Glen Eagle Resources Inc.

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Consolidated Financial Statements

December 31, 2020 and 2019 (in Canadian dollars, unless otherwise stated)

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Independent auditor’s report

To the Shareholders of Glen Eagle Resources Inc.

Our opinion

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of Glen Eagle Resources Inc. and its subsidiary (together, the Corporation) as at December 31, 2020 and 2019, and its financial performance and its cash flows for the years then ended in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (IFRS).

What we have audited

The Corporation’s consolidated financial statements comprise:

the consolidated statements of financial position as at December 31, 2020 and 2019;
the consolidated statements of loss and comprehensive loss for the years then ended;
the consolidated statements of changes in equity for the years then ended;
the consolidated statements of cash flows for the years then ended; and
the notes to the consolidated financial statements, which include significant accounting policies and other explanatory information.

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 believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence

We are independent of the Corporation in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in Canada. We have fulfilled our other ethical responsibilities in accordance with these requirements.

PricewaterhouseCoopers LLP/s.r.l./s.e.n.c.r.l. 1250 René-Lévesque Boulevard West, Suite 2500, Montréal, Quebec, Canada H3B 4Y1 T: +1 514 205 5000, F: +1 514 876 1502

“PwC” refers to PricewaterhouseCoopers LLP/s.r.l./s.e.n.c.r.l., an Ontario limited liability partnership.

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Material uncertainty related to going concern

We draw attention to note 1 to the consolidated financial statements, which describes events or conditions that indicate the existence of a material uncertainty that may cast significant doubt about the Corporation’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 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 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.

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 Corporation’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 Corporation or to cease operations, or has no realistic alternative but to do so.

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

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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 Corporation’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 Corporation’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 Corporation 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 Corporation 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.

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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 Yves Bonin.

\s\PricewaterhouseCoopers LLP[1]

Montréal, Quebec April 30, 2021

1 CPA auditor, CA, public accountancy permit No. A110416

Glen Eagle Resources Inc. Consolidated Statements of Financial Position

(in Canadian dollars)

Assets Current assets Cash Short term investments – term deposits Amounts receivable (note 6) Inventory (note 7) Non-current assets Property, plant and equipment (note 8) Exploration and evaluation assets (note 9) TOTAL ASSETS Liabilities Current liabilities Accounts payable and accrued liabilities (note 10) Current portion of terms loans and convertible debenture Non-current liabilities Term loans (note 11) Provision (note 12) Convertible debenture (note 13) TOTAL LIABILITIES Equity Share capital (note 14) Warrants (note 14) Stock options (note 15) Equity component of convertible debenture Contributed surplus Deficit Accumulated other comprehensive loss Total equity TOTAL LIABILITIES AND EQUITY Going concern(note 1) Contingencies (note 24)	December 31 2020 $ December 31 2019 $
	141,532 7,470 8,099 8,096 82,003 57,884 38,871 235,722
	270,505 309,172
	2,846,493 3,066,089 214,727 214,727
	3,061,220 3,280,816
	3,331,725 3,589,988
	1,272,650 1,002,887 147,641 -
	1,420,291 1,002,887
	660,000 660,000 68,461 65,678 93,752 137,596
	822,213 863,274
	2,242,504 1,866,161
	28,817,777 28,138,995 192,005 - 512,081 617,106 7,140 - 3,284,643 3,050,304 (31,545,576) (29,895,310) (178,849) (187,268)
	1,089,221 1,723,827
	3,331,725 3,589,988

The accompanying notes are an integral part of these consolidated financial statements Approved by the Board of Directors

/s/ Jean Labrecque___ Director /s/ Guy Chamard__ Director

Glen Eagle Resources Inc. Consolidated Statements of Loss and Comprehensive Loss For the years ended December 31, 2020 and 2019

(in Canadian dollars)

Sales Gold & silver Cost of sales (note 17) Gross operating margin General and administrative expenses (note 17) Selling expenses General exploration Operating loss Interest expense Foreign exchange loss Unrealized gain on fair value of derivative Net loss for the year Other comprehensive income (loss) net of income tax: Currency translation adjustment Comprehensive loss for the year Weighted average number of outstanding common shares(note 16) Loss per share Basic and diluted (note 16)	2020 $	2019 $
	778,662 (1,430,612)	2,098,720 (2,236,772)
	(651,950) (662,992) (53,745) (133,940)	(138,052) (691,366) (121,037) (1,099)
	(1,502,627) (131,074) (16,214) (351)	(951,554) (101,166) (17,348) 21,252
	(1,650,266) 8,419	(1,048,816) (155,173)
	(1,641,847)	(1,203,989)
	86,827,492	82,868,108
	(0.02)	(0.01)

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

Glen Eagle Resources Inc. Consolidated Statements of Changes in Equity For the years ended December 31, 2020 and 2019

(in Canadian dollars, except for the number of shares)

Number of common shares Share capital $	Warrants $ Stock options $	Equity component of convertible debenture $ Contributed surplus $ Accumulated other comprehensive loss $ Deficit $	Total $
82,868,108 28,138,995	- 596,676	- 2,929,176 (32,095) (28,846,494)	2,786,258
		- (1,048,816) (155,173) -	(1,048,816) (155,173)
- - - -	- (121,128) - 141,558	(155,173) (1,048,816) - 121,128 - - - - - -	(1,203,989) - 141,558
- -	- 20,430	- 121,128 (155,173) (1,048,816)	(1,062,431)
82,868,108 28,138,995	- 617,106	- 3,050,304 (187,268) (29,895,310)	1,723,827
82,868,108 28,138,995	- 617,106	- 3,050,304 (187,268) (29,895,310)	1,723,827
		- (1,650,266) 8,419 -	(1,650,266) 8,419
11,087,500 830,787 - (192,005) 500,000 40,000 - - - - - -	- - 192,005 - - - - - - (234,339) - 129,314	8,419 (1,650,266) - - - - - - - - - - - - 7,140 - - - - 234,339 - - - - - -	(1,641,847) 830,787 - 40,000 7,140 - 129,314
11,587,500 678,782	192,005 (105,025)	7,140 234,339 8,419 (1,650,266)	(634,606)
94,455,608 28,817,777	192,005 512,081	7,140 3,284,643 (178,849) (31,545,576)	1,089,221

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

Glen Eagle Resources Inc. Consolidated Statements of Cash Flows For the years ended December 31, 2020 and 2019

(in Canadian dollars) Cash flows used in Operating activities Net loss for the year Adjustments for Depreciation and amortization Accretion expense Unrealized gain on fair value of derivative Foreign exchange gain Share-based compensation expense Foreign exchange on cash Changes in working capital items Amounts receivable Inventory Accounts payable and accrued liabilities Net cash used in operating activities Investing activities Acquisition of property, plant & equipment Acquisition of exploration and evaluation asset Net cash used in investing activities Financing activities Increase of term loans Increase of convertible debenture Issuance of share capital, net of issue costs Net cash provided by financing activities Foreign exchange on cash Net decrease – cash Cash – Beginning of year Cash – End of year Additional information	2020 $ 2019 $
	(1,650,266) (1,048,816) 231,489 230,391 13,367 7,583 351 (21,252) 4,756 4,759 129,314 141,558 16,214 17,348
	(1,254,775) (668,429)
	(24,119) (10,766) 196,851 (61,337) 309,763 272,590
	482,495 200,487
	(772,280) (467,942)
	(8,231) (49,464) - (4,567)
	(8,231) (54,031)
	- 410,000 100,000 - 830,787 -
	930,787 410,000
	(16,214) (17,348) 134,062 (129,321) 7,470 136,791
	141,532 7,470

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

Glen Eagle Resources Inc. Notes to consolidated financial statements For the years ended December 31, 2020 and 2019

(in Canadian dollars, except per share amounts)

1 Incorporation, nature of activities and going concern

Glen Eagle Resources Inc. (the “Corporation”) is incorporated under the Canada Business Corporations Act and is engaged in the acquisition, the exploration and the evaluation of mining properties. The address of the registered office and its principal place of business is 4710 St-Ambroise Street, Suite 308 Montréal (Québec), Canada. The Corporation’s shares are listed on the TSX Venture Exchange (symbol: GER).

Although management has taken steps to verify titles of mining properties in which the Corporation has an interest, in accordance with industry standards for the current stage of exploration of such properties, these procedures do not guarantee the Corporation’s title. Property title may be subject to unregistered prior agreements and non-compliant with regulatory requirements.

The Corporation has not yet determined whether the exploration and evaluation assets have economically recoverable ore reserves. Recovery of amounts indicated under exploration and evaluation assets and other tangible assets are subject to certain conditions: the discovery of economically recoverable reserves, the Corporation’s ability to obtain the financing required to complete exploration, evaluation, development, construction and, ultimately, the sale of such assets.

The Corporation’s consolidated financial statements have been prepared using accounting principles applicable to a going concern, which contemplates the realization of assets and settlement of liabilities in the normal course of business as they come due. In assessing whether the going concern assumption is appropriate, management takes into account all available information about the future, which is at least, but not limited to, twelve months from the end of the reporting period. Management is aware, in making its assessment, of material uncertainties related to events and conditions that may cast a significant doubt upon the Corporation’s ability to continue as a going concern as described in the following paragraph, and accordingly, the appropriateness of the use of accounting principles applicable to a going concern. These consolidated financial statements do not reflect the adjustment to the carrying values of assets and liabilities, expenses and balance sheet classifications that would be necessary were the going concern assumption would not be appropriate. These adjustments could be material.

For the year ended December 31, 2020, the Corporation reported a net loss of $1,650,266 (net loss of $1,048,816 for the year ended December 31, 2019) and has an accumulated deficit of $31,545,576 as at December 31, 2020. In addition to ongoing working capital requirements, the Corporation must secure sufficient funding to meet its existing commitments for exploration and evaluation programs and pay general and administration costs. As at December 31, 2020, the Corporation has a negative working capital of $1,149,786 (negative of $693,715 as at December 31, 2019). Management estimates that current funds will not be sufficient to meet the Corporation’s obligations and budgeted expenses through December 31, 2021. Any additional funding may be met in the future in a number of ways including but not limited to, increase in production, the issuance of new equity instruments and debt financing. While management has been successful in securing financing in the past, there can be no assurance it will be able to do so in the future or that these sources of funding or initiatives will be available for the Corporation or that they will be available on terms which are acceptable to the Corporation. If management is unable to obtain new funding, the Corporation may be unable to continue its operations, and amounts realized for assets might be less than amounts reflected in these consolidated financial statements.

The COVID-19 pandemic has negatively impacted the global economy, disrupted global supply chains and workforce participation and created significant volatility and disruption of financial markets. The extent of the impact of the COVID-19 pandemic on the Corporation operational and financial performance, including its ability to execute the 2021 business plan in the expected time frame, will depend on future developments, including the duration and severity of the pandemic and related restrictions, all of which are uncertain and cannot be predicted. The Corporation has taken and will continue to take action to minimize the impact. However, it is impossible to determine the financial implications of these events for the moment.

These consolidated financial statements were approved and authorized for issue by the board of directors on April 29, 2021.

Glen Eagle Resources Inc. Notes to consolidated financial statements For the years ended December 31, 2020 and 2019

(in Canadian dollars, except per share amounts)

2 Summary of significant accounting policies

The Corporation prepares its financial statements in accordance with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board (“IASB”).

The significant accounting policies used in the preparation of these consolidated financial statements are as follows:

A. Basis of measurement

The consolidated financial statements have been prepared under the historical cost basis, except for the revaluation of certain financial assets and financial liabilities to fair value.

B. Consolidation

These consolidated financial statements include the accounts of the Corporation and those of its wholly-owned foreign subsidiary Cobra Oro De Honduras. The amounts reported in the financial statements of the subsidiary have been adjusted, if necessary, so that they meet the accounting policies adopted by the Corporation. Profit or loss or other comprehensive loss of the subsidiary acquired or sold during the period are recorded from the actual date of acquisition or until the effective date of the sale, if any. All intercompany transactions, balances, income and expenses are eliminated at consolidation.

C. Cash

Cash consists of cash on hand and bank balances including interest savings accounts.

D. Foreign currency translation

Functional and presentation currency

Items included in the financial statements of each consolidated entity in the Corporation group are measured using the currency of the primary economic environment in which the entity operates (“the functional currency”). These consolidated financial statements are presented in Canadian dollars, which is the functional currency of the Corporation. The functional currency of Cobra Oro De Honduras is the Honduran Lempira. The functional currencies have remained unchanged during the reporting periods.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are re-measured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in the consolidated statement of comprehensive loss.

Foreign exchange gains and losses that relate to borrowings and cash are presented in the consolidated statement of comprehensive loss in “foreign exchange gain (loss)”.

Glen Eagle Resources Inc. Notes to consolidated financial statements For the years ended December 31, 2020 and 2019

(in Canadian dollars, except per share amounts)

Non-monetary assets and liabilities are translated at historical rates, unless such assets and liabilities are carried at market value, in which case, they are translated at the exchange rate in effect at the date of the balance sheet. Translation differences on non-monetary financial assets and liabilities, such as equities held at fair value through profit or loss, are recognized in profit or loss as part of the fair value gain or loss.

The results and financial position of foreign subsidiaries that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

assets and liabilities for each statement of financial position presented are translated at the closing rate at the date of that statement of financial position,
income and expenses for each statement of comprehensive loss are translated at average exchange rates, and
all resulting exchange differences are recognised in other comprehensive income (loss).

On consolidation, exchange differences arising from the translation of any net investment in foreign entities, and of borrowings, are recognised in other comprehensive income (loss).

E. Inventories

Gold doré are valued at the lower of average production cost and net realizable value. The stockpiled ore is valued at the lower of the weighted average purchase cost and net realizable value. Net realizable value is the estimated selling price less applicable selling expenses. Cost includes all expenses directly attributable to the manufacturing process as well as suitable portions of related production overheads, based on normal capacity. Consumable inventories are valued at the lower of the average cost and net realizable value. Obsolete, redundant and slow moving inventories are identified at each reporting date and written down to their net realizable values.

F. Property, plant and equipment

Property, plant and equipment (“PP&E”) are carried at cost, less accumulated depreciation and accumulated impairment losses.

The cost of an item of PP&E consists of the purchase price, applicable borrowing costs, any costs directly attributable to bringing the asset to the location and condition necessary for its intended use, and an initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located. Repairs and maintenance costs are charged to the consolidated statement of loss during the period in which they are incurred unless the PP&E are used in mineral properties under development for which the costs are capitalized in the mineral properties under development assets.

Depreciation is recognized based on the cost of an item of PP&E, less its estimated residual value, over their expected useful lives:

Category Buildings Machinery and equipment Vehicles	Years 20 3 to 20 5

The residual value, useful life and depreciation method for PP&E are reviewed, and adjusted if appropriate, on an annual basis.

An item of PP&E is de-recognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on disposal of the asset, determined as the difference between the net proceeds on disposal and the carrying amount of the asset, is recognized in profit or loss in the consolidated statement of loss.

Glen Eagle Resources Inc. Notes to consolidated financial statements For the years ended December 31, 2020 and 2019

(in Canadian dollars, except per share amounts)

Where an item of PP&E consists of major components with different useful lives, the components are accounted for as separate items of PP&E. Expenditures incurred to replace a component of an item of PP&E that is accounted for separately, including major inspection and overhaul expenditures, are capitalized.

Capitalized costs are not depreciated until the time at which the related mining property has reached a predetermined level of operating capacity intended by management. Costs incurred prior to this point, including depreciation of related PP&E, are capitalized and proceeds from sales during this period are offset against capitalized costs.

G. Exploration and evaluation (E&E) assets

Costs related to exploration and evaluation of mineral properties are recognized in profit or loss as incurred. All option payments and costs of acquiring mineral rights are capitalized as exploration and evaluation assets. Exploration and evaluation assets are assessed for impairment indicators at the end of each reporting period.

Any option payments or proceeds from the sale of royalty interests received by the Corporation are credited to the capitalized cost of the related exploration and evaluation asset. If payments received exceed the capitalized cost of the exploration and evaluation assets, the excess is recognized as income in the period received.

Whenever a mining property is considered no longer viable, or is abandoned, the capitalized amounts are written down to their recoverable amounts with the difference recognized in profit or loss. When the technical feasibility and the commercial viability of extracting a mineral resource are demonstrable and a mine development decision has been made by the Corporation, exploration and evaluation assets related to the mining property are transferred to tangible assets and related development expenditures are capitalized. Before the reclassification, the related exploration and evaluation assets are tested for impairment and any impairment loss is then recognized in profit or loss.

The establishment of technical feasibility and commercial viability of a mineral property is assessed based on a combination of factors, including a) the extent to which mineral reserves or mineral resources as defined in National Instrument 43-101 have been identified through a feasibility study or similar document; b) the results of optimization studies and further technical evaluation carried out to mitigate project risks identified in the feasibility study; c) the status of environmental permits; and d) the status of mining leases or permits.

H. Revenue recognition

Revenue from the sale of gold and silver in the form of doré bars is measured at the transaction price, being the amount of consideration to which the Corporation expects to be entitled in exchange for transferring promised goods. Revenue is recognized at the point in time when control of the asset is transferred to the customer, generally on delivery of the goods.

I. Impairment of non-financial assets

Property, plant and equipment and E&E assets are reviewed for impairment on an annual basis and if there is any indication that the carrying amount may not be recoverable. If any such indication is present, the recoverable amount of the asset is estimated in order to determine whether impairment exists. Where the asset does not generate cash flows that are independent from other assets, the Corporation estimates the recoverable amount of the asset group to which the asset belongs.

An asset’s recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value, using a pre-tax discount rate that

Glen Eagle Resources Inc. Notes to consolidated financial statements For the years ended December 31, 2020 and 2019

(in Canadian dollars, except per share amounts)

reflects current market assessments of the time value of money and the risks specific to the asset for which estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset or asset group is estimated to be less than its carrying amount, the carrying amount is reduced to the recoverable amount. Impairment is recognized immediately in the consolidated statement of comprehensive loss. Where an impairment subsequently reverses, the carrying amount is increased to the revised estimate of recoverable amount but only to the extent that this does not exceed the carrying value that would have been determined if no impairment had previously been recognized.

J. 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 other comprehensive income (loss) or in equity, in which case it is recognized in other comprehensive income (loss) or in equity, respectively.

Mining taxes represent Canadian provincial taxes levied on mining operations and are classified as income taxes since such taxes are based on a percentage of mining profits. 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. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

Deferred tax is provided using the liability method, providing for temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial statements. The temporary differences are not provided for if it arises from the initial recognition of goodwill or the 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 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 the financial position reporting date and whose implementation is expected over the period during which the deferred tax is realized or recovered.

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.

Deferred income tax assets and liabilities are presented as non-current and are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.

K. Provisions for other liabilities and charges

Provisions for environmental restoration and legal claims are recognized when: the Corporation has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated.

Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to passage of time is recognized as interest expense.

Glen Eagle Resources Inc. Notes to consolidated financial statements For the years ended December 31, 2020 and 2019

(in Canadian dollars, except per share amounts)

L. Share-based compensation

The Corporation accounts for all share-based compensation using the fair value method. Each tranche in an award is considered a separate award with its own vesting period and grant date fair value. Fair value is calculated based on the Black-Scholes valuation model. Compensation expense is recognized over the tranche’s vesting period based on the number of awards expected to vest, by increasing the account stock options. The number of awards expected to vest is reviewed at least annually, with any impact being recognized immediately in the consolidated statement of comprehensive loss, with a corresponding adjustment to equity. When stock options are exercised, any consideration paid is credited to share capital.

M. Earnings per share

Basic earnings per share are computed using the weighted average number of common shares outstanding during the periods. Provided that they are not anti-dilutive, diluted earnings per share amounts are calculated giving effect to the potential dilution that would occur if securities or other contracts to issue common shares were exercised or converted to common shares using the treasury stock method. The treasury stock method assumes that proceeds received from the exercise of stock options and warrants and any unamortized share-based compensation amounts are used to repurchase common shares at the prevailing market rate.

N. Financial instruments

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

Financial assets and liabilities are offset and the net amount is reported in the consolidated statement of financial position when there is an unconditional and legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis, or realize the asset and settle the liability simultaneously.

Financial Assets

Financial assets are initially measured at fair value. If the financial asset is not subsequently accounted for at fair value, then the initial measurement includes transaction costs that are directly attributable to the asset’s acquisition or origination. On initial recognition, the Corporation classifies its financial assets in the following measurement categories:

measured subsequently at amortized cost; and
measured subsequently at fair value through net loss.
i) Financial assets measured at amortized cost
A financial asset is subsequently measured at amortized cost, using the effective interest method and net of any impairment loss, if:
the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and
the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Glen Eagle Resources Inc. Notes to consolidated financial statements For the years ended December 31, 2020 and 2019

(in Canadian dollars, except per share amounts)

Financial Liabilities

Financial liabilities are initially recorded at fair value net of any directly attributable transaction costs. Subsequent to initial recognition these financial instruments are measured at amortized cost using the effective interest method. Accounts payable and accrued liabilities, term loans and convertible debenture (Note 14 b) are classified as financial liabilities at amortized cost.

Impairment

The Corporation assesses on a forward looking basis the expected credit losses associated with its debt instruments carried at amortised cost. The impairment methodology applied depends on whether there has been a significant increase in credit risk.

For trade receivables, the Corporation applies the simplified approach permitted by IFRS 9, which requires expected lifetime losses to be recognised from initial recognition of the receivables.

The Company assumes that there is no significant increase in credit risk for instruments that have a low credit risk.

Embedded Derivatives

An embedded derivative is a component of a hybrid contract that also includes a non-derivative host, with the effect that some of the cash flows of the combined instrument vary in a way similar to a stand-alone derivative. If a hybrid contract contains a host that is a financial asset, the entire hybrid contract is measured at fair value through net loss. If a hybrid contract contains a host that is not a financial asset, embedded derivatives are recorded at fair value separately from the host contract when their economic characteristics and risks are not clearly and closely related to those of the host contract. Subsequent changes in fair value are recorded in the consolidated statements of loss.

The convertible debenture issued by the Corporation is a hybrid financial instrument that can be converted into units of the Corporation at the option of the holder, each unit comprised of a common share and a purchase warrant. The hybrid financial instrument is recognized as a liability, with the initial carrying value of the convertible debenture (host) being the residual amount of the proceeds after separating the derivative component, which is recognized at fair value. Any directly attributable transaction costs are allocated to the host and derivative components in proportion to their initial carrying amounts. Subsequent to initial recognition, the host component of the hybrid financial instrument is measured at amortized cost using the effective interest method. The derivative component of the hybrid financial instrument is measured at fair value through profit and loss. Subsequent changes in fair value are recorded in the consolidated statements of comprehensive loss.

i) The Corporation’s financial instruments consist of the following:

	Method
Cash	Amortized cost
Amounts receivable	Amortized cost
Short term investments	Amortized cost
Accounts payable and accrued liabilities	Financial liabilities at amortized cost
Term loans	Financial liabilities at amortized cost
Convertible debenture – Host (Note 14 a)	Financial liabilities at amortized cost
Convertible debenture – Derivative (Note 14 a)	Fair value through net loss
Convertible debenture (Note 14 b)	Financial liabilities at amortized cost

Glen Eagle Resources Inc. Notes to consolidated financial statements For the years ended December 31, 2020 and 2019

(in Canadian dollars, except per share amounts)

O. Effective interest method

The effective interest method is a method of calculating the amortized cost of a financial asset/liability and of allocating interest income/expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash flows (including transaction costs) through the expected life of the financial asset/liability, or, if appropriate, a shorter period.

P. Share capital and warrants

Common shares and warrants are classified as equity. Incremental costs directly attributable to the issuance of shares or warrants are recognized as a deduction from the proceeds in equity in the period where the transaction occurs. As part of its financing activities, the Corporation may grant warrants. Each warrant entitles its holder to purchase a determined number of shares at a price determined at grant for a certain period of time. Proceeds from unit placements are allocated between shares and warrants issued using the relative fair value method on a pro rata basis. The Corporation uses the Black-Scholes pricing model to determine the fair value of warrants issued.

Q. Segment disclosures

The Corporation currently operates in two segments which are the acquisition, exploration, evaluation and development of mineral properties and recovery of gold and silver from tailings and recovery of gold from rocks. The Corporation’s activities are conducted in Québec (Canada) and Honduras.

4 Critical accounting estimates, judgments and assumptions

Many of the amounts included in the financial statements require management to make judgments and/or estimates. These judgments and estimates are continuously evaluated and are based on management’s experience and knowledge of the relevant facts and circumstances. Actual results may differ from the amounts included in the financial statements.

Areas of significant judgment and estimates affecting the amounts recognized in the consolidated financial statements include:

a) Impairment of non-financial assets

After capitalization, mining properties are reviewed for impairment annually and if there is any indication that the carrying amount may not be recoverable.

Determining if there are any facts or circumstances indicating impairment, loss or reversal of impairment losses is a subjective process involving judgment and a number of estimates and interpretations in many cases. Determining whether to test for impairment exploration and evaluation assets requires management’s judgment regarding the following, among others:

a) The period for which the entity has the right to explore in the specific area has expired during the period or will expire in the near future, and is not expected to be renewed;
b) Substantive expenditure on further exploration and 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; or

Glen Eagle Resources Inc. Notes to consolidated financial statements For the years ended December 31, 2020 and 2019

(in Canadian dollars, except per share amounts)

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.

Additional external factors which could trigger an impairment review include, but are not limited to, significant negative industry or economic trends and a significant drop in ore prices. When an indication of impairment loss or a reversal of an impairment loss exists, the recoverable amount of the individual asset must be estimated. If it is not possible to estimate the recoverable amount of the individual asset, the recoverable amount of the cash generating unit to which the asset belongs must be determined. Identifying the cash generating units requires considerable management judgment. In testing an individual asset or cash generating unit for impairment and identifying a reversal of impairment losses, management estimates the recoverable amount of the asset or the cash-generating unit. This requires management to make several assumptions as to future events or circumstances. These assumptions and estimates are subject to change if new information becomes available.

Actual results with respect to impairment losses or reversals of impairment losses could differ in such a situation and significant adjustments to the Corporation’s assets and losses may occur during the next period.

b) Provision 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 source of estimation uncertainty.

c) Income tax recovery

Significant judgment is required in determining the income tax recovery as there are transactions and calculations for which the ultimate tax determination is uncertain.

d) Going concern

The assessment of the Corporation’s ability to execute its strategy by funding future working capital requirements involves judgment. Estimates and assumptions are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances (see note 1).

5 Recent accounting standards New standards and interpretations adopted

Amendments to IAS 1 Presentation of Financial Statements

The IASB has made amendments to IAS 1 Presentation of Financial Statements which use a consistent definition of materiality throughout IFRS and the Conceptual Framework for Financial Reporting, clarify when information is material and incorporate some of the guidance in IAS 1 about immaterial information. In particular, the amendments clarify that information is material if omitting, misstating, or obscuring it could reasonably be expected to influence decisions that the primary users of general-purpose financial statements make based on those financial statements. Materiality depends on the nature or magnitude of information, or both. An entity assesses whether information, either individually or in combination with other information, is material in the context of its financial statements taken as a whole. The Corporation adopted IAS 1 on January 1, 2020, which did not have a significant impact on the consolidated financial statements disclosures.

Glen Eagle Resources Inc. Notes to consolidated financial statements For the years ended December 31, 2020 and 2019

(in Canadian dollars, except per share amounts)

Amendments to the Conceptual framework for financial reporting

In March 2018, the IASB issued a comprehensive set of concepts for financial reporting: the revised Conceptual Framework for Financial Reporting, which replaces its previous version. It assists companies in developing accounting policies when no IFRS standard applies to a particular transaction and it helps stakeholders more broadly to better understand the standards. The amendments are effective for annual period beginning on or after January 1, 2020, the date at which the Corporation adopted this new framework, and this change had no material impact on the Corporation’s consolidated financial statements .

6 Amounts receivable

Sales tax receivable Trade receivables	December 31 2020 December 31 2019
	$ $
	17,638 9,607 64,365 48,277
	82,003 57,884

All of the Corporation’s gold and silver sales are with one customer at the market prices in effect at the time of delivery, however economic dependence is mitigated as the Corporation can sell its gold to numerous clients throughout the world.

7 Inventories

Consumables Work in process	December 31 2020 December 31 2019
	$ $
	38,871 62,752 - 172,970
	38,871 235,722

Glen Eagle Resources Inc. Notes to consolidated financial statements For the years ended December 31, 2020 and 2019

(in Canadian dollars, except per share amounts)

8 Property and equipment

Land $	Building $	Plant equipment $	Vehicle $	Machinery and	Machinery and
				Equipment
				$
524,017 - (285)	394,992 - (217)	2,148,032 - (1,174)	18,307 - (10)
523,732	394,775	2,146,858	18,297	524,961	3,608,623
- - -	(78,332) (44,760) 1,108	(353,293) (147,706) 3,707	(9,968) (3,711) 93	(94,850) (35,312) 894	(536,443) (231,489) 5,802
-	(121,984)	(497,292)	(13,586)	(129,268)	(762,130)
523,732	272,791	1,649,566	4,711	395,693	2,846,493 Total $ 3,732,890 49,464 (179,822)

Land $	Building $	Plant equipment $	Vehicle $	Machinery and	Total $
				Equipment
				$
550,366 - (26,349)	414,853 - (19,861)	2,256,039 - (108,007)	19,227 - (920)	492,405 49,464 (24,685)
524,017	394,992	2,148,032	18,307	517,184	3,602,532
- - -	(36,353) (44,548) 2,569	(219,533) (147,005) 13,245	(6,662) (3,693) 387	(63,394) (35,145) 3,689	(325,942) (230,391) 19,890
-	(78,332)	(353,293)	(9,968)	(94,850)	(536,443)
524,017	316,660	1,794,739	8,339	422,334	3,066,089

Glen Eagle Resources Inc. Notes to consolidated financial statements For the years ended December 31, 2020 and 2019

(in Canadian dollars, except per share amounts)

9 Exploration and evaluation assets

Capitalized E&E assets are comprised of wholly owned mining rights and undivided interests in properties, detailed as follows:

Costs of E&E assets at the end of the year

Moose Lake- Canada (phosphate)	La Cobra -	La Cobra -	La Cobra -	Piedra Dorada - Honduras
	Honduras
		(gold)		(gold) Total
				$
210,159 4,567		1 -	- 210,160 - 4,567 - 214,727 1 - 1 214,727
214,726 - 214,726		1 (1)
		-

a) Moose Lake (Lac St-Jean – Quebec)

On October 12, 2011, the Corporation entered into an option agreement with a private company and two individuals, to acquire a 100% interest in a phosphate property (“Moose Lake”) located in the St-Jean Lake area (Quebec), approximately 150 km south of Lisette Lake. As the obligations of the option agreement have been fully respected, the right to property was transferred to the Corporation in 2018. The Corporation assumes a 1% NSR payable to the vendor and redeemable by tranche of 0.5% for $500,000 each.

b) La Cobra

On May 17, 2017, the Corporation acquired, through its wholly owned Honduran subsidiary, the property called "La Cobra", attributed to the Corporation by the Ministry of Mines of Honduras, which is composed of one claim covering approximately 775 hectares and located in the Valle Department, Honduras.

On March 6, 2020, the Corporation exchanged its La Cobra property for 80% of the Piedra Dorada property, located in the municipality of El Corpus, Choluteca, Honduras. The transfer is subject to the approval of the Ministry of Mines.

Glen Eagle Resources Inc. Notes to consolidated financial statements For the years ended December 31, 2020 and 2019

(in Canadian dollars, except per share amounts)

10 Accounts payable and accrued liabilities

Accounts payable and accrued liabilities
Accounts payable Accrued and other liabilities (a)	December 31 2020 December 31 2019
	$ $
	183,009 232,963 1,089,641 769,924
	1,272,650 1,002,887

(a) As at December 31, 2020 and 2019, the accrued and other liabilities include a provision of $431,736 for tax and other non-compliance penalty. It also includes interest on loans and debenture due to insiders of $167,631 (2019: $62,495) and management fees due of $87,000 (2019: $60,650).

11 Term loans

Balance – Beginning of the year Increase during the year Balance – End of year Current portion Non-current portion	December 31 2020 December 31 2019
	$ $
	660,000 250,000 - 410,000
	660,000 660,000
	- -
	660,000 660,000

A first loan by an insider, of $100,000, is a non-guaranteed loan due on April 30, 2021, that was closed on October 20, 2018 and bears interest at an annual rate of 15%. The interest is payable twice a year on June 30 and December 31. An Officer of the Corporation has guaranteed this loan. On April 26, 2021, the Corporation has extended the loan until June 30, 2022.

A second loan by an insider, of $150,000, is a non-guaranteed loan due on April 30, 2021, that was closed on December 19, 2018 and bears interest at an annual rate of 15%. The interest is payable twice a year on June 30 and December 31. On April 26, 2021, the Corporation has extended the loan until June 30, 2022.

A third loan by an insider, of $410,000, is a non-guaranteed long term loan due on May 29, 2023, that was closed on May 30, 2019 and bears interest at an annual rate of 12%. The interest is payable monthly.

Glen Eagle Resources Inc. Notes to consolidated financial statements For the years ended December 31, 2020 and 2019

(in Canadian dollars, except per share amounts)

13 Provision

Balance – Beginning of the year Net increase (decrease) during the year Balance – End of year Asset retirement obligations	December 31 2020 $ December 31 2019 $ 65,678 66,150 2,783 (472)
	68,461 65,678

During 2017, an asset retirement obligation study was conducted for the subsidiary in Honduras. The liability for asset retirement obligations as at December 31, 2020 was $68,461. The estimated undiscounted value of this liability was $104,212 on December 31, 2020 and disbursements are expected to be made in 2031. A discount rate of 4.22% was used to estimate the obligation. Each quarter, the Corporation reviews the expected timing of the cash payments required to settle the obligations, and adjusts the asset retirement obligation accordingly, which also includes foreign exchange differences. During 2020, the increase in asset obligation retirement is due to accretion.

14 Convertible debenture

a)

Balance – December 31, 2018 Unrealized gain on fair value of derivative Accretion Balance – December 31, 2019 Unrealized loss on fair value of derivative Accretion Balance – December 31, 2020	Host Embedded Derivative Total
	122,261 28,532 150,793 - (21,252) (21,252) 8,055 - 8,055
	130,316 7,280 137,596 - 351 351 9,694 - 10,586
	140,010 7,631 147,641

On December 13, 2018, the Corporation completed the financing of a $150,000 convertible debenture bearing interest at a rate of 12% per annum and maturing on December 12, 2021. The principal amount of the debenture will be payable at the maturity date and accrued interest will be paid on June 30 and December 31 of each year until maturity date. Interest were not paid and recorded in accrued liabilities.

Glen Eagle Resources Inc. Notes to consolidated financial statements For the years ended December 31, 2020 and 2019

(in Canadian dollars, except per share amounts)

The debenture is convertible at $0.20 into units, composed of one common share and one common share purchase warrant. The unit is to be converted at $0.20 a share until maturity date for a total of 750,000 shares and 750,000 common share purchase warrants to be exercised at $0.30 for two years after conversion of the debenture.

The convertible debenture is a hybrid instrument, which is in its entirety a financial liability. The initial carrying amount of $122,261 for the host represents the residual amount of the proceeds after separating out the $28,532 fair value of the derivative. The derivative value was reduced by $351 during 2020 (2019: $21,252).

The derivative was valued using a binomial model. The following key assumptions were used in that model:

	As at December 31, 2020	As at December 31, 2019
Expected life in years	1.0	2.0
Expected volatility (unobservable input)	84%	61.0%
Risk-free rate	0.05%	1.83%
Share price	$0.07	$0.09
Exercice price	$0.20	$0.20

b)

Balance – December 31, 2019 Proceeds Equity component of convertible debenture Accretion Balance – December 31, 2020	As at December 31, 2020 - 100,000 (7,140) 892 93,752

On July 18, 2020, the Corporation completed the financing of a $100,000 convertible debenture bearing interest at a rate of 12% per annum and maturing on July 18, 2023. The principal amount of the debenture will be payable at the maturity date and accrued interest will be paid annually on December 31 of each year until maturity date. Interest were not paid and recorded in accrued liabilities.

The debenture is convertible at $0.12 into common shares. After the end of the first year, the Corporation will be able to force the conversion debentures if the company's stock trades at more than $1.00 for more than 10 consecutive days.

Glen Eagle Resources Inc. Notes to consolidated financial statements For the years ended December 31, 2020 and 2019

(in Canadian dollars, except per share amounts)

15 Share capital and warrants

Share capital Authorized

Unlimited number of voting common shares, participating, without par value.

a) Issued and fully paid
i) On September 1, 2020, the Corporation completed the final closing of a private placement for 3,587,500 units at a price of $0.08 per unit for a cash consideration of $287,000.

On July 21, 2020, a first closing for 1,250,000 units was completed. Each unit consists of one common share and one warrant which entitles its holder to purchase one common share at a price of $0.12 per share for 24 months. The fair value of $18,228 was assigned to the warrant account and the total share issue cost amounted to $761. The fair value of the warrants was determined using the Black-Scholes model with the following assumptions: share price of $0.08, expected dividend yield of 0%, expected volatility of 72.5%, risk free rate of 0.27% and expected life of 2 years.

On September 1, 2020, a second closing for 2,337,500 units was completed. Each unit consists of one common share and one warrant which entitles its holder to purchase one common share at a price of $0.12 per share for 24 months. The fair value of $$34,913 was assigned to the warrant account and the total share issue cost amounted to $3,363. The fair value of the warrants was determined using the Black-Scholes model with the following assumptions: share price of $0.08, expected dividend yield of 0%, expected volatility of 73.9%, risk free rate of 0.27% and expected life of 2 years.

ii) On September 1, 2020, the Corporation completed the final closing of a private placement for 7,500,000 units at a price of $0.08 per unit for a cash consideration of $600,000. Each unit consists of one common share and one warrant which entitles its holder to purchase one common share at a price of $0.12 per share for 36 months. The fair value of $139,689 was assigned to the warrant account and the total share issue cost amounted to $52,089 reduced by a value of $12,000 attributable to the warrants. The fair value of the warrants was determined using the Black-Scholes model with the following assumptions: share price of $0.08, expected dividend yield of 0%, expected volatility of 73.1%, risk free rate of 0.28% and expected life of 3 years.
iii) On September 1, 2020, the Corporation issued 600,000 broker warrants exercisable at $0.12 for 36 months. The fair value of $11,175 was assigned to the warrant account. The fair value of the warrants was determined using the Black-Scholes model with the following assumptions: share price of $0.08, expected dividend yield of 0%, expected volatility of 73.1%, risk free rate of 0.28% and expected life of 3 years.
iv) On October 13, 2020, the Corporation issued 500,000 common shares at a deemed price of $0.08 per share, for the settlement of amounts due to the CEO.

Glen Eagle Resources Inc. Notes to consolidated financial statements For the years ended December 31, 2020 and 2019

(in Canadian dollars, except per share amounts)

b) Changes in Corporation warrants are as follows:

Share purchase warrants Balance – Beginning ofyear Issued Exercised Balance – End ofyear	December 31 2020 December 31 2019	December 31 2020 December 31 2019	December 31 2020 December 31 2019
	Number Weighted average exercise price $ Number		Weighted average exercise price $
	- - 2,000,000 11,687,500 0.12 - - - (2,000,000)		0.10 - 0.10
	11,687,500 0.12 -		-

Number of warrants	Exercise price
		Expiry date
	$
1,250,000 2,337,500 7,500,000 600,000	0.12 July 20, 2022 0.12 August 31, 2022 0.12 August 31, 2023 0.12 August 31, 2023

16 Share based payments

The Corporation has a stock option plan whereby the Board of Directors may grant to directors, officers or consultants of the Corporation, options to acquire common shares. The Board of Directors has the authority to determine the terms and conditions of the grant of options. The Board of Directors approved a ‘‘Rolling’’ stock option plan (“Plan”) reserving a maximum of 10% of the shares of the Corporation at the time of the stock option grant, with a vesting period allowed of zero up to eighteen months, when the grant of option is made at market price, for the benefit of its directors, officers, employees and consultants. The Plan provides that no single person may hold options representing more than 5% of the outstanding common shares. The number of stock options granted to a beneficiary and the vesting period are determined by the Board of Directors.

The exercise price of any option granted under the Plan is fixed by the Board of Directors at the time of the grant and cannot be less than the market price per common share the day before the grant. The term of an option will not exceed five years from the date of grant. Options are not transferable and can be exercised while the beneficiary remains a director, an officer, an employee or consultant of the Corporation or between three and up to twelve months after the beneficiary has left.

Glen Eagle Resources Inc. Notes to consolidated financial statements For the years ended December 31, 2020 and 2019

(in Canadian dollars, except per share amounts)

The options granted in 2020 and 2019 were granted at a price equal to the closing market value of the shares, the previous day before the grant. The changes to the number of stock options granted by the Corporation and their weighted average exercise price are as follows:

	December 31 2020 Weighted average exercise price $		December 31 2019
Number		Number	Weighted average exercise price $
8,080,000 2,125,000 (3,850,000)	0.11 0.10 (0.09)	7,270,000 1,800,000 (990,000)	0.12 0.11 (0.17)
6,355,000	0.12	8,080,000	0.11
6,355,000	0.12	8,080,000	0.11

Options granted

i) On September 18, 2020, the Corporation granted an aggregate of 1,700,000 options to officers and a consultant. The options are fully vested on the day of granting, in accordance with the option plan. The options issued are exercisable at the price of $0.10 until September 18, 2025. The fair value of these options was estimated at $101,481 using the Black-Scholes option-pricing model with the following assumptions: share price of $0.10, expected dividend yield of 0%, expected volatility of 81.9%, risk free rate of 0.37% and expected life of 5 years.
ii) On February 13, 2020, the Corporation granted an aggregate of 425,000 options to one officer and two employees. The options are fully vested on the day of granting, in accordance with the option plan. The options issued are exercisable at the price of $0.10 until February 13, 2025. The fair value of these options was estimated at $27,832 using the Black-Scholes option-pricing model with the following assumptions: share price of $0.10, expected dividend yield of 0%, expected volatility of 78.9%, risk free rate of 1.4% and expected life of 5 years
iii) On June 26, 2019, the Corporation granted an aggregate of 1,450,000 options to directors and one consultant. The options are fully vested on the day of granting, in accordance with the option plan. The options issued are exercisable at the price of $0.105 until June 25, 2024. The fair value of these options was estimated at $114,886 using the Black-Scholes option-pricing model with the following assumptions: share price of $0.105, expected dividend yield of 0%, expected volatility of 102%, risk free rate of 1.4% and expected life of 5 years.
iv) On January 24, 2019, the Corporation granted an aggregate of 350,000 options to directors and one consultant. The options are fully vested on the day of granting, in accordance with the option plan. The options issued are exercisable at the price of $0.13 until January 24, 2024. The fair value of these options was estimated at $26,672 using the Black-Scholes option-pricing model with the following

Glen Eagle Resources Inc. Notes to consolidated financial statements For the years ended December 31, 2020 and 2019

(in Canadian dollars, except per share amounts)

assumptions: share price of $0.13, expected dividend yield of 0%, expected volatility of 70%, risk free rate of 1.86% and expected life of 5 years.

For the year ended December 31, 2020 the stock-based compensation charged to the consolidated statement of comprehensive loss was $129,314 (December 2019 – $141,558).

As at December 31, 2020, the Corporation had the following stock options outstanding and exercisable:

Exercise price $	Options granted Number of options exercisable	Remaining
		contractual
		life (year)

0.105 0.12 0.20 0.225 0.13 0.105 0.10 0.10	1,335,000 1,335,000 0.53 70,000 70,000 1.12 850,000 850,000 1.32 175,000 175,000 2.07 350,000 350,000 3.07 1,450,000 1,450,000 3.48 425,000 425,000 4.12 1,700,000 1,700,000 4.72 6,355,000 6,355,000
	6,355,000 6,355,000

17 Earnings (loss) per share

Diluted earnings (loss) per share is calculated by adjusting the weighted average number of common shares outstanding to assume conversion of all dilutive potential common shares. The Corporation has three categories of dilutive potential common shares: warrants, stock options and convertible debentures. For warrants and options, a calculation is done to determine the number of shares that could have been acquired at fair value (determined as the average market share price of the Corporation’s outstanding shares for the period), based on the exercise prices attached to the warrants and stock options. The number of shares calculated above is compared with the number of shares that would have been issued assuming exercise of the warrants and stock options. For the convertible debentures, the if-converted method is used. For the year ended December 31, 2020 all potentially dilutive instruments were anti-dilutive since the Corporation reported a net loss.

The calculation of basic and diluted earnings (loss) per share is based on the net income (loss) for the year divided by the weighted average number of shares outstanding during the same period.

Glen Eagle Resources Inc. Notes to consolidated financial statements For the years ended December 31, 2020 and 2019

(in Canadian dollars, except per share amounts)

	2020	2019
	$	$
Net loss for the year	(1,650,266)	(1,048,816)
Weighted average number common
shares outstanding	86,827,492	82,868,108
Weighted average number of outstanding
shares for diluted earnings (loss) per share	86,827,492	82,868,108
Basic and diluted loss per share	(0.02)	(0.01)
Information included in the consolidated statements of comprehensive loss
	2020	2019
	$	$
Cost of sales
Stockpile ore	176,428	791,457
Consumables	90,069	146,904
Salaries, benefits and other employee expenses	397,244	471,430
Electricity	119,660	267,776
Equipment repair and maintenance	106,055	175,018
Production supplies	173,961	273,354
Depreciation and amortization	188,441	188,213
Variation of finished goods	-	88,662
Variation of work in process inventory	172,970	(166,042)
	1,430,612	2,236,772

18 Information included in the consolidated statements of comprehensive loss

General and administrative Office expenses and rent Consulting and management fees Share based payments Professional fees Public company expenses Depreciation and amortization Business development	2020 $ 2019 $
	85,347 93,552 273,013 262,646 129,314 141,558 65,066 68,860 44,581 35,151 43,048 42,178 22,623 47,421
	662,992 691,366

Glen Eagle Resources Inc. Notes to consolidated financial statements For the years ended December 31, 2020 and 2019

(in Canadian dollars, except per share amounts)

19 Related party transactions

Remuneration of key management

Key management includes directors and senior executives of the parent company and its subsidiary. The compensation recognized as an expense and paid to key management for services is presented below:

Related party transactions Consulting and management fees Share based payments	2020 $ 2019 $
	194,400 210,000 96,091 116,036
	290,491 326,036

During the year, companies controlled by officers and directors charged an amount of $18,678 ($17,660 - 2019) for office expenses and rent. An amount of $87,000 is due to Officers of the Corporation at the end of the year ($60,650 at the end of 2019).

20 Income tax

Deferred income tax recovery

Deferred tax recovery relating to origination and reversal of temporary differences Other liabilities reversed in proportion of flow through E&E expenditures incurred during the year Income tax recovery	2020 $ 2019 $ - - - - - -

Glen Eagle Resources Inc. Notes to consolidated financial statements For the years ended December 31, 2020 and 2019

(in Canadian dollars, except per share amounts)

The Corporation’s income tax provision consists of the following:

The Corporation’s income tax provision consists of the following:
Deferred tax recovery Income taxes computed at Canadian statutory rate of 26.5% (2019: 26.6%) Stock-based compensation cost Non-deductible expenses (non-taxable) income Tax rate difference Losses incurred in Tax free zone – Honduras Increase in unrecognized deferred tax assets Other Income tax expense (recovery)	2020 2019
	$ $
	(437,320) (278,985) 34,268 37,654 4,130 (1,121) - 6,170 258,723 113,846 138,988 126,772 1,211 (4,336) - -

Deferred tax assets and liabilities

The analysis of deferred tax assets and deferred tax liabilities is as follows:

Unrecognized deferred tax assets Temporary differences related to reserves Temporary differences related to property and equipment and intangible assets Non-capital losses carried forward Tax benefit on share issue expenses	2020 2019
	$ $
	106,300 106,300 2,250 2,250 1,681,750 1,539,650 11,900 100 1,802,200 1,648,300

As at December 31, 2020, the tax base of the E&E assets totalled approximately $1,773,520 (2019 – $1,778,086). The difference between the tax base and the amount capitalized is due mainly to the fact that the tax benefits related to some assets were transferred to the Corporation’s shareholders and certain E&E assets were written down.

As at December 31, 2020, the Corporation had accumulated capital losses for Canadian tax purposes of approximately $1,071,088 (2019 – $1,071,088) which can be used to reduce taxable capital gain in future years.

Glen Eagle Resources Inc. Notes to consolidated financial statements For the years ended December 31, 2020 and 2019

(in Canadian dollars, except per share amounts)

As at December 31, 2020, the Corporation had accumulated non-capital losses for Canadian tax purposes of approximately $4,630,832 (2019 – $4,088,713) which can be used to reduce taxable income in future years as follows:

	Federal	Provincial	Expiration
	$	$
281,507		230,040	2031
546,707		541,873	2032
593,165		587,391	2033
573,861		569,448	2034
655,199		649,143	2035
505,544		500,036	2037
435,176		430,587	2038
497,554		491,301	2039
542,119		538,879	2040
4,630,832		4,538,698

21 Capital management policies and procedures

The Corporation considers the items included in equity as capital components.

The Corporation’s capital management objectives are:

to ensure the Corporation’s ability to continue as a going concern;
to increase the value of the assets of the business; and
to provide an adequate return to shareholders.

These objectives will be achieved by identifying the right exploration projects, adding value to these projects and ultimately taking them through to production or sale and cash flow, either with partners or by the Corporation’s own means.

The Corporation is not exposed to any externally imposed capital requirements except when the Corporation issues flow-through shares for which amounts should be used for E&E work. There is no dividend policy. Changes in capital are described in the consolidated statements of Changes in Equity and the related notes.

22 Financial instruments

Measurement categories

As explained in Note 3, financial assets and liabilities have been classified into categories that determine their basis of measurement and, for items measured at fair value, whether changes in fair value are recognized in the consolidated statement of comprehensive loss. Those categories are: fair value through net loss and amortized cost. The following table shows the carrying values of assets and liabilities for each of these categories at December 31, 2020 and December 31, 2019.

Glen Eagle Resources Inc. Notes to consolidated financial statements For the years ended December 31, 2020 and 2019

(in Canadian dollars, except per share amounts)

Financial instruments Amortized cost Cash Term deposit Amounts receivable Liabilities – Amortized cost Accounts payable, accrued liabilities(1) Term loans Convertible debenture Convertible debenture – Host Liabilities at fair value through profit or loss Convertible debenture – Derivative (level 3)		December 31 2020 December 31 2019

		$ $
		141,532 7,470 8,099 8,096 64,366 48,277 213,997 63,843 811,646 571,151 660,000 660,000 93,752 - 140,010 130,316 7,631 7,280

(1) Includes interest expenses due to insiders for $167,631 and management fees for $87,000 (Note 11).

Fair values, including valuation methods and assumptions

As at December 31, 2020, the carrying values of cash, amounts receivable, trade payables and accrued liabilities approximate their fair value due to their relative short maturities. Interest income on term deposits measured at amortized cost was nil for the current year (2019- nil).

As at December 31, 2020, the Corporation is committed to minimum future principal and interest payments for term loans and convertible debentures, as follows:

Year ending December 31, 2021 Year ending December 31, 2022 Year ending December 31, 2023	Term loans $ (Note 11) Convertible debenture $ (Note 13) Total $
	86,700 179,014 265,714 317,950 12,000 329,950 430,500 106,510 537,010
	835,150 297,524 1,132,674

Financial risks factors

The Corporation’s activities expose it to a variety of financial risks: market risk (including currency risk, interest rate risk, and price risk), credit risk and liquidity risk. Risk management is carried out by management under policies approved by the board of directors. The board provides written principles for overall risk management, as well as written policies covering specific areas, such as foreign exchange risk, interest rate risk, fair value risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of

Glen Eagle Resources Inc. Notes to consolidated financial statements For the years ended December 31, 2020 and 2019

(in Canadian dollars, except per share amounts)

excess liquidity. The Corporation’s overall risk management program seeks to minimize potential adverse effects on the Corporation’s financial performance.

b) Market risk
i) Foreign exchange risk

On December 31, 2020, the subsidiary of the Corporation made certain transactions in foreign currencies such as the Hondurans Lempira and the US dollar. Consequently, certain assets and liabilities and expenses are exposed to currency fluctuations. The Corporation does not use derivative or hedge instruments to manage foreign exchange risks.

The Corporation’s consolidated statement of financial position contains balances of cash, receivables and payables and accrued liabilities in currencies other than the operations’ relevant functional currency. Accordingly, the Corporation is exposed to foreign exchange risk.

The balances that are not denominated in the relevant functional currency are as follows as at December 31, 2020 and December 31, 2019 :

Cash in Lempiras CAD dollar equivalents	December 31 2020 December 31 2019
	HNL HNL 70,359 131,424
	3,731 6,973

The sensitivity of the Corporation to a variation of 10% in the value of the Honduran Lempira and the US dollar would not have a significant impact on the assets, liabilities and expenses.

ii) Interest rate risk: Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate due to changes in market interest rates. As at December 31, 2020, a term deposit of $8,099 (December 31, 2019 – $8,096) is in the current assets. The sensitivity of the Corporation to a variation of 1% in the interest rate would not have an impact. The Corporation’s financial liabilities are based on fixed interest rates.

iii) 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 Corporation is subject to concentration of credit risk through cash and accounts receivable. The Corporation reduces its credit risk by maintaining part of its cash in financial instruments held with a Canadian chartered bank.

iv) Liquidity risk Liquidity risk is the risk that the Corporation will not be able to meet the obligations associated with its financial liabilities. Management estimates that the funds as at December 31, 2020 will not be sufficient to meet the Corporation’s obligations and budgeted assets through December 31, 2021. Any additional funding may be met in the future in a number of ways including but not limited to, the issuance of new equity instruments. Cash flow forecasting is performed by the Corporation which monitors rolling forecasts of the Corporation’s liquidity requirements to ensure it has sufficient cash to meet operational

Glen Eagle Resources Inc. Notes to consolidated financial statements For the years ended December 31, 2020 and 2019

(in Canadian dollars, except per share amounts)

needs at all times. Surplus cash over and above balances required for working capital management are invested in interest bearing short-term deposits with a maturity within 12 months, which are selected with appropriate maturities or sufficient liquidity to provide sufficient head-room as determined by the above-mentioned forecasts. Accounts payable and accrued liabilities as at December 31, 2020 consist of items that should be settled within approximately 30 days (see note 1 for information on going concern), except for a provision in the accounts payable and accrued liabilities (note 10).

23 Segmented information

The Corporation operates in 2 different geographic segments located in Canada and Honduras.

ASSETS Current assets Non-current assets Property and equipment Exploration and evaluation assets Current liabilities Accounts payable and accrued liabilities Current portion of terms loans and convertible debenture Non-current liability Term loans Convertible debenture Provision	Glen Eagle Resources (Canada) $ Cobra Oro De Honduras SA (Honduras) $ Total $
	166,577 103,928 270,505 - 2,846,493 2,846,493 214,727 - 214,727 793,628 479,022 1,272,650 147,641 - 147,641 660,000 - 660,000 93,752 - 93,752 - 68,461 68,461

24 Contingencies

In February 2021, the Corporation received a notice of arbitration and claim from a potential investor for failure to issue warrants as provided in an equity line of credit agreement, claiming an amount of approximately $1.3 million. On July 28, 2020, the TSX Venture reviewed the terms of the agreement and came to the conclusion that the transaction could not take place in its current form and further discussions with the investor stalled. No provision has been recorded in these consolidated financial statements on this matter as management believes that the amounts claimed are unfounded. The Corporation intends to vigorously defend its position.

25 Subsequent events

On April 26, 2021, the Corporation closed a non-brokered private placement for 4,839,275 shares issued at $0.05 per share of the Corporation for gross proceeds of $241,963.

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Glen Eagle Resources Inc. — Audit Report / Information 2020

42904_rns_2021-04-30_e86712d6-166c-4e64-8c1d-db944d252b84.pdf

Consolidated Financial Statements

Glen Eagle Resources Inc.

Independent auditor’s report

Our opinion

What we have audited

Basis for opinion

Independence

Material uncertainty related to going concern

Other information

Responsibilities of management and those charged with governance for the consolidated financial statements

Auditor’s responsibilities for the audit of the consolidated financial statements

\s\PricewaterhouseCoopers LLP[1]

Glen Eagle Resources Inc. Consolidated Statements of Changes in Equity For the years ended December 31, 2020 and 2019

Glen Eagle Resources Inc. Consolidated Statements of Cash Flows For the years ended December 31, 2020 and 2019

1 Incorporation, nature of activities and going concern

2 Summary of significant accounting policies

A. Basis of measurement

B. Consolidation

C. Cash

D. Foreign currency translation

E. Inventories

F. Property, plant and equipment

G. Exploration and evaluation (E&E) assets

H. Revenue recognition

I. Impairment of non-financial assets

J. Income taxes

K. Provisions for other liabilities and charges

L. Share-based compensation

M. Earnings per share

N. Financial instruments

Financial Assets

Financial Liabilities

Impairment

Embedded Derivatives

O. Effective interest method

P. Share capital and warrants

Q. Segment disclosures

4 Critical accounting estimates, judgments and assumptions

5 Recent accounting standards New standards and interpretations adopted

6 Amounts receivable

7 Inventories

8 Property and equipment

9 Exploration and evaluation assets

a) Moose Lake (Lac St-Jean – Quebec)

b) La Cobra

10 Accounts payable and accrued liabilities

11 Term loans

13 Provision

14 Convertible debenture

a)

b)

15 Share capital and warrants

16 Share based payments

17 Earnings (loss) per share

18 Information included in the consolidated statements of comprehensive loss

19 Related party transactions

Remuneration of key management

20 Income tax

Deferred income tax recovery

Deferred tax assets and liabilities

21 Capital management policies and procedures

22 Financial instruments

Measurement categories

Fair values, including valuation methods and assumptions

Financial risks factors

23 Segmented information

24 Contingencies

25 Subsequent events

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Glen Eagle Resources Inc. Audit Report / Information 2020