Glen Eagle Resources Inc. — Interim / Quarterly Report 2020

Sep 1, 2020

Unaudited Condensed Consolidated Interim Financial Statements

Glen Eagle Resources Inc.

Second quarter ended June 30, 2020

(in Canadian dollars, unless otherwise stated)

UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

Under National Instrument 51-102, Part 4, subsection 4.3 (3)(a), if an auditor has not performed a review of the interim financial statements, they must be accompanied by a notice indicating that the financial statements have not been reviewed by an auditor.

The accompanying unaudited condensed interim consolidated financial statements of the Company have been prepared by, and are the responsibility of the Company's management.

The unaudited condensed interim consolidated financial statements of Glen Eagle Resources Inc. as at June 30, 2020 and for the three-month periods ended June 30, 2020 and 2019, have not been reviewed by the Company's external auditors.

Jean Labrecque Daniel Bélisle Jean Labrecque Daniel Bélisle, CPA, CA

President and Chief Executive Officer Chief Financial Officer & Corporate Secretary

Date: August 30th, 2020

Consolidated Interim Statements of Financial Position

Unaudited

(in Canadian dollars)

	June 302020$	December 312019$
Assets
Current assetsCash	34,459	7,470
Short term investments –term depositsPrepaids	8,09921,100	8,096-
Amounts receivable (note3)Inventory (note 4)	74,43190,438	57,884235,722
	228,527	309,172
Non-current assetsProperty, plant and equipment (note 5)Exploration and evaluation assets (note 6)	3,062,184214,727	3,066,089214,727
	3,276,911	3,280,816
TOTAL ASSETS	3,505,438	3,589,988
Liabilities
Current liabilitiesAccounts payable and accrued liabilities(note7)	1,236,944	1,002,887
Non-current liabilities
Term loans (note 8)Provision (note 9)	660,00069,428	660,00065,678
Convertible debenture (note 10)	142,524	137,596
	871,952	863,274
TOTAL LIABILITIES	2,108,896	1,866,161
Equity
Share capital	28,138,995	28,138,995
Subscriptions receivedStock options (note 11)	44,000499,340	-617,106
Contributed surplus	3,195,903	3,050,304
DeficitAccumulated other comprehensive income (loss)	(30,399,237)(82,459)	(29,895,310)(187,268)
Total equity	1,396,542	1,723,827
TOTALLIABILITIES AND EQUITY	3,505,438	3,589,988

Going concern (note 1)

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

Consolidated Interim Statements of Comprehensive Income (Loss)

For the three and six months periods ended June 30, 2020 and 2019

Unaudited

(in Canadian dollars)

	Three-monthperiod endedJune 30, 2020$	Three-monthperiod endedJune 30, 2019$	Six-monthperiod endedJune 30, 2020$	Six-monthperiod endedJune 30, 2019$
Sales
Gold & silver	284,892	356,680	696,828	918,047
Cost of sales (note 12)	(356,948)	(619,772)	(823,150)	(1,250,743)
Gross operating margin	(72,056)	(263,092)	(126,322)	(332,696)
General and administrative (note 12)Selling expensesGeneral exploration, net of tax credits	(125,816)(23,947)-	(266,677)(27,358)(400)	(262,069)(40,737)-	(446,439)(50,181)(599)
Operatingincome (loss)	(221,819)	(557,527)	(429,128)	(829,915)
Interest incomeInterest expenseForeign exchange gain (loss)	-(46,589)(356)	83(19,390)(594)	13(70,494)(4,318)	86(32,000)(4,226)
Netincome (loss)for the period	(268,764)	(577,428)	(503,927)	(866,055)
Othercomprehensive income (loss)netof income tax:Currency translation adjustment	(112,237)	(69,725)	104,809	(155,315)
Net comprehensive income (loss)for the period	(381,001)	(647,153)	(399,118)	(1,021,370)
Weighted average number ofoutstanding commonshares	82,868,108	82,868,108	82,868,108	82,868,108
Loss per shareBasicand diluted	(0.00)	(0.01)	(0.01)	(0.01)

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

Consolidated Interim Statements of Changes in Equity For the three and six months periods ended June 30, 2020 and 2019 Unaudited

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

	(note)	Numberof commonshares	Sharecapital$	Subscriptionsreceived$	Stockoptions$	Contributedsurplus$	Accumulatedothercomprehensiveloss$	Deficit (1)$	Total$
Balance as at January 1, 2019		82,868,108	28,138,995	-	596,676	2,929,176	(32,095)	(28,846,493)	2,786,259
Net loss for the periodCurrency translation adjustment							-(155,315)	(866,055)-	(866,055)(155,315)
Comprehensive loss for the period							(155,315)	(866,055)	(1,021,370)
Fair value of stock option expiredShare based compensation expense	(11)(11)	--	--	--	(121,128)141,558	121,128-	--	--	-141,558
		-	-	-	20,430	121,128	(155,315)	(866,055)	(879,812)
Balance as at June 30, 2019		82,868,108	28,138,995	-	617,106	3,050,304	(187,410)	(29,712,548)	1,906,447
Balance as at January 1, 2020		82,868,108	28,138,995	-	617,106	3,050,304	(187,268)	(29,895,310)	1,723,827
Net loss for the periodCurrency translation adjustment							-104,809	(503,927)-	(503,927)104,809
Comprehensive loss for the period							104,809	(503,927)	(399,118)
Subscriptions receivedFair value of stock option expiredShare based compensation expense	(11)(11)	---	---	44,000--	-(145,599)27,833	-145,599-	---	---	44,000-27,833
		-	-	44,000		145,599	104,809	(503,927)	327,285
Balance as at June 30, 2020		82,868,108	28,138,995	44,000	499,340	3,195,903	(82,459)	(30,399,237)	1,396,542

(1) On October 1st , 2019, the Corporation changed its accounting policy related to exploration and evaluation expenses, which previously consisted in capitalizing all such expenditures. The audited consolidated financial statements as at and for the period ended December 31, 2018 have been adjusted retroactively to reflect adjustments made as a result of this change in accounting policy.

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

Consolidated Interim Statement of Cash Flows

For the three and six months periods ended June 30, 2020 and 2019

Unaudited

(in Canadian dollars)

	Three-monthperiod endedJune 30, 2020$	Three-monthperiod endedJune 30, 2019$	Six-monthperiod endedJune 30, 2020$	Six-monthperiod endedJune 30, 2019$
Cash flows provided (used in)
Operating activitiesNet income (loss) for the periodAdjustments for	(268,764)	(577,428)	(503,927)	(866,055)
Depreciation and amortizationUnrealized gain on fair value of derivativeAccretion expenseForeign exchange gain (loss)	53,5731,9752,34614,142	58,244(69,726)(819)-	117,1813514,57723427,833	116,191(155,316)(1,821)-141,558
Share-based compensation expenseForeign exchange on cash	-(356)	114,886(594)	(4,318)	(4,226)
Changes in working capital items	(197,084)	(475,437)	(358,069)	(769,669)
Amounts receivablePrepaid expense	(58,234)-	(59,355)-	(16,547)(21,100)	(41,656)-
Inventory	154,283	129,830	145,284	65,466
Accounts payable and accrued liabilities	60,094	55,682	234,054	201,153
Net cash from (used in)operating activities	(40,941)	(349,280)	(16,377)	(544,706)
Investing activities
Acquisition of exploration and evaluation assetAcquisition of property, plant & equipment	-15,401	(3,067)50,605	-(4,951)	(4,565)126,559
Net cash used in investing activities	15,401	47,538	(4,951)	121,994
FinancingactivitiesDecrease in convertible debentureIncrease in long term debtSubscription received	--44,000	(3,554)410,000-	--44,000	(4,369)410,000-
Net cash provided by financing activities	44,000	406,446	44,000	405,631
Foreign exchange on cash	356	594	4,318	4,226
Net increase (decrease) –cash and cashequivalentCashand cash equivalents–Beginning of period	18,81615,643	105,29818,638	26,9907,470	(12,855)136,791
Cashand cash equivalents–End of period
	34,459	123,936	34,459	123,936
AdditionalinformationInterest received	-	83	13	86

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

Notes to condensed consolidated interim financial statements For the three and six months periods ended June 30, 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 4,710 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 period ended June 30, 2020, the Corporation reported a net loss of $268,764 (net loss of $577,428 for the period ended June 30, 2019) and has an accumulated deficit of $30,399,237 as at June 30, 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 June 30, 2020, the Corporation has a negative working capital of $1,008,417 (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, 2020. 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.

These condensed consolidated interim financial statements were approved and authorized for issue by the board of directors on August 30th, 2020.

Notes to condensed consolidated interim financial statements For the three and six months periods ended June 30, 2020 and 2019

(in Canadian dollars, except per share amounts)

2 Basis of preparation

These condensed interim consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") applicable to the preparation of interim financial statements, including IAS 34, Interim Financial Reporting, as issued by the International Accounting Standards Board ("IASB").

The accounting policies followed in these condensed interim consolidated financial statements are consistent with those applied in the Corporation's annual financial statements for the year ended December 31, 2019. These condensed interim consolidated financial statements should be read in conjunction with the Corporation's annual financial statements for the year ended December 31, 2019 which have been prepared in accordance with IFRS as issued by the IASB.

Uncertainty due to COVID-19

The duration and full financial effect of the COVID-19 pandemic is unknown at this time, as are the measures taken by governments, companies and others to attempt to reduce the spread of COVID-19. Any estimate of the length and severity of these developments is therefore subject to significant uncertainty, and accordingly estimates of the extent to which the COVID-19 may materially and adversely affect the Company's operations, financial results and condition in future periods are also subject to significant uncertainty. Glen Eagle Resources 's operating counterparties have announced temporary operational restrictions due to the ongoing COVID-19 pandemic, including reduced activities and operations placed on care and maintenance. In the current environment, the assumptions and judgements made by the Company are subject to greater variability than normal, which could in the future significantly affect judgments, estimates and assumptions made by management as they relate to potential impact of the COVID-19 and could lead to a material adjustment to the carrying value of the assets or liabilities affected. The impact of current uncertainty on judgments, estimates and assumptions extends, but is not limited to, the Company's valuation of its long-term assets, including the assessment for impairment and impairment reversal. Actual results may differ materially from these estimates.

Notes to condensed consolidated interim financial statements For the three and six months periods ended June 30, 2020 and 2019

(in Canadian dollars, except per share amounts)

3 Amounts receivable

	June 302020$	December 312019$
Sales tax receivableTrade receivables	13,70760,724	9,60748,277
	74,431	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.

4 Inventories

	June 302020$	December 312019$
Doré barsConsummablesWork in process	26,41064,028-	-62,752172,970
	90,438	235,722

Notes to condensed consolidated interim financial statements For the three and six months periods ended June 30, 2020 and 2019

(in Canadian dollars, except per share amounts)

5 Property and equipment

	Land$	Building$	Plantequipment$	Vehicle$	Machinery andEquipment$	Total$
Cost
As at January 1, 2020Additions	524,017-	394,993-	2,148,032-	18,306-	517,1844,951	3,602,5324,951
Foreign exchange	18,399	13,867	75,419	643	18,672	127,000
As atJune 30,2020	542,416	408,860	2,223,451	18,949	540,807	3,734,483
Accumulated depreciation
As at January 1, 2020DepreciationForeign exchange	---	(78,332)(22,658)(2,719)	(353,292)(74,771)(12,301)	(9,967)(1,879)(348)	(94,850)(17,876)(3,306)	(536,441)(117,184)(18,674)
As at June 30, 2020	-	(103,709)	(440,364)	(12,194)	(116,032)	(672,299)
Net book valueJune 30, 2020	542,416	305,151	1,783,087	6,755	424,775	3,062,184
	Land	Building	Plantequipment	Vehicle	Machinery andEquipment	Total
Cost	$	$	$	$	$	$
As at January 1, 2019	550,366	414,853	2,256,039	19,227	492,405	3,732,890
AdditionsForeign exchange	-(26,349)	-(19,862)	-(108,007)	-(921)	49,464(24,685)	49,464(179,824)
As at December 31, 2019	524,017	394,991	2,148,032	18,306	517,184	3,602,530
Accumulated depreciation
As at January 1, 2019DepreciationForeign exchange	---	(36,354)(44,548)2,570	(219,532)(147,005)13,245	(6,662)(3,693)388	(63,394)(35,145)3,689	(325,942)(230,391)19,892
As at December 31, 2019	-	(78,332)	(353,292)	(9,967)	(94,850)	(536,441)

Notes to condensed consolidated interim financial statements For the three and six months periods ended June 30, 2020 and 2019

(in Canadian dollars, except per share amounts)

6 Exploration and evaluation assets

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

Mining properties	Moose LakeCanada(phosphate)$	PiedraDoradaHonduras(gold)$	Total$
Balance January 1, 2019	210,160	1	210,161
Additions	4,566	-	4,566
Balance December 31, 2019Additions	214,726-	1-	214,727-
Balance June 30, 2020	214,726	1	214,727

During the period, the Corporation has not spent on exploration and evaluation assets as funds were allocated to the Honduran processing plant.

During the quarter, the Corporation concluded a final agreement to obtain ownership of the Piedra Dorada concession in the municipality of El Corpus, Choluteca in Honduras. The property La Cobra was remitted in exchange of 80% of the concession Piedra Dorada owned by a private company in Honduras. The owner will keep 20% of the property and will be responsible for 20% of the exploration costs.

7 Accounts payable and accrued liabilities

	June 302020$	December 312019$
Accounts payableAccrued and other liabilities (a)	265,641971,303	232,963769,924
	1,236,944	1,002,887

(a) As at June 30, 2020 and December 31, 2019, the the accrued and other liabilities included a provision of $431,736 for tax and other non-compliance penalty. It also includes interest on loans and debenture due to insiders for $110,402 and management fees due for $156,600 (note 13).

Notes to condensed consolidated interim financial statements For the three and six months periods ended June 30, 2020 and 2019

(in Canadian dollars, except per share amounts)

8 Term loans

	June 302020$	December 312019$
Balance –Beginning of the periodIncrease during the period	250,000410,000	250,000410,000
Balance –End of period	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, 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.

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

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, bears interest at an annual rate of 12%. The interest is payable monthly.

9 Provision

	June 302020$	December 312019$
Balance –Beginning of the period	65,678	66,150
Increase (decrease) during the period	3,750	(472)
Balance –End of period	69,428	65,678

Asset retirement obligations

During 2017, an asset retirement obligation study was conducted, for the subsidiary in Honduras. The liability for asset retirement obligations as at June 30, 2020 was $69,428. The estimated undiscounted value of this liability was $107,930 on June 30, 2020 and disbursments 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 the period ended June 30, 2020, the increase in asset obligation retirement is due to the foreign exchange factor.

Notes to condensed consolidated interim financial statements For the three and six months periods ended June 30, 2020 and 2019

(in Canadian dollars, except per share amounts)

10 Convertible debenture

	Host	Derivative	Total
Balance –January 1, 2020	130,316	7,280	137,596
Unrealized loss on fair value of derivative	-	351	351
Accretion	4,577	-	4,577
Balance –June 30, 2020	134,893	7,631	142,524

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.

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 increased by $351 during the period ended June 30, 2020.

The derivative was valued using a binomial model.

11 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.

Notes to condensed consolidated interim financial statements For the three and six months periods ended June 30, 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:

		June 302020		December 312019
Stock option	Number	Weightedaverageexerciseprice$	Number	Weightedaverageexerciseprice$
Balance –Beginning of periodGrantedExpired	8,080,000425,000(2,050,000)	0.110.11(0.17)	7,270,0001,800,000(990,000)	0.120.11(0.17)
Balance –End of period	6,455,000	0.11	8,080,000	0.11
OptionsexercisableEnd of period	6,455,000	0.11	8,080,000	0.11

Options granted

• i) 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 $27,833 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.
• ii) On June 26th, 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.
• iii) On January 24th, 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 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 period ended June 30, 2020 the stock-based compensation charged to the consolidated statement of comprehensive income (loss) was nil (December 2019 – $141,558).

As at June 30 , 2020, the Corporation had the following stock options outstanding:

Notes to condensed consolidated interim financial statements For the three and six months periods ended June 30, 2020 and 2019

(in Canadian dollars, except per share amounts)

Expiry date	Exerciseprice$	Optionsgranted	Numberof optionsexercisable	Remainingcontractslife (year)
December 29, 2020July 13, 2021February 13, 2022April 26, 2022January 25, 2023January 24, 2024June 25, 2024February 13, 2025	0.070.1050.120.200.2250.130.1050.10	1,800,0001,335,00070,000850,000175,000350,0001,450,000425,000	1,800,0001,335,00070,000850,000175,000350,0001,450,000425,000	0.501.041.621.822.573.573.994.63
		6,455,000	6,455,000	2.07

12 Information included in the consolidated statements of comprehensive income

	Three-month	Three-month	Six-month	Six-month
	period ended	period ended	period ended	period ended
	June 30, 2020	June 30, 2019	June 30, 2020	June 30, 2019
	$	$	$	$
Cost of sales
Material suppliesConsumablesSalaries, benefits and other employee	36,90812,271	96,28441,134	141,14559,895	347,08396,688
expenses	70,040	134,098	167,778	253,390
Electricity	12,554	54,141	85,639	119,050
Equipment repair and maintenance	10,102	43,420	47,828	132,414
Production supplies	32,589	66,893	71,785	131,032
Depreciation of plant and equipment	42,054	41,202	82,816	82,111
Depreciation vehicle	6,732	6,596	13,257	13,144
Variation of finished goods	-26,474	153,786	-26,474	86,850
Variation of work in process inventory	160,172	(17,782)	179,482	(11,019)
	356,948	619,772	823,151	1,250,743
	Three-month	Three-month	Six-month	Six-month
	period ended	period ended	period ended	period ended
	June 30, 2020	June 30, 2019	June 30, 2020	June 30, 2019
	$	$	$	$
General and administrative
Office expenses and rent	7,824	30,908	22,554	55,455
Consulting and management fees	60,170	60,518	123,334	125,527
Share base payments	-	114,886	27,833	141,558
Professional fees	33,566	22,360	33,566	49,360
Public company expenses	8,012	11,353	20,534	22,812
Depreciation and amortization	10,786	10,565	21,374	21,055
Business development	5,458	16,087	12,874	30,672
	125,816	266,677	262,069	446,439

Notes to condensed consolidated interim financial statements For the three and six months periods ended June 30, 2020 and 2019

(in Canadian dollars, except per share amounts)

13 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	Three-monthperiod endedJune 30, 2020$	Three-monthperiod endedJune 30, 2019$	Six-monthperiod endedJune 30, 2020$	Six-monthperiod endedJune 30, 2019$
Management feesShare basedpayments	52500-	50,880109,171	105,00027,333	103,860135,843
	52,500	160,051	132,333	239,703

During the period, companies controlled by officers and directors charged an amount of $3,600 ($3,600 - 2019) for office expenses and rent. An amount of $156,600 is due to Officers of the Corporation at the end of the period. Out of this amount due, on February 11th, 2020, the Corporation contracted a share or debt transaction with an Officer by which consulting fees for an amount of $40,000, are converted at $0.08 per share into 500,000 shares. This transaction is subject to TSX and desinterested shareholders approval.

14 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.

Notes to condensed consolidated interim financial statements For the three and six months periods ended June 30, 2020 and 2019

(in Canadian dollars, except per share amounts)

15 Financial instruments

Measurement categories

As explained in Note 3 of the Corporation's annual financial statements for the year ended December 31, 2019, 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 profit or loss; loans and receivables; available for sale financial assets; and, for liabilities, amortized cost. The following table shows the carrying values of assets and liabilities for each of these categories as at June 30, 2020 and December 31,2019.

Financial instruments	June 302020$	December 312019$
Loans and receivable
Cash	34,459	7,470
Term depositReceivable from related party and other receivables (except	8,099	8,096
indirect taxes)	60,724	48,277
	103,282	63,843
Liabilities –Amortizedcost
Accounts payable, accrued liabilities(1)	805,208	571,151
Term loans	660,000	660,000
Convertible debenture –Host	134,893	130,316
Liabilities at fair value through profit or lost
Convertible debenture –Derivative level (level3)	7,631	7,280

(1) Includes interest expenses due to insiders for $110,402 and management fees for $156,600. (note 7).

Fair values, including valuation methods and assumptions

As at June 30, 2020, the carrying values of cash, amounts receivable, convertible debenture, 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 period (2019- nil).

As at June 30, 2020, the Coporation is committed to minimum future principal and interest payments for term loans and convertible debentures, as follows:

	Term loans	Convertible debenture	Total
	$	$	$
	(Note 8)	(Note 9)
Year ending December 31, 2020	86,700	18,000	104,700
Year ending December 31, 2021	336,700	168,000	504,700
Year ending December 31, 2022	49,200	-	49,200
Year ending December 31, 2023	459,200	-	459,200

Notes to condensed consolidated interim financial statements For the three and six months periods ended June 30, 2020 and 2019

(in Canadian dollars, except per share amounts)

931,800 186,000 1,117,800

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 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 June 30, 2020, the subsidiary of the Corporation has 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 operation's relevant functional currency. Accordingly, the Corporation is exposed to foreign exchange risk.

The balances in currencies are as follows as at June 30, 2020 and December 31,2019 :

	June 302020	December 312019
	HNL	HNL
Cashin Lempiras	646,574	131,424
CAD dollar equivalents	35,512	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 June 30, 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 other financial assets and liabilities do not comprise any interest rate fair value risk since they do not bear interest.

Notes to condensed consolidated interim financial statements For the three and six months periods ended June 30, 2020 and 2019

(in Canadian dollars, except per share amounts)

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 concentrations 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 June 30, 2020 will not be sufficient to meet the Corporation's obligations and budgeted assets through December 31, 2020. 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 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 June 30, 2020 consist of items that should be settled within approximately 30 days (see note 1 for information on going concern), except for provision made in the accounts payable and accrued liabilities (note 6).

16 Segmented information

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

	GlenEagleResources(Canada)$	Cobra Oro DeHonduras SA(Honduras)$	Total$
ASSETSCurrent assets
Non-current assets	44,834	183,693	228,527
Property and equipmentExploration and evaluation assets	-214,727	3,062,184-	3,062,184214,727
Current liabilities	860,402	376,542	1,236,944
Non-current liabilityTerm loansProvisionConvertible debenture	660,000-142,524	-69,428-	660,00069,428142,524

Notes to condensed consolidated interim financial statements For the three and six months periods ended June 30, 2020 and 2019

(in Canadian dollars, except per share amounts)

17 Subsequent events

On July 21, 2020, the Corporation made a fisrst closing of a non-brokered private placement for 1,250,000 units for gross proceeds of $ 100,000. Each unit consists of one common share at a price of $0.08 per common share and one common share purchase warrant. Each warrant entitles the holder thereof to acquire one additional common share in the capital of the Company at a price of $0.12 per common share for a period of 24 months.