba Hill Copper Corp. (“the Company”) was incorporated on March 10, 2017 under the laws of British Columbia. The address of the Company’s corporate office and its principal place of business is 1500 – 1055 West Georgia Street, Vancouver, BC. The Company’s principal business activities include the acquisition and exploration of mineral property assets. As at June 30, 2023, the Company had not yet determined whether the Company’s mineral property assets contain ore reserves that are economically recoverable. The recoverability of amount shown for exploration and evaluation asset is dependent upon the discovery of economically recoverable reserves, confirmation of the Company’s interest in the underlying mineral claims, the ability of the Company to obtain the necessary financing to complete the development of and the future profitable production from the property or realizing proceeds from its disposition.

These consolidated financial statements have been prepared on the assumption that the Company will continue as a going concern, meaning it will continue in operation for the foreseeable future and will be able to realize assets and discharge liabilities in the ordinary course of operations. Different bases of measurement may be appropriate if the Company is not expected to continue operations for the foreseeable future. During the year ended June 30, 2023, the Company has not generated any revenues and has negative cash flow from operations. As at June 30, 2023, the Company and an accumulated deficit of $34,785,081 (June 30, 2022 - $29,689,562). The Company’s continuation as a going concern is dependent on its ability to generate future cash flows and/or obtain additional financing. Management intends to finance operating costs over the next twelve months with cash on hand, loans from directors and companies controlled by directors, and/or private placements of common shares. There is a risk that additional financing will not be available on a timely basis or on terms acceptable to the Company. These factors indicate the existence of a material uncertainty that may cast significant doubt on the ability of the Company to continue as a going concern. These consolidated financial statements do not reflect any adjustments that may be necessary if the Company is unable to continue as a going concern.

2. Significant Accounting Policies

• (a) Statement of Compliance and Basis of Preparation

The accompanying consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board (“IASB”).

These consolidated financial statements have been prepared on a historical cost basis and are presented in Canadian dollars, which is also the Company’s functional currency.

• (b) Principles of Consolidation

These consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, Bam Bam Nevada, Inc. All significant inter-company balances and transactions have been eliminated on consolidation.

8

MAJUBA HILL COPPER CORP. Notes to the Consolidated Financial Statements Years Ended June 30, 2023 and 2022 (Expressed in Canadian dollars)

2. Significant Accounting Policies (continued)

• (c) Use of Estimates and Judgments

When preparing the audited financial statements, management undertakes a number of judgments, estimates and assumptions about recognition and measurement of assets, liabilities, income and expenses. The actual results are likely to differ from the judgments, estimates and assumptions made by management, and will seldom equal the estimated results. Information about the significant judgments, estimates and assumptions that have the most significant effect on the recognition and measurement of assets, liabilities, income and expenses are discussed below.

Going concern

The assessment of the Company's ability to execute its strategy by funding future working capital requirements involves judgment. Further information regarding going concern issues are outlined in Note 1.

Share-based payments

The estimation of share-based payment costs requires the selection of an appropriate valuation model and consideration as to the inputs necessary for the valuation model chosen. The Company has made estimates as to the expected volatility of its own shares, the expected life of share options granted, the estimated number of share options expected to vest and the expected time of exercise of those stock options. The model used by the Company is the Black-Scholes option pricing valuation model.

Exploration and evaluation assets

Indications of impairment

The assessment of indications of impairment loss and the measuring of the recoverable amount when impairment tests have been done involve judgment. If there is an indication of impairment, an estimate of the recoverable amount of the asset or the cash generating unit is performed and an impairment loss is recognized to the extent that the carrying amount of the asset exceeds its recoverable amount. The recoverable amount of an asset is determined as the higher of its fair value less costs to sell and its value in use.

The impairment criteria considered by the Company in relation to its exploration and evaluation assets include the following criteria:

(a) the period for which the entity has the right to explore in a specific area has expired during the period or will expire in the near future, and is not expected to be renewed;

(b) substantive expenditures on further exploration for an evaluation of mineral resources in a specific area is neither budgeted nor planned;

(c) exploration for and evaluation of mineral resources in a specific area have not led to the discovery of commercially viable quantities of mineral resources and the entity has decided to discontinue such activities in the specific area;

(d) sufficient data exists to indicate that, although a development in a specific area is likely to proceed, the carrying amount of the exploration and evaluation asset is unlikely to be recovered in full from successful development or by sale.

When an indication of impairment loss exists, management has to evaluate the recoverable amount of the asset or the cash-generating unit, and this requires management to make assumptions as to the future events or circumstances.

The actual results are likely to differ and significant adjustments to the Company’s assets may be required.

9

MAJUBA HILL COPPER CORP. Notes to the Consolidated Financial Statements Years Ended June 30, 2023 and 2022 (Expressed in Canadian dollars)

2. Significant Accounting Policies (continued)

• (c) Use of Estimates and Judgments (continued)

Provisions and contingent liabilities

Judgments are made as to whether a past event has led to a liability that should be recognized in the financial statements or disclosed as a contingent liability. Quantifying any such liability often involves judgments and estimations. These judgments are based on a number of factors including the nature of the claims or dispute, the legal process and potential amount payable, legal advice received, previous experience and the probability of a loss being realized. Several of these factors are a source of estimation uncertainty.

Decommissioning, restoration and similar liabilities are estimated based on the Company's interpretation of current regulatory requirements, constructive obligations and are measured at fair value. Fair value is determined based on the net present value of estimated future cash expenditures for the settlement of decommissioning, restoration or similar liabilities that may occur upon decommissioning of the project. Such estimates are subject to change based on changes in laws and regulations and negotiations with regulatory authorities.

• (d) Cash and Cash Equivalents

The Company considers all highly liquid instruments with a maturity of three months or less at the time of issuance, are readily convertible to known amounts of cash, and which are subject to insignificant risk of changes in value to be cash equivalents.

• (e) Foreign Currency Translation

The functional and reporting currency is the Canadian dollar. Transactions denominated in foreign currencies are translated using the exchange rate in effect on the transaction date or at an average rate. Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange in effect at the statement of financial position date. Non-monetary items are translated using the historical rate on the date of the transaction. Foreign exchange gains and losses are included in the consolidated statement of operations.

(f) Exploration and Evaluation Expenditures

Exploration and evaluation expenditures include the costs of acquiring licenses, costs associated with exploration and evaluation activity, and the fair value (at acquisition date) of exploration and evaluation assets acquired in a business combination. Exploration and evaluation expenditures are capitalized. Costs incurred before the Company has obtained the legal rights to explore an area are charged to operations.

Exploration and evaluation assets are assessed for impairment if: (i) sufficient data exists to determine technical feasibility and commercial viability; and (ii) facts and circumstances suggest that the carrying amount exceeds the recoverable amount.

10

MAJUBA HILL COPPER CORP. Notes to the Consolidated Financial Statements Years Ended June 30, 2023 and 2022 (Expressed in Canadian dollars)

2. Significant Accounting Policies (continued)

• (f) Exploration and Evaluation Expenditures (continued)

Once the technical feasibility and commercial viability of the extraction of mineral resources in an area of interest are demonstrable, exploration and evaluation assets attributable to that area of interest are first tested for impairment and then reclassified to mining property and development assets within property, plant and equipment.

Recoverability of the carrying amount of any exploration and evaluation assets is dependent on successful development and commercial exploitation, or alternatively, sale of the respective areas of interest.

Mineral Property Options

The Company does not record any expenditures made by the farmee in its accounts. It also does not recognize any gain or loss on its exploration and evaluation farm out arrangements but redesignates any costs previously capitalized in relation to the whole interest as relating to the partial interest retained and any consideration received directly from the farmee is credited against costs previously capitalized.

• (g) Restoration, Rehabilitation, and Environmental Obligations

An obligation to incur restoration, rehabilitation and environmental costs arises when environmental disturbance is caused by the exploration or development of a mineral property interest. Such costs arising from the decommissioning of plant and other site preparation work, discounted to their net present value, are provided for and capitalized at the start of each project to the carrying amount of the asset, along with a corresponding liability as soon as the obligation to incur such costs arises. The timing of the actual rehabilitation expenditure is dependent on a number of factors such as the life and nature of the asset, the operating license conditions and, when applicable, the environment in which the mine operates.

Discount rates using a pre-tax rate that reflects the time value of money are used to calculate the net present value. These costs are charged in the consolidated statement of operations over the economic life of the related asset, through amortization using either the unit of production or the straight-line method. The obligation is increased for the accretion and the corresponding amount is recognized in the consolidated statement of operations.

Decommissioning costs are also adjusted for changes in estimates. Those adjustments are accounted for as a change in the corresponding capitalized cost, except where a reduction in costs is greater than the unamortized capitalized cost of the related assets, in which case the capitalized cost is reduced to nil and the remaining adjustment is recognized in the consolidated statement of operations.

The operations of the Company have been, and may in the future be, affected from time to time in varying degree by changes in environmental regulations, including those for site restoration costs. Both the likelihood of new regulations and their overall effect upon the Company are not predictable.

As at June 30, 2023 and 2022, the Company has no material restoration, rehabilitation, and environmental obligations.

11

MAJUBA HILL COPPER CORP. Notes to the Consolidated Financial Statements Years Ended June 30, 2023 and 2022 (Expressed in Canadian dollars)

2. Significant Accounting Policies (continued)

• (h) Financial Instruments

Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the respective instrument.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are included in the initial carrying value of the related instrument and are amortized using the effective interest method. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in the consolidated statement of operations.

Fair value estimates are made at the consolidated statement of financial position date based on relevant market information and information about the financial instrument. All financial instruments are classified into either: fair value through profit or loss (“FVTPL”) or amortized cost.

The Company has made the following classifications:

Cash FVTPL Accounts payable and accrued liabilities Amortized cost

Financial assets

The classification of financial assets depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.

Financial assets at FVTPL

Financial assets are classified as FVTPL when the financial asset is either held for trading or it is designated as FVTPL. A financial asset is classified as held for trading if:

• it has been acquired principally for the purpose of selling it in the near term; or

• on initial recognition it is part of a portfolio of identified financial instruments that the Company manages together and has a recent actual pattern of short-term profit-taking; or

• it is a derivative that is not designated and effective as a hedging instrument.

Financial assets at amortized cost

Financial assets at amortized cost are non-derivative financial assets which are held within a business model whose objective is to hold assets to collect contractual cash flows and its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. A financial asset (unless it is a trade receivable without a significant financing component that is initially measured at the transaction price) is initially measured at fair value plus, for an item not at FVTPL, transaction costs that are directly attributable to its acquisition. Subsequent to initial recognition, financial assets are measured at amortized cost using the effective interest method, less any impairment.

Impairment of financial assets

Financial assets, other than those classified as FVTPL, are assessed for indicators of impairment at the end of each reporting period. Financial assets are considered to be impaired when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been decreased.

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables, where the carrying amount is reduced through the use of an allowance account.

12

MAJUBA HILL COPPER CORP. Notes to the Consolidated Financial Statements Years Ended June 30, 2023 and 2022 (Expressed in Canadian dollars)

2. Significant Accounting Policies (continued)

• (h) Financial Instruments (continued)

Financial assets (continued)

Impairment of financial assets (continued)

When a trade receivable is considered uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are offset against the allowance account. Changes in the carrying amount of the allowance account are recognized in the consolidated statement of operations. Loss allowances are based on the lifetime ECL’s that result from all possible default events over the expected life of the trade receivable, using the simplified approach.

For financial assets measured at amortized cost, if, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognized, the previously recognized impairment loss is reversed through the consolidated statement of operations 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.

Financial liabilities and equity instruments

Classification as debt or equity

Debt and equity instruments issued by the Company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Company are recognized as the proceeds received, net of direct issue costs.

Other financial liabilities

Other financial liabilities (including loans and borrowings and trade payables and other liabilities) are initially measured at fair value, net of transaction costs. Subsequently, other financial liabilities are measured at amortized cost using the effective interest method.

The effective interest method is a method of calculating the amortized cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.

• (i) Income Taxes

Current income tax

Current income tax assets and liabilities for the current period are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date. Current income tax relating to items recognized directly in other comprehensive income or equity is recognized in other comprehensive income or equity and not in the consolidated statement of operations. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

13

MAJUBA HILL COPPER CORP. Notes to the Consolidated Financial Statements Years Ended June 30, 2023 and 2022 (Expressed in Canadian dollars)

2. Significant Accounting Policies (continued)

• (i) Income Taxes (continued)

Deferred income tax

Deferred income tax is provided using the statement of financial position method on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. The carrying amount of deferred income tax assets is reviewed at the end of each reporting period and recognized only to the extent that it is probable that sufficient taxable income will be available to allow all or part of the deferred income tax asset to be utilized. Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. Deferred income tax assets and deferred income tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current income tax liabilities and the deferred income taxes relate to the same taxable entity and the same taxation authority.

(j) Share-based Payments

The Company grants share-based awards to employees, directors, and consultants as an element of compensation. The fair value of the awards is recognized over the vesting period as share-based compensation expense and share-based payment reserve. The fair value of share-based payments is determined using the Black-Scholes option pricing model using estimates at the date of the grant. At each reporting date prior to vesting, the cumulative expense representing the extent to which the vesting period has expired and management’s best estimate of the awards that are ultimately expected to vest is computed. The movement in cumulative expense is recognized in the consolidated statement of operations with a corresponding entry within equity, against share-based payment reserve. No expense is recognized for awards that do not ultimately vest. When stock options are exercised, the proceeds received, together with any related amount in share-based payment reserve, are credited to share capital.

Share-based payments arrangements in which the Company receives goods or services as consideration for its own equity instruments are accounted for as equity-settled share-based payment transactions, unless the fair value cannot be estimated reliably. If the Company cannot reliably estimate the fair value of the goods or services received, the Company will measure their value by reference to the fair value of the equity instruments granted.

(k) Loss Per Share

Basic loss per share is calculated by dividing the loss attributable to ordinary equity holders of the Company by the weighted average number of common shares outstanding during the year. Diluted loss per share is calculated by adjusting loss attributable to common equity holders of the Company, and the weighted average number of common shares outstanding, for the effects of all dilutive potential common shares. Dilutive potential common shares shall be deemed to have been converted into common shares at the beginning of the period or, if later, at the date of issue of the potential common shares.

The diluted loss per share is equal to the basic loss per share as a result of the anti-dilutive effect of the outstanding options and warrants.

(l) Related party transactions

Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control, related parties may be individuals or corporate entities. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties.

14

MAJUBA HILL COPPER CORP. Notes to the Consolidated Financial Statements Years Ended June 30, 2023 and 2022 (Expressed in Canadian dollars)

3. Exploration and Evaluation Assets

Exploration and Evaluation Assets
	Majuba Hill Property
	$
Acquisition costs:
Balance, June 30, 2021	405,493
Additions	159,472
Balance, June 30, 2022	564,965
Additions	169,566
Balance,June 30,2023	734,531
Exploration costs:
Balance, June 30, 2021	1,893,272
Assay and analysis	316,052
Camp and crew costs	54,255
Drilling	1,158,045
Geological consulting	360,792
Transportation	37,755
Other expenses	378,347
Balance, June 30, 2022	4,198,518
Assay and analysis	115,855
Camp and crew costs	30,836
Drilling	1,666,282
Geological consulting	402,812
Transportation	52,229
Other expenses	245,508
Balance,June 30,2023	6 6,712,040
Carrying amounts:
Balance,June 30,2022	4,763,483
Balance,June 30,2023	7,446,571

Majuba Hill Copper Project

On May 28, 2018, the Company entered into an Exploration Lease and Option to Purchase Agreement with Majuba Hill LLC, a Nevada limited liability company (the “Owner”), for the Majuba Hill Copper Project in Nevada, USA. The Owner granted to the Company the exclusive option and right to acquire ownership of the property for the final purchase price of US$4,000,000 due on or before May 28, 2028, and the following commitments:

• i) Cash payments to be made:

• US$50,000 upon execution of the agreement; (paid)

• US$50,000 on or before May 28, 2019 (paid);

• US$75,000 on or before May 28, 2020 (paid);

• US$100,000 on or before May 28, 2021 (paid); and

• US$125,000 on or before May 28, 2022 (paid) and each subsequent anniversary of the agreement date.

• ii) Shares to be issued

• 750 upon execution of the agreement (issued);

• 750 on or before May 28, 2019 (issued);

• 750 on or before May 28, 2020 (issued); and

• 750 on or before May 28, 2021 (issued).

15

MAJUBA HILL COPPER CORP. Notes to the Consolidated Financial Statements Years Ended June 30, 2023 and 2022 (Expressed in Canadian dollars)

3. Exploration and Evaluation Assets (continued)

iii) Exploration expenditures to be incurred:

• US$100,000 on or before May 28, 2019 (incurred); and

• US$350,000 on or before May 28, 2020 (incurred).

Precious metals from the property are subject to a 3% net smelter return royalty. Minerals from the property are subject to a 1% net smelter return royalty.

4. Related Party Transactions

• (a) As at June 30, 2023, the amount of $21,000 (June 30, 2022 - $153,000) is owed to a company controlled by the President and Chief Executive Officer of the Company, which is unsecured, noninterest bearing, and due on demand. The amount is included in accounts payable and accrued liabilities. During the year ended June 30, 2023, the Company incurred management fees of $240,000 (2022 - $540,000) to a company controlled by the President and Chief Executive Officer of the Company.

• (b) As at June 30, 2023, the amount of $3,214 (June 30, 2022 - $nil) is due from the President and Chief Executive Officer of the Company, which is unsecured, non-interest bearing, and due on demand. The amount is included in accounts payable and accrued liabilities.

• (c) During the year ended June 30, 2023, the Company incurred management fees of $70,000 (2022 - $270,000) to a company controlled by the Chief Financial Officer of the Company.

• (d) As at June 30, 2023, the amount of $16,257 (June 30, 2022 - $nil) is due to the Chief Financial Officer of the Company. The amount is included in accounts payable and accrued liabilities. During the year ended June 30, 2023, the Company incurred management fees of $60,000 (2022 - $nil) to the Chief Financial Officer of the Company.

• (e) During the year ended June 30, 2023, the Company incurred management fees of $30,000 (2022 – $55,000) to a company controlled by the former Corporate Secretary of the Company.

• (f) As at June 30, 2023, the amount of $nil (June 30, 2022 – $21,325) is owed to a director of the Company, which is unsecured, non-interest bearing, and due on demand. During the year ended June 30, 2023, the Company incurred consulting fees of $10,000 (2022 - $100,000) to a director of the Company.

All related party transactions are in the normal course of operations and have been measured at the agreed to amounts, which is the amount of consideration established and agreed to by the related parties.

5. Share Capital

Authorized: Unlimited common shares without par value

Share transactions for the year ended June 30, 2023:

• (a) On July 22, 2022, the Company issued 10,500,000 units at $0.20 per unit for proceeds of $2,100,000. Each unit consisted of one common share of the Company and one transferable share purchase warrant. Each share purchase warrant is exercisable at a price of $0.25 per common share expiring on July 22, 2023.

• (b) On August 16, 2022, the Company issued 6,713,830 units at $0.20 per unit for proceeds of $1,342,766. Each unit consisted of one common share of the Company and one transferable share purchase warrant. Each share purchase warrant is exercisable at a price of $0.25 per common share expiring on August 16, 2023.

16

MAJUBA HILL COPPER CORP. Notes to the Consolidated Financial Statements Years Ended June 30, 2023 and 2022 (Expressed in Canadian dollars)

5. Share Capital (continued)

• (c) On May 3, 2023, the Company issued 8,816,666 units at $0.15 per unit for proceeds of $1,322,500, and 666,667 units at $0.15 per unit to settle the debt in the amount of $100,000, resulting in no gain or loss Each unit consisted of one common share of the Company and one transferable share purchase warrant. Each share purchase warrant is exercisable at a price of $0.40 per common share expiring on May 3, 2024.

• (d) During the year ended June 30, 2023, the Company issued 2,035,000 common shares for proceeds of $431,425 pursuant to the exercise of stock options. The fair value of $240,651 was reallocated from reserves to share capital.

• (e) During the year ended June 30, 2023, the Company issued 4,080,588 common shares pursuant to the settlement of restricted share units. The fair value of $1,576,000 for the restricted share units vested was reallocated from reserves to share capital.

Share transactions for the year ended June 30, 2022:

• (a) On May 31, 2022, the Company consolidated its outstanding common shares on a 10:1 basis. All share amounts have been retroactively restated for all periods presented.

• (b) On August 9, 2021, the Company issued 750 common shares with a fair value of $1,050 pursuant to the terms of the mineral property option agreement for the Majuba Hill Property.

• (c) On September 7, 2021, the Company issued 2,350,359 units at $0.95 per unit for proceeds of $2,232,841. Each unit consisted of one common share of the Company and one transferable share purchase warrant. Each share purchase warrant is exercisable at a price of $1.25 per common share expiring on September 7, 2023. In connection with this share issuance, the Company incurred share issuance costs of $11,542.

• (d) On December 24, 2021, the Company issued 5,018,615 units at $0.65 per unit for proceeds of $3,262,100. Each unit consisted of one common share of the Company and one transferable share purchase warrant. Each share purchase warrant is exercisable at a price of $0.90 per common share expiring on December 24, 2024. In connection with this share issuance, the Company incurred share issuance costs of $15,893.

• (e) During the year ended June 30, 2022, the Company issued 454,700 common shares for proceeds of $386,495 pursuant to the exercise of share purchase warrants.

• (f) During the year ended June 30, 2022, the Company issued 3,330,000 common shares pursuant to the settlement of restricted share units. The fair value of $5,205,105 for the restricted share units vested was reallocated from reserves to share capital.

17

MAJUBA HILL COPPER CORP. Notes to the Consolidated Financial Statements Years Ended June 30, 2023 and 2022 (Expressed in Canadian dollars)

6. Share Purchase Warrants

The following table summarizes the continuity of share purchase warrants:

		Weighted
		average
	Number of	exercise price
	warrants	$
Balance, June 30, 2021	3,800,980	1.90
Issued	7,368,974	1.01
Exercised	(454,700)	0.85
Expired	(659,400)	2.70
Balance, June 30, 2022	10,055,854	1.25
Issued	26,697,163	0.30
Balance,June 30,2023	36,753,017	0.56

As at June 30, 2023, the following share purchase warrants were outstanding:

Number of	Exercise
warrants	price
outstanding	$	Expiry date
2,350,359	1.25	September 7, 2023
1,166,600	0.85	September 14, 2023
1,520,280	2.70	November 16, 2023
5,018,615	0.90	December 24, 2024
10,500,000	0.25	July 22, 2023
6,713,830	0.25	August 16, 2023
9,483,333	0.40	May 3, 2024
36,753,017

7. Stock Options

The Company has adopted a Stock Option Plan (the “Plan”). Under the Plan, the Company can issue up to 10% of the issued and outstanding common shares as incentive stock options to directors, officers, employees and consultants to the Company. The Plan limits the number of stock options which may be granted to any one individual to not more than 5% of the total issued common shares of the Company in any 12-month period. The Plan also limits the stock options which may be granted to any one individual if the exercise would result in the issuance of common shares more than 2% in any 12month period. The number of options granted to any one consultant or a person employed to provide investor relations activities in any 12-month period must not exceed 2% of the total issued common shares of the Company. As well, stock options granted under the Plan may be subject to vesting provisions as determined by the Board of Directors.

18

MAJUBA HILL COPPER CORP. Notes to the Consolidated Financial Statements Years Ended June 30, 2023 and 2022 (Expressed in Canadian dollars)

7. Stock Options (continued)

The following table summarizes the continuity of the Company’s stock options:

		Weighted
		average
	Number	exercise price
	of options	$
Outstanding, June 30, 2021	117,408	2.30
Granted	400,000	2.00
Expired/cancelled	(517,408)	2.07
Outstanding, June 30, 2022	–	–
Granted	2,235,000	0.21
Exercised	(2,035,000)	0.21
Outstanding,June 30,2023	200,000	0.20

On December 13, 2022, the Company granted 1,250,000 stock options at an exercise price of $0.185 per option with a term of one year expiring December 13, 2023. All of the options vested upon date of grant. The fair value of the options was measured at $131,867 on grant date.

On January 4, 2023, the Company granted 785,000 stock options at an exercise price of $0.255 per option with a term of one year expiring January 4, 2024. All of the options vested upon date of grant. The fair value of the options was measured at $108,784 on grant date.

On May 19, 2023, the Company granted 200,000 stock options at an exercise price of $0.20 per option with a term of fourteen months expiring July 19, 2024. All of the options vested upon date of grant. The fair value of the options was measured at $16,117 on grant date.

The weighted average grant date fair value of stock options granted during the year ended June 30, 2023 was $0.11 (2022 - $1.91). The weighted average share price at the date of exercise during the year ended June 30, 2023 was $0.23 (2022 - $nil).

The fair value of stock options granted have been estimated using the Black-Scholes option-pricing model assuming no expected dividends, no forfeitures, and the following weighted average assumptions:

	2023	2022
Risk-free interest rate	4.56%	0.39%
Expected volatility	154%	130%
Expected option life (in years)	1	1
Estimated forfeiture rate	0.00%	0.00%
Dividend rate	0.00%	0.00%

19

MAJUBA HILL COPPER CORP. Notes to the Consolidated Financial Statements Years Ended June 30, 2023 and 2022 (Expressed in Canadian dollars)

8. Restricted Share Units

The Company adopted a Restricted Share Unit Plan (the “RSU Plan”), approved by the Company’s shareholders on December 2, 2019. The RSU Plan is designed to provide certain directors, officers, consultants and other key employees (an “Eligible Person”) of the Company and its related entities with the opportunity to acquire restricted share units (“RSUs”) of the Company. The RSU Plan allows the Company to award, in aggregate, up to a rolling 10% maximum of the issued and outstanding shares from time to time, under and subject to the terms and conditions of the RSU Plan.

During the year ended June 30, 2023, the Company granted 4,070,588 (2022 – 3,405,000) RSUs to consultants of the Company. RSUs fully vest at dates of grant. The total fair value of RSUs is calculated to be $1,430,500 (2022 - $3,425,750) based on the Company’s share prices on the dates of grant.

The following table summarizes the continuity of RSUs:

The following table summarizes the continuity of RSUs:
		Weighted
		average issue
	Number of	price
	RSUs	$
Balance and exercisable, June 30, 2021	450,000	4.60
Granted	3,405,000	1.01
Settled	(3,330,000)	1.56
Balance and exercisable, June 30, 2022	525,000	0.58
Granted	4,070,588	0.35
Settled	(4,080,588)	0.39
Expired	(15,000)	4.63
Balance and exercisable,June 30,2023	500,000	0.18

9. Financial Instruments and Risk Management

(a) Fair Values

Fair value measurements are classified using a fair value hierarchy that reflects the significance of inputs used in making the measurements. The fair value hierarchy has the following levels:

• Level 1 - valuation based on quoted prices (unadjusted) in active markets for identical assets or liabilities;

• Level 2 - valuation techniques based on inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and

• Level 3 - valuation techniques using inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The fair values of financial instruments, which include cash, and accounts payable and accrued liabilities, approximate their carrying values due to the relatively short-term maturity of these instruments. Cash is carried at fair value using a level 1 fair value measurement.

(b) Credit Risk

Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. The Company’s primary exposure to credit risk is in its cash. The risk in cash is managed through the use of a major financial institution which has a high credit quality as determined by rating agencies.

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MAJUBA HILL COPPER CORP. Notes to the Consolidated Financial Statements Years Ended June 30, 2023 and 2022 (Expressed in Canadian dollars)

9. Financial Instruments and Risk Management (continued)

(c) Interest Rate Risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is not exposed to interest rate risk as it does not have any assets or liabilities that are affected by changes in interest rates.

(d) Foreign Exchange Rate Risk

Foreign exchange risk is the risk that the Company’s financial instruments will fluctuate in value as a result of movements in foreign exchange rates. As at June 30, 2023, the Company has no significant financial instruments denominated in a foreign currency; however, the Company has exploration and evaluation assets in the U.S. with mineral property option agreement obligations denominated in U.S. dollars. The Company has not entered into foreign exchange rate contracts to mitigate this risk. As at June 30, 2023, the Company is not exposed to any significant foreign exchange rate risk.

(e) Liquidity Risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company requires funds to finance its business development activities. In addition, the Company needs to raise equity financing to carry out its exploration programs. There is no assurance that financing will be available or, if available, that such financing will be on terms acceptable to the Company.

• (f) Price Risk

The Company is exposed to price risk with respect to commodity prices. The Company’s ability to raise capital to fund exploration and development activities is subject to risks associated with fluctuations in the market price of commodities.

10. Capital Management

The Company’s capital structure consists of cash and equity. The Company manages its capital structure and makes adjustments to it, based on the funds available to the Company, in order to support acquisition and exploration of mineral properties. The Board of Directors does not establish quantitative return on capital criteria for management, but rather relies on the expertise of the Company’s management to sustain future development of the business. The properties in which the Company currently has interests are in the exploration stage; as such, the Company is dependent on external financing to fund its activities. In order to carry out the planned exploration and pay for administrative costs, the Company will spend its existing working capital and raise additional amounts as needed. The Company will continue to assess new properties and seek to acquire interests in additional properties if it feels there is sufficient geologic or economic potential and if it has adequate financial resources to do so. Management reviews its capital management approach on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable.

There were no changes in the Company’s approach to capital management since inception. The Company is not subject to externally imposed capital requirements.

21

MAJUBA HILL COPPER CORP. Notes to the Consolidated Financial Statements Years Ended June 30, 2023 and 2022 (Expressed in Canadian dollars)

11. Contingencies

On September 17, 2021, the Executive Director of the BC Securities Commission (the “ED”) issued a Notice of Hearing alleging that the Company issued news releases and filed material change reports relating to two financings undertaken by the Company in 2018, that contained misrepresentations contrary to the Securities Act (the “Act”). On May 27, 2022, the ED and the Company entered into an agreement whereby the Company agreed to admit by way of agreed statement of facts, that the Company made the contraventions of the Act. In exchange, the ED agreed to submit to the BC Securities Commission (the “BCSC”) that no sanctions should be made against the Company. On April 14, 2023, the BCSC found that the Company had contravened the Act in manner admitted. On September 12, 2023, the BCSC issued its sanctions decision in which it found that no sanctions would be made against the Company. The sanctions decision concludes this proceeding.

On July 11, 2019, a Notice of Civil Claim was filed with the Supreme Court of British Columbia seeking certification for a class action against the Company (the “Action”). The proposed class action includes allegations that the Company made misrepresentations in its public disclosure. On November 22, 2021, the plaintiffs were granted leave to proceed with the Action under the Act, and this decision was affirmed on September 13, 2022. The hearing for certification of the Action is scheduled for December 2023. No settlement has been made and the eventual outcome is not determinable.

On March 29, 2023, Proactive Investors North America (“Proactive”) filed a small claims lawsuit against the Company in Provicial Court regarding a certain outstanding invoice. The Company is also counterclaiming that Proactive fundamentally underperformed their contractual obligations while it was active. At present, the parties are in settlement negotiations and the outcome is not determinable.

12. Income Taxes

The actual income tax provisions differ from the expected amounts calculated by applying the Canadian combined federal and provincial corporate income tax rates to the loss before income taxes. The components of these differences are as follows:

components of these differences are as follows:
	2023	2022
	$	$
Canadian statutory income tax rate	27%	27%
Income tax recovery at statutory rate	(1,375,791)	(2,129,643)
Tax effect of:
Permanent differences and other	456,310	1,017,703
Change in unrecognized deferred tax assets	919,481	1,111,940
Deferred income tax recovery	–	–

The significant components of deferred tax assets and liabilities are as follows:

	2023	2022
	$	$
Deferred income tax assets (liability):
Non-capital losses carried forward	5,746,998	4,821,989
Exploration and evaluation assets	(23,405)	(23,405)
Investment	158,486	158,486
Share issuance costs	8,192	13,720
Unrecognized deferred income tax assets	(5,890,271)	(4,970,790)
Net deferred income tax asset	–	–

22

MAJUBA HILL COPPER CORP. Notes to the Consolidated Financial Statements Years Ended June 30, 2023 and 2022 (Expressed in Canadian dollars)

12. Income Taxes (continued)

The Company has approximately $21,000,000 of non-capital losses available, which begin to expire in 2037 through to 2043 and may be applied against future taxable income. Also, the Company has approximately $7,400,000 of exploration and development costs which are available for deduction against future income for tax purposes. At June 30, 2023, the net amount which would give rise to a deferred income tax asset has not been recognized as it is not probable that such benefit will be utilized in the future years.

13. Segmented Information

The Company currently operates in one industry segment, that being the acquisition and exploration of a mineral property in the USA.

14. Subsequent Events

On July 17, 2023, the Company issued 300,000 common shares pursuant to the settlement of restricted share units.

On September 7, 2023, the Company granted 2,200,000 RSUs to consultants of the Company. RSUs fully vested on date of grant. And the Company granted 1,000,000 stock options to consultants of the Company at an exercise price of $0.17 per option with a term of one year expiring September 7, 2024. All of the options vested upon date of grant.

On September 11, 2023, the Company issued 1,050,000 common shares pursuant to the settlement of restricted share units.

On September 21, 2023, the Company issued 600,000 common shares pursuant to the settlement of restricted share units.

On October 3, 2023, the Company issued 150,000 common shares pursuant to the settlement of restricted share units.

On October 5, 2023, the Company entered into a Share Exchange Agreement with 1429570 BC Ltd. to earn up to 100% interest in the Copper Chest Property located on the Bonavista Peninsula in Newfoundland, Canada. Pursuant to the Share Exchange Agreement, the Company will issue 13,260,000 common shares at a deemed price of $0.15 per share in exchange for 100% issued and outstanding shares of 1429570 BC Ltd. The closing date for the transaction is expected to be on or before November 15, 2023.

23