Gold Mountain Mining Corp. — Audit Report / Information 2021

May 27, 2021

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Vancouver, BC

GOLD MOUNTAIN MINING CORP. (Formerly Freeform Capital Partners Inc.)

Consolidated Financial Statements January 31, 2021 and 2020

(Expressed in Canadian Dollars)

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Independent auditor’s report

To the Shareholders of Gold Mountain Mining Corp.

Our opinion

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of Gold Mountain Mining Corp. and its subsidiaries (together, the Company) as at January 31, 2021 and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (IFRS).

What we have audited

The Company’s consolidated financial statements comprise:

• the consolidated statement of financial position as at January 31, 2021;

• the consolidated statement of loss and comprehensive loss for the year then ended;

• the consolidated statement of changes in shareholders’ equity for the year then ended;

• the consolidated statement of cash flows for the year 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 Company 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.

Comparative information

The financial statements of the Company for the year ended January 31, 2020 were audited by another auditor who expressed an unmodified opinion on those statements on May 5, 2020.

PricewaterhouseCoopers LLP

PricewaterhouseCoopers Place, 250 Howe Street, Suite 1400, Vancouver, British Columbia, Canada V6C 3S7 T: +1 604 806 7000, F: +1 604 806 7806

“PwC” refers to PricewaterhouseCoopers LLP, an Ontario limited liability partnership.

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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 Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

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

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

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

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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 Company’s internal control.

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

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

• Evaluate the overall presentation, structure and content of the 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 Company to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

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

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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 Dean Larocque.

/s/PricewaterhouseCoopers LLP

Chartered Professional Accountants

Vancouver, British Columbia May 26, 2021

Gold Mountain Mining Corp. (formerly Freeform Capital Partners Inc.) Consolidated Statements of Financial Position (Expressed in Canadian Dollars)

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January 31, January 31,
Notes 2021 2020
Assets
Current assets
Cash $ 2,691,382 $ 378,902
Receivables 5 124,626 10,400
Tax credit receivable 8 58,851 -
Prepaid expenses and deposits 6 467,891 29,582
3,342,750 418,884
Non-current assets
Prepaid expenses and deposits 6 526,875 4,875
Field equipment 7 73,258 95,513
Reclamation deposits 9 160,000 160,000
Exploration and evaluation asset 8 9,881,559 7,041,944
Total Assets $ 13,984,442 $ 7,721,216
Liabilities
Current liabilities
Accounts payable and accrued liabilities 10,14 $ 1,493,740 $ 544,314
Short-term loans 11 76,930 -
Current portion of promissory note 12 2,860,506 -
4,431,176 544,314
Non-current liabilities
Reclamation provision 8 60,000 -
Promissory note 12 4,471,018 6,215,656
Total Liabilities 8,962,194 6,759,970
Shareholders' Equity
Share capital 3,13 11,628,629 2,398,082
Warrants 3,13 1,406,273 -
Special warrants 13 - 13,676
Contributed surplus 3,13 1,135,288 -
Deficit (9,147,942) (1,450,512)
Total Shareholders' Equity 5,022,248 961,246
Total Liabilities and Shareholders' Equity $ 13,984,442 $ 7,721,216
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Nature of operations (Note 1) Commitments (Note 18) Subsequent events (Note 19)

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

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Gold Mountain Mining Corp. (formerly Freeform Capital Partners Inc.) Consolidated Statements of Loss and Comprehensive Loss (Expressed in Canadian Dollars)

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Year ended Year ended
January 31, January 31,
Notes 2021 2020
Operating Expenses
Director fees 14 $ 12,217 $ 66,340
General and administration 49,073 11,829
Management and consulting fees 14 429,260 219,497
Marketing 116,122 -
Professional fees 142,599 62,163
Travel 5,764 6,393
Share-based payments 13,14 1,027,086 -
Total expenses (1,782,121) (366,222)
Other Items
Interest income 1,036 3,085
Interest expense and finance costs 11,12 (1,117,797) (713,895)
Impairment of loan receivable 5 - (62,617)
Listing expense 3 (4,798,548) -
Loss and comprehensive loss $ (7,697,430) $ (1,139,649)
Basic and diluted loss per common share $ (0.24) $ (0.07)
Weighted average and diluted number of common shares outstanding 31,891,909 16,260,574
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The accompanying notes are an integral part of these consolidated financial statements.

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Gold Mountain Mining Corp. (formerly Freeform Capital Partners Inc.) Consolidated Statement of Changes in Shareholders’ Equity (Expressed in Canadian Dollars)

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Common Shares
Share Special Contributed
Notes Number Capital Warrants Warrants Surplus Deficit Total
Balance at January 31, 2019 1 $ 1 $ - $ - $ - $ (310,863) $ (310,862)
Cancellation of incorporator's share (1) (1) - - - - (1)
Shares issued 13 40,000 100 - - - - 100
Shares issued, debt settlement 13 8,800,000 410,000 - - - - 410,000
Shares issued, private placement 13 11,497,600 1,506,400 - - - - 1,506,400
Shares issued, convertible debentures 13 6,920,000 500,000 - - - - 500,000
Share subscriptions received 13 - (19,599) - - - - (19,599)
Share issuance costs 13 - (8,819) - - - - (8,819)
Special warrants 13 - - - 27,200 - - 27,200
Special warrants issuance cost 13 40,000 10,000 - (13,524) - - (3,524)
Loss for the year - - - - - (1,139,649) (1,139,649)
Balance at January 31, 2020 27,297,600 $ 2,398,082 $ - $ 13,676 $ - $(1,450,512) $ 961,246
Shares issued, private placement 13 9,703,379 4,399,345 1,397,031 - - - 5,796,376
Share issuance costs, broker warrants 13 - (96,714) 96,714 - - - -
Share issuance costs 13 - (307,757) (170,122) - (477,879)
Shares issued for consulting fees 13 1,000,000 250,000 - - - - 250,000
Shares issued for exercise of special
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warrants 272,000 13,676 - (13,676) - - -
Shares issued for exercise of warrants 13 96,874 9,687 - - - - 9,687
Reallocation of fair market value of
13
warrants exercised - 39,417 (39,417) - - - -
Share subscriptions received 13 - 893 - - - - 893
Reverse take-over transaction 3,13 10,700,000 4,922,000 122,067 - 108,202 - 5,152,269
Share-based payments 13 - - - - 1,027,086 - 1,027,086
Loss for the year - - - - - (7,697,430) (7,697,430)
Balance at January 31, 2021 49,069,852 $11,628,629 $ 1,406,273 $ - $1,135,288 $(9,147,942) $5,022,248
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The accompanying notes are an integral part of these consolidated financial statements.

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Gold Mountain Mining Corp. (formerly Freeform Capital Partners Inc.) Consolidated Statements of Cash Flows (Expressed in Canadian Dollars)

	Year ended January 31, Year ended January 31, 2021 2020
	Operating activities Net loss $ (7,697,430) $ (1,139,649) Adjustments for non-cash items: Share-based payment 1,027,086 - Interest expense and finance costs 1,117,797 687,843 Listing expense 4,628,223 - Impairment of loan receivable - 62,617 Changes in non-cash working capital items: Receivables 390,861 (72,356) Prepaid expenses and deposit (185,309) (34,457) Accounts payable and accrued liabilities (421,591) 211,346
	Net cash flows used in operating activities (1,140,363) (284,656)
	Investing activities Acquisition of subsidiary - (1,000,000) Cash assumed from acquisition of subsidiary - 7,468 Reverse take-over transaction 307,027 - Deposits for exploration expenditures (525,000) - Exploration expenditures (1,737,520) (345,787)
	Net cash flows used in investing activities (1,955,493) (1,338,319)
	Financing activities Shares issued for cash (net of issuance costs) 5,333,336 1,497,581 Shares issued for convertible debentures (net of issuance costs) - 480,401 Special warrants (net of issuance costs) - 23,676 Short-term loan 75,000 -
	Net cash flows provided by financing activities 5,408,336 2,001,658 Net change in cash 2,312,480 378,683
	Cash, beginning 378,902 219
	Cash, ending $ 2,691,382 $ 378,902
	Non-cash transactions: Common shares issued for reverse take-over transaction $ 4,922,000 $ - Common shares issued for consulting fees 250,000 - Common shares issued for debt settlement - 410,000 Common shares issued for special warrants compensation fee - 10,000

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

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Gold Mountain Mining Corp. (formerly Freeform Capital Partners Inc.) Notes to the Consolidated Financial Statements Years Ended January 31, 2021 and 2020 (Expressed in Canadian Dollars)

1. Nature of operations

Gold Mountain Mining Corp., (the "Company" or “GMTN”) previously Freeform Capital Partners Inc. was incorporated pursuant to the provisions of the Business Corporations Act of British Columbia on November 5, 2018. The Company’s common shares were listed on the TSX Venture Exchange (“the TSXV”) under the stock symbol “FRM.P” and commenced trading on June 19, 2020. On December 23, 2020, the Company changed its name to Gold Mountain Mining Corp. On December 31, 2020, the Company listed on the TSXV as a Tier 2 Mining Issuer and began trading on the TSXV under the stock symbol “GMTN.v”.

On December 23, 2020, the Company completed the three-cornered amalgamation (“Qualifying Transaction”) between the Company, its wholly owned subsidiary, 1262975 B.C. Ltd. (“975 B.C.”), and Bayshore Minerals Incorporated (“Bayshore”), under which 975 B.C. amalgamated with Bayshore and Bayshore became a wholly owned subsidiary of the Company. For accounting purposes, the amalgamation and acquisition constituted a reverse takeover (“RTO”) (Note 3) whereby Bayshore is identified as the acquirer of GMTN. The consolidated financial statements for the year ended January 31, 2021 include the results of operations of Bayshore from February 1, 2020 and GMTN from December 23, 2020, the date of the RTO. The comparative figures are those of Bayshore.

GMTN is a mineral exploration company and is focused on the exploration and development of gold properties.

The registered head office and principal address of the Company is 1285 West Pender Street, Suite 1000, Vancouver, British Columbia, Canada, V6E 4B1.

Since March 2020, several measures have been implemented in Canada and the rest of the world in response to the increased impact from novel coronavirus (“COVID-19”). The impact of COVID-19 is expected to be long term, and the effects on business operations cannot be reasonably estimated at this time. The Company anticipates this could have an adverse impact on its business, results of operations, financial position and cash flows in future periods.

2. Significant accounting policies and basis of preparation

These consolidated financial statements were authorized for issue by the directors of the Company on May 26, 2021.

Statement of compliance with International Financial Reporting Standards

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

Basis of preparation

These consolidated financial statements have been prepared using the historical cost basis. The consolidated financial statements are presented in Canadian dollars unless otherwise specified.

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Gold Mountain Mining Corp. (formerly Freeform Capital Partners Inc.) Notes to the Consolidated Financial Statements Years Ended January 31, 2021 and 2020 (Expressed in Canadian Dollars)

2. Significant accounting policies and basis of preparation (continued)

Consolidation

The Company’s consolidated financial statements include the accounts of the Company and its subsidiaries. The subsidiaries are entities controlled by the Company, where control is achieved by the Company being exposed to, or having rights to, variable returns from its involvement with the entity and having the ability to affect those returns through its power over the entity. The subsidiaries are fully consolidated from the date on which control is obtained by the Company and are deconsolidated from the date that control ceases. All intercompany transactions, balances, income and expenses are eliminated on consolidation.

Details of controlled subsidiaries are as follows:

Functional Currency Country of incorporation	Percentage owned January 31, 2021 January 31, 2020* 100% 0% 100% 0% 100% 0%
Bayshore Minerals Inc. CAD Canada Gold Mountain Mining Corporation (“GMMC”) CAD Canada Gold Mountain Resources Corp.(“GMRC”) CAD Canada

*Percentage of voting power is in proportion to ownership.

Significant accounting judgments, estimates and assumptions

The preparation of consolidated financial statements in conformity with IFRS requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported revenues and expenses during this period.

Although management uses historical experience and its best knowledge of the amount, events or actions to form the basis for judgments and estimates, actual results may differ from these estimates.

The most significant accounts that require estimates as the basis for determining the stated amounts include the recoverability of evaluation and exploration assets and share-based payments.

Critical judgments exercised in applying accounting policies that have the most significant effect on the amounts recognized in the consolidated financial statements are as follows:

• i) Exploration and evaluation asset The application of the Company’s accounting policy for exploration and evaluation assets requires judgement in the following areas:

• a) Determination of whether any impairment indicators exist at each reporting date giving consideration to factors such as mining title expiration dates, budgeted expenditures on the Elk Gold Project, discontinuation of activities in any area and evaluation of any data which would indicate that the carrying amount of exploration and evaluation assets is not recoverable; and

• b) Assessing when the commercial viability and technical feasibility of the project has been determined, at which point the asset is reclassified to development properties.

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Gold Mountain Mining Corp. (formerly Freeform Capital Partners Inc.) Notes to the Consolidated Financial Statements Years Ended January 31, 2021 and 2020 (Expressed in Canadian Dollars)

2. Significant accounting policies and basis of preparation (continued)

Business combinations

Determination of whether a set of assets acquired and liabilities assumed constitute the acquisition of a business or asset may require the Company to make certain judgements as to whether or not the assets acquired and liabilities assumed include the inputs, processes and outputs necessary to constitute a business as defined in IFRS 3 – Business Combinations. Based on an assessment of the relevant facts and circumstances, the Company concluded that the RTO transaction on December 23, 2020 (Note 3) and the acquisition of Elk Gold Mining Corp. (“Elk Mining”) and its subsidiary Gold Mountain Mining Resources Corp. (“GMRC”) on May 16, 2019 (Note 4) did not meet the definition of a business and the transactions have been accounted for as asset acquisitions.

Exploration and evaluation assets

The title to exploration and evaluation assets including mineral properties involves certain inherent risks due to the difficulties of determining the validity of certain claims as well as the potential for problems arising from the historical characteristic of many properties. The Company has investigated title to all its mineral properties, and to the best of its knowledge title to all of its properties are in good standing.

The Company accounts for exploration and evaluation assets in accordance with IFRS 6 – Exploration for and Evaluation of Mineral Resources (“IFRS 6”). Once the legal right to explore a property has been acquired, costs directly related to exploration and evaluation are recognized and capitalized, in addition to the acquisition costs. These expenditures include but are not limited to acquiring licenses, researching and analyzing existing exploration data, conducting geological studies, exploration drilling and sampling and payments made to contractors and consultants in connection with the exploration and evaluation of the property. Costs not directly attributable to exploration and evaluation activities, including general administrative overhead costs, are expensed in the year in which they occur.

Acquisition costs incurred in obtaining legal right to explore a mineral property are deferred until the legal right is granted and thereon reclassified to mineral properties. Transaction costs incurred in acquiring an asset are deferred until the transaction is completed and then included in the purchase price of the asset acquired.

When a project is deemed to no longer have commercially viable prospects to the Company, exploration and evaluation expenditures in respect of that project are deemed to be impaired. As a result, those exploration and evaluation expenditure costs, in excess of the estimated recoverable amount, are written off to the statement of loss and comprehensive loss.

The Company assesses exploration and evaluation assets for impairment when facts and circumstances suggest that the carrying amount of the asset may exceed its recoverable amount. The recoverable amount is the higher of the asset’s fair value less costs to sell and value in use.

Once the technical feasibility and commercial viability of extracting the mineral resource has been determined, the property is considered to be a mine under development. Exploration and evaluation assets are also tested for impairment before the assets are transferred to development properties.

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Gold Mountain Mining Corp. (formerly Freeform Capital Partners Inc.) Notes to the Consolidated Financial Statements Years Ended January 31, 2021 and 2020 (Expressed in Canadian Dollars)

2. Significant accounting policies and basis of preparation (continued)

Field equipment

Field equipment is recorded at cost and depreciated over the estimated useful life. Cost includes the purchase price and directly attributable costs to bring the asset to the location and condition necessary for it to be capable of operating in a manner intended by management. Where field equipment comprises major components with different useful lives, the components are accounted for as separate items of field equipment.

Depreciation on the field equipment is recognized on a straight-line basis over the estimated useful life of five years. The depreciation method, useful life and residual values are reviewed each financial year end and are adjusted if appropriate.

Impairment of non-financial assets

The carrying amount of the Company’s assets is reviewed at each reporting date to determine whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. An impairment loss is recognized whenever the carrying amount of an asset or its cash generating unit exceeds its recoverable amount. Impairment losses are recognized in the statement of loss and comprehensive loss.

The recoverable amount of assets is the greater of an asset’s fair value less cost 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 reflects the current market assessments of the time value of money and the risks specific to the asset. For an asset that does not generate cash inflows largely independent of those from other assets, the recoverable amount is determined for the cash-generating unit to which the asset belongs.

An impairment loss is only reversed if there is an indication that the impairment loss may no longer exist and there has been a change in the estimates used to determine the recoverable amount, however, not to an amount higher than the carrying amount that would have been determined had no impairment loss been recognized in previous years. Assets that have an indefinite useful life are not subject to amortization and are tested annually for impairment.

Share capital

Common shares are classified as equity. Incremental costs directly attributable to the issue of common shares and share options are recognized as a deduction from equity, net of any tax effects. The proceeds from the exercise of stock options or warrants together with amounts previously recorded in reserves over the vesting periods are recorded as share capital. Share capital issued for non-monetary consideration is recorded at an amount based on fair value on the date of issue.

Loss per share

Basic loss per share is computed by dividing net loss available to common shareholders by the weighted average number of shares outstanding during the reporting period. Diluted loss per share is computed similar to basic loss per share except that the weighted average shares outstanding are increased to include additional shares for the assumed exercise of stock options and warrants, if dilutive. The number of additional shares is calculated by assuming that outstanding stock options and warrants were exercised and that the proceeds from such exercise were used to acquire common shares at the average market price during the reporting period.

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Gold Mountain Mining Corp. (formerly Freeform Capital Partners Inc.) Notes to the Consolidated Financial Statements Years Ended January 31, 2021 and 2020 (Expressed in Canadian Dollars)

2. Significant accounting policies and basis of preparation (continued)

Valuation of equity units issued in private placements

The Company has adopted a relative fair value method with respect to the measurement of shares and warrants issued as private placement units. The relative fair value of warrants is determined using the Black-Scholes Option Pricing Model and is recorded separately under warrant reserve within shareholders’ equity.

Share-Based Payments

Share-based payments to employees are measured at the fair value of the instruments issued and recognized over the vesting periods. Share-based payments to non-employees are measured at the fair value of goods or services received or the fair value of the equity instruments issued, if it is determined the fair value of the goods or services cannot be reliably measured and are recorded at the date the goods or services are received.

The fair value of options granted is measured at the grant date, and each tranche is recognized using the graded vesting method over the period during which the options vest. The fair value of the options granted is measured using the Black-Scholes Option Pricing Model taking into account the terms and conditions upon which the options were granted. At each reporting date, the amount recognized as an expense is adjusted to reflect the actual number of share options that are expected to vest. The fair value of the options is charged to share-based payments, with the offset credit to contributed surplus over the vesting period. If and when the stock options are exercised, the applicable amounts from contributed surplus are transferred to share capital. When vested options are forfeited or are not exercised at the expiry date, the amount previously recognized remains in contributed surplus. The Company estimates a forfeiture rate and adjusts the corresponding expense each period based on an updated forfeiture estimate.

The Black-Scholes Option Pricing Model used by the Company to determine fair values of options and similar financial instruments requires the input of highly subjective assumptions including expected future stock volatility and expected time until exercise. Changes in the subjective input assumptions can materially affect the fair value estimate.

Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to profit or loss over the remaining vesting period.

The Company intends to settle Restricted Share Units (“RSUs”) and Performance Share Units (“PSUs”) in equity. Compensation expense is recognized based on the share price of the Company’s common shares on the grant date multiplied by the number of RSUs expected to vest and recognized ratably over the vesting period, with a corresponding credit to contributed surplus. Adjustments to the number of RSUs expected to vest are recognized in the current period.

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Gold Mountain Mining Corp. (formerly Freeform Capital Partners Inc.) Notes to the Consolidated Financial Statements Years Ended January 31, 2021 and 2020 (Expressed in Canadian Dollars)

2. Significant accounting policies and basis of preparation (continued)

Financial instruments

(i) Classification

The Company classifies its financial instruments in the following categories: at fair value through profit and loss (“FVTPL”), at fair value through other comprehensive income (loss) (“FVTOCI”) or at amortized cost. The Company determines the classification of financial assets at initial recognition. The classification of debt instruments is driven by the Company’s business model for managing the financial assets and their contractual cash flow characteristics. Equity instruments that are held for trading are classified as FVTPL. For other equity instruments, on the day of acquisition the Company can make an irrevocable election (on an instrument-by-instrument basis) to designate them as FVTOCI. Financial liabilities are measured at amortized cost, unless they are required to be measured at FVTPL (such as instruments held for trading or derivatives) or if the Company has opted to measure them at FVTPL.

The following table shows the classification under IFRS 9:

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Financial Asset/Liability IFRS 9 Classification
Cash Amortized cost
Receivables Amortized cost
Reclamation deposits Amortized cost
Accounts payable and accrued liabilities Amortized cost
Short-term loans Amortized cost
Promissory note Amortized cost
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(ii) Measurement

Financial assets and liabilities at amortized cost

Financial assets and liabilities at amortized cost are initially recognized at fair value plus or minus transaction costs, respectively, and subsequently carried at amortized cost less any impairment.

Financial assets and liabilities at FVTPL

Financial assets and liabilities carried at FVTPL are initially recorded at fair value and transaction costs are expensed in the consolidated statements of loss and comprehensive loss. Realized and unrealized gains and losses arising from changes in the fair value of the financial assets and liabilities held at FVTPL are included in the consolidated statements of loss and comprehensive loss in the period in which they arise.

Debt investments at FVTOCI

These assets are subsequently measured at fair value. Interest income calculated using the effective interest method, foreign exchange gains and losses and impairment are recognized in profit or loss. Other net gains and losses are recognized in other comprehensive income (“OCI”). On derecognition, gains and losses accumulated in OCI are reclassified to profit or loss.

Equity investments at FVTOCI

These assets are subsequently measured at fair value. Dividends are recognized as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognized in OCI and are never reclassified to profit or loss.

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Gold Mountain Mining Corp. (formerly Freeform Capital Partners Inc.) Notes to the Consolidated Financial Statements Years Ended January 31, 2021 and 2020 (Expressed in Canadian Dollars)

2. Significant accounting policies and basis of preparation (continued)

Financial instruments (continued)

(iii) Impairment of financial assets at amortized cost

The Company recognizes a loss allowance for expected credit losses on financial assets that are measured at amortized cost. At each reporting date, the Company measures the loss allowance for the financial asset at an amount equal to the lifetime expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition. If at the reporting date, the financial asset has not increased significantly since initial recognition, the Company measures the loss allowance for the financial asset at an amount equal to the twelve-month expected credit losses. The Company shall recognize in the consolidated statements of loss and comprehensive loss, as an impairment gain or loss, the amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognized.

(iv) Derecognition

Financial assets

The Company derecognizes financial assets only when the contractual rights to cash flows from the financial assets expire, or when it transfers the financial assets and substantially all of the associated risks and rewards of ownership to another entity. Gains and losses on derecognition are generally recognized in the consolidated statements of loss and comprehensive loss.

Financial liabilities

The Company derecognizes a financial liability when its contractual obligations are discharged or cancelled or expired. The Company also derecognizes financial liability when the terms of the liability are modified such that the terms and/or cash flows of the modified instrument are substantially different, in which case a new financial liability based on the modified terms is recognized at fair value.

Gains and losses on derecognition are generally recognized in profit and loss.

Provisions

Provisions are recorded when a present legal or constructive obligation exists as a result of past events where it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate of the amount of the obligation can be made.

The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the statement of financial position date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows. The increase in the obligation due to the passage of time is recognized as a finance expense. When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognized as an asset if it is virtually certain that reimbursement will be received, and the amount receivable can be measured reliably.

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Gold Mountain Mining Corp. (formerly Freeform Capital Partners Inc.) Notes to the Consolidated Financial Statements Years Ended January 31, 2021 and 2020 (Expressed in Canadian Dollars)

2. Significant accounting policies and basis of preparation (continued)

Income taxes

Current income tax:

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

Deferred income tax:

Deferred tax is accounted for using the statement of financial position liability method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred taxes are not recognized for temporary differences related to the initial recognition of the assets or liabilities that affect neither accounting nor taxable profit nor investments in subsidiaries, associates and interests in joint ventures to the extent it is probable that they will not reverse in the foreseeable future. The amount of deferred tax provided is based on the expected manner and expected date of realization or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the statement of financial position date. A deferred tax asset is recognized only to the extent that it is probable that future taxable amounts will be available against which the asset can be utilized.

New IFRS pronouncements

Amendments to IAS 16 – Property, plant and equipment: Proceeds before intended use

In May 2020, the International Accounting Standards Board issued amendments to IAS 16, Property, Plant and Equipment (IAS 16). The amendments prohibit a company from deducting from the cost of property, plant and equipment amounts received from selling items produced while the company is preparing the asset for its intended use. Instead, a company will recognize such sales proceeds and related costs in profit (loss). An entity is required to apply these amendments for annual reporting periods beginning on or after January 1, 2022. The amendments are applied retrospectively only to items of property, plant and equipment that are available for use after the beginning of the earliest period presented in the financial statements in which the entity first applies the amendments. We are currently assessing the effect of this amendment on our financial statements. We expect this amendment to have an effect on the accounting related to the sale of products during the commissioning phase of the Elk Gold Project.

17

Gold Mountain Mining Corp. (formerly Freeform Capital Partners Inc.) Notes to the Consolidated Financial Statements Years Ended January 31, 2021 and 2020 (Expressed in Canadian Dollars)

3. Reverse takeover

On December 23, 2020, the Company acquired 100% of the issued and outstanding shares of Bayshore. As a result of this acquisition, the shareholders of Bayshore obtained control of the Company through the acquisition of approximately 75.56% of the common shares of the combined entity and the transaction has been accounted for as a reverse takeover (“RTO”).

Accordingly, for accounting purposes, Bayshore has been treated as the accounting parent company (legal subsidiary) and the Company has been treated as the accounting subsidiary (legal parent) in these consolidated financial statements. As Bayshore was deemed to be the acquirer for accounting purposes, its assets, liabilities and operations since incorporation are included in these consolidated financial statements at their historical carrying value. The Company’s results of operations have been included from December 23, 2020, the date of the RTO.

The RTO has been accounted for as a share-based payment transaction on the basis that GMTN was a Capital Pool Company and did not meet the definition of a business, as defined in IFRS 3, Business Combination, as it had no ongoing business operations. For purposes of this RTO transaction, the purchase price consideration paid was $5,152,269 and the amount received was the fair value of the net assets acquired of the Company, which on December 23, 2020 was $524,046. These amounts were calculated as follows:

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Cash	$ 307,027
Receivables	505,087
Accounts payable and accrued liabilities	(288,068)
Net assets acquired	524,046
Consideration paid in excess of net asset acquired	4,628,223
Other listing expense	170,325
Total listing expense	$ 4,798,548

The fair value of the 300,000 share agents’ warrants deemed issued ($122,067) was estimated using the Black-Scholes option pricing model. Weighted average assumptions used in the pricing model were as follows: risk-free interest rate of 0.19%; an expected life of 1.48 years, volatility of 175.9%, and expected dividends of nil.

The fair value of the 250,000 options deemed granted ($108,202) was estimated using the Black-Scholes option pricing model. Weighted average assumptions used in the pricing model were as follows: risk-free interest rate of 0.31%; an expected life of 3.09 years, volatility of 168.31%, and expected dividends of nil.

18

Gold Mountain Mining Corp. (formerly Freeform Capital Partners Inc.) Notes to the Consolidated Financial Statements Years Ended January 31, 2021 and 2020 (Expressed in Canadian Dollars)

4. Acquisitions

On May 16, 2019, pursuant to a share purchase agreement, the Company acquired from Equinox Gold Corp (“Equinox”) all of the shares of Elk Mining, and its subsidiary GMRC, which was the owner of the Elk Gold Project in British Columbia, Canada, for total consideration of $10,000,000 as follows:

• Cash of $1,000,000 paid at the closing date;

• A secured promissory note for $9,000,000 payable in annual installments of $3,000,000 commencing two years from closing. The fair value of the promissory note was $5,527,813, calculated by discounting the future cash payments at a market rate of interest (Note 12).

At the transaction date, the Company determined that acquisition of Elk Mining and GMRC did not constitute a business as defined under IFRS, Business Combinations, and the transaction was accounted for as an asset acquisition. The excess of the consideration paid over the fair value of the net liabilities was attributed to the exploration and evaluation asset.

Year ended January 31, 2020

The purchase price is as follows:

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The net assets acquired are as follows:

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5. Receivables

Receivables
	January 31,	January 31,
	2021	2020
GST receivable	$ 122,995	$ 9,370
Accrued interest receivable	196	930
Other receivable	1,435	100
	$ 124,626	$ 10,400

Loan receivable

During the year ended January 31, 2020, the Company provided a loan to EVI Ventures Corp. (“EVI”), an arms-length company. The loan was unsecured, non-interest bearing and has no specified terms of repayment.

During the year ended January 31, 2020, the Company impaired the loan receivable from EVI of $62,617.

As at January 31, 2021, the loan receivable is $nil (January 31, 2020 - $nil).

19

Gold Mountain Mining Corp. (formerly Freeform Capital Partners Inc.) Notes to the Consolidated Financial Statements Years Ended January 31, 2021 and 2020 (Expressed in Canadian Dollars)

6. Prepaid expenses and deposits

7.		January 31, January 31, 2021 2020
	Current: Other deposits Prepaid marketing expense Prepaid investor relations Prepaid consulting and management fee Prepaid insurance and other prepaids	$ 8,500 $ 3,500 220,960 20,049 7,310 - 217,473 - 13,648 6,033
		$ 467,891 $ 29,582
	Non-current: Deposits for exploration expenditures Prepaid exploration expenditures	$ 525,000 $ - 1,875 4,875
		$ 526,875 $ 4,875
	Field equipment Cost Balance January 31, 2019 Additions (Note 4) Balance January 31, 2021 and 2020 Accumulated depreciation Balance January 31, 2019 Depreciation (Note 8) Balance January 31, 2020 Depreciation (Note 8) Balance January 31, 2021 Net book value Balance January 31, 2020 Balance January 31, 2021	$ - 111,278 $ 111,278 $ - 15,765 $ 15,765 22,255 $ 38,020 $ 95,513 $ 73,258

20

Gold Mountain Mining Corp. (formerly Freeform Capital Partners Inc.) Notes to the Consolidated Financial Statements Years Ended January 31, 2021 and 2020 (Expressed in Canadian Dollars)

8. Exploration and evaluation asset

The following is a description of the Company’s exploration and evaluation asset and the related expenditures incurred for the years ended January 31, 2021 and 2020:

ELK Gold Property	January 31, 2021	January 31, 2020
Property acquisition costs
Balance, beginning	$ 6,248,405	$ -
Additions	-	6,248,405
Property acquisition costs, ending	6,248,405	6,248,405
Exploration and evaluation costs
Balance, beginning	793,539	-
Costs incurred during the year:
Assaying	48,676	31,119
Camp operations	47,854	-
Consulting	121,906	-
Drilling	585,088	-
Depreciation	22,255	15,765
Environmental	1,183,480	633,758
Geological	376,071	147,315
Maintenance	426,541	14,642
Travel and accommodation	26,595	11,201
	2,838,466	853,800
Other Items:
Exploration tax credits	(58,851)	(60,261)
Change in estimate on reclamation obligation	60,000	-
Exploration and evaluation costs, ending	3,633,154	793,539
Total	$9,881,559	$7,041,944

Elk Gold Property

On May 16, 2019, pursuant to the acquisition of Elk Mining and GMRC (Note 4), the Company acquired the Elk Gold Property in British Columbia, Canada from Equinox for total consideration of $10,000,000 as follows:

• Cash of $1,000,000 paid at the closing date;

• A secured promissory note for $9,000,000 payable in annual installments of $3,000,000 commencing two years from closing. The fair value of the promissory note was $5,527,813, calculated by discounting the future cash payments at a market rate of interest (Note 12).

The Elk Gold Property is located near Merritt, British Columbia, Canada within the Similkameen Mining District and consists of 27 contiguous mineral claims and one mining lease. A 1% net smelter royalty production royalty is payable on production from the Agur Option block within the property and a 2% net smelter royalty production is payable on production from the Elk Gold Property.

During the year ended January 31, 2021, the Company recorded $58,851 in BC Mineral Exploration Tax Credits as reduction to the exploration and evaluation asset (January 31, 2020 - $60,261).

21

Gold Mountain Mining Corp. (formerly Freeform Capital Partners Inc.) Notes to the Consolidated Financial Statements Years Ended January 31, 2021 and 2020 (Expressed in Canadian Dollars)

9. Reclamation deposits

The Company has posted bonds and investment certificates to provide for certain potential reclamation liabilities as agreed with the Province of British Columbia – Ministry of Energy, Mines and Petroleum Resources.

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10. Accounts payable and accrued liabilities

	January 31,	January 31,
	2021	2020
Accounts payable	$ 1,113,743	$ 14,922
Amounts due to related parties (Note 14)	174,780	30,000
Accrued liabilities	205,217	499,392
	$ 1,493,740	$ 544,314

11. Short-term loans

On April 30, 2020, the Company received a loan in the amount of $50,000 from K2 Solutions Ltd, an arm’slength company. The loan is unsecured, bears interest at 5% per annum and is due on December 31, 2021. During the year ended January 31, 2021, the Company recorded $1,929 (January 31, 2020 - $Nil) in interest on the loan. The balance of the loan at January 31, 2021 is $51,930 (January 31, 2020 - $Nil).

On May 1, 2020, the Company received a loan in the amount of $25,000 from K2 Solutions Ltd. The loan is unsecured, non-interest bearing and has no specified terms of repayment. The balance of the loan at January 31, 2021 is $25,000 (January 31, 2020 - $Nil).

12. Promissory note

On May 16, 2019, the Company entered into a secured promissory note agreement with Equinox in the amount of $9,000,000 with respect to the purchase of 100% of the common shares of Elk Mining, which is the owner of the Elk Gold Project and its subsidiary GMRC. The fair value of the promissory note was $5,527,813, calculated by discounting the future cash payments at a market rate of interest of 18%.

During the year ended January 31, 2021, interest of $1,115,868 was recorded in the consolidated statements of loss and comprehensive loss (January 31, 2020 - $687,843).

At January 31, 2021, the promissory note is made up as follows:

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22

Gold Mountain Mining Corp. (formerly Freeform Capital Partners Inc.) Notes to the Consolidated Financial Statements Years Ended January 31, 2021 and 2020 (Expressed in Canadian Dollars)

12. Promissory note (continued)

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----- Start of picture text -----

January 31, 2021 January 31, 2020
Current prtion $ 2,860,506 $ -
Long term portion 4,471,018 6,215,656
$ 7,331,524 $ 6,215,656
----- End of picture text -----

The promissory note is non-interest bearing. In the event of default, the outstanding amount shall bear interest at a rate of 10% per annum, payable monthly from the date of default until the earlier of (i) the date of repayment; or (ii) the date of default is cured. The promissory note is a direct first ranking secured obligation of the Company in priority to all current and future debt and other liabilities of the Company and in priority to all equity securities of the Company of any nature whatsoever. If the Company defaults on the payment of the promissory note, Equinox may take possession of the Elk Mining common shares.

The principal is payable as follows:

• $3,000,000 shall be payable on the second anniversary date of the promissory note (“First Installment Date”). Paid on May 17, 2021 (Note 19);

• $3,000,000 shall be payable on the third anniversary date of the promissory note (“Second Installment Date”). Due on May 16, 2022; and

• $3,000,000 shall be payable on the fourth anniversary date of the promissory note. Due on May 16, 2023.

If the Company pays Equinox $8,000,000 at the First Installment Date, the payment shall represent full and final payment of the principal. Subsequent to year-end, this prepayment option expired unexercised (Note 19). If the Company pays $5,500,000 on the Second Installment Date, said payment shall represent full and final payment of the principal.

13. Share capital

Authorized share capital

An unlimited number of common shares and preferred shares without par value.

Issued share capital

Year ended January 31, 2021

At January 31, 2021, there were 49,069,852 issued and fully paid common shares (January 31, 2020 – 27,297,599).

On December 23, 2020, the Company completed the acquisition of Bayshore by way of an RTO transaction (Note 3). Concurrent with the RTO, the Company completed a subscription receipts financing (“Concurrent Financing”) of 5,185,433 units at a price of $0.90, raising gross proceeds of $4,666,890. Proceeds from the Concurrent Financing were allocated between warrants and common shares based on the relative fair value method and the common shares were valued at $3,269,859. Each unit consisted of one common share and one-half common share purchase warrant. Each full share purchase warrant is exercisable for one common share of the Company for a price of $1.20 for a period of three years following the closing of the Concurrent Financing. Further, a broker commission of $266,962 in cash and 296,624 warrants with a fair value of $96,714 were paid in relation to the Concurrent Financing. Each broker warrant is exercisable for one common share of the Company for a price of $0.90 for a period of two years. $398,183 of total share issuance costs in connection with the Concurrent Financing were allocated to share capital.

23

Gold Mountain Mining Corp. (formerly Freeform Capital Partners Inc.) Notes to the Consolidated Financial Statements Years Ended January 31, 2021 and 2020 (Expressed in Canadian Dollars)

13. Share capital (continued)

Issued share capital (continued)

Year ended January 31, 2021 (continued)

On August 26, 2020, the Company issued 1,000,000 common shares with a fair value of $250,000 for one year of corporate advisory consulting services.

On August 24, 2020, the Company consolidated all the issued and outstanding common shares on a 2.5:1 basis. At the date of the 2.5:1 share consolidation, the common shares issued and outstanding was reduced from 79,538,865 pre-consolidated to 31,815,545 post-consolidated common shares. All shares and stock options and per share figures and references in the consolidated financial statement have been retroactively adjusted to reflect the share consolidation.

On July 29, 2020, the Company closed the third tranche of a non-brokered private placement for gross and net proceeds of $969,486 and issued 3,877,946 common shares.

On June 24, 2020, the Company closed the second tranche of a non-brokered private placement for gross and net proceeds of $35,000 and issued 140,000 common shares.

On June 9, 2020, the Company closed the first tranche of a non-brokered private placement for gross and net proceeds of $125,000 and issued 500,000 common shares.

During the year ended January 31, 2021, share issuance costs of $404,471 were incurred in connection with the June and July 2020 private placements and December 2020 RTO transaction.

During the year ended January 31, 2021, 96,874 warrants were exercised for gross proceeds of $9,687. In addition, 272,000 special warrants in Bayshore were automatically converted to the common shares of the Company in connection with the closing of the RTO transaction.

Year ended January 31, 2020

On January 23, 2020, the Company closed a non-brokered private placement for gross and net proceeds of $103,500 and issued 414,000 common shares.

On November 19, 2019, the Company issued 40,000 common shares with a value of $10,000 as compensation fee shares to Launch Crowdfunding Corp. (“Launch”), a company that provided access to an equity crowdfunding portal for the Company’s special warrants offering.

On November 15, 2019, the Company closed a non-brokered private placement for gross and net proceeds of $34,900 and issued 139,600 common shares.

On August 16, 2019, the Company closed the second tranche of a non-brokered private placement for gross and net proceeds of $1,068,000 and issued 8,544,000 common shares.

On May 9, 2019, the Company closed the first tranche of a non-brokered private placement for gross and net proceeds of $300,000 and issued 2,400,000 common shares.

On April 30, 2019, the Company entered into debt settlement and subscription agreements to settle a total of $400,000 in debt for past services in exchange for 8,000,000 common shares.

On April 11, 2019, the Company entered into debt settlement and subscription agreements to settle a total of $10,000 in debt for past services due to related parties in exchange for 800,000 common shares.

24

Gold Mountain Mining Corp. (formerly Freeform Capital Partners Inc.) Notes to the Consolidated Financial Statements Years Ended January 31, 2021 and 2020 (Expressed in Canadian Dollars)

13. Share capital (continued)

Issued share capital (continued)

Year ended January 31, 2020 (continued)

On April 11, 2019, the Company issued 40,000 common shares to directors and officers with a value of $100.

The Company recorded $8,819 of share issuance costs in relation to the various share issuances and private placements closed during the year ending January 31, 2020.

During the year ended January 31, 2020, the Company issued unsecured convertible debentures consisting of:

• Five hundred of series A convertible notes, each having a principal amount of $0.30;

• Five hundred of series B convertible notes, each having a principal amount of $1.65;

• Five hundred of series C convertible notes, each having a principal amount of $3.05.

The principal amounts of each series of debentures were converted into common shares of the Company. The Company issued a total of 6,920,000 common shares at an aggregate price of $500,000. The shares were issued as follows:

• On June 18, 2019, 2,400,000 of series A debt convertible shares were issued at a price of $.01 per share;

• On July 18, 2019, 3,300,000 of series B debt convertible shares were issued at a price of $.05 per share; and

• On September 18, 2019, 1,220,000 of series C debt convertible shares were issued at a price of $0.225 per share.

The Company paid interest of $22,188 after the conversion of all series debentures calculated using the simple interest method at a rate of 15% per annum. The Company also recorded finance costs of $23,463 in relation to the convertible debenture offering, of which $19,599 was associated with the conversion of debentures to common shares.

Warrants

In connection with the December 23, 2020 Concurrent Financing, 2,595,716 warrants were issued. Each warrant gives the holder the right to acquire one share of the Company at a price of $1.20 for a term of 3 years. Proceeds from the Concurrent Financing were allocated between warrants and common shares based on the relative fair value method and the warrants were valued at $1,397,031 using the BlackScholes pricing model with the following assumptions: risk-free rate of 0.22%, volatility of 194%, dividends of $Nil, and expected life of 3 years.

In connection with the January 16, 2020 Concurrent Financing, the Company also issued 296,624 brokers’ warrants exercisable at a price of $0.90 for a period of 2 years. The brokers’ warrants were valued at $96,714 using the Black-Scholes pricing model with the following assumptions: risk-free rate of 0.23%, volatility of 176.06%, dividends of $Nil, and expected life of 2 years. $170,122 of total share issuance costs in connection with the Concurrent Financing were allocated to warrants.

Further, in connection with the RTO transaction, 300,000 agents’ warrants were deemed issued by Bayshore with a fair value of $122,067 (Note 3). The fair value was calculated using the Black Scholes pricing model with the following assumptions: risk-free rate of 0.19%, volatility of 175.90%, dividends of $Nil, and expected life of 1.48 years.

25

Gold Mountain Mining Corp. (formerly Freeform Capital Partners Inc.) Notes to the Consolidated Financial Statements Years Ended January 31, 2021 and 2020 (Expressed in Canadian Dollars)

13. Share capital (continued)

Warrants (continued)

The changes in warrants during the years ended January 31, 2021 and 2020 are as follows:

	Weighted Average	Weighted Average
Number of Warrants	Exercise Price ($)
Balance, January 31, 2020 and 2019 -		-
Issued 3,189,340		1.07
Exercised (96,874)		0.10
Balance, January 31, 2021 3,092,466		1.10

Warrants outstanding as at January 31, 2021 are as follows:

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Special warrants

On September 25, 2019, the Company issued 272,000 special warrants at a price of $0.10 per warrant.

Each special warrant is non-transferable and entitles the holder to automatically receive, without payment of additional consideration and without further action on the part of the holder, and subject to adjustment, one common share upon the occurrence of any of the following conversion conditions, whichever occurs earliest:

• The Company filing a prospectus which qualifies for the conversion of the special warrants;

• Two years from the date of closing; or

• Immediately prior to the Company closing an arrangement, merger, reorganization, share exchange or similar transaction such that each special warrant converts to one common share immediately prior to the closing.

The Company paid Launch Crowdfunding Corp. $2,693 for the portal service fee as well as compensation fee shares by issuance of 40,000 common shares with a fair value of $10,000. In addition, the Company recorded $831 of warrants issuance costs for the issuance of special warrants.

During the year ended January 31, 2021, 272,000 special warrants in Bayshore were automatically converted to the common shares of the Company in connection with the closing of the RTO transaction.

As at January 31, 2021, the Company had no special warrants outstanding (January 31, 2020 – 272,000).

26

Gold Mountain Mining Corp. (formerly Freeform Capital Partners Inc.) Notes to the Consolidated Financial Statements Years Ended January 31, 2021 and 2020 (Expressed in Canadian Dollars)

13. Share capital (continued)

Share based compensation

The Company has adopted a new equity incentive compensation plan (“New Plan”) which provides for the granting of options which equal a maximum of 10% of the Company’s issued and outstanding common shares at any given time. The New Plan also provides for the issuance of up to 4,800,000 Fixed Share Awards which include Deferred Share Units (“DSU’s”), Restricted Share Units (“RSU’s”) and Performance Share Units (“PSU’s”).

The following table summarizes the Company’s outstanding equity compensation as at January 31, 2021 and 2020:

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(i) Stock options

The changes in stock options during the year ended January 31, 2021 and 2020 are as follows:

		Weighted
		Average Exercise
	Number of Options	Price ($)
Balance, January 31, 2020 and 2019	-	$ -
Stock options granted	4,321,354	0.39
Balance, January 31, 2021	4,321,354	$ 0.39

Stock options outstanding and exercisable at January 31, 2021 are as follows:

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The average remaining life of the options is 4.21 years as at January 31, 2021.

In connection with the RTO transaction, 250,000 stock options were deemed granted by Bayshore with a fair value of $108,202 (Note 3). The fair value was calculated using the Black Scholes pricing model with the following assumptions: risk-free rate of 0.31%, volatility of 168.31%, dividends of $Nil, and expected life of 3.09 years.

27

Gold Mountain Mining Corp. (formerly Freeform Capital Partners Inc.) Notes to the Consolidated Financial Statements Years Ended January 31, 2021 and 2020 (Expressed in Canadian Dollars)

13. Share capital (continued)

Share based compensation (continued)

(i) Stock options (continued)

During the year ended January 31, 2021, the Company granted 4,071,354 (January 31, 2020 – Nil) stock options. The Company recorded share-based payments of $989,261 (January 31, 2020 - $Nil) related to the options granted and vested during the year.

The fair value of options granted was determined using the Black-Scholes option pricing model with the following weighted average assumptions:

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(ii) Restricted Share Units (RSUs)

The Company intends to settle RSUs in equity and may be granted to directors, consultants, officers and employees of the Company. Compensation expense is recognized based on the share price of the Company’s common shares on the grant date multiplied by the number of RSU’s expected to vest and recognized ratably over the vesting period, with a corresponding credit to the contributed surplus. Adjustments to the number of RSUs expected to vest are recognized in the current period. Share-based payments of $37,825 were recorded for RSUs during the year ended January 31, 2021 (January 31, 2020 - $Nil).

The continuity of RSUs for the years ended January 31, 2021 and 2020 is as follows:

		Weighted
		Average Grant
	Number of RSUs	Price ($)
Balance, January 31, 2020 and 2019	-	$ -
Issued	575,000	0.89
Balance, January 31, 2021	575,000	$ 0.89

14. Related party transactions

Balances

The following amounts due to related parties are unpaid director and consulting fees included in trade payables and accrued liabilities (Note 10). These amounts are unsecured, non-interest bearing and have no fixed terms of repayment.

January 31, 2021 January 31, 2020 Directors and officers of the Company $174,780 $30,000	January 31, 2021 January 31, 2020 Directors and officers of the Company $174,780 $30,000

28

Gold Mountain Mining Corp. (formerly Freeform Capital Partners Inc.) Notes to the Consolidated Financial Statements Years Ended January 31, 2021 and 2020 (Expressed in Canadian Dollars)

14. Related party transactions (continued)

Transactions

The Company has identified the CEO, President, CFO, COO, General Counsel & Corporate Secretary and the Company’s directors as its key management personnel. During the year ended January 31, 2021 and 2020, the following amounts were incurred for directors and officers of the Company:

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15. Income tax

The tax expense differs from the theoretical amount that would arise using the tax rate applicable to profits of the Company for the years ended January 31, 2021 and 2020 as follows:

	January 31, 2021	January 31, 2020
Statutory tax rate	27%	27%
Loss before income taxes recovery	$ (7,697,430)	$ (1,139,649)
Expected income tax recovery	(2,078,306)	(307,705)
Increase (decrease) in income tax recovery resulting from:
Non-taxable (deductible expenditures)	$ 1,572,921	$ 353,873
Other	(65,334)	-
Change in non-recognized deferred assets	570,719	(46,168)
Total income tax recovery	$-	$-

Deferred income tax assets are recorded to the extent that the realization of the related tax benefit is probable based on estimated future earnings. Deferred income tax assets have not been recognized with respect to the following deductible temporary differences:

respect to the following deductible temporary differences:
	January 31, 2021 January 31, 2020
Deferred Tax Assets Losses carried forward Share issue costs Property and equipment	$ 3,752,641 $ 3,144,265 340,628 28,418 39,753 15,765
Total unrecognized temporary deductible differences	$4,133,022 $3,188,448

29

Gold Mountain Mining Corp. (formerly Freeform Capital Partners Inc.) Notes to the Consolidated Financial Statements Years Ended January 31, 2021 and 2020 (Expressed in Canadian Dollars)

15. Income tax (continued)

The Company has non-capital losses of approximately $3,752,641 (January 31, 2020 - $3,144,265) which are available to reduce future year’s taxable income. The non-capital losses will commence to expire on 2032 if not utilized. Management estimates future income using forecasts based on the best available current information.

The significant components of the Company’s deferred income tax assets are comprised of the following:

	January 31, 2021 January 31, 2020
Non-capital losses carried forward Capital losses carry-forwards Capital assets Finance costs	$ 1,013,213 $ 848,951 - - 10,733 4,724 91,970 7,673
Unrecognized deferred tax assets	1,115,916 861,348 (1,115,916) (861,348)
Total	$- $-

16. Capital management

The Company defines its capital as both debt and shareholders’ equity. The Company manages its capital structure and makes adjustments to it, based on the funds available to the Company, in order to support the acquisition and exploration and development of mineral properties.

The Board of Directors does not establish quantitative return on capital criteria for management, but rather relies on the expertise of management to sustain future development of the business. As such, the Company expects to rely on the equity markets to fund its activities. In addition, the Company is dependent upon external financings to fund activities.

In order to carry out planned exploration and pay for administrative costs, the Company will need to raise additional funds. The Company will continue to assess new properties and seek to acquire an interest in additional properties if it feels there is sufficient geologic or economic potential and if it has adequate financial resources to do so.

Management reviews its capital management approach on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable.

17. Financial instruments

The Company’s financial instruments consist of cash, receivables excluding GST receivables, reclamation deposits, accounts payable and accrued liabilities, short-term loans and promissory note. The carrying values of cash, receivables, accounts payable and accrued liabilities and short-term loans approximate their fair value because of their relatively short-term nature on the instruments. The promissory note and reclamation deposits are measured at amortized cost using the effective interest rate method and the carrying value approximates the fair value. These estimates are subjective and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumption could significantly affect the estimates.

30

Gold Mountain Mining Corp. (formerly Freeform Capital Partners Inc.) Notes to the Consolidated Financial Statements Years Ended January 31, 2021 and 2020 (Expressed in Canadian Dollars)

17. Financial instruments (continued)

There are three levels of the fair value hierarchy as follows:

• Level 1: Values based on unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities.

• Level 2: Values based on quoted prices in markets that are not active or model inputs that are observable either directly or indirectly for substantially the full term of the asset or liability.

• Level 3: Values based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement.

The Company is exposed in varying degrees to a variety of financial instrument related risks. The Board of Directors approves and monitors the risk management processes, inclusive of documented investment policies, counterparty limits, and controlling and reporting structures. The type of risk exposure and the way in which such exposure is managed is summarized as follows:

Credit risk

Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. The Company’s primary exposure to credit risk is on its cash held in bank accounts. The majority of cash is deposited in bank accounts at a major bank in Canada. As most of the Company’s cash are held by one bank there is a concentration of credit risk. This risk is managed by using major banks that are high credit quality financial institutions as determined by rating agencies.

Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company has a planning and budgeting process in place to help determine the funds required to support the Company’s normal operating requirements on an ongoing basis. The Company aims to have sufficient funds to meet its short-term business requirements, taking into account its anticipated cash flows from its ability to raise equity capital or borrowing sufficient funds and its holdings of cash.

Historically, the Company’s principal source of funding has been the issuance of equity securities for cash, primarily through private placements. The Company’s access to financing is always uncertain. There can be no assurance of continued access to necessary levels of equity funding.

Interest rate risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is not exposed to significant interest rate risks.

Foreign exchange risk

The Company’s functional and reporting currency is the Canadian dollar and major purchases are transacted in Canadian dollars. As a result, the Company’s exposure to foreign currency risk is minimal.

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Gold Mountain Mining Corp. (formerly Freeform Capital Partners Inc.) Notes to the Consolidated Financial Statements Years Ended January 31, 2021 and 2020 (Expressed in Canadian Dollars)

18. Commitments

On January 26, 2021, the Company entered into an Ore Purchase Agreement (“OPA”) with New Gold Inc. (“New Gold”) for a three-year term. Under the terms of the OPA, GMTN will deliver 70,000 tonnes of ore per annum, approximately 200 tonnes per day, to the mill located at New Gold’s New Afton Mine situated 130km from the Elk Gold Project, in Kamloops British Columbia.

The OPA is effective upon the first delivery of ore to the New Afton Mine. Prior to the first delivery of ore, the parties must settle on a sampling procedure for tracking the tonnes and grade delivered, GMTN must receive the Joint Permit Amendment Application and New Gold must obtain a permit amendment to allow for the processing to occur.

19. Subsequent events

• I. Share capital transactions

• a) On February 23, 2021, the Company closed its brokered private placement of units by issuing 10,310,000 units at a price of $0.97 per unit. Each unit consists of one common share of the Company and one-half of a share purchase warrant. Each full warrant is exercisable for one common share of the Company for a price of $1.25 for a period of three years following the closing of the private placement. Further, a broker commission of $262,507 in cash and 270,626 warrants was paid. Each brokers’ warrant is exercisable for one common share of the Company for a price of $0.97 for a period of two years.

• b) On March 24, 2021, 230,000 bonus shares were issued to officers of the Company with a fair value of $289,800.

• c) On April 2, 2021, 1,300,000 of PSUs were issued to the officers of the Company.

• d) On April 2, 2021, the Company granted 310,000 stock options with an exercise price of $1.20 per common share, vesting 25% per quarter beginning April 30, 2021 and expiring on April 2, 2026.

• e) Subsequent to January 31, 2021, 77,500 of vested RSUs were converted to common shares.

• f) Subsequent to January 31, 2021, 560,500 PSUs were converted to common shares.

• g) Subsequent to January 31, 2021, 261,531 stock options were exercised for gross proceeds of $56,860.

• h) Subsequent to January 31, 2021, 959,954 warrants were exercised for gross proceeds of $1,016,347.

• II. On April 15, 2021, the Company’s common shares began trading on the OTCQB Venture Market under the stock symbol “GMTNF”. The Company will remain listed on the TSV Venture Exchange under the stock symbol “GMTN”.

• III. On May 17, 2021, the Company paid the first installment payment of $3,000,000 due to Equinox (Note 12).

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