FILING STATEMENT

OF

SIERRA MADRE DEVELOPMENTS INC.

INVOLVING THE ACQUISITION

OF

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GOLDSHORE RESOURCES INC.

May 26, 2021

Neither the TSX Venture Exchange Inc. nor any securities regulatory authority has in any way passed upon the merits of the reverse takeover described in this filing statement.

ABOUT THIS FILING STATEMENT ............... 1 MEANING OF CERTAIN REFERENCES......... 1 FORWARD-LOOKING INFORMATION ........ 1

MARKET DATA AND INDUSTRY DATA ..... 2 GLOSSARY OF TERMS ....................................... 2

SUMMARY OF FILING STATEMENT........... 11

INFORMATION CONCERNING SIERRA

MADRE ................................................................. 17

CORPORATE STRUCTURE..................................... 17 GENERAL DEVELOPMENT OF THE BUSINESS ...... 17 SELECTED CONSOLIDATED FINANCIAL INFORMATION ..................................................... 18 MANAGEMENT’S DISCUSSION AND ANALYSIS .. 18 DESCRIPTION OF SECURITIES .............................. 18 STOCK OPTION PLAN .......................................... 18 CONSOLIDATED CAPITALIZATION ..................... 19 PRIOR SALES ........................................................ 20 STOCK EXCHANGE PRICE .................................... 20 ARM’S LENGTH TRANSACTIONS ......................... 20 LEGAL PROCEEDINGS .......................................... 20 AUDITOR, TRANSFER AGENT AND REGISTRAR .. 21 MATERIAL CONTRACTS ...................................... 21 INFORMATION CONCERNING GOLDSHORE ...................................................... 21

CORPORATE STRUCTURE..................................... 21 GENERAL DEVELOPMENT OF THE BUSINESS ...... 21 SIGNIFICANT ACQUISITIONS ............................... 25 NARRATIVE DESCRIPTION OF THE PROPERTY .... 26 SELECTED CONSOLIDATED FINANCIAL INFORMATION ..................................................... 26 MANAGEMENT’S DISCUSSION AND ANALYSIS .. 26 DESCRIPTION OF SECURITIES .............................. 26 CONSOLIDATED CAPITALIZATION ..................... 27 PRIOR SALES ........................................................ 27 STOCK EXCHANGE PRICE .................................... 27 EXECUTIVE COMPENSATION ............................... 28 MANAGEMENT CONTRACTS ............................... 28 NON-ARM’S LENGTH PARTY TRANSACTIONS ... 28 LEGAL PROCEEDINGS .......................................... 29 MATERIAL CONTRACTS ...................................... 29 THE TRANSACTION ........................................ 29

AMALGAMATION AGREEMENT .......................... 29 OFFERINGS .......................................................... 31 SHAREHOLDER APPROVALS ............................... 32 EXCHANGE ACCEPTANCE ................................... 32 INFORMATION CONCERNING THE RESULTING ISSUER ......................................... 32 AVAILABLE FUNDS AND PRINCIPAL PURPOSES . 34 DIVIDENDS .......................................................... 35 PRINCIPAL SECURITY HOLDERS .......................... 36 DIRECTORS AND OFFICERS ................................. 36 MANAGEMENT .................................................... 38 STRATEGIC ADVISORY BOARD ............................ 41 OTHER REPORTING ISSUER EXPERIENCE ............ 41 CORPORATE CEASE TRADE ORDERS OR BANKRUPTCIES .................................................... 44 PENALTIES OR SANCTIONS.................................. 44 CONFLICTS OF INTEREST ..................................... 45 EXECUTIVE COMPENSATION ............................... 45 DIRECTOR COMPENSATION ................................ 47 INDEBTEDNESS OF DIRECTORS AND OFFICERS ... 47 RISK FACTORS ................................................... 51 GENERAL MATTERS ........................................ 60

APPENDIX A – MOSS LAKE PROPERTY

APPENDIX B – FINANCIAL STATEMENTS AND MD&A OF SIERRA MADRE DEVELOPMENTS INC.

APPENDIX C – FINANCIAL STATEMENTS AND MD&A OF GOLDSHORE RESOURCES INC.

APPENDIX D – PRO FORMA FINANCIAL STATEMENTS OF GOLDSHORE RESOURCES INC.

APPENDIX E – CARVE-OUT FINANCIAL STATEMENTS AND MD&A OF MOSS LAKE GOLD MINES LTD.

CERTIFICATE OF SIERRA MADRE DEVELOPMENTS INC.

CERTIFICATE OF GOLDSHORE RESOURCES INC.

ACKNOWLEDGEMENT

ABOUT THIS FILING STATEMENT

Readers should rely only on the information contained in this Filing Statement in respect of Sierra Madre Developments Inc. (“ Sierra Madre ”). We have not authorized any other person to provide additional or different information. If anyone provides additional or different or inconsistent information, including information or statements in media articles about Sierra Madre, prospective purchasers should not rely on it. Readers should assume that the information appearing in this Filing Statement is accurate only as of its date, regardless of its time of delivery. Sierra Madre’s business, financial condition, results of operations and prospects may have changed since that date.

All information contained in this Filing Statement with respect to Goldshore Resources Inc. (“ Goldshore ”) has been supplied by Goldshore for inclusion herein, and with respect to that information, Sierra Madre and its directors and officers have relied solely on Goldshore. Based on its due diligence conducted in this respect, Sierra Madre has no reason to believe that such information is not accurate.

All currency amounts in this Filing Statement are expressed in Canadian dollars, unless otherwise indicated.

MEANING OF CERTAIN REFERENCES

Unless otherwise noted or the context otherwise states, “Sierra Madre”, “we”, “us”, and “our” refers to Sierra Madre Developments Inc.

References to “management” in this Filing Statement refer to the management of Sierra Madre. Any statements in this Filing Statement made by or on behalf of management are made in such persons’ capacities as officers of Sierra Madre, and not in their personal capacities.

Words importing the singular number include the plural, and vice versa, and words importing any gender include all genders.

Certain capitalized terms and phrases used in this Filing Statement are defined in the “Glossary of Terms”.

FORWARD-LOOKING INFORMATION

This Filing Statement contains forward-looking information. Often, but not always, forward-looking information can be identified by the use of words such as “plans”, “expects” or “does not expect”, “is expected”, “estimates”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or states that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. Forward-looking information involves known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Sierra Madre, Goldshore or the Resulting Issuer to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information.

Examples of such statements include: the intention to complete the Transaction and the Amalgamation; the description of the Resulting Issuer that assumes completion of the Transaction; and in respect of the Resulting Issuer, Goldshore and the Moss Lake Property, statements pertaining to, without limitation, the future price of gold, the estimation of Mineral Resources, the realization of Mineral Resource estimates, expected capital expenditures, costs and timing of development of new deposits, costs and timing of future exploration, success of exploration activities, permitting requirements, requirements for additional capital,

government regulation of mining operations, environmental risks and hazards, title disputes or claims and limitations on insurance coverage.

Actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking information contained in this Filing Statement. Such forward-looking information is based on a number of assumptions that may prove to be incorrect, including, but not limited to: the ability of Sierra Madre to complete the Transaction, satisfy conditions precedent under the Amalgamation Agreement, satisfy the requirements of the Exchange such that it will issue the Final Exchange Bulletin, obtain necessary financing and adequate insurance, and successfully integrate Sierra Madre and Goldshore and manage risks; the economy generally; and in respect of the Resulting Issuer, Goldshore and the Moss Lake Property: there being no significant disruptions affecting operations, whether due to labour disruptions, supply disruptions, damage to equipment or otherwise; certain commodity price assumptions; the prices for energy and other key supplies remaining consistent with current levels; and the accuracy of current Mineral Resource estimates of the Moss Lake Property. The factors identified above are not intended to represent a complete list of the factors that could affect Sierra Madre, Goldshore or the Resulting Issuer. Additional factors are noted under the heading “Risk Factors”.

Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward- looking information prove incorrect, actual results, performance or achievements may vary materially from those expressed or implied by the forward-looking information contained in this Filing Statement. These factors should be carefully considered and readers are cautioned not to place undue reliance on forward-looking information, which speaks only as of the date of this Filing Statement. All subsequent forward-looking information attributable to Sierra Madre, Goldshore or the Resulting Issuer herein is expressly qualified in its entirety by the cautionary statements contained or referred to herein. Sierra Madre, Goldshore and the Resulting Issuer do not undertake any obligation to release publicly any revisions to this forward-looking information to reflect events or circumstances that occur after the date of this Filing Statement or to reflect the occurrence of unanticipated events, except as may be required under applicable securities laws.

MARKET DATA AND INDUSTRY DATA

Market and industry data used throughout this Filing Statement was obtained from third party sources, industry publications, and publicly available information as well as industry data prepared by management on the basis of its knowledge of the digital display industry (including management’s estimates and assumptions relating to the industry based on that knowledge). Management believes that its market and industry data is accurate and that its estimates and assumptions are reasonable, but there can be no assurance as to the accuracy or completeness thereof. The accuracy and the completeness of the market and industry data used throughout this Filing Statement is not guaranteed and Sierra Madre does not make any representation as to the accuracy of such information. Although management believes it to be reliable, Sierra Madre has not independently verified any of the data from third party sources referred to in this Filing Statement, or analyzed or verified the underlying studies or surveys relied upon or referred to by such sources, or ascertained the underlying economic and other assumptions relied upon by such sources.

GLOSSARY OF TERMS

The following is a glossary of certain definitions used in this Filing Statement. Terms and abbreviations used in the financial statements and MD&A of Sierra Madre, Goldshore and the Resulting Issuer in the appendices to this Filing Statement are defined separately and the terms and abbreviations defined below are not used therein, except where otherwise indicated. Words importing the singular, where the context requires, include the plural and vice versa and words importing any gender include all genders.

“ 36-Month Voluntary Resale Restrictions ” means the voluntary resale restrictions whereby certain Resulting Issuer Shares are subject to resale restrictions which expire over a period of 36 months as follows: (a) 10% on the date that is six months following the date of the Final Exchange Bulletin, (b) 15% on the date that is nine months following the date of the Final Exchange Bulletin, (c) 15% on the date that is 12 months following the date of the Final Exchange Bulletin, (d) 15% on the date that is 18 months following the date of the Final Exchange Bulletin, (e) 15% on the date that is 24 months following the date of the Final Exchange Bulletin, (f) 15% on the date that is 30 months following the date of the Final Exchange Bulletin, and (g) 15% on the date that is 36 months following the date of the Final Exchange Bulletin;

“ Affiliate ” means a Company that is affiliated with another Company as described below: (a) a Company is an “Affiliate” of another Company if: (i) one of them is the subsidiary of the other, or (ii) each of them is controlled by the same Person; (b) a Company is “controlled” by a Person if: (i) voting securities of the Company are held, other than by way of security only, by or for the benefit of that Person, and (ii) the voting securities, if voted, entitle the Person to elect a majority of the directors of the Company; (c) a Person beneficially owns securities that are beneficially owned by: (i) a Company controlled by that Person, or (ii) an Affiliate of that Person or an Affiliate of any Company controlled by that Person;

“ Agency Agreement ” means the agency agreement dated as of the Offering Closing Date, among Goldshore, Sierra Madre and the Agents, with respect to the Offerings;

“ Agents ” means the Lead Agent, Canaccord Genuity Corp., Laurentian Bank Securities Inc., Haywood Securities Inc., and Desjardins Securities Inc.;

“ Amalco ” means the continuing corporation constituted upon the Amalgamation becoming effective and named “1284403 B.C. Ltd.”;

“ Amalco Shares ” means the common shares in the capital of Amalco;

“ Amalgamating Companies ” means Goldshore and Sierra Madre Subco;

“ Amalgamation ” means the amalgamation of the Amalgamating Companies as contemplated in the Amalgamation Agreement;

“ Amalgamation Agreement ” means the amalgamation agreement dated effective January 25, 2021, as amended and restated on February 16, 2021, entered into among Goldshore, Sierra Madre and Sierra Madre Subco in respect of the Amalgamation;

“ Amalgamation Application ” means the Form 13 jointly completed and filed by Sierra Madre Subco and Goldshore with the Registrar giving effect to the Amalgamation upon and subject to the terms and conditions of the Amalgamation Agreement;

“ Asset Purchase Agreement ” means the asset purchase agreement among Goldshore, Wesdome and Wesdome Sub dated January 25, 2021 as amended on May 7, 2021 pursuant to which Goldshore agreed to acquire a 100% undivided interest in the Moss Lake Property;

“ Associate ” when used to indicate a relationship with a Person or Company, means: (a) an issuer of which the Person or Company beneficially owns or controls, directly or indirectly, voting securities entitling him to more than 10% of the voting rights attached to outstanding securities of the issuer, (b) any partner of the Person or Company, (c) any trust or estate in which the Person or Company has a substantial beneficial interest or in respect of which a Person or Company serves as trustee or in a similar capacity, and (d) in the case of a Person, a relative of that Person, including (i) that Person’s spouse or child, or (ii) any relative of that Person or of his spouse who has the same residence as that Person;

“ BCBCA ” means the Business Corporations Act (British Columbia), as from time to time amended or reenacted;

“ Board ” means the board of directors of Sierra Madre and, following the Amalgamation, the board of directors of the Resulting Issuer;

“ Certificate of Amalgamation ” means the certificate of amalgamation issued by the Registrar pursuant to Section 281 of the BCBCA following the filing of the Amalgamation Application;

“ Company ” unless specifically indicated otherwise, means a corporation, incorporated association or organization, body corporate, partnership, trust, association or other entity other than an individual;

“ Compensation Committee ” means the compensation committee anticipated to be constituted of the Resulting Issuer;

“ Compensation Option Expiry Date ” means the date that is 24 months after the Compensation Option Vesting Date;

“ Compensation Option Vesting Date ” means the relevant Escrow Release Date, subject to the relevant Escrow Release Conditions being satisfied or waived by such date;

“ Compensation Options ” means the Sierra Madre Compensation Options and the Goldshore Compensation Options;

“ Consolidation ” means the consolidation of the Sierra Madre Shares on a six old for one new basis;

“ Control Person ” means any Person or Company that holds or is one of a combination of Persons or Companies that holds a sufficient number of any of the securities of an issuer so as to affect materially the control of that issuer, or that holds more than 20% of the outstanding voting securities of an issuer except where there is evidence showing that the holder of those securities does not materially affect the control of the issuer;

“ Effective Date ” means the effective date of the Amalgamation as set forth in the Certificate of Amalgamation issued to Amalco;

“ Escrow Release Conditions ” means the Sierra Madre Escrow Release Conditions and/or the Goldshore Escrow Release Conditions, as the context requires;

“ Escrow Release Date ” means Sierra Madre Escrow Release Date and/or the Goldshore Escrow Release Date, as the context requires;

“ Escrow Release Deadlines ” means the Sierra Madre Escrow Release Deadline and the Goldshore Escrow Release Deadline;

“ Escrowed Funds ” means the Sierra Madre Escrowed Funds and/or the Goldshore Escrowed Funds, as the context requires;

“ Exchange ” means the TSX Venture Exchange Inc.;

“ Exchange Policy 5.2 ” means Policy 5.4 – Changes of Business and Reverse Takeovers of the Manual;

“ Exchange Policy 5.4 ” means Policy 5.4 – Escrow, Vendor Consideration and Resale Restrictions of the Manual;

“ Filing Statement ” means this filing statement, together with all appendices attached hereto and including the summary hereof;

“ Final Exchange Bulletin ” means the Exchange bulletin which is issued following the closing of the Transaction and the submission of all required documentation and that evidences the final Exchange acceptance of the Transaction;

“ Form 3D2 ” means Form 3D2 – Information Required in a Filing Statement for a Reverse Takeover or Change of Business of the Manual;

“ Goldshore ” means Goldshore Resources Inc., a corporation existing under the laws of British Columbia;

“ Goldshore Board ” means the board of directors of Goldshore;

“ Goldshore Compensation Options ” means the non-transferable compensation options of Goldshore issuable to the Agents on the Goldshore Escrow Release Date, each Goldshore Compensation Option entitling the holder thereof to purchase one Goldshore Share at a price of $0.65 for a period of 24 months following the Goldshore Escrow Release Date;

“ Goldshore Escrow Release Conditions ” means the occurrence of each of the following events:

(a) the entering into of the Asset Purchase Agreement;
(b) written confirmation from each of Goldshore and Wesdome that all conditions to the completion of the Property Acquisition have been satisfied or waived;
(c) written confirmation from each of Sierra Madre and Goldshore that all conditions to the completion of the Transaction have been satisfied or waived (other than the transactions contemplated by the Property Acquisition and such other conditions thereunder that by their nature are to be satisfied at completion of the Transaction, including release of the Escrowed Funds);
(d) the receipt of all shareholder, third party, regulatory and stock exchange approvals required for the completion of the Transaction;
(e) the Resulting Issuer (including the Resulting Issuer Shares issued in respect of the exercise of Sierra Madre Subscription Receipts and the subscription for, and issuance of, the associated Resulting Issuer Shares) being conditionally approved for listing on the Exchange;
(f) the receipt of all regulatory, shareholder and third-party approvals, if any, required in connection with the Transaction;
(g) counsel to the Resulting Issuer having delivered an opinion addressed to the Agents confirming, among other things, the Resulting Issuer Shares issued in connection with the exchange of the Goldshore Shares pursuant to the Transaction will be free of any statutory hold periods in Canada upon the issue thereof, other than in respect of control block sales;
(h) Goldshore, Sierra Madre and the Resulting Issuer will not be in breach or default of any of its covenants or obligations under the subscription agreements governing the Subscription Receipts or the Agency Agreement, except (in the case of the Agency Agreement only) for those breaches or defaults that have been waived by the Agents and all conditions set out in the Agency Agreement will have been fulfilled, which will all be confirmed to be true in a certificate of a senior officer of the Resulting Issuer; and

(i) Goldshore, Sierra Madre and the Lead Agent (on its own behalf, and on behalf of the other Agents) will have delivered the Goldshore Escrow Release Notice;

“ Goldshore Escrow Release Date ” means the date on which the Goldshore Escrow Release Notice is considered delivered under the Goldshore Subscription Receipt Agreement;

“ Goldshore Escrow Release Deadline ” means June 30, 2021 or such other date the Lead Agent may consent to in writing;

“ Goldshore Escrow Release Notice ” means a joint notice executed by Goldshore, Sierra Madre and the Lead Agent confirming that the Goldshore Escrow Release Conditions have been satisfied or waived in accordance with the Goldshore Subscription Receipt Agreement;

“ Goldshore Escrowed Funds ” means $14,359,835.38 from the proceeds of the Goldshore Offering (less 50% of the cash commission payable to the Agents plus the Agents’ expenses) that are held in escrow pursuant to the Goldshore Subscription Receipt Agreement, plus earned interest accrued;

“ Goldshore Financial Statements ” means the audited financial statements of Goldshore for the period from the date of incorporation (October 23, 2020) to March 31, 2021, including the notes thereto and the report of Goldshore’s auditors thereon;

“ Goldshore MD&A ” means the MD&A for Goldshore for the period covered by the Goldshore Financial Statements;

“ Goldshore Offering ” means the sale by Goldshore of 23,076,924 Goldshore Subscription Receipts for gross proceeds of $15,000,000.60 pursuant to the Agency Agreement;

“ Goldshore Shareholder ” means a holder of Goldshore Shares from time to time, and “ Goldshore Shareholders ” means all of such holders;

“ Goldshore Shares ” means the common shares in the capital of Goldshore;

“ Goldshore Subscription Receipt Agreement ” means the subscription receipt agreement dated as of the Offering Closing Date among Goldshore, Sierra Madre, the Subscription Receipt Agent and the Lead Agent governing the Goldshore Subscription Receipts and pursuant to which the Goldshore Escrowed Funds are held in escrow until the Goldshore Escrow Release Date;

“ Goldshore Subscription Receipts ” means subscription receipts in the capital of Goldshore sold pursuant to the Goldshore Offering at a price of $0.65 per Goldshore Subscription Receipt;

“ Indicated Resource ” means that part of a Mineral Resource for which quantity, grade or quality, densities, shape and physical characteristics are estimated with sufficient confidence to allow the application of modifying factors in sufficient detail to support mine planning and evaluation of the economic viability of the deposit;

“ Inferred Resource ” means that part of a Mineral Resource for which quantity and grade or quality are estimated on the basis of limited geological evidence and sampling. Geological evidence is sufficient to imply but not verify geological and grade or quality continuity;

“ Insider ” if used in relation to an issuer, means: (a) a director or senior officer of the issuer; (b) a director or senior officer of the issuer that is an Insider or subsidiary of the issuer; (c) a Person that beneficially owns

or controls, directly or indirectly, voting shares carrying more than 10% of the voting rights attached to all outstanding voting shares of the issuer; or (d) the issuer itself if it holds any of its own securities;

“ Lead Agent ” means Eventus Capital Corp.;

“ Manual ” means the Corporate Finance Manual of the Exchange;

“ MD&A ” means management’s discussion and analysis;

“ Measured Resource ” means that part of a Mineral Resource for which quantity, grade or quality, densities, shape and physical characteristics are estimated with confidence sufficient to allow the application of modifying factors to support detailed mine planning and final evaluation of the economic viability of the deposit;

“ Mineral Reserve ” has the meaning ascribed to it by the CIM Definition Standards for Mineral Resources & Mineral Reserves;

“ Mineral Resource ” has the meaning ascribed to it by the CIM Definition Standards for Mineral Resources & Mineral Reserves;

“ Moss Lake Property ” means the property known as the Moss Lake gold property, located in Ontario, Canada and which is the subject of the Technical Report;

“ Name Change ” means the change of name of Sierra Madre to “Goldshore Resources Inc.”, or such other name as acceptable to Sierra Madre, Goldshore and applicable regulatory authorities;

“ Named Executive Officer ” means each of the following individuals: (i) the Chief Executive Officer of a Company; (ii) the Chief Financial Officer of a Company; (iii) each of the three most highly compensated executive officers of a Company, including any of its subsidiaries, or the three most highly compensated individuals acting in a similar capacity, other than the Chief Executive Officer and Chief Financial Officer, at the end of the most recently completed financial year whose total compensation was, individually, more than $150,000 for that financial year; and (iv) each individual who would be a Named Executive Officer under paragraph (iii) but for the fact that the individual was neither an executive officer of the Company or its subsidiaries, nor acting in a similar capacity, at the end of that financial year;

“ NEX ” means the market on which former Exchange and Toronto Stock Exchange issuers that do not meet Exchange CLR for Tier 2 Issuers may continue to trade;

“ NEX Company ” means a Company which has its securities listed for trading on NEX;

“ NI 43-101 ” means National Instrument 43-101 – Standards of Disclosure for Mineral Projects of the Canadian Securities Administrators;

“ Non-Arm’s Length Party ” means in relation to a Company, a promoter, officer, director, other Insider or Control Person of that Company (including Sierra Madre) and any Associates or Affiliates of any such Persons, and in relation to an individual, means any Associate of the individual or any Company of which the individual is a promoter, officer, director, Insider or Control Person;

“ NSR ” means net smelter returns;

“ Offering Closing Date ” means February 26, 2021;

“ Offerings ” means the Sierra Madre Offering and the Goldshore Offering;

“ Payment Shares ” means the Goldshore Shares issuable to Wesdome on closing of the Property Acquisition;

“ Person ” means a Company or individual;

“ Principal ” has the meaning ascribed to it in section 1.2 of Exchange Policy 1.1 Interpretation ;

“ Property Acquisition ” means the acquisition of the Moss Lake Property by Goldshore pursuant to the terms of the Asset Purchase Agreement;

“ Qualified Persons ” mean collectively Reno Pressacco, P.Geo. and Derek Riehm, P.Eng., of SLR Consulting, each an independent “Qualified Person”, as defined in NI 43-101;

“ Reactivation ” means the process of a NEX Company undertaking a transaction or series of transactions which results in the NEX Company becoming eligible to re-list on the Exchange by meeting all Tier 1 or Tier 2 Continued Listing Requirements or Initial Listing Requirements (as those terms are defined in the Manual) in accordance with Exchange Requirements;

“ Registrar ” means the Registrar of Companies appointed under the BCBCA;

“ Related Party Transaction ” has the meaning ascribed to that term under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions adopted by the Ontario Securities Commission and includes a transaction that is determined by the Exchange to be a Related Party Transaction under Exchange Policy 5.9 Protection of Minority Security Holders in Special Transactions;

“ Resulting Issuer ” means the issuer (i.e. Sierra Madre) existing upon issuance of the Final Exchange Bulletin;

“ Resulting Issuer Shares ” means the Sierra Madre Shares following completion of the Transaction;

“ Sierra Madre ” means Sierra Madre Developments Inc., a corporation existing under the laws of the Province of British Columbia;

“ Sierra Madre Audited Financial Statements ” means the audited financial statements of Sierra Madre for the years ended March 31, 2020, March 31, 2019 and March 31, 2018, including the notes thereto and the report of Sierra Madre’s auditors thereon;

“ Sierra Madre Board ” means the board of directors of Sierra Madre;

“ Sierra Madre Compensation Options ” means the non-transferable compensation options of Sierra Madre issuable to the Agents on the Sierra Madre Escrow Release Date, each Sierra Madre Compensation Option entitling the holder thereof to purchase one Sierra Madre Share at a price of $0.75 for a period of 24 months following the Sierra Madre Escrow Release Date;

“ Sierra Madre Escrow Release Conditions ” means the occurrence of each of the following events:

(a) the Goldshore Escrow Release Conditions have been satisfied; and
(b) Sierra Madre, Goldshore and the Lead Agent (on its own behalf, and on behalf of the other Agents) will have delivered the Sierra Madre Escrow Release Notice to the Subscription Receipt Agent;

“ Sierra Madre Escrow Release Date ” means the date on which the Sierra Madre Escrow Release Notice is considered delivered under the Subscription Receipt Agreement;

“ Sierra Madre Escrow Release Deadline ” means June 30, 2021 or such other date the Lead Agent may consent to in writing;

“ Sierra Madre Escrow Release Notice ” means a joint notice executed by Sierra Madre, Goldshore and the Lead Agent confirming that the Sierra Madre Escrow Release Conditions have been satisfied or waived in accordance with the Sierra Madre Subscription Receipt Agreement;

“ Sierra Madre Escrowed Funds ” means $10,000,001.25 from the proceeds of the Goldshore Offering that are held in escrow pursuant to the Goldshore Subscription Receipt Agreement, plus earned interest accrued;

“ Sierra Madre Financial Statements ” means, collectively, the Sierra Madre Audited Financial Statements and the Sierra Madre Interim Financial Statements;

“ Sierra Madre Interim Financial Statements ” means the unaudited condensed interim financial statements of Sierra Madre for the nine months ended December 31, 2020, including the notes thereto;

“ Sierra Madre MD&A ” means the MD&A for Sierra Madre for the periods covered by the Sierra Madre Financial Statements;

“ Sierra Madre Offering ” means the sale by Sierra Madre of 13,333,335 Sierra Madre Subscription Receipts for gross proceeds of $10,000,001.25 pursuant to the Agency Agreement;

“ Sierra Madre Replacement Compensation Options ” means the non-transferable compensation options of Sierra Madre to acquire Sierra Madre Shares to be issued under the Amalgamation Agreement in replacement of the Goldshore Compensation Options outstanding immediately prior to the Amalgamation, each Sierra Madre Replacement Compensation Option entitling the holder thereof to purchase one Sierra Madre Share for $0.65 until the expiry date of each such Goldshore Compensation Options being replaced by a Sierra Madre Replacement Compensation Options, in accordance with its terms;

“ Sierra Madre Shareholder ” means a holder of Sierra Madre Shares from time to time, and “ Sierra Madre Shareholders ” means all of such holders;

“ Sierra Madre Shares ” means the common shares in the capital of Sierra Madre;

“ Sierra Madre Subco ” means Sierra Madre’s wholly-owned subsidiary, 1284403 B.C. Ltd., a corporation incorporated by Sierra Madre pursuant to the provisions of the BCBCA for the purposes of the Amalgamation;

“ Sierra Madre Subco Shares ” means the common shares in the capital of Sierra Madre Subco;

“ Sierra Madre Subscription Receipts ” means flow-through subscription receipts in the capital of Sierra Madre sold pursuant to the Sierra Madre Offering at a price of $0.75 per Sierra Madre Subscription Receipt;

“ Sierra Madre Subscription Receipt Agreement ” means the subscription receipt agreement dated as of the Offering Closing Date among Sierra Madre, Goldshore, the Subscription Receipt Agent and the Lead Agent governing the Sierra Madre Subscription Receipts and pursuant to which the Sierra Madre Escrowed Funds are held in escrow until the Sierra Madre Escrow Release Date;

“ SLR Consulting ” means SLR Consulting (Canada) Ltd.;

“ Stock Option Plan ” means the current stock option plan of Sierra Madre, which provides that the Sierra Madre Board may, from time to time, in its discretion, and in accordance with Exchange requirements, grant to directors, officers, employees and consultants of Sierra Madre, options to purchase Sierra Madre Shares;

“ Subscription Receipt Agent ” means Odyssey Trust Company;

“ Subscription Receipt Agreements ” means the Sierra Madre Subscription Receipt Agreement and the Goldshore Subscription Receipt Agreement;

“ Subscription Receipts ” means the Goldshore Subscription Receipts and the Sierra Madre Subscription Receipts;

“ Tax Act ” means the Income Tax Act (Canada), as from time to time amended or re-enacted;

“ Technical Report ” means the technical report entitled “Technical Report on the Moss Lake Project, Ontario, Canada, Report for NI 43-101“ dated April 6, 2021 prepared by SLR Consulting in respect of the Moss Lake Property;

“ Transaction ” means the business combination between Sierra Madre and Goldshore whereby Sierra Madre will acquire Goldshore by way of the Amalgamation, and which will constitute a reverse takeover of Sierra Madre pursuant to Exchange Policy 5.2;

“ Value Securities ” means the Resulting Issuer Shares escrowed under the Value Security Escrow Agreement in accordance with Exchange Policy 5.4;

“ Value Security Escrow Agreement ” means an escrow agreement on Exchange Form 5D to which Value Securities will be subject;

“ Wesdome ” means Wesdome Gold Mines Ltd.; and

“ Wesdome Sub ” means Moss Lake Gold Mines Ltd., a wholly-owned subsidiary of Wesdome.

SUMMARY OF FILING STATEMENT

The following is a summary of information relating to Sierra Madre, Sierra Madre Subco, Goldshore, the Moss Lake Property and the Resulting Issuer (assuming completion of the Transaction) and should be read together with the more detailed information and financial data and statements contained elsewhere in this Filing Statement. Reference is made to the Glossary for the definitions of certain abbreviations and terms used in this Filing Statement and in this summary.

This Filing Statement is being prepared in accordance with Policy 5.2 and Form 3D2 in connection with the Transaction.

The Companies

Sierra Madre

Sierra Madre was incorporated on April 30, 2009 pursuant to the BCBCA. Sierra Madre’s head office is located at Suite 907, 1030 West Georgia Street, Vancouver, British Columbia, Canada V6E 2Y3. Sierra Madre’s registered office is located at 353 Water Street, Suite 401, Vancouver, British Columbia, Canada V6B 1B8.

Sierra Madre is a mineral exploration company focused on the acquisition and evaluation of precious metal mineral properties in Canada. As at the date of this Filing Statement, Sierra Madre does not hold title to, or an interest in, any mineral exploration properties.

Sierra Madre currently has 22,065,722 Sierra Madre Shares, 13,333,335 Sierra Madre Subscription Receipts, and 772,560 Sierra Madre Compensation Options outstanding. In connection with the Consolidation, the Sierra Madre Shares will be consolidated on a six old for one new basis.

Sierra Madre is a reporting issuer in the provinces of British Columbia, Alberta and Ontario. The Sierra Madre Shares are listed on the NEX board of the Exchange under the trading symbol “SMG.H”.

Sierra Madre Subco

Sierra Madre Subco is a private company incorporated pursuant to the BCBCA on January 18, 2021. Sierra Madre Subco is a wholly-owned subsidiary of Sierra Madre and was incorporated for the purposes of completing the Amalgamation.

Goldshore

Goldshore was incorporated on October 23, 2020 pursuant to the BCBCA. Goldshore’s head office is located at Suite 918, 1030 West Georgia Street, Vancouver, British Columbia, Canada V6E 2Y3. Goldshore’s registered office is located at Suite 2200, 885 West Georgia Street, Vancouver, British Columbia, Canada V6C 3E8.

Goldshore is focused on the development of the Moss Lake Property located in Ontario, Canada.

Goldshore currently has 30,122,381 Goldshore Shares, 23,076,924 Goldshore Subscription Receipts and 1,263,924 Goldshore Compensation Options outstanding.

Goldshore is not a reporting issuer in any jurisdiction of Canada and no public market exists for the Goldshore Shares.

Moss Lake Property

The Moss Lake Property is located approximately 100 km west of the city of Thunder Bay, Ontario. It is accessed via Highway 11 which passes within one km of the property boundary to the north. The Moss Lake Property consists of 282 unpatented and patented mining claims that are 100% owned by Wesdome Sub, and cover 14,292 hectares.

See “Information Concerning Goldshore – General Development of the Business – Moss Lake Property”.

The Transaction

Amalgamation Agreement

Pursuant to the Amalgamation Agreement, among other things, Goldshore and Sierra Madre Subco will amalgamate, with the amalgamated entity being a subsidiary of Sierra Madre.

In connection with the Amalgamation, it is intended that Sierra Madre will change its name to “Goldshore Resources Inc.”, or such other name as acceptable to Sierra Madre, Goldshore and applicable regulatory authorities.

After giving effect to the Amalgamation, all Sierra Madre Shares will be referred to herein as “Resulting Issuer Shares”.

See “The Transaction – Amalgamation Agreement”.

Offerings

A condition precedent to the closing of the Transaction is completion of the Offerings. To that end, Goldshore and Sierra Madre entered into the Agency Agreement with the Agents in connection with the Offerings providing for the sale of Subscription Receipts to raise up to an aggregate of $25,000,000. The Offerings closed on February 26, 2021 in respect of the sale of a total of 13,333,335 Sierra Madre Subscription Receipts at a price of $0.75 per Sierra Madre Subscription Receipt for gross proceeds of $10,000,001.25 and 23,076,924 Goldshore Subscription Receipts at a price of $0.65 per Goldshore Subscription Receipt for gross proceeds of $15,000,000.60.

See “The Transaction – The Offerings”.

Directors and Executive Officers

Upon Closing, the directors and executive officers of the Resulting Issuer are expected to be as follows:

Name	Title
Brett A. Richards	Chief Executive Officer and Director
Gavin Cooper	Chief Financial Officer and Corporate Secretary

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Name Title
Peter Flindell Vice President, Exploration
Doug Ramshaw Director
Victor Cantore Director
Galen McNamara Director
Shawn Khunkhun Director
Brandon Macdonald Director
Joanna Pearson Director
Michael Michaud Director
Heather Laxton Director
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See “Directors and Executive Officers”.

Arm’s Length Transaction

The Transaction is not a Non-Arm’s Length Transaction.

Available Funds and Principal Purposes

The following funds are expected to be available to the Resulting Issuer:

Funds Available	Amount
Estimated workingcapital(1)	$3,747,119
Net proceeds from the Sierra Madre Offering and the Goldshore Offering (2)	$23,369,641
Total	$27,116,760

Notes:

(1) Based on working capital of Sierra Madre and Goldshore as at April 30, 2021 of $355,002 and $3,392,117, respectively.
(2) Consisting of gross proceeds from the Subscription Receipts of $25,000,001.85 less legal fees, filing fees and other professional fees related to the Offerings.

The following table sets forth the principal purposes for which the estimated funds available to the Resulting Issuer will be used and the current estimated amounts to be used for each such principal purpose:

Use of Funds Available	Amount
Paymentpursuant to the Asset Purchase Agreement(1)	$12,500,000

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Use of Funds Available Amount
To pay the estimated cost of the recommended Phase I exploration $14,000,000
program and budget on the Moss Lake Property as outlined in the
Technical Report
Costs related to the Transaction [(2)] $50,000
Operating expenses for 12 months [(3)] $264,500
Unallocated working capital [(4)] $322,260
Total $27,116,760
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Notes:

(1) Due on closing of the Transaction.
(2) Consists of professional fees ($42,500) and filing fees ($7,500).
(3) Estimated operating expenses for the next 12 months include: consulting ($174,000), professional fees ($30,000), insurance ($40,000), filing fees ($14,500) and general and administrative ($6,000).
(4) Possible uses of the unallocated working capital: to fund ongoing operations; future due diligence of other mining claims/concessions; Phase II exploration program; and other uses as may be necessary.

The Resulting Issuer intends to spend the funds available to it as stated in this Filing Statement. However, there may be circumstances where, for sound business reasons, a reallocation of the funds may be necessary. The amounts set forth above may increase if we are required to carry out due diligence investigations in regards to any prospective investment or business opportunity, or if the costs of this Filing Statement or the Listing, or negotiating an applicable transaction, are greater than anticipated. See “Funds Available and Use of Available Funds”.

Selected Pro Forma Consolidated Financial Information

The following sets out selected pro forma financial information of the Resulting Issuer. This table should be read in conjunction with the unaudited pro forma consolidated balance sheet of the Resulting Issuer included in this Filing Statement as Appendix D.

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Item Amount
Current Assets $14,497,254
Non-Current Assets $32,021,915
Total Liabilities $1,547,641
Shareholders’ Equity $46,519,169
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Exchange Listing and Market Price

The Sierra Madre Shares are listed for trading on the NEX board of the Exchange under the trading symbol “SMG.H”. The closing price of the Sierra Madre Shares on January 18, 2021, the last day the Sierra Madre Shares traded prior to being halted pending announcement of the Transaction, was $0.11.

No public market exists for any securities of Goldshore.

Relationships with the Agents

Eventus Capital Corp., Canaccord Genuity Corp., Laurentian Bank Securities Inc., Haywood Securities Inc., and Desjardins Securities Inc. acted as the Agents in connection with the Offerings. See “The Transaction – Offerings” for disclosure of compensation paid and payable to the Agents pursuant to the Agency Agreement.

Conflicts of Interest

Other than as disclosed below, as of the date of this Filing Statement and to the knowledge of the directors and officers of Sierra Madre and Goldshore, there are no existing conflicts of interest between the Resulting Issuer and any of the individuals proposed for appointment as directors or officers following the completion of the Transaction.

Risk Factors

AN INVESTMENT IN SECURITIES OF SIERRA MADRE AND, FOLLOWING THE COMPLETION OF THE TRANSACTION, THE RESULTING ISSUER, IS HIGHLY SPECULATIVE AND INVOLVES A HIGH DEGREE OF RISK AND SHOULD ONLY BE MADE BY INVESTORS WHO CAN AFFORD TO LOSE THEIR ENTIRE INVESTMENT.

The Resulting Issuer’s business, being the exploration and development of mineral properties in North America, is speculative and involves a high degree of risk. The risk factors listed below could materially affect the Resulting Issuer’s financial condition and/or future operating results, and could cause actual events to differ materially from those described in forward-looking statements made by or relating to the Resulting Issuer. Such risks include, but are not limited to risks relating to: the construction and start up of new mines; nature of mineral exploration, development and operations; volatility of commodity prices; title matters; insurance and uninsured risks; environmental hazards; permitting risks; infrastructure; competition for exploration, development and operation rights; uncertainty and inherent sample variability; reliability and uncertainty of Mineral Resource estimates; government regulation; operational labour and employment matters; uncertainty and inherent sample variability; reliability of Mineral Resource estimates; uncertainty relating to Inferred Resources; operational labour and employment matters; community relationships; impact of pandemic disease on global economic conditions and economic performance; production estimates; cost estimates; reclamation costs; the Transaction may not complete; liquidity and additional financing; no earnings or history of loss; attracting and retaining talented personnel; possible conflicts of interest of directors and officers of the resulting issuer; volatility of the market for Resulting Issuer Shares; and dilution risk.

For additional information, please see the discussion under “Risk Factors”.

Shareholder Approvals

Under the policies of the Exchange, Sierra Madre is not expected to require shareholder approval for the Transaction. In this regard, Sierra Madre and the Transaction satisfy the Exchange requirements as to not be subject to a shareholder approval requirement as: (a) the Transaction is an Arm’s Length transaction; (b) Sierra Madre is a NEX Company without active operations; (c) Sierra Madre is not subject to a cease trade order and is not expected to be subject to such an order upon completion of the Transaction; and (d) shareholder approval of the Transaction is not required under applicable corporate and securities laws. However, Sierra Madre sought and obtained shareholder approval of certain matters related to the implementation of the Transaction – including the Consolidation and the approval of the appointment of

the new board of directors of Sierra Madre to be effective upon completion of the Transaction – at a shareholders’ meeting held on March 29, 2021.

Pursuant to the BCBCA, the Amalgamation must be consented to in writing by all the shareholders of each of the Amalgamating Companies entitled to vote on the resolution or adopted by the shareholders of each the Amalgamating Companies by special resolution at a meeting. In this regard:

Sierra Madre, as the sole shareholder of Sierra Madre Subco, has consented in writing to the Amalgamation.
Goldshore Shareholders holding a special majority of the issued and outstanding Goldshore Shares represented at a meeting held on May 17, 2021 voted in favour of the Amalgamation.

Exchange Acceptance

The Exchange has conditionally accepted the Transaction as Sierra Madre’s Reactivation on Tier 2 of the Exchange, subject to Sierra Madre completing all of the requirements of the Exchange.

INFORMATION CONCERNING SIERRA MADRE

The following information is presented on a pre-Transaction basis and prior to giving effect to any of the Transaction. Please see the discussion under “Information Concerning the Resulting Issuer” for pro forma business, financial and share capital information relating to the Resulting Issuer.

Corporate Structure

Name and Incorporation

Intercorporate Relationships

On January 18, 2021, Sierra Madre incorporated Sierra Madre Subco pursuant to the provisions of the BCBCA for the purposes of the Amalgamation. Sierra Madre Subco is a direct, wholly-owned subsidiary of Sierra Madre.

General Development of the Business

Sierra Madre is a mineral exploration company focused on the acquisition and evaluation of precious metal mineral properties in Canada. Sierra Madre had one wholly-owned subsidiary, Bear Mountain Gold Mines Ltd., the shares of which were distributed to shareholders during the year ended March 31, 2020. As at the date of this Filing Statement, Sierra Madre does not hold title to, or an interest in, any mineral exploration properties.

Sierra Madre was designated as an “inactive issuer” after it ceased carrying on active business operations at a level which met the Exchange’s listing standards. As a result of the change in status, Sierra Madre’s shares were transferred to the NEX board of the Exchange.

On April 3, 2020, Sierra Madre announced that it would not be proceeding with the previously announced acquisition of claims in the Urban-Barry Gold Camp area in Quebec, or the corresponding share consolidation and private placement financing.

On August 4, 2020, Sierra Madre completed a share consolidation of one new share for every two outstanding shares.

On August 4, 2020, Sierra Madre closed a private placement of 16,666,667 Sierra Madre Shares at a price of $0.06 per Sierra Madre Share for gross proceeds of $1,000,000.

On January 25, 2021, Sierra Madre and Goldshore entered into the Amalgamation Agreement providing for, among other things, the Transaction. The Amalgamation Agreement was amended and restated on February 16, 2021. For a description of the Amalgamation Agreement, see the discussion under “The Transaction – Amalgamation Agreement”.

On February 26, 2021, Sierra Madre completed the Sierra Madre Offering. For a description of the Sierra Madre Offering, see the discussion under “The Transaction – Offerings”.

Selected Consolidated Financial Information

A summary of selected financial information of Sierra Madre from the Sierra Madre Financial Statements is set out below and should be read in conjunction with the Sierra Madre Financial Statements attached hereto as Appendix B:

	Nine months ended December 31, 2020 (Unaudited)	Year ended March 31, 2020 (Audited)	Year ended March 31, 2019 (Audited)	Year ended March 31, 2018 (Audited)
Total Expenses	$120,146	$39,867	$207,794	$59,672
Amounts deferred in connection with the Transaction	-	-	-	-

Management’s Discussion and Analysis

The Sierra Madre MD&A is attached to this Filing Statement as Appendix B. The Sierra Madre MD&A is a review of how Sierra Madre performed during the period covered by the Sierra Madre Financial Statements and of Sierra Madre’s financial condition and future prospects. The Sierra Madre MD&A complements and supplements the Sierra Madre Financial Statements and should be read in conjunction with the Sierra Madre Financial Statements.

Description of Securities

Sierra Madre will be distributing Sierra Madre Shares in connection with the Transaction. Sierra Madre is authorized to issue an unlimited number of Sierra Madre Shares.

The holders of Sierra Madre Shares are entitled, subject to the rights, privileges, restrictions and conditions attached to any preferred share, to dividends if, as and when declared by the directors, to one vote per share at meetings of the holders of Sierra Madre Shares and, subject to the rights, privileges, restrictions and conditions attached to any preferred share, upon liquidation, to receive such assets of Sierra Madre as are distributable to the holders of the Sierra Madre Shares. Sierra Madre has no preferred shares outstanding.

Stock Option Plan

Sierra Madre has approved an incentive share option plan (the “ Stock Option Plan ”), for the employees, directors, officers, consultants and employees of a person or company which provides management services to Sierra Madre or its associated, affiliated, controlled and subsidiary companies (the “ Participants ”), to grant such Participants stock options to acquire up to 10% of the number of Sierra Madre Shares outstanding from time to time. This is a “rolling” plan as the number of shares reserved for issuance pursuant to the grant of stock options will increase as Sierra Madre’s issued and outstanding share capital increases.

The Stock Option Plan provides that the directors of Sierra Madre may grant options to purchase Sierra Madre Shares on terms that the directors may determine, within the limitations of the Stock Option Plan. The exercise price of an option issued under the Stock Option Plan is determined by the directors, but may not be less than the closing market price of the Sierra Madre Shares on the day preceding the date of granting of the option less any available discount, in accordance with Exchange policies. No option may be granted for a term longer than ten years. An option may expire on such earlier date or dates as may be

fixed by the Board, subject to earlier termination in the event the optionee ceases to be eligible under the Stock Option Plan by reason of death, retirement or otherwise.

The Stock Option Plan provides for the following restrictions: (i) no Participant may be granted an option if that option would result in the total number of stock options granted to the Participant in the previous 12 months, exceeding 5% of the issued and outstanding Sierra Madre Shares unless Sierra Madre has obtained disinterested shareholder approval in accordance with Exchange policies; (ii) the aggregate number of options granted to Participants conducting Investor Relations Activities (as defined in Exchange policies) in any 12 month period must not exceed 2% of the issued and outstanding Sierra Madre Shares, calculated at the time of grant; and (iii) the aggregate number of options granted to any one consultant in any 12 month period must not exceed 2% of the issued and outstanding Sierra Madre Shares, calculated at the time of grant. In addition, options granted to consultants conducting Investor Relations Activities (as defined in Exchange policies) will vest over a period of not less than 12 months as to 25% on the date that is three months from the date of grant, and a further 25% on each successive date that is three months from the date of the previous vesting or such longer vesting period as the Board may determine. Vesting of options is otherwise at the discretion of the Board.

In accordance with good corporate governance practices and as recommended by National Policy 51-201 – Disclosure Standards , Sierra Madre imposes black-out periods restricting the trading of its securities by directors, officers, employees and consultants during periods surrounding the release of annual and interim financial statements and at other times when deemed necessary by management and the Board. In order to ensure that holders of outstanding options are not prejudiced by the imposition of such black-out periods, the Stock Option Plan contains a provision to the effect that any outstanding options with an expiry date occurring during a management imposed black-out period or within five trading days thereafter will be automatically extended to a date that is ten trading days following the end of the black-out period.

Consolidated Capitalization

The following table outlines the capitalization of Sierra Madre as at January 31, 2021 and as at the date of this Filing Statement. The table should be read in conjunction with the Sierra Madre Financial Statements and with a reference to the material changes as further described beneath the table:

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Designation of Security Amount Outstanding as of Outstanding as of
Authorized January 31, 2021 date of Filing
Statement prior to
Transaction
Sierra Madre Shares Unlimited 22,065,722 22,065,722 [(1)]
Sierra Madre Subscription Receipts [(2)] N/A Nil 13,333,335
Sierra Madre Compensation Options [(2)] N/A Nil 772,560
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Notes:

(1) In connection with the Consolidation, these Sierra Madre Shares will be consolidated on a six old for one new basis.

(2) See “The Transaction – Offerings” for a description of the Sierra Madre Subscription Receipts and the Sierra Madre Compensation Options.

Prior Sales

During the 12-month period before the date of this Filing Statement, Sierra Madre has issued the following Sierra Madre securities:

Date of Issuance	Number and Type of Securities	Issue Priceper Security	Nature of Consideration
February 26, 2021	13,333,335 Sierra Madre Subscription Receipts(1)	$0.75	Cash
August 4,2020	16,666,667 Sierra Madre Shares	$0.06	Cash

Note:

(1) Issued in connection with the Sierra Madre Offering.

Stock Exchange Price

The Sierra Madre Shares are listed for trading on the NEX board of the Exchange under the trading symbol “SMG.H”. The following table sets out trading information for the Sierra Madre Shares for the periods indicated as reported by the Exchange:

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Period High Low Volume
January 1, 2021 to January 18, 2021 [(1)] $0.11 $0.11 -
Q4 2020 $0.14 $0.11 87,982
Q3 2020 $0.20 $0.10 63,492
Q2 2020 $0.19 $0.06 332,698
Q1 2020 $0.07 $0.04 70,000
Q4 2019 $0.08 $0.07 45,165
Q3 2019 $0.15 $0.07 530,666
Q2 2019 $0.12 $0.11 32,130
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Note:

(1) The Sierra Madre Shares were halted from trading on January 19, 2021 pending announcement of the Transaction.

Arm’s Length Transactions

The Transaction does not constitute a Non-Arm’s Length Transaction.

Legal Proceedings

There are no legal proceedings material to Sierra Madre to which Sierra Madre is, or has been, a party or of which any of its property is, or has been, the subject matter. Additionally, to the knowledge of Sierra Madre, there are no such proceedings contemplated.

Auditor, Transfer Agent and Registrar

The auditor of Sierra Madre is Baker Tilly WM LLP located at Suite 900, 400 Burrard Street, Vancouver, British Columbia, Canada V6C 3B7.

The transfer agent and registrar for the Sierra Madre Shares is Computershare Investor Services Inc. located at 3[rd] Floor, 510 Burrard Street, Vancouver, British Columbia, Canada V6C 3B9.

Material Contracts

The following are material contracts, other than contracts entered in the ordinary course of business, entered into by Sierra Madre:

(a) Amalgamation Agreement. For more information see “The Transaction – Amalgamation Agreement”.
(b) Agency Agreement. For more information see “The Transaction – Offerings”.
(c) Sierra Madre Subscription Receipt Agreement. For more information see “The Transaction – Offerings”.

Copies of these materials contracts are publicly available under Sierra Madre’s SEDAR profile at www.sedar.com.

INFORMATION CONCERNING GOLDSHORE

The following information has been provided by Goldshore and presented on a pre-Transaction basis. Please see the discussion under “Information Concerning the Resulting Issuer” for pro forma business, financial and share capital information relating to the Resulting Issuer following the Transaction.

Corporate Structure

Name and Incorporation

Intercorporate Relationships

Goldshore does not have any subsidiaries.

General Development of the Business

Goldshore is engaged in the acquisition, exploration and development of mineral properties in North America and currently has a portfolio of one material property, the Moss Lake Property. Its current focus is to conduct the proposed exploration program on the Moss Lake Property as more particularly set out in the Technical Report.

In addition, Goldshore continues to identify and potentially acquire additional property interests and conduct exploration and evaluation to assess their potential.

History

Since incorporation, Goldshore has taken the following steps to develop its business:

identified and evaluated a number of mining-related projects in North America;
negotiated and entered into the Asset Purchase Agreement in respect of the Moss Lake Property;
recruited directors, officers and strategic advisors with the skills required to operate a publicly listed mineral exploration and development company;
raised aggregate gross proceeds of approximately $4,000,000 in various private placement financings;
secured additional financing by entering into an engagement letter with the Lead Agent in respect of the Goldshore Offering and subsequently completed the Goldshore Offering on February 26, 2021; and
engaged auditors and legal counsel.

Moss Lake Property

The Moss Lake Property hosts a number of gold and base metal rich deposits including the Moss Lake Deposit, the East Coldstream Deposit (Table 1), the historically producing North Coldstream Mine (Table 2), and the Hamlin Zone, all of which occur over a mineralized trend exceeding 20 km in length. A historical preliminary economic assessment was completed on the Moss Lake Property in 2013 and published by Wesdome Sub. A historical mineral resource estimate was completed on the East Coldstream Deposit in 2011 by Foundation Resources Inc.[2,3] In addition to these zones, the Moss Lake Property also hosts a number of poorly understood mineral occurrences which are reported to exist both at surface and in historically drilled holes.

The Moss Lake Deposit is a shear-hosted disseminated-style gold deposit which outcrops at surface. It has been drilled over a 2.5 km length and to depths of 300 m with 376 holes completed between 1983 and 2017. The last drilling program was conducted in 2016 and 2017 by Wesdome, which consisted of widely spaced holes along the strike extension of the deposit was successful in expanding the mineralized footprint and hydrothermal system 1.6 km to the northeast. Additionally, the deposit remains largely open to depth. In 2017, Wesdome completed an induced polarization survey which traced the potential extensions of pyrite mineralization associated with the Moss Lake Deposit over a total strike length of 8 km and spanning the entire extent of the survey grids. Historic drill hole highlights from the Moss Lake Deposit include 11.3 g/t Au over 70.4m in L-08-01, 2.55 g/t Au over 71.3 m in 89-172, and 1.19 g/t Au over 163.1 m in 87-101.

The East Coldstream Deposit is a shear-hosted disseminated-style gold deposit which locally outcrops at surface. It has been drilled over a 1.3 km length and to depths of 200 m with 138 holes completed between 1988 and 2017. The deposit remains largely open at depth and may have the potential for expansion along strike. Historic drill hole highlights from the East Coldstream Deposit include 4.86 g/t Au over 27.3 m in C-10-15.

The historically producing North Coldstream Mine is reported to have produced significant amounts of copper, gold and silver from mineralization with potential iron-oxide-copper-gold deposit style affinity. The exploration potential immediately surrounding the historic mining area is not currently well understood and historic data compilation is required.

The Hamlin Zone is a significant occurrence of copper and gold mineralization, and also of potential ironoxide-copper-gold deposit style affinity. Between 2008 and 2011, Glencore tested Hamlin with 24 drill holes which successfully outlined a broad and intermittently mineralized zone over a strike length of 900 m. Historic drill hole highlights from the Hamlin Zone include 0.9 g/t Au and 0.35% Cu over 150.7 m in HAM11-75.

The Moss Lake, East Coldstream and North Coldstream deposits sit on a mineral trend marked by a regionally significant deformation zone locally referred to as the Wawiag Fault Zone in the area of the Moss Lake Deposit. This deformation zone occurs over a length of approximately 20 km on the Project and there is an area spanning approximately seven km between the Moss Lake and East Coldstream deposits that is significantly underexplored.

Table 1: Historical Mineral Resources[(1,2,3) ]

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Indicated Resource Inferred Resource
Deposit Tonnes Au g/t Au oz Tonnes Au g/t Au oz
Moss Lake Deposit [ (1)] (2013 resource estimate)
Open Pit Potential 39,795,000 1.1 1,377,300 48,904,000 1.0 1,616,300
Underground Potential - - - 1,461,100 2.9 135,400
Moss Lake Total 39,795,000 1.1 1,377,300 50,364,000 1.1 1,751,600
East Coldstream Deposit [ (2)] (2011 resource estimate)
East Coldstream Total 3,516,700 0.85 96,400 30,533,000 0.78 763,276
Combined Total 43,311,700 1.08 1,473,700 80,897,000 0.98 2,514,876
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Notes:

(1) Source: Poirier, S., Patrick, G.A., Richard, P.L., and Palich, J., 2013. Technical Report and Preliminary Economic Assessment for the Moss Lake Project, 43-101 technical report prepared for Moss Lake Gold Mines Ltd. Moss Lake Deposit resource estimate is based on 0.5 g/t Au cut-off grade for open pit and 2.0 g/t Au cut-off grade for underground resources.
(2) Source: McCracken, T., 2011. Technical Report and Resource Estimate on the Osmani Gold Deposit, Coldstream Property, Northwestern Ontario, 43-101 technical report prepared for Foundation Resources Inc. and Alto Ventures Ltd. East Coldstream Deposit resource estimate is based on a 0.4 g/t Au cut-off grade.
(3) The reader is cautioned that the above referenced "historical mineral resource" estimates are considered historical in nature and as such is based on prior data and reports prepared by previous property owners. A qualified person has not done sufficient work to classify the historical estimates as current resources and

Goldshore is not treating the historical estimates as current resources. Significant data compilation, re-drilling, re-sampling and data verification may be required by a qualified person before the historical estimate on the Project can be classified as a current resource. There can be no assurance that any of the historical mineral resources, in whole or in part, will ever become economically viable. In addition, mineral resources are not mineral reserves and do not have demonstrated economic viability. Even if classified as a current resource, there is no certainty as to whether further exploration will result in any Inferred Resources being upgraded to an Indicated Resource or Measured Resource category.

Table 2: Reported Historical Production from the North Coldstream Deposit[(1) ]

Deposit	Tonnes	Cu %	Au g/t	Ag	Cu lbs	Au oz	Ag oz
Historical Production	2,700,000	1.89	0.56	5.59	102,000,000	44,000	440,000

Note:

(1) Source: Schlanka, R., 1969. Copper, Nickel, Lead and Zinc Deposits of Ontario, Mineral Resources Circular No. 12, Ontario Geological Survey, pp. 314-316.

Asset Purchase Agreement

Pursuant to the Asset Purchase Agreement, Goldshore has agreed to acquire the Moss Lake Property (the “ Property Acquisition ”) for aggregate consideration of (a) $12,500,000 in cash and (b) the issuance of Goldshore Shares (the “ Payment Shares ”) equal to the greater of (i) the number of Goldshore Shares having an aggregate deemed value (calculated based on a price per Goldshore Share of not less than $0.65) equal to $19,000,000; and (ii) 30% of the issued and outstanding Goldshore Shares.

The Payment Shares will be subject to the Value Security Escrow Agreement and the 36-Month Voluntary Resale Restrictions. See “Information Concerning the Resulting Issuer – Escrowed Securities and Securities Subject to Resale Restrictions”.

In addition, Goldshore has agreed to issue up to $20,000,000 in Goldshore Shares (the “ Milestone Shares ”) to Wesdome as follows:

(a) $5,000,000 in Milestone Shares within 12 months from closing of the Property Acquisition;
(b) $7,500,000 in Milestone Shares upon the earlier of (i) Goldshore completing an updated preliminary economic assessment or pre-feasibility study on the Moss Lake Property; and (ii) 30 months from closing of the Property Acquisition; and
(c) $7,500,000 in Milestone Shares upon the earlier of (i) Goldshore completing a feasibility study on the Project, or, (ii) if Goldshore does not complete a feasibility study on the Moss Lake Property, the earlier of (A) the date on which Goldshore makes a development decision on the Moss Lake Property; and (B) 48 months from closing of the Property Acquisition.

The Asset Purchase Agreement provides that all Milestone Shares will be issued at the greater of (a) $0.60 per Milestone Share, and (b) the volume-weighted average price of the Resulting Issuer for the 20 trading days prior to the date of issuance. Any Milestone Shares issued within 36 months of the Final Exchange Bulletin will be subject to the Value Security Escrow Release Schedule. See “Information Concerning the Resulting Issuer – Escrowed Securities and Securities Subject to Resale Restrictions”.

Under the terms of the Asset Purchase Agreement, the Resulting Issuer is required to issue all Milestone Shares immediately prior to the effective time of certain change of control transactions of the Resulting Issuer.

In addition, Goldshore will grant Wesdome a 1% NSR royalty (the “ NSR Royalty ”) on all metal production from the Moss Lake Property. Goldshore will have the right to repurchase the NSR Royalty for: (i) $3,000,000 in cash and $2,000,000 in Resulting Issuer Shares (the “ NSR Buyback Shares ”), if the buyback right is exercised within 30 months of closing of the Property Acquisition; or (ii) $5,500,000 in cash and $2,000,000 in NSR Buyback Shares, if the buyback right is exercised between 30 and 48 months from closing of the Property Acquisition. Any NSR Buyback Shares will be issued at the greater of (a) $0.60 per NSR Buyback Share, and (b) the volume-weighted average price of the Resulting Issuer for the 15 trading days prior to the date of issuance. The NSR Royalty buyback rights will expire if not exercised within 48 months of closing of the Property Acquisition.

It is expected that the Property Acquisition will close concurrently with the Transaction, and that, if necessary, Goldshore’s rights and obligations under the Asset Purchase Agreement will be assigned to the Resulting Issuer at such time.

The foregoing summary does not purport to be complete and is qualified in its entirety by the full text of the Asset Purchase Agreement. The Asset Purchase Agreement contains covenants, representations and warranties of and from Goldshore and Wesdome and various conditions precedent, both mutual and with respect to each party to the Asset Purchase Agreement. Capitalized terms not otherwise defined herein are defined in the Asset Purchase Agreement.

Investor Rights Agreement

In connection with closing of the Property Acquisition, Wesdome and the Resulting Issuer are expected to enter into an investor rights agreement (the “ Investor Rights Agreement ”), pursuant to which will provide, among other things, that for so long as Wesdome holds at least 10% of the issued and outstanding Resulting Issuer Shares, it will have a pro rata participation right and a piggyback registration right which would allow Wesdome to require the Resulting Issuer to include Resulting Issuer Shares held by Wesdome in any qualification of securities for distribution under Canadian securities laws by way of a prospectus. Further, the Investor Rights Agreement provides that until such time as Wesdome no longer holds 10% or more of the issued and outstanding Resulting Issuer Shares, Wesdome must give the Resulting Issuer prior written notice of its intention to sell more than 1% of the then issued and outstanding Resulting Issuer Shares in any 90-day period. Upon receipt of such notice, the Resulting Issuer will have five business days to designate the purchase of all or any portion of such shares, failing which, Wesdome will have the right to sell any remaining shares for an additional 30 days. Additionally, for so long as Wesdome holds at least 10% of the issued and outstanding Resulting Issuer Shares, it has the right to nominate two directors to the Resulting Issuer board of directors pursuant to the terms of the Investor Rights Agreement.

The foregoing summary does not purport to be complete and is qualified in its entirety by the full text of the Investor Rights Agreement. The Investor Rights Agreement contains covenants, representations and warranties of and from Goldshore and Wesdome and various conditions precedent, both mutual and with respect to each party to the Investor Rights Agreement. Capitalized terms not otherwise defined herein are defined in the Investor Rights Agreement.

Significant Acquisitions

Goldshore has not completed any significant acquisitions.

Narrative Description of the Property

Disclosure regarding the Moss Lake Property is included in the attached Appendix A to this Filing Statement.

Selected Consolidated Financial Information

A summary of selected financial information of Goldshore from the Goldshore Financial Statements is set out below and should be read in conjunction with the Goldshore Financial Statements attached hereto as Appendix C:

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Date of incorporation (October 23, 2020) to March 31, 2021
(Audited)
Total Revenues -
Loss from Continuing Operations $766,103
Net Income (Loss) ($766,103)
Total Assets $3,286,591
Total Long Term Financial Liabilities -
Cash Dividends Declared -
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Management’s Discussion and Analysis

The Goldshore MD&A is attached to this Filing Statement as Appendix C. The Goldshore MD&A is a review of how Goldshore performed during the period covered by the Goldshore Financial Statements and of Goldshore’s financial condition and future prospects. The Goldshore MD&A complements and supplements the Goldshore Financial Statements and should be read in conjunction with the Goldshore Financial Statements.

Description of Securities

Goldshore is authorized to issue an unlimited number of common shares. The holders of Goldshore Shares are entitled to one vote per Goldshore Share at all meetings of shareholders except meetings at which only holders of another specified class or series of shares of Goldshore are entitled to vote separately as a class or series. The holders of Goldshore Shares are entitled to receive dividends as and when declared by the directors, and to receive a pro rata share of the remaining property and assets of Goldshore in the event of liquidation, dissolution or winding up of Goldshore. The Goldshore Shares have no pre-emptive, redemption, purchase or conversion rights. Neither the BCBCA nor the constating documents of Goldshore impose restrictions on the transfer of Goldshore Shares, provided that Goldshore receives the certificate representing the Goldshore Shares to be transferred together with a duly endorsed instrument of transfer and payment of any fees and taxes which may be prescribed by the Goldshore Board from time to time. There are no sinking fund provisions in relation to the Goldshore Shares and they are not liable to further calls or to assessment by Goldshore. The BCBCA provides that the rights and provisions attached to any class of shares may not be modified, amended or varied unless consented to by special resolution passed

by a majority of not less than two-thirds of the votes cast in person or by proxy by holders of shares of that class.

Consolidated Capitalization

The following table outlines the capitalization of Goldshore as at March 31, 2021 and as at the date of this Filing Statement. The table should be read in conjunction with the Goldshore Financial Statements and with a reference to the material changes as further described beneath the table:

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Designation of Security Amount Authorized Outstanding as of Outstanding as of
March 31, 2021 date of Filing
Statement prior to
Transaction
Goldshore Shares Unlimited 30,122,381 30,122,381
Goldshore Subscription Receipts [(1)] N/A Nil 23,076,924
Goldshore Compensation Options [(1)] N/A Nil 1,263,924
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Notes:

(1) See “The Transaction – Offerings” for a description of the Goldshore Subscription Receipts and the Goldshore Compensation Options.

Prior Sales

During the 12-month period before the date of this Filing Statement, Goldshore has issued the following Goldshore securities:

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Date of Issuance # and Type of Securities Issue Price per Security Nature of Consideration
February 26, 2021 23,076,924 Goldshore Subscription $0.65 Cash
Receipts [(1)]
January 26, 2021 3,422,380 Goldshore Shares [(2)] $0.36 Cash
January 26, 2021 7,000,000 Goldshore Shares [(2)] $0.20 Cash
January 26, 2021 7,700,000 Goldshore Shares [(2)] $0.10 Cash
January 26, 2021 12,000,000 Goldshore Shares [(2)] $0.05 Cash
October 23, 2020 1 Goldshore Share [(3)] $0.01 Cash
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Notes:

(1) Issued in connection with the Goldshore Offering.

(2) Issued in connection with Goldshore non-brokered private placements.

(3) Issued on incorporation.

Stock Exchange Price

The Goldshore Shares are not listed for trading on any stock exchange or market.

Executive Compensation

Goldshore has not been a reporting issuer during any financial period to date. As a result, certain information required by Form 51-102F6 – Statement of Executive Compensation (“ Form 51-102F6 ”) has been omitted pursuant to Section 1.3(8) of Form 51-102F6.

Compensation Discussion and Analysis

Goldshore’s Named Executive Officer for the purposes of this section is Galen McNamara (Chief Executive Officer).

In assessing the compensation of its directors and executive officers, including the Named Executive Officer, Goldshore does not have in place any formal objectives, criteria or analysis. Compensation payable to executive officers and directors is currently reviewed and recommended by the Board, on an annual basis. Goldshore has not established any specific performance criteria or goals to which total compensation or any significant element of total compensation to be paid to any Named Executive Officer is dependent. The Named Executive Officer’s performance is reviewed in light of Goldshore’s objectives from time to time.

Following the completion of the Transaction, the Resulting Issuer will carry on the business of Goldshore. See “Information Concerning the Resulting Issuer – Executive Compensation”.

Summary Compensation Table

The Named Executive Officer does not receive and has not received cash or share-based compensation.

Employment, Consulting and Management Agreements

Goldshore is not party to any agreement or arrangement under which compensation was provided during any prior financial period or is payable in respect of services provided to Goldshore or any of its subsidiaries that were performed by a director or the Named Executive Officer or performed by any other party but are services typically provided by a director or the Named Executive Officer.

Director Compensation

Goldshore’s directors do not receive and have not received cash or share-based compensation.

Management Contracts

Goldshore is not party to any agreement whereby management functions of Goldshore are to any substantial degree performed by a person other than the directors or executive officers of Goldshore.

Non-Arm’s Length Party Transactions

Goldshore has not acquired or provided any assets or services in any transaction involving a director, officer or promoter of Goldshore, a security holder disclosed in this Filing Statement as a principal security holder, either before or after giving effect to the Transaction, or any of their respective Associates or Affiliates, other than as set out in this section or otherwise disclosed in this Filing Statement.

Legal Proceedings

There are no legal proceedings material to Goldshore to which Goldshore or a subsidiary of Goldshore is a party or of which any of their respective property is the subject matter. Additionally, to the reasonable knowledge of the management of Goldshore, there are no such proceedings contemplated.

Material Contracts

The following material contracts have been entered into by Goldshore within the two years before the date of this Filing Statement:

(a) Asset Purchase Agreement. For more information see “Information Concerning Goldshore – General Development of the Business”.
(b) Amalgamation Agreement. For more information see “The Transaction – Amalgamation Agreement”.
(c) Agency Agreement. For more information see “The Transaction – Offerings”.
(d) Goldshore Subscription Receipt Agreement. For more information see “The Transaction – Offerings”.

Copies of these contracts may be inspected without charge during regular business hours at Suite 907, 1030 West Georgia Street, Vancouver, British Columbia, Canada V6E 2Y3 until the closing of the Transaction and for a period of 30 days thereafter.

THE TRANSACTION

Amalgamation Agreement

Effective as of January 25, 2021, Sierra Madre, Goldshore and Sierra Madre Subco entered into the Amalgamation Agreement providing for the Transaction. The Amalgamation Agreement was amended and restated on February 16, 2021. A copy of the Amalgamation Agreement has been filed under Sierra Madre’s SEDAR profile at www.sedar.com.

The following summary of the Amalgamation Agreement contained in this Filing Statement is qualified in its entirety by reference to the full version of the Amalgamation Agreement:

(a) Pursuant to the Amalgamation Agreement, among other things, it is expected that on the Effective Date the following will occur without further act or formality: (i) each issued and outstanding Sierra Madre Subco Share held by Sierra Madre will be exchanged for one Amalco Share; and (ii) each issued and outstanding Goldshore Share will be exchanged for one Sierra Madre Share;
(b) As of and from the Effective Date, Sierra Madre, which is entitled to receive Amalco Shares in exchange for the Sierra Madre Subco Shares, may at any time surrender the certificate representing the Sierra Madre Subco Shares held by Sierra Madre to Amalco and, in return, will be entitled to receive a certificate representing Amalco Shares. Until such surrender and exchange, any share certificate(s) representing Sierra Madre Subco Shares held by Sierra Madre will be evidence of Sierra Madre’s right to be registered as a shareholder of Amalco;
(c) All the unissued shares of each of the Amalgamating Companies will be cancelled upon the Amalgamation becoming effective; and

(d) With respect to Goldshore Compensation Options: (i) each Goldshore Compensation Option which is outstanding and has not been duly exercised prior to the Effective Date will be exchanged for a Sierra Madre Replacement Compensation Option to purchase from Sierra Madre the same number of Sierra Madre Shares as the number of Goldshore Shares subject to such Goldshore Compensation Option immediately prior to the Effective Date. Each such Sierra Madre Replacement Compensation Option will provide for an exercise price per Sierra Madre Share equal to the exercise price per Goldshore Share otherwise purchasable pursuant to such Goldshore Compensation Option, (ii) all terms and conditions of a Sierra Madre Replacement Compensation Option, including the term to expiry, conditions to and manner of exercising, will be the same as the Goldshore Compensation Option for which it was exchanged (in all cases subject to customary adjustments for share reorganizations, reclassifications, consolidations, or subdivisions), and any certificate previously evidencing the Goldshore Compensation Option will thereafter evidence and be deemed to evidence such Sierra Madre Replacement Compensation Option unless and until a certificate evidencing the Sierra Madre Replacement Compensation Option is issued in replacement, (iii) each holder of Goldshore Compensation Options will cease to be the holder of Goldshore Compensation Options, or have any rights as a holder of such Goldshore Compensation Options (other than to receive Sierra Madre Replacement Compensation Options in accordance with the terms of the Amalgamation Agreement), (iv) the name of each holder of Goldshore Compensation Options will be removed from the applicable register of Goldshore Compensation Options maintained by or on behalf of Goldshore, and (v) all Goldshore Compensation Options exchanged for Sierra Madre Replacement Compensation Option will be cancelled.

Upon completion of the Amalgamation on the Effective Date:

30,122,381 Sierra Madre Shares are expected to be issued to the holders of Goldshore Shares;
13,333,335 Sierra Madre Shares are expected to be issued to the current holders of Sierra Madre Subscription Receipts;
23,076,924 Sierra Madre Shares are expected to be issued to the current holders of Goldshore Subscription Receipts; and
1,263,924 Sierra Madre Replacement Compensation Options are expected to be issued to the current holders of Goldshore Compensation Options.

Completion of the Transaction is subject to satisfaction of a number of conditions precedent, including, but not limited to, receipt of the approval of the Exchange, the requisite approval of the Goldshore Shareholders of the Amalgamation; and the closing of the Offerings (now completed). The Amalgamation Agreement may be terminated: (a) by mutual agreement in writing by the parties; (b) in the event that the Effective Date has not occurred by June 30, 2021; or (c) if either Goldshore or Sierra Madre fails to meet any conditions precedent as set forth in the Amalgamation Agreement at any time prior to the Effective Date.

Immediately following the completion of the Amalgamation, it is intended that Sierra Madre will change its name to “Goldshore Resources Inc.” or such other name as acceptable to Sierra Madre, Goldshore and applicable regulatory authorities.

After giving effect to the Amalgamation, all Sierra Madre Shares will be referred to herein as “Resulting Issuer Shares”.

Offerings

Each Sierra Madre Subscription Receipt will be automatically converted on the Sierra Madre Escrow Release Date which is expected to occur immediately prior to the Amalgamation, without further payment or action on the part of the holder, upon satisfaction of the Sierra Madre Escrow Release Conditions, into one Sierra Madre Share to be issued as a “flow-through share” as defined in subsection 66(15) of Tax Act. Each Goldshore Subscription Receipt will be automatically converted on the Goldshore Escrow Release Date which is expected to occur immediately prior to the Amalgamation, without further payment or action on the part of the holder, upon satisfaction of the Goldshore Escrow Release Conditions, into one Goldshore Share. In connection with the completion of the Transaction, each Goldshore Share will be exchanged into one Resulting Issuer Share.

Sierra Madre will incur (or be deemed to incur) resource exploration expenses which will constitute “Canadian exploration expenses” as defined in subsection 66.1(6) of the Tax Act and “flow through mining expenditures” as defined in subsection 127(9) of the Tax Act, in an amount equal to the amount raised pursuant to the sale of Sierra Madre Subscription Receipts and Sierra Madre will renounce the Canadian exploration expenses (on a pro rata basis) to each subscriber with an effective date of no later than December 31, 2021 in accordance with the Tax Act.

The Escrowed Funds (being the escrowed funds plus earned interest accrued thereon) are held in escrow by the Subscription Receipt Agent in accordance with the Subscription Receipt Agreements and will be released to the Resulting Issuer upon the satisfaction or waiver of the Escrow Release Conditions, provided that the Escrow Release Conditions are satisfied at or prior to the Escrow Release Deadlines.

In consideration for the Agents’ services under the Agency Agreement, Goldshore and Sierra Madre agreed to pay the Agents a cash commission equal to 6% of the aggregate gross proceeds from the sale of Subscription Receipts, excluding sales of Subscription Receipts to purchasers introduced to the Agents by Goldshore or Sierra Madre (the “ President’s List ”), in which case, a cash commission of 4% of the gross proceeds from purchasers on the President’s List were paid to the Agents. Pursuant to the Agency Agreement, 50% of the Agents’ cash commission plus the Agents’ expenses in respect of the Goldshore Offering was paid by Goldshore on closing from the gross proceeds of the sale of the Goldshore Subscription Receipts. The remaining 50% of the Agents’ cash commission payable in respect of the Goldshore Offering is to be paid on the Goldshore Escrow Release Date subject to the Goldshore Escrow Release Conditions being satisfied or waived by the Goldshore Escrow Release Deadline. The Agent’s cash commission and expenses payable in respect of the Sierra Madre Offering is to be paid on the Sierra Madre Escrow Release Date subject to the Sierra Madre Escrow Release Conditions being satisfied or waived by the Sierra Madre Escrow Release Deadline.

Pursuant to the Agency Agreement, Sierra Madre issued to the Agents that number of Sierra Madre Compensation Options as is equal to 6% of the aggregate number of Subscription Receipts issued pursuant to the Sierra Madre Offering (other than in respect of sales of Sierra Madre Subscription Receipts to purchasers on the President’s List, in respect of which the Agents were issued that number of Sierra Madre Compensation Options representing 4% of such number of Sierra Madre Subscription Receipts). Each Sierra Madre Compensation Option is exercisable at $0.75 per Sierra Madre Share until the Compensation

Option Expiry Date. A total of 772,560 Sierra Madre Compensation Options were issued on the Offering Closing Date.

Pursuant to the Agency Agreement, Goldshore issued to the Agents that number of Goldshore Compensation Options as is equal to 6% of the aggregate number of Subscription Receipts issued pursuant to the Goldshore Offering (other than in respect of sales of Goldshore Subscription Receipts to purchasers on the President’s List, in respect of which the Agents were issued that number of Goldshore Compensation Options representing 4% of such number of Goldshore Subscription Receipts). Each Goldshore Compensation Option is exercisable at $0.65 per Goldshore Share until the Compensation Option Expiry Date. A total of 1,263,924 Goldshore Compensation Options were issued on the Offering Closing Date. In connection with the Transaction, each Goldshore Compensation Option will be exchanged for one compensation option of the Resulting Issuer, which will be exercisable for one Resulting Issuer Share at a price of $0.65 until the Compensation Option Expiry Date.

Shareholder Approvals

Under the policies of the Exchange, Sierra Madre is not expected to require shareholder approval for the Transaction. In this regard, Sierra Madre and the Transaction satisfy the Exchange requirements as to not be subject to a shareholder approval requirement as: (a) the Transaction is an Arm’s Length transaction; (b) Sierra Madre is a NEX Company without active operations; (c) Sierra Madre is not subject to a cease trade order and is not expected to be subject to such an order upon completion of the Transaction; and (d) shareholder approval of the Transaction is not required under applicable corporate and securities laws. However, Sierra Madre sought and obtained shareholder approval of certain matters related to the implementation of the Transaction (including the Consolidation and the approval of the appointment of the new board of directors of Sierra Madre to be effective upon completion of the Transaction) at a shareholders’ meeting held on March 29, 2021.

Sierra Madre, as the sole shareholder of Sierra Madre Subco, has consented in writing to the Amalgamation.
Goldshore Shareholders holding a special majority of the issued and outstanding Goldshore Shares represented at a meeting held on May 17, 2021 voted in favour of the Amalgamation.

Exchange Acceptance

The Exchange has conditionally accepted the Transaction as Sierra Madre’s Reactivation on Tier 2 of the Exchange, subject to Sierra Madre completing all of the requirements of the Exchange.

INFORMATION CONCERNING THE RESULTING ISSUER

The following information is presented on a post-Transaction basis and is reflective of the projected business, financial and share capital position of the Resulting Issuer. This section only includes information respecting the Resulting Issuer that is materially different from information provided earlier in this Filing Statement. Following the completion of the Transaction, the Resulting Issuer will carry on the business of Goldshore. Please see the discussion under the various headings in the sections entitled “Information Concerning Sierra Madre” and “Information Concerning Goldshore” for additional information regarding Sierra Madre and Goldshore, respectively. See also the Pro Forma Financial Statements of the Resulting Issuer attached hereto as Appendix D.

Name and Incorporation

The Resulting Issuer will be governed by the BCBCA and it is expected that its corporate name will be “Goldshore Resources Inc.”, or such other name as acceptable to Sierra Madre, Goldshore and applicable regulatory authorities. The Resulting Issuer’s head office will be located at Suite 918, 1030 West Georgia Street, Vancouver, British Columbia, Canada V6E 2Y3 and its registered office will be located at 353 Water Street, Suite 401, Vancouver, British Columbia, Canada V6B 1B8.

Intercorporate Relationships

After giving effect to the Transaction, the Resulting Issuer’s sole direct and wholly-owned subsidiary will be Amalco, which will exist under the laws of the Province of British Columbia. The Resulting Issuer will own 100% of the issued and outstanding voting securities of Amalco.

Narrative Description of the Business

Following completion of the Transaction, the business of the Resulting Issuer will be the business of Goldshore. For a description of the business of Goldshore, see “Information Concerning Goldshore – General Development of the Business”.

The Resulting Issuer is expected to carry on the recommended work program on the Moss Lake Property as disclosed above. See “Information Concerning Goldshore – Narrative Description of the Property – Exploration and Development”.

Description of Securities

The share structure of the Resulting Issuer will be the same as the share structure of Sierra Madre and the rights associated with each Resulting Issuer Share will be the same as the rights associated with each Sierra Madre Share. See “Information Concerning Sierra Madre – Description of Securities”.

Following completion of the Transaction and the Offerings, it is anticipated that that the Resulting Issuer will have 100,295,260 Resulting Issuer Shares outstanding (after taking into account the Consolidation), of which:

3,677,620 Resulting Issuer Shares, representing approximately 3.67% of the then-outstanding Resulting Issuer Shares, will be held by the current Sierra Madre Shareholders;
30,122,381 Resulting Issuer Shares, representing approximately 30.03% of the then-outstanding Resulting Issuer Shares, will be held by current holders of Goldshore Shares;
30,085,000 Resulting Issuer Shares, representing 30.00% of the then-outstanding Resulting Issuer Shares, will be held by Wesdome; and
36,410,259 Resulting Issuer Shares, representing approximately 36.30% of the then-outstanding Resulting Issuer Shares, will be held by the subscribers in the Offerings.

Pro Forma Consolidated Capitalization

The table outlines the expected pro forma share and capital of the Resulting Issuer, on a consolidated basis, after giving effect to the Transaction and the Consolidation, based on the pro forma consolidated balance sheet attached to this Filing Statement as Appendix D:

Designation of Security	Amount Authorized	Outstanding after Transaction and Consolidation
ResultingIssuer Shares	Unlimited	100,295,260
ResultingIssuer Stock Options	10%	9,700,000
Compensation Options	N/A	2,036,484

Fully Diluted Share Capital

The following table outlines the expected number and percentage of Resulting Issuer Shares to be outstanding on a fully diluted basis after giving effect to the Transaction and the Consolidation:

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Description of Issue # of Resulting Issuer Shares % of Total
Outstanding Sierra Madre Shares prior to Amalgamation 3,677,620 2.53%
Issued to Goldshore Shareholders 30,122,381 20.72%
Issued to Subscribers of the Sierra Madre Offering 13,333,335 9.17%
Issued to Subscribers of the Goldshore Offering 23,076,924 15.88%
Payment Shares to be issued pursuant to Asset Purchase 30,085,000 20.70%
Agreement
Issuable on the exercise of Compensation Options 2,036,484 1.40%
Issuable on the exercise of Resulting Issuer Stock 9,700,000 6.67%
Options
Milestone Shares 33,333,333 [(1)] 22.93%
Total 145,365,077 100%
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Note:

(1) Up to 33,333,333 Milestone Shares are issuable pursuant to the Asset Purchase Agreement, assuming issuance of Milestone Shares at $0.60. All Milestone Shares will be issued at the greater of (a) $0.60 per Milestone Share, and (b) the volume-weighted average price of the Resulting Issuer for the 20 trading days prior to the date of issuance.

Available Funds and Principal Purposes

The following funds are expected to be available to the Resulting Issuer:

Funds Available	Amount
Estimated workingcapital(1)	$3,747,119

Funds Available	Amount
Net proceeds from the Sierra Madre Offering and the Goldshore Offering (2)	$23,369,641
Total	$27,116,760

Notes:

(1) Based on working capital of Sierra Madre and Goldshore as at April 30, 2021 of $355,002 and $3,392,117, respectively.
(2) Consisting of gross proceeds from the Subscription Receipts of $25,000,001.85 less aggregate commissions payable to the Agents and legal fees associated with the Offerings.

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Use of Funds Available Amount
Payment pursuant to the Asset Purchase Agreement [(1)] $12,500,000
To pay the estimated cost of the recommended Phase I exploration $14,000,000
program and budget on the Moss Lake Property as outlined in the
Technical Report
Costs related to the Transaction [(2] [)] $50,000
Operating expenses for 12 months [(3)] $264,500
Unallocated working capital [(4)] $322,260
Total $27,116,760
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Notes:

(1) Due on closing of the Transaction.
(2) Consists of professional fees ($42,500) and filing fees ($7,500).
(3) Estimated operating expenses for the next 12 months include: consulting ($174,000), professional fees ($30,000), insurance ($40,000), filing fees ($14,500) and general and administrative ($6,000).
(4) Possible uses of the unallocated working capital: to fund ongoing operations; future due diligence of other mining claims/concessions; Phase II exploration program; and other uses as may be necessary.

Dividends

There will be no restrictions in the Resulting Issuer’s articles or elsewhere which would prevent the Resulting Issuer from paying dividends subsequent to the completion of the Transaction. It is not currently contemplated that any dividends will be paid on the Resulting Issuer Shares in the immediate future following completion of the Transaction, as it is anticipated that all available funds will be invested to finance the growth of the Resulting Issuer’s business. The directors of the Resulting Issuer will determine if, as and when dividends will be declared and paid in the future from funds properly applicable to the

payment of dividends based on the Resulting Issuer’s financial position at the relevant time. All of the Resulting Issuer Shares are entitled to an equal share in any dividends declared and paid.

Principal Security holders

To the knowledge of Sierra Madre as of the date hereof, the following are the only Persons who will own of record or beneficially, directly or indirectly, or exercise control or direction over more than 10% of the Resulting Issuer Shares after giving effect to the Transaction:

Name	Number and Type of Securities	Percentage of Class(1)
Wesdome Gold Mines Ltd.	30,085,000 ResultingIssuer Shares(2)	30.00%

Notes:

(1) Based on 100,295,260 Resulting Issuer Shares issued and outstanding after giving effect to the Transaction. (2) Issuable pursuant to the Asset Purchase Agreement.

Directors and Officers

Name, Occupation and Security Holdings

The following table sets forth certain information regarding the proposed directors and officers of the Resulting Issuer, including their municipality of residence, the position(s) and office(s) to be held with the Resulting Issuer, their principal occupation within the five preceding years, the period during which each proposed director has served as a director of Sierra Madre or Goldshore and the approximate number and percentage of Resulting Issuer Shares proposed to be beneficially owned, directly or indirectly, or over which control or direction is proposed to be exercised by each of them, upon completion of the Transaction (including the Offerings) and the Consolidation:

Name and Residence	Position or Office	Principal Occupation	Securities Held
Brett A. Richards Hertfordshire, United Kingdom	Chief Executive Officer and Director	Chairman and CEO, Banro Corporation (May 2018- current); CEO, African Thunder Platinum (August 2015 to current); CEO, Midnight Sun Mining Corp. (August 2017 to May 2018); CEO, Octea (January 2015 to August 2017)	3,350,000 Shares 3.24% 17,500 Subscription Receipts
Gavin Cooper British Columbia, Canada	Chief Financial Officer and Corporate Secretary	Chartered Professional Accountant, providing strategic, financial and administrative services to various public and private companies	100,000 Shares 0.10%
Peter Flindell Kuala Lumpur, Malaysia	Vice President of Exploration	Head of Exploration, Banro Corporation (August 2018 to June 2020); VP Exploration, Midnight Sun MiningCorp.(January	Nil

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Name and Residence Position or Office Principal Occupation Securities Held
2018 to August 2018);
Signal Delta, Director
(January 2013 to present)
Director, Condor Gold plc
(September 2014 to June
2018); Director, Global
Drilling and Exploration
Group (May 2015 to
present)
President and Director,
Doug Ramshaw Director 1,500,000 Shares
Minera Alamos Inc. (2018
Alberta, Canada 1.51%
to present); Director, Great
Bear Resources Ltd. (2016
10,000 Subscription
to present)
Receipts
Victor Cantore Director President and CEO, Amex 1,555,000 Shares
Quebec, Canada Exploration Inc. (June 2016 1.92%
to present); Investor
Relations, Nemaska 38,500 Subscription
Lithium Inc. (November Receipts
2011 to November 2019)
Galen McNamara Director CEO, Summa Silver Corp. 4,029,001 Shares
British Columbia, Canada (May 2020 to present); 3.97%
Consultant Geologist
(March 2018 to May 2020); 38,500 Subscription
Geologist, NexGen Energy Receipts
Ltd. (March 2014 to March
2018)
Shawn Khunkhun Director CEO, Dolly Varden Silver 765,000 Shares
British Columbia, Canada Corp. (February 2020 to 0.80%
present); CEO, StrikePoint
Gold Inc., (May 2013 to
present)
Brandon Macdonald Director CEO, Fireweed Zinc Ltd. 350,000 Shares
British Columbia, Canada (October 2016 to present); 0.26%
CFO, Arcturus Ventures
Inc. (2013 to October 2016) 10,000 Subscription
Receipts
Joanna Pearson
Director CFO, Endeavour Mining Nil
London, United Kingdom
Corp. (January 2021 to
present)
Michael Michaud Director Vice President Exploration, Nil
Ontario, Canada Wesdome Gold Mines Ltd.
(September 2017 to
present); Chief Geologist,
Iamgold Inc. (August 2015
to September 2017)
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Name and Residence	Position or Office	Principal Occupation	Securities Held
Heather Laxton Ontario, Canada	Director	Chief Governance Officer & Corporate Secretary, Wesdome Gold Mines Ltd. (January2016 topresent)	Nil

The term of office of the directors will expire annually at the time of the Resulting Issuer’s annual general meeting. The term of office of the executive officers expires at the discretion of the Board.

The Resulting Issuer is expected to have four committees: (i) the Audit Committee, whose members will be Brandon Macdonald (Chair), Doug Ramshaw, Victor Cantore and Shawn Khunkhun; (ii) the Nominations and Governance Committee, whose members will be Heather Laxton (Chair), Galen McNamara, Victor Cantore and Brandon Macdonald; (iii) the Technical and Sustainability Committee, whose members will be Brandon Macdonald (Chair), Michael Michaud and Galen McNamara; and (iv) the Compensation Committee, whose members will be Doug Ramshaw (Chair), Galen McNamara, Shawn Khunkhun and Heather Laxton.

It is anticipated that in the quarter following the closing of the Transaction, the Board will form additional committees as needed, such as a governance committee and a health and safety committee.

Management

Brett A. Richards – Chief Executive Officer and Director, Age: 56

Mr. Richards is a natural resources executive with over 33 years of expertise in mining and metals. He has a unique background in mining M&A, mine financing, mine development and senior level operations experience. He brings publicly listed CEO experience in the mining sector, as well as global operational experience. Mr. Richards has held positions for private equity shareholders in the past including CEO of Banro Corporation who was appointed in its restructuring phase, CEO of Midnight Sun Mining, CEO of African Thunder Platinum, CEO of Renew Resources, and CEO of Octéa. He previously served as the transition CEO of Roxgold, CEO of Avocet Mining plc, and was part of the five-person start-up of Katanga Mining. Mr. Richard’s other publicly listed experience was in senior executive positions with Kinross Gold and Co-Steel Inc. Mr. Richards is a Mechanical Engineer, and graduated Magna Cum Laude from Cornell University, Johnson School of Business – Masters of Business Administration, in Management Engineering.

It is anticipated that Mr. Richards’ involvement with the Resulting Issuer will be part-time, representing approximately 75% of his time.

Gavin Cooper – Chief Financial Officer and Corporate Secretary, Age: 74

Mr. Cooper is a Chartered Professional Accountant with extensive experience in all aspects of corporate and financial management. For the past 35 years, Mr. Cooper has been providing strategic and financial advice and corporate administration services, and has held senior positions with a number of public and private companies with local and international operations. He was formerly CEO and a director of a shipconstruction project with a budget in excess of $400 million, and Director of Finance & Administration at a shipyard that had employed over 1,000 workers. He currently acts as CFO, corporate secretary or director of various other Exchange listed companies. Mr. Cooper has a Hons. Bachelor of Accounting from the University of South Africa and is a member of the Chartered Professional Accountants of British Columbia.

It is anticipated that Mr. Cooper’s involvement with the Resulting Issuer will be part-time, representing approximately 15% of his time.

Peter Flindell – Vice President of Exploration, Age: 57

Mr. Flindell is an Australian geologist with 35 years of experience in minerals exploration and feasibility studies. He has worked in senior exploration, resource development and management roles and has led teams to discover, develop and expand several gold and copper mines in Southeast Asia, Central Asia, West Africa, Central Africa, Europe and Central America. His experience also extends to base metal and iron ore projects. His career includes 12 years with Newmont Mining, eleven years with Avocet Mining and eight years with Signal Delta. Peter is a member of AusIMM and AIG enabling him to perform the roles of Competent Person (JORC) and Qualified Person (NI 43-101) for most gold and copper deposits. He is a non-executive Director on the Board of Global Drilling and Exploration Group.

It is anticipated that Mr. Flindell’s involvement with the Resulting Issuer will be full-time.

Doug Ramshaw – Director, Age: 49

Doug Ramshaw is a senior executive and corporate director with more than 25 years of experience in the mineral resource sector. His work has focused on mineral project evaluation, M&A and business development strategies supporting corporate growth. Mr. Ramshaw is currently President and Director of Minera Alamos Inc. and has previously worked as a mining analyst for an independent brokerage firm in London, UK and served in various executive capacities for a number of publicly listed junior resource companies. He holds a Bachelor of Science in Mining Geology from the Royal School of Mines.

It is anticipated that Mr. Ramshaw’s involvement with the Resulting Issuer will be part-time, representing approximately 10% of his time.

Victor Cantore – Director, Age: 56

Mr. Cantore is a seasoned capital markets professional specializing in the resource and hi-tech sectors. He has more than 20 years of advisory and leadership experience having begun his career in 1992 as an investment advisor and then moving into management roles at both public and private companies. During his career, he has organized and structured numerous equity and debt financings, mergers and acquisitions, joint venture partnerships and strategic alliances. Mr. Cantore serves on the boards of various companies both private and public.

It is anticipated that Mr. Cantore’s involvement with the Resulting Issuer will be part-time, representing approximately 10% of his time.

Galen McNamara – Director, Age: 36

Mr. McNamara is an entrepreneur and Professional Geologist with extensive discovery and capital markets experience over nearly 15 years. He was the co-winner of the 2018 PDAC Bill Dennis “Prospector of the Year” award for the Arrow uranium deposit and 2016 Mines and Money Exploration Award. He is currently Chief Executive Officer and Director of Summa Silver Corp. and Chairman of Angold Resources Ltd. Mr. McNamara holds MSc and BSc degrees in geology from Laurentian University.

It is anticipated that Mr. McNamara’s involvement with the Resulting Issuer will be part-time, representing approximately 10% of his time.

Shawn Khunkhun – Director, Age: 40

Mr. Khunkhun is currently Chief Executive Officer, President and Director of Dolly Varden Silver. He has over 15 years of experience in the capital markets, mineral exploration and development sector with a focus on enhancing shareholder value. He has served in a variety of strategic roles including investor relations, corporate development, chief executive officer and director. Mr. Khunkhun has been instrumental in creating a new awareness for undervalued companies including grass roots explorers, developers and producers. Mr. Khunkhun’s experience in incubating and growing early stage companies through capital raises, acquisitions, joint ventures and spinouts, and his long-standing relationships with an extensive global network of high-net-worth investors, private equity and institutional investors, analysts, brokers, and investment bankers have been a valuable asset to growing mineral exploration companies

It is anticipated that Mr. Khunkhun’s involvement with the Resulting Issuer will be part-time, representing approximately 10% of his time.

Brandon Macdonald – Director, Age: 43

Mr. Macdonald is a professional geologist with a diverse experience base including exploration geology worldwide and investment banking. He is currently Chief Executive Officer and Director of Fireweed Zinc. In recent years he has focused his efforts on exploration and development as a principal of and consultant to various junior mining companies. He has worked previously in London structuring financings and risk management at Macquarie Bank. In 2007, Mr. Macdonald graduated with an MBA (with Distinction) from Oxford. He completed his B.Sc. in Geology from UBC in 2000. He is a Professional Geologist registered with Engineers and Geoscientists British Columbia (EGBC).

It is anticipated that Mr. Macdonald’s involvement with the Resulting Issuer will be part-time, representing approximately 10% of his time.

Joanna Pearson – Director, Age: 46

Joanna Pearson joined Endeavour Mining Corporation in September 2020 and assumed the role of Executive Vice President and Chief Financial Officer in January 2021. Prior to joining Endeavour, Joanna had a successful career at Deloitte LLP (Canada) with more than ten years’ experience as an audit partner, including six years as the audit partner responsible for Endeavour, and over 20 years’ experience serving clients in public practice, with a focus on multinational mining clients.

A graduate of the University of British Columbia, Joanna is a qualified chartered accountant and Canadian CPA, and speaks French.

It is anticipated that Ms. Pearson’s involvement with the Resulting Issuer will be part-time, representing approximately 10% of her time.

Michael Michaud – Director, Age: 57

Currently Vice President, Exploration at Wesdome, Mr. Michaud, P.Geo., M.Sc. is a Professional Geologist with over 30 years of experience in domestic and international gold exploration and mining that includes a broad range of deposit types within North and South America, Africa, Asia and Europe. Michael was responsible for developing and implementing regional and mine-site exploration strategies to discover new deposits and to expand mineral resources and reserves around existing mines. Most recently Michael served as IAMGOLD’s Chief Geologist responsible for providing global geological support for IAMGOLD’s exploration activities worldwide. Previously, Michael held roles of increasing responsibility for several exploration and mining companies including, Vice-President, Exploration for St Andrew Goldfields and was a Principal of SRK Consulting Inc. Mr. Michaud holds an honors B.Sc. from the University of Waterloo, and a M.Sc. from Lakehead University.

It is anticipated that Mr. Michaud’s involvement with the Resulting Issuer will be part-time, representing approximately 10% of his time.

Heather Laxton – Director, Age: 43

Ms. Laxton has over 23 years of corporate governance, corporate secretarial, and securities regulation experience with a focus on the mining sector in Canada, Europe, Russia and West Africa. Ms. Laxton began her career working as a professional law clerk in multi-national law firms and has held executive roles for several mining companies throughout her career, including her current role as Chief Governance Officer with Wesdome and previously as Corporate Secretary with Kirkland Lake Gold, Chief Governance Officer and Corporate Secretary with Northern Gold Mining Inc. She has been involved in numerous transactions and financings, and has led the evaluation, design, implementation and monitoring of governance programs for several junior and emerging companies. Ms. Laxton will complete a Master’s Degree in Business Law at Osgoode Hall Law School in 2021, obtained an honours diploma from the Law Clerk Program at Seneca College, completed the Canadian Securities Course in 2000, and is a member of faculty with the Governance Professionals of Canada Education Program.

It is anticipated that Ms. Laxton’s involvement with the Resulting Issuer will be part-time, representing approximately 10% of her time.

Strategic Advisory Board

In addition, the Resulting Issuer is expected to appoint a strategic advisory board consisting of the following individuals:

David Garofalo – Former CEO of Goldcorp presiding over its sale to Newmont in 2019
Craig Parry - Chairman of Skeena Resources
Bryan Slusarchuk - Co-Founder and former President & Director of K92 Mining
Leo Hathaway - Senior VP for Luminex Resources and Lumina Gold
Daniel J. Kunz - CEO & Director of Prime Mining, former CEO of Ivanhoe Mines Ltd
Adrian Rothwell - CEO & Director of Angold Resources, former Goldcorp executive

Other Reporting Issuer Experience

The following table sets out the proposed directors and officers of the Resulting Issuer that are, or have been within the last five years, directors or officers of other reporting issuers:

Name	Reporting Issuer and Stock Exchange	Position	Term
Brett A. Richards	Midnight Sun Mining Corp. (TSXV: MMA)	CEO Director	August 2017 to May 2018 August 2018 to present
Gavin Cooper	Kutcho Copper Corp. (TSXV: KC)	CFO and Corporate Secretary	April 2015 to present

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Name Reporting Issuer and Position Term
Stock Exchange
Gold Bull Resource Corp. CFO and Corporate September 2016 to
(TSXV: GBRC) Secretary present
Nevaro Capital Corp. (not Director and CFO January 2010 to
listed) present
Angold Resources Corp. CFO December 2020 to
(TSXV: AAU) present
E79 Resources Corp. (CSE: CFO December 2020 to
ESNR) present
District Metals Corp. CFO May 2017 to February
(TSXV: DMX) 2021
ZTR Acquisition Corp. Director March 2019 to August
(NEX: ZTR) 2020
Canopy Rivers Inc. (TSXV: CFO February 2018 to
RIV) September 2018
James E Wagner CFO and Corporate August 2017 to June
Cultivation Corp. (TSXV: Secretary 2018
JWCA)
Minfocus Exploration CFO December 2010 to
Corp. (TSXV: MFX) January 2018
Enthusiast Gaming Director, CEO and CFO September 2017 to
Holdings (TSX: EGLX) September 2018
GreenStar Biosciences Director and CFO May 2012 to May 2019
Corp. (TSX: GSTR)
Standard Lithium Ltd. Director and CFO August 2015 to May
(TSXV: SLL) 2017
Pepcap Resources Inc. CFO May 2015 to December
(NEX: WAV) 2017
Doug Ramshaw Minera Alamos Inc. President and Director April 2018 to present
(TSXV: MAI)
Great Bear Resources Ltd. Director July 2016 to present
(TSXV: GBR)
District Metals Corp. Director March 2020 to present
(TSXV: DMX)
Victor Cantore Amex Exploration Inc. President and CEO June 2016 to present
(TSXV: AMX)
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Name Reporting Issuer and Position Term
Stock Exchange
Vision Lithium Inc. Chairman May 2017 to present
(TSXV: VLI)
Hanna Capital Corp. Director April 2010 to present
(CSE: HHC)
Generic Gold Corp. (CSE: Director February 2018 to
GGC) present
Freeman Gold Corp. (CSE: Director April 2020 to present
FMAN)
Vanstar Mining Resources Director September 2020 to
Inc. (TSXV: VSR) present
Galen McNamara Summa Silver Corp. CEO and Director May 2020 to present
(TSXV: SSVR)
Sherpa II Holdings Corp. Director December 2020 to
(TSXV: SHRP) present
Angold Resources Corp. Director December 2020 to
(TSXV: AAU) present
Hornby Bay Mineral Director February 2010 to
Exploration Ltd. (TSXV: present
HBE)
Shawn Khunkhun Dolly Varden Silver Corp. CEO and Director February 2020 to
(TSXV: DV) present
StrikePoint Gold Inc. CEO and Director May 2013 to present
(TSXV: SKP)
Brandon Macdonald Fireweed Zinc Ltd. (TSXV: CEO October 2016 to
FWZ) present
Commander Resources Director June 2016 to present
Ltd. (TSXV: CMD)
NorthIsle Copper & Gold Director June 2013 to June 2019
Inc. (TSXV: NCX)
Arcturus Ventures Inc. CFO October 2009 to June
(TSXV: AZN.H) 2017
Joanna Pearson Endeavour Mining Corp. CFO January 2021 to
(TSX: EDV) present
Michael Michaud Wesdome Gold Mines Vice President September 2017 to
Ltd. (TSX: WDO) Exploration present
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Name	Reporting Issuer and Stock Exchange	Position	Term
Heather Laxton	Wesdome Gold Mines Ltd.(TSX: WDO)	Chief Governance Officer & Corporate Secretary	September 2015 to present

Corporate Cease Trade Orders or Bankruptcies

Other than as set out below, to the knowledge of Sierra Madre, as at the date of this Filing Statement and within the ten years before the date of this Filing Statement, no proposed director or executive officer of the Resulting Issuer is or has been a director, chief executive officer or chief financial officer of any person or company, that while that person was acting in that capacity:

(a) was subject of a cease trade order or similar order or an order that denied the relevant person or Company access to any exemptions under securities legislation (an “order”), for a period of more than 30 consecutive days; or
(b) was subject to an order that was issued after the director or executive officer ceased to be a director, chief executive officer or chief financial officer and which resulted from an event that occurred while that person was acting in the capacity as director, chief executive officer or chief financial officer.

Other than as set out below, to the knowledge of Sierra Madre, as at the date of this Filing Statement and within the ten years before the date of this Filing Statement, no proposed director or officer of the Resulting Issuer or security holder anticipated to hold a sufficient number of securities of the Resulting Issuer to affect materially its control:

(a) is, or has been within the ten years before the date of this Filing Statement, a director or executive officer of any company that, while that person was acting in that capacity, or within a year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets; or
(b) has, within the ten years before the date of this Filing Statement, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or become subject to or instituted any proceedings, arrangement, or compromise with creditors or had a receiver manager or trustee appointed to hold the assets of that individual.

Mr. Doug Ramshaw was the President, CEO and Director of Aftermath Silver Ltd., a company listed on the NEX board of the Exchange. On October 6, 2015, Aftermath Silver was subject to a cease trade order for failure to file financial statements. The cease trade order was lifted on August 18, 2017, by the British Columbia Securities Commission.

Penalties or Sanctions

To the knowledge of Sierra Madre, no proposed director or officer of the Resulting Issuer or security holder anticipated to hold a sufficient number of securities of the Resulting Issuer to affect materially its control:

(a) has been subject to any penalties or sanctions imposed by a court relating to securities legislation or by a securities regulatory authority or has entered into a settlement agreement with a securities regulatory authority; or
(b) has been subject to any other penalties or sanctions imposed by a court or regulatory body, including a self-regulatory body, that would be likely to be considered important to a reasonable investor in making an investment decision.

Conflicts of Interest

The Resulting Issuer’s directors and officers will be subject to fiduciary obligations to act in the best interest of the Resulting Issuer. Conflicts will be subject to the procedures and remedies of the BCBCA or other applicable corporate legislation.

Executive Compensation

The following section sets out the anticipated compensation for each of Brett A. Richards (Chief Executive Officer), Gavin Cooper (Chief Financial Officer and Corporate Secretary(, and Peter Flindell (Vice President, Exploration) (collectively, the “ Named Executive Officers ”) for the 12-month period after giving effect to the Transaction. The Named Executive Officers represent all of the Resulting Issuer’s proposed executive officers. The levels of compensation for the Named Executive Officers will be considered and recommended to the Board by the incoming Compensation Committee following Completion of the Transaction. Each of the Named Executive Officers will begin his tenure with the Resulting Issuer on verbal agreements with no set salary. It is anticipated that following the Completion of the Transaction, the Resulting Issuer will begin negotiating employment terms with the Named Executive Officers.

Compensation Discussion and Analysis

Compensation Governance

The Board of the Resulting Issuer will administer the Resulting Issuer’s executive compensation program with advice from the Compensation Committee. The Compensation Committee will be responsible for, among other things, reviewing and making recommendations to the Board with respect to, setting the initial compensation for each of the Named Executive Officers, the compensation policies and practices of the Resulting Issuer, annually reviewing and recommending to the Board for approval the remuneration of the senior officers of the Resulting Issuer, making, on an annual basis, a recommendation to the Board as to any incentive award to be made to the senior officers of the Resulting Issuer, and comparing, on an annual basis, the total remuneration and the main components thereof of the senior officers of the Resulting Issuer with the remuneration of peers in the same industry. The Compensation Committee will ensure that total compensation paid to the Named Executive Officers is fair, reasonable and consistent with the Resulting Issuer’s compensation philosophy.

It is currently anticipated that the Compensation Committee will be comprised of four members, being Doug Ramshaw, Galen McNamara, Shawn Khunkhun and Heather Laxton, each of whom will be independent.

Philosophy and Objectives

The proposed Board believes that the Resulting Issuer should provide a compensation package that is competitive and motivating, that will attract, hold and inspire qualified executives, that will encourage performance by executives to enhance the growth and development of the Resulting Issuer and that will

balance the interests of the executives and the shareholders of the Resulting Issuer. Achievement of these objectives is expected to contribute to an increase in shareholder value.

The Named Executive Officers have agreed to forego salary in the near term, subject to achieving certain milestones that will be predetermined by the Compensation Committee. It is anticipated that the milestones will be tied to such items as the delineation of further Mineral Resources, the achievement of certain market capitalization thresholds and the commencement of commercial production at the Moss Lake Property.

Elements of Executive Compensation

It is expected that the Resulting Issuer will provide its executive officers with both fixed compensation, comprised of base salary, and performance-based variable incentive compensation, comprised of an annual cash bonus and long-term incentives in the form of awards under the Stock Option Plan. The metrics for the incentive-based compensation are outlined above.

In the near term, the Compensation Committee will determine the salaries for the Named Executive Officers during one of their first constituted meetings. In the meantime, Named Executive Officers will continue to forego salary or remuneration until such time as the meeting is held. The base salary is designed to provide income certainty and to attract and retain executives and, therefore, will be based on the assessment of a number of factors such as current competitive market conditions, compensation levels within the peer group and factors particular to the executive, including individual performance, the scope of the executive’s role with the Resulting Issuer and retention considerations. In addition to base salary, the Resulting Issuer may award executives with short term incentive awards in the form of annual cash bonuses.

Annual cash bonuses are intended to provide short-term incentives to executives and to reward them for their yearly individual contribution and performance of personal objectives in the context of overall annual corporate performance. It is expected that the amount will not be pre-established and will be at the discretion of the Board, with advice from the Compensation Committee. While it is expected there will be no target amount for annual cash bonuses, the Board will review similar factors as those discussed above in relation to base salary and likely tie annual bonuses to achieving certain pre-determined milestones.

Long-term incentive compensation will be provided through the granting of options under the Stock Option Plan. Equity incentive awards will be designed to motivate executives to achieve long-term sustainable business results, align their interest with those of shareholders and to attract and retain executives. Awards will be based on a variety of factors, such as the need to attract or retain key individuals, competitive market conditions and internal equity. Previous grants will be taken into account when considering new grants.

Risks

The proposed Board of the Resulting Issuer recognizes that certain elements of compensation could promote unintended inappropriate or excessive risk-taking behaviours; however, the Resulting Issuer will seek to ensure that executive compensation packages appropriately balance short-term incentives, in the form of base salaries, and long- term incentives, in the form of option-based awards. As a result of the factors discussed above, the proposed Board does not believe that its compensation policies and practices are reasonably likely to have a material adverse effect on the Resulting Issuer.

Named Executive Officers and directors of the Resulting Issuer will not be permitted to purchase financial instruments, including, for greater certainty, prepaid variable forward contracts, equity swaps, collars, or units of exchange funds, that are designed to hedge or offset a decrease in market value of equity securities granted as compensation or held, directly or indirectly, by the Named Executive Officer or director.

Incentive Plan Awards

Share-based Awards

During the 12-month period after giving effect to the Transaction, the Resulting Issuer may grant sharebased awards, being awards granted under an equity incentive plan of equity-based instruments that do not have option-like features, including, for greater certainty, common shares, restricted shares, restricted share units, deferred share units, phantom shares, phantom share units, common share equivalent units, and stock.

Option-based Awards

The Resulting Issuer intends to grant, subject to Exchange approval, option-based awards, being awards granted under an equity incentive plan of options, including, for greater certainty, share options, share appreciation rights, and similar instruments that have option-like features, by granting options to its directors, officers and employees, however, the timing, amounts, exercise price and recipients of such issuances have not yet been determined. Stock options are expected to be granted under the Stock Option Plan which will be continued by the Resulting Issuer. For information on the Stock Option Plan, see “Information Concerning Sierra Madre – Stock Option Plan”. For a grant of any other equity incentive other than stock options, the Resulting Issuer will need to amend its Stock Option plan or adopt a separate equitybased incentive plan to provide for the issuance of securities such as share appreciation rights and other similar instruments.

Pension Disclosure

The Resulting Issuer will not provide a pension to its directors or Named Executive Officers.

Termination and Change of Control Benefits

All of the Named Executive Officers will commence their tenure as executives of the Resulting Issuer under verbal management agreements with no payouts upon termination or change of control. The incoming Compensation Committee will determine what level, if any, payout will be provided to executives.

Director Compensation

Resulting Issuer director compensation will be determined by the Compensation Committee following the closing of the Transaction for the 12-month period after giving effect to the Transaction for services rendered to the Resulting Issuer and its subsidiaries.

It is expected that the Resulting Issuer will grant options to the directors of the Resulting Issuer from time to time under the Stock Option Plan. The Resulting Issuer may pay directors’ fees to the directors of the Resulting Issuer in the future as determined by the Compensation Committee.

Indebtedness of Directors and Officers

No director or officer of Sierra Madre or Goldshore, no proposed director or officer of the Resulting Issuer, no individual who at any time during the most recently completed financial year of Sierra Madre or Goldshore was a director or officer of Sierra Madre or Goldshore, nor any associate of such individuals, is indebted to Sierra Madre or Goldshore, or is indebted to another entity where such indebtedness is the subject of a guarantee, support agreement, letter of credit or other similar arrangement or understanding provided by Sierra Madre or Goldshore.

Investor Relations Arrangements

No written or oral agreement or understanding has been reached with any Person to provide any promotional or investor relations services for the Resulting Issuer.

Options to Purchase Securities

The following table sets out certain information in respect of options to purchase securities of the Resulting Issuer that will be held upon completion of the Transaction and the Consolidation:

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Category # of Stock Options Exercise Price Expiry Date
All proposed officers of the 5,700,000 $0.65 Five years after the
Resulting Issuer, as a group Final Exchange
Bulletin
All proposed directors of the 2,350,000 $0.65 Five years after the
Resulting Issuer, as a group Final Exchange
Bulletin
All consultants of the 400,000 $0.65 Five years after the
Resulting Issuer, as a group Final Exchange
Bulletin
Any other Person or 1,250,000 $0.65 Five years after the
Company Final Exchange
Bulletin
Total 9,700,000
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Stock Option Plan

The Stock Option Plan will continue to be the stock option plan of the Resulting Issuer. See information under “Information Concerning Sierra Madre – Stock Option Plan”.

Escrowed Securities and Securities Subject to Resale Restrictions

Exchange Escrow Requirements

It is anticipated that the 41,734,001 Resulting Issuer Shares subject to the Value Security Escrow Agreement are scheduled to be released as to: (a) 10% on the date of the Final Exchange Bulletin; (b) 15% on the date that is six months following the date of the Final Exchange Bulletin; (c) 15% on the date that is 12 months following the date of the Final Exchange Bulletin; (d) 15% on the date that is 18 months following the date of the Final Exchange Bulletin; (e) 15% on the date that is 24 months following the date of the Final Exchange Bulletin; (f) 15% on the date that is 30 months following the date of the Final Exchange Bulletin; and (g) 15% on the date that is 36 months following the date of the Final Exchange Bulletin (the “ Tier 2 Value Security Escrow Release Schedule ”).

To the knowledge of Sierra Madre and Goldshore as of the date of this Filing Statement, the following table lists the names and municipalities of residence of the holders of the Resulting Issuer Securities that are anticipated to be held in escrow after giving effect to the Transaction (including the Offerings) and the

Consolidation, and the percentage that number represents of the outstanding securities of that class. No Goldshore securities are currently held in escrow.

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Prior to Transaction After Transaction
Name and Class # Held in % of Class # Held in % of Class
Municipality of Escrow Escrow
Residence
Brett A. Resulting Issuer Nil N/A 3,350,000 3.34%
Richards Shares
Hertfordshire,
United
Kingdom
Gavin Cooper Resulting Issuer Nil N/A 100,000 0.10%
British Shares
Columbia,
Canada
Doug Ramshaw Resulting Issuer Nil N/A 1,500,000 1.50%
Alberta, Canada Shares
Victor Cantore Resulting Issuer Nil N/A 1,555,000 1.55%
Quebec, Canada Shares
Galen Resulting Issuer Nil N/A 4,029,001 4.02%
McNamara Shares
British
Columbia,
Canada
Shawn Resulting Issuer Nil N/A 765,000 0.76%
Khunkhun Shares
British
Columbia,
Canada
Brandon Resulting Issuer Nil N/A 350,000 0.35%
Macdonald Shares
British
Columbia,
Canada
Wesdome Gold Resulting Issuer Nil N/A 30,085,000 30.00%
Mines Ltd. Shares
Ontario, Canada
Total 41,734,001 41.61%
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In the event of the death of a holder of Value Securities, the Value Securities held by such deceased holder will be released to the holder’s legal representatives provided that the requirements of the Exchange for such release are met.

Dealing with Value Securities

The Value Securities held pursuant to the Value Security Escrow Agreement may not be sold, assigned, transferred or otherwise dealt with in any manner except as provided in the Value Security Escrow Agreement. Subject to certain exceptions set forth in the Value Security Escrow Agreement, a holder of Value Securities may:

(a) pledge, mortgage or charge Value Securities to a financial institution as collateral for a loan, provided that no Value Securities or any share certificates or other evidence of escrow securities will be transferred or delivered by the escrow agent to the financial institution for this purpose;
(b) exercise voting rights attached to Value Securities, other than in support of one or more arrangements that would result in the repayment of capital being made on the Value Securities prior to a winding up of the Resulting Issuer;
(c) receive a dividend or other distribution on Value Securities, and elect the manner of payment; and
(d) exercise rights to exchange or convert Value Securities in accordance with the Value Security Escrow Agreement.

Permitted Transfers within Escrow

The Value Securities may be transferred within escrow to an individual who will be a director or senior officer of the Resulting Issuer or a material operating subsidiary, provided that certain requirements of the Exchange are met, including that the proposed transferee agrees to be bound by the terms of the Value Security Escrow Agreement. In the event of the bankruptcy of a holder of Value Securities, the Value Securities held by such holder may be transferred within escrow to the trustee in bankruptcy or other person legally entitled to such Value Securities provided that certain prescribed Exchange requirements are met. The Value Securities may be transferred within escrow to a Person or Company that: (a) before the transfer holds greater than 20% of the voting rights attached to the Resulting Issuer Shares, or (b) after the transfer will hold more than 10% of the voting rights attached to the Resulting Issuer Shares and has the right to elect or appoint one or more directors or senior officers of the Resulting Issuer or its material operating subsidiaries. Value Securities may also be transferred within escrow by a holder of Value Securities to a RRSP or a RRIF, provided that the Exchange receives proper notice of the same, the holder of such Value Securities is the sole beneficiary of the RRSP or RRIF and the trustee of the RRSP or RRIF agrees to be bound by the terms of the Value Security Escrow Agreement.

Termination of Value Security Agreement

The Value Security Escrow Agreement may be terminated with respect to all parties in certain circumstances, including, without limitation: (a) upon agreement of all parties to the Value Security Escrow Agreement, provided that (i) the agreement to terminate is evidenced by a memorandum in writing signed by all parties; or (ii) if the Resulting Issuer is then listed on the Exchange, the termination of the Value Security Escrow Agreement has been consented to in writing by the Exchange; and the agreement to terminate has been approved by a majority vote of securityholders of the Resulting Issuer excluding, in each case, the holders of Value Security Escrow Shares; or (b) when all of the Value Securities have been released from escrow pursuant to the Value Security Escrow Agreement.

Escrow of New Securities

If the Value Securities are exchanged for new securities in the event of a business combination, merger, or other similar transaction, the new securities received will be subject to escrow in substitution of the

tendered Value Securities, unless certain requirements of the Exchange are met, including if the holder does not become a Principal of the successor issuer.

Seed Share Resale Restrictions

In addition to the above, certain securities of the Resulting Issuer will be subject to resale restrictions pursuant to the Exchange imposed seed share resale restrictions (“ SSRRs ”). SSRRs are Exchange escrow and hold periods of various lengths which apply where seed shares are issued by private companies prior to the completion of certain transactions and initial listings. The terms of SSRRs are based on the length of time such securities have been held and the price at which such securities were issued. The following table sets out the application of the SSRRs on certain Resulting Issuer Securities held by Non-Principals:

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Class # of Securities % of Class Resale Restriction
Resulting Issuer Shares 5,516,000 5.50% 2 year hold with 20% released on
the date of the Final Exchange
Bulletin and every six months
thereafter
Resulting Issuer Shares 5,060,000 5.05% 1 year hold with 20% released on
the date of the Final Exchange
Bulletin and every three months
thereafter
Resulting Issuer Shares 4,725,000 4.71% 4 month hold with 20% released on
the date of the Final Exchange
Bulletin and every month
thereafter
Total 15,301,000
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Voluntary Resale Restrictions

An aggregate of 62,130,994 Resulting Issuer Shares will be subject to the 36-Month Voluntary Resale Restrictions. Some of these Resulting Issuer Shares are also subject to the Value Security Escrow Agreement and/or the SSRRs.

Auditor, Transfer Agent and Registrar

Davidson & Company LLP, located at Suite 1200 – 609 Granville Street, P.O. Box 10372, Pacific Centre, Vancouver, British Columbia, Canada V7Y 1G6, will be the auditor for the Resulting Issuer.

Computershare Investor Services Inc., through its office in Vancouver, British Columbia, is the transfer agent and registrar for Sierra Madre Shares and will continue to act as transfer agent and registrar for the Resulting Issuer.

RISK FACTORS

An investment in the Resulting Issuer Shares should be considered highly speculative, not only due to the nature of Goldshore’s business and operations, but also because of the uncertainty related to completion of the Transaction. In addition to the other information in this Filing Statement, an investor should carefully consider each of, and the cumulative effect of, the following factors, which assume the completion of the

Transaction. Except as noted, these risk factors have been drafted in a manner so as to assume the completion of the Transaction.

Project Risks

Construction and Start-up of New Mines

The success of the Moss Lake Property is subject to a number of factors including the availability and performance of engineering and construction contractors, mining contractors, suppliers and consultants, the receipt of required governmental approvals and permits in connection with the construction of mining facilities and the conduct of mining operations (including environmental permits), and the successful completion and operation of operational elements that have to be factored in. Any delay in the performance of any one or more of the contractors, suppliers, consultants or other persons on which the Resulting Issuer is dependent in connection with its construction activities, a delay in or failure to receive the required governmental approvals and permits in a timely manner or on reasonable terms, or a delay in or failure in connection with the completion and successful operation of the operational elements in connection with new mines could delay or prevent the construction and start-up of new mines as planned.

There can be no assurance that current or future construction and start-up plans implemented by the Resulting Issuer will be successful; that the Resulting Issuer will be able to obtain sufficient funds to finance construction and start-up activities; that toll milling arrangements will be secured on satisfactory terms to the Resulting Issuer; that available personnel and equipment will be available in a timely manner or on reasonable terms to successfully complete construction projects; that the Resulting Issuer will be able to obtain all necessary governmental approvals and permits, including an amendment to the Mine Permit to permit the Resulting Issuer to begin commercial production; and that the completion of the construction, the start-up costs and the ongoing operating costs as set out in the Technical Report will not be significantly higher than anticipated by the Resulting Issuer. Any of the foregoing factors could adversely impact the operations and financial condition of the Resulting Issuer.

Exploration, Development and Operations

The long-term profitability of the Resulting Issuer’s operations will be in part directly related to the cost and success of its exploration programs on the Moss Lake Property, which may be affected by a number of factors, including the Resulting Issuer’s ability to extend the permitted term of exploration granted by the underlying claims and leases. Substantial expenditures are required to establish resources or reserves through drilling, to develop processes to extract the resources and, in the case of new properties, to develop the extraction and processing facilities and infrastructure at any site chosen for extraction. Although substantial benefits may be derived from the discovery of a major deposit, no assurance can be given that any such deposit will be commercially viable or that the funds required for development can be obtained on a timely basis.

Volatility of Commodity Prices

The development of the Moss Lake Property and any other project the Resulting Issuer acquires is dependent on the future prices of minerals and metals. The viability of developing the Moss Lake Property depends heavily on the price of gold.

Precious metals prices are subject to volatile price movements that are beyond the Resulting Issuer’s control, which can be material and occur over short periods of time. Factors affecting such volatility include, but are not limited to, interest and exchange rates, inflation or deflation, fluctuations in the value of the United States dollar and foreign currencies, global and regional supply and demand, speculative trading, the costs of and levels of precious metals production, and political and economic conditions. Such external

economic factors are in turn influenced by changes in international investment patterns, monetary systems, the strength of and confidence in the United States dollar (the currency in which the prices of precious metals are generally quoted), and political developments.

The effect of these factors on the prices of precious metals, and therefore the economic viability of the Moss Lake Property and any project the Resulting Issuer may acquire in the future, cannot be accurately determined. The prices of commodities have historically fluctuated widely, and future price declines could cause the development of (and any future commercial production from) the Moss Lake Property to be impracticable or uneconomical. As such, the Resulting Issuer may determine that it is not economically feasible to commence commercial production, which could have a material adverse impact on the Resulting Issuer’s financial performance and results of operations. In such a circumstance, the Resulting Issuer may also curtail or suspend some or all of its exploration activities.

Title Matters

Once acquired, title to, and the area of, mineral properties may be disputed. There is no guarantee that title to one or more claims, concessions or leases at the Moss Lake Property or any future Resulting Issuer projects will not be challenged or impugned. There may be challenges to any of the Resulting Issuer’s titles which, if successful, could result in the loss or reduction of the Resulting Issuer’s interest in such titles. The Resulting Issuer’s properties may be subject to prior unregistered liens, agreements, transfers or claims, and title may be affected by, among other things, undetected defects. In addition, the Resulting Issuer may be unable to operate its properties as permitted or to enforce its rights with respect to its properties. The failure to comply with all applicable laws and regulations, including a failure to pay taxes or to carry out and file assessment work, can lead to the unilateral termination of concessions by mining authorities or other governmental entities.

Insurance and Uninsured Risks

The Resulting Issuer’s business is subject to a number of risks and hazards generally, including adverse environmental conditions, industrial accidents, labour disputes, unusual or unexpected geological conditions, ground or slope failures, cave-ins, catastrophic equipment failures, changes in the regulatory environment and natural phenomena such as inclement weather conditions, pandemics, floods and earthquakes. Such occurrences could result in damage to mineral properties or production facilities, personal injury or death, environmental damage to the Resulting Issuer’s properties or the properties of others, delays in mining, monetary losses and possible legal liability.

Although the Resulting Issuer will maintain insurance to protect against certain risks in such amounts as it considers to be reasonable, its insurance will not cover all the potential risks associated with a mining company’s operations. The Resulting Issuer may also be unable to maintain insurance to cover these risks at economically feasible premiums. Insurance coverage may not continue to be available or may not be adequate to cover any resulting liability. Moreover, insurance against risks such as environmental pollution or other hazards as a result of exploration and production is not generally available to the Resulting Issuer or to other companies in the mining industry on acceptable terms. The Resulting Issuer might also become subject to liability for pollution or other hazards that may not be insured against or that the Resulting Issuer may elect not to insure against because of premium costs or other reasons. Losses from these events may cause the Resulting Issuer to incur significant costs that could have a material adverse effect upon its financial performance and results of operations.

Environmental Risks and Hazards

All phases of the Resulting Issuer’s operations are subject to environmental regulation. Environmental legislation provides for restrictions and prohibitions on spills, releases or emissions of various substances

produced in association with certain mining operations, such as seepage from tailings disposal areas, which would result in environmental pollution. A breach of such legislation may result in the imposition of fines and penalties. In addition, certain types of operations require the submission and approval of environmental impact assessments. Environmental legislation is evolving in a manner that will require stricter standards and enforcement, increased fines and penalties for noncompliance, more stringent environmental assessments of proposed projects and a heightened degree of responsibility for Companies and their officers, directors and employees. There is no assurance that existing or future environmental regulation will not materially adversely affect the Resulting Issuer’s business, financial condition and results of operations.

Permitting Risks

Government environmental approvals and permits are currently, or may in the future be, required in connection with the Resulting Issuer’s operation. To the extent such approvals are required and not obtained, the Resulting Issuer will be curtailed or prohibited from proceeding with planned exploration, development or operation of mineral properties.

Failure to comply with applicable laws, regulations and permitting requirements may result in enforcement actions thereunder, including orders issued by regulatory or judicial authorities causing operations to cease or be curtailed, and may include corrective measures requiring capital expenditures, installation of additional equipment or remedial actions. Parties engaged in mining operations, including the Resulting Issuer, may be required to compensate those suffering loss or damage by reason of the mining activities and may have civil or criminal fines or penalties imposed for violations of applicable laws or regulations.

Amendments to current laws, regulations and permits governing operations and activities of Companies in the mining industry, or more stringent implementation thereof, could have a material adverse impact on the Resulting Issuer and cause increases in exploration expenses, capital expenditures or production costs, reduction in levels of production at producing properties, or abandonment or delays in development of new mining properties.

Infrastructure

Mining, processing, development and exploration activities depend on adequate infrastructure. Reliable roads, bridges, power sources and water supply are important determinants, which affect capital and operating costs. Unusual or infrequent weather phenomena, sabotage, government or other interference in the maintenance or provision of such infrastructure could adversely affect the Resulting Issuer’s business, financial condition and results of operations.

Competition for Exploration, Development and Operation Rights

The mining industry is intensely competitive in all of its phases and the Resulting Issuer competes with many companies possessing greater financial and technical resources. Competition in the precious metals mining industry is primarily for: mineral rich properties that can be developed and produced economically; the technical expertise to find, develop and operate such properties; the labour to operate the properties; and the capital for the purpose of funding such properties. Many competitors not only explore for and mine precious metals, but conduct refining and marketing operations on a global basis. Such competition may result in the Resulting Issuer being unable to recruit or retain qualified employees or to acquire the capital necessary to fund its operations and develop the Moss Lake Property as contemplated in the Technical Report. Existing or future competition in the mining industry could materially adversely affect the Resulting Issuer’s prospects for mineral exploration and success in the future.

Increased demand for services and equipment could cause project costs to increase materially, resulting in delays if services or equipment cannot be obtained in a timely manner due to inadequate availability, or at all, and increase potential scheduling difficulties and cost increases due to the need to coordinate the availability of services or equipment, any of which could materially increase project exploration, development or construction costs, result in project delays or both.

Reliability of Mineral Resource Estimates

Mineral Resources are estimates only, and no assurance can be given that the anticipated tonnages and grades will be achieved or that the indicated level of recovery will be realized. Mineral Resource estimates may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing and other relevant issues. There are numerous uncertainties inherent in estimating Mineral Resources, including many factors beyond the Resulting Issuer’s control. Such estimation is a subjective process, and the accuracy of any Mineral Resource estimate is a function of the quantity and quality of available data, the nature of the mineralized body and of the assumptions made and judgments used in engineering and geological interpretation. These estimates may require adjustments or downward revisions based upon further exploration or development work or actual production experience.

Fluctuations in gold prices, results of drilling, metallurgical testing and production, the evaluation of mine plans after the date of any estimate, permitting requirements or unforeseen technical or operational difficulties may require revision of Mineral Resource estimates set out in the Technical Report. Should reductions in Mineral Resources occur, the Resulting Issuer may be required to take a material write-down of its investment in mining properties, reduce the carrying value of one or more of its assets or delay or discontinue production or the development of new projects, resulting in increased net losses and reduced cash flow. Mineral Resources should not be interpreted as assurances of mine life or of the profitability of current or future operations. Any material reductions in estimates of Mineral Resources could have a material adverse effect on the Resulting Issuer’s results of operations and financial condition.

Uncertainty Relating to Indicated and Inferred Resources

The Technical Report discloses Indicated Resources and Inferred Resources. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. Due to the uncertainty which may attach to Mineral Resources, there is no assurance that Mineral Resources will be upgraded to proven and probable Mineral Reserves as a result of continued exploration.

Governmental Regulation

The mineral exploration and development activities of the Resulting Issuer are subject to various laws governing prospecting, exploration, development, production, taxes, labour standards and occupational health, mine safety, toxic substances, land use, water use, land claims of local people and other matters in local areas of operation. Although the Resulting Issuer’s exploration and development activities are currently carried out in accordance with all applicable rules and regulations, no assurance can be given that new rules and regulations will not be enacted or that existing rules and regulations will not be applied in a manner which could limit or curtail exploration, development or production. Amendments to current laws and regulations governing the Resulting Issuer’s operations, or more stringent implementation thereof, could have an adverse impact on the Resulting Issuer’s business and financial condition.

Operational Labour and Employment Matters

While the Resulting Issuer has good relations with its employees and consultants, exploration and development at its mining properties is dependent upon the efforts of the Resulting Issuer’s employees. In addition, relations between the Resulting Issuer and its employees may be affected by changes in the

scheme of labour relations that may be introduced by the relevant federal and provincial governmental authorities. Changes in such legislation or in the relationship between the Resulting Issuer and its employees may have a material adverse effect on the Resulting Issuer’s business, results of operations and financial condition.

Community Relationships

The Resulting Issuer’s relationships with the communities in which it operates are critical to ensure the future success of its existing operations and the construction and development of its projects.

The Moss Lake Property may be subject to the rights or the asserted rights of various community stakeholders, including First Nations. The presence of community stakeholders may impact the Resulting Issuer’s ability to develop or operate the Moss Lake Property or to conduct exploration activities. Accordingly, the Resulting Issuer is subject to the risk that one or more groups may oppose the continued operation, further development or new development or exploration of the Resulting Issuer’s current or future mining properties and projects. Such opposition may be directed through legal or administrative proceedings, or through protests or other campaigns against the Resulting Issuer’s activities. Governments in many jurisdictions must consult with, or require the Resulting Issuer to consult with, indigenous peoples with respect to grants of mineral rights and the issuance or amendment of project authorizations. The risk of unforeseen title claims by First Nations peoples also could affect existing operations as well as development projects. These legal requirements may also affect the Resulting Issuer’s ability to expand or transfer existing operations or to develop new projects.

Impact of Pandemic Disease on Global Economic Conditions and Economic Performance

The Resulting Issuer’s operations are subject to the risk of emerging infectious diseases or the threat of outbreaks of viruses or other contagions or epidemic diseases, such as the novel coronavirus (“ COVID19 ”) outbreak which began at the beginning of 2020. These infectious disease risks may not be adequately responded to locally, nationally or internationally due to lack of preparedness to detect and respond to outbreaks or respond to significant pandemic threats. As such, there are potentially significant economic and social impacts of infectious disease risks, including the inability of the Resulting Issuer’s mining and exploration operations to operate as intended due to a shortage of skilled employees, shortages or disruptions in supply chains, inability of employees to access sufficient healthcare, significant social upheavals, government or regulatory actions or inactions, decreased demand or the inability to sell precious metals or declines in the price of precious metals, capital market volatility, or other unknown but potentially significant impacts.

There are potentially significant economic losses from infectious disease outbreaks that can extend far beyond the initial location of an infectious disease outbreak. As such, both catastrophic outbreaks as well as regional and local outbreaks can have a significant impact on the Resulting Issuer’s operations, future cash flows, earnings, results of operations and financial condition. The Resulting Issuer may not be able to accurately predict the quantum of such risks. In addition, the Resulting Issuer’s own operations are exposed to infectious disease risks noted above and, as such, the Resulting Issuer’s operations may be adversely affected by such infectious disease risks. Accordingly, any outbreak or threat of an outbreak of a virus, such as COVID-19 or other contagions or epidemic disease could have a material adverse effect on the Resulting Issuer, its business, results from operations and financial condition. The COVID-19 outbreak at the beginning of 2020 has resulted in extended shutdowns of numerous business activities and supply chain disruptions. These shutdowns and disruptions have impacted the global economy and may have an adverse impact on the Resulting Issuer’s business. As new developments continue to arise, the full impact that COVID-19 may have on gold prices, commodity prices, costs and availability of supplies, availability of personnel and the global economy are not fully ascertainable. The direct and indirect effects of COVID19 could have a material adverse effect on the Resulting Issuer’s future cash flows, earnings, results of

operations and financial condition. In addition, health concerns could result in social, economic and labour instability.

Production Estimates

Forecasts of future production in this Filing Statement and in the Technical Report are estimates based on interpretation and assumptions, and actual production may be less than estimated. Unless otherwise noted, the Resulting Issuer’s production forecasts are based on full production being achieved at all of its potential mines. The Resulting Issuer’s ability to achieve and maintain full production rates at the Moss Lake Property is subject to a number of risks and uncertainties, the occurrence of any of which could result in delays, slowdowns or suspensions and, ultimately, the failure to achieve and maintain full production rates. The Resulting Issuer’s production estimates at the Moss Lake Property are dependent on, among other things, the accuracy of Mineral Resource estimates, the accuracy of its life of mine plans, the accuracy of assumptions regarding ore grades and recovery rates, weather conditions, ground conditions, physical characteristics of ores, such as hardness and the presence or absence of particular metallurgical characteristics, the accuracy of estimated rates and costs of mining and processing, including, without limitation, operating expenses cash costs and all-in sustaining costs, mill availability, reliability of equipment and machinery, the performance of the processing circuit or other processes, water supply and/or quality, the receipt and maintenance of permits and the availability of a sufficient amount of people to perform the work necessary to maintain production as estimated. The Resulting Issuer’s actual production and other projected economic and operating parameters may not be realized. The failure of the Resulting Issuer to achieve its production estimates could have a material adverse effect on its prospects, results of operations and financial condition.

Cost Estimates

The Resulting Issuer prepared estimates of operating costs, capital costs and closure costs for the Moss Lake Property that are set out in the Technical Report. The Resulting Issuer’s actual costs are dependent on a number of factors, including smelting and refining charges, penalty elements in concentrates, royalties, the price of gold and byproduct metals, the cost of inputs used in mining operations and production levels. The Resulting Issuer’s actual costs may vary from estimates for a variety of reasons, including changing waste-to-ore ratios, ore grade metallurgy, weather conditions, ground conditions, labour and other input costs, commodity prices, general inflationary pressures and currency exchange rates. Failure to achieve cost estimates or material increases in costs could have an adverse impact on the Resulting Issuer’s future cash flows, profitability, results of operations and financial condition.

Reclamation Costs

The Resulting Issuer’s operations are subject to reclamation plans that establish its obligations to reclaim properties after minerals have been mined from a site. These obligations represent significant future costs for the Resulting Issuer. It may be necessary to revise reclamation concepts and plans, which could increase costs. Reclamation bonds or other forms of financial assurance are often required to secure reclamation activities. Governing authorities require companies to periodically recalculate the amount of a reclamation bond and may require bond amounts to be increased. It may be necessary to revise the planned reclamation expenditures and the operating plan for a mine in order to fund an increase to a reclamation bond. In addition, reclamation bonds are generally issued under a Company’s credit facilities; increases in the amount of reclamation bonds will decrease the amount of the credit facility available for other purposes. Reclamation bonds may represent only a portion of the total amount of money that will be spent on reclamation over the life of a mine operation. The actual costs of reclamation set out in mine plans are estimates only and may not represent the actual amounts that will be required to complete all reclamation activity. If actual costs are significantly higher than the Resulting Issuer’s estimates, then its results of operations and financial position could be materially adversely affected.

Corporate Risks

The Transaction May Not Be Completed

The Transaction is subject to final acceptance by the Exchange as evidenced by the Final Exchange Bulletin. There can be no assurance that all of the necessary approvals will be obtained. If the Transaction is not completed for any reason, Sierra Madre will continue to search for and evaluate other investment opportunities; however, it will have incurred significant costs associated with the failed implementation of the Transaction.

Liquidity and Additional Financing

The Resulting Issuer’s ability to continue its business operations and retain its ownership in the Moss Lake Property is dependent on management’s ability to secure additional financing. The Resulting Issuer’s only source of liquidity is its cash and cash equivalent balances. Liquidity requirements are managed based upon forecasted cash flows to ensure that there is sufficient working capital to meet the Resulting Issuer’s obligations.

The advancement, exploration and development of the Moss Lake Property, including continuing exploration and development, and, if warranted, construction or repair of mining facilities and the commencement of mining operations, will also require substantial additional financing. As a result, the Resulting Issuer may be required to seek additional sources of equity financing in the near future. The Resulting Issuer’s ability to raise additional equity financing may be affected by numerous factors beyond its control including, but not limited to, adverse market conditions, commodity price changes and economic downturns. There can be no assurance that the Resulting Issuer will be successful in obtaining any additional financing required to continue its business operations and/or to maintain its property interests, or that such financing will be sufficient to meet the Resulting Issuer’s objectives or obtained on terms favourable to the Resulting Issuer. Failure to obtain sufficient financing as and when required may result in the delay or indefinite postponement of exploration and/or development on any or all of the Resulting Issuer’s properties, or even a loss of its property interests, which would have a material adverse effect on the Resulting Issuer’s business, financial condition and results of operations.

No Earnings and History of Losses

The business of developing and exploring resource properties involves a high degree of risk and, therefore, there is no assurance that current exploration programs will result in identifying further profitable operations. The Resulting Issuer has not determined whether the Moss Lake Property contains economically recoverable reserves of mineralized material and currently has not earned any revenue from its projects; therefore, the Resulting Issuer does not generate cash flow from its operations. There can be no assurance that significant additional losses will not occur in the future. The Resulting Issuer’s operating expenses and capital expenditures may increase in future years with advancing exploration, development and/or production from the Resulting Issuer’s properties. The Resulting Issuer expects to incur losses until such time as the Moss Lake Property or any future property it acquires enters into commercial production and generates sufficient revenue to fund continuing operations. There is no assurance that any of the Resulting Issuer’s properties will eventually enter commercial operation. There is also no assurance that new capital will become available and, if it does not, the Resulting Issuer may be forced to substantially curtail or cease operations.

Attracting and Retaining Talented Personnel

The Resulting Issuer’s success will depend in large measure on the abilities, expertise, judgment, discretion, integrity and good faith of management and other personnel in conducting the business of the Resulting

Issuer. The Resulting Issuer will initially have a small management team and the loss of any of these individuals or the inability to attract suitably qualified staff could materially adversely impact the business. The Resulting Issuer’s ability to manage its operating, development, exploration and financing activities will depend in large part on the efforts of these individuals.

The Resulting Issuer’s success will depend on the ability of management and employees to interpret market and technical data successfully and to interpret and respond to economic, market and other business conditions in order to locate and adopt appropriate investment opportunities, monitor such investments and ultimately, if required, successfully divest such investments. Further, key personnel may not continue their association or employment with the Resulting Issuer which may not be able to find replacement personnel with comparable skills. The Resulting Issuer has sought to and will continue to ensure that management and any key employees are appropriately compensated; however, their services cannot be guaranteed. If the Resulting Issuer is unable to attract and retain key personnel, business may be adversely affected. The Resulting Issuer faces market competition for qualified personnel and there can be no assurance that the Resulting Issuer will be able to attract and retain such personnel.

Possible Conflicts of Interest of Directors and Officers of the Resulting Issuer

Certain of the directors and officers of the Resulting Issuer will also serve as directors and/or officers of other companies involved in mineral resource exploration and development and, consequently, there exists the possibility for such directors and officers to be in a position of conflict. The Resulting Issuer expects that any decision made by any of such directors and officers involving the Resulting Issuer will be made in accordance with their duties and obligations to deal fairly and in good faith with a view to the best interests of the Resulting Issuer and its shareholders, but there can be no assurance in this regard.

Volatility of Market for Resulting Issuer Shares

The market price of the Resulting Issuer Shares may be highly volatile and could be subject to wide fluctuations in response to a number of factors, including: (i) dilution caused by issuance of additional Resulting Issuer Shares and other forms of equity securities, which the Resulting Issuer expects to make in connection with future financings to fund operations and growth, to attract and retain qualified personnel and in connection with future strategic partnerships with other companies, (ii) announcements of new acquisitions, reserve discoveries or other business initiatives by competitors, (iii) fluctuations in revenue from operations as new reserves come to market, (iv) changes in the market for gold and/or in the capital markets generally, (v) changes in the demand for minerals and metals; and (vi) changes in the social, political and/or legal climate in the regions in which the Resulting Issuer operates. In addition, the market price of the Resulting Issuer Shares could be subject to wide fluctuations in response to: (a) quarterly variations in operating expenses, (b) changes in the valuation of similarly situated Companies, both in the mining industry and in other industries, (c) changes in analysts’ estimates affecting the Resulting Issuer, competitors and/or the industry, (d) changes in the accounting methods used in or otherwise affecting the industry, (e) additions and departures of key personnel, (f) fluctuations in interest rates, exchange rates and the availability of capital in the capital markets, and (g) significant sales of the Resulting Issuer Shares, including sales by future investors in future offerings which may be made to raise additional capital. These and other factors will be largely beyond the Resulting Issuer’s control, and the impact of these risks, singularly or in the aggregate, may result in material adverse changes to the market price of the Resulting Issuer Shares and/or the Resulting Issuer’s results of operations and financial condition.

Dilution Risk

In order to finance future operations and development efforts, the Resulting Issuer may raise funds through the issue of Resulting Issuer Shares or securities convertible into Resulting Issuer Shares. The constating documents of the Resulting Issuer will allow it to issue, among other things, an unlimited number of

Resulting Issuer Shares for such consideration and on such terms and conditions as may be established by the directors of the Resulting Issuer, in many cases, without the approval of shareholders. The size of future issues of Resulting Issuer Shares or securities convertible into Resulting Issuer Shares or the effect, if any, that future issues and sales of the Resulting Issuer Shares will have on the price of the Resulting Issuer Shares cannot be predicted at this time. Any transaction involving the issue of previously authorized but unissued Resulting Issuer Shares or securities convertible into Resulting Issuer Shares would result in dilution, possibly substantial, to present and prospective shareholders of the Resulting Issuer.

Dividends

The Resulting Issuer does not intend to declare dividends for the foreseeable future as the Resulting Issuer anticipates that any future earnings will be re-invested in the development and growth of the business. Therefore, investors will not receive any funds unless they sell their Resulting Issuer Shares, and shareholders may be unable to sell their Resulting Issuer Shares on favorable terms or at all. Investors cannot be assured of a positive return on investment or that they will not lose the entire amount of their investment in Resulting Issuer Shares.

GENERAL MATTERS

Agent Relationships

Other than as described above, neither Sierra Madre nor Goldshore has entered into any agreement with any registrant to provide sponsorship or corporate finance services, either now or in the future.

Experts

The Qualified Persons prepared the Technical Report. Neither of the Qualified Persons nor SLR Consulting hold any of the outstanding securities of each of Sierra Madre and Goldshore, or of any Associate or Affiliate of either of them, when the Qualified Persons prepared the Technical Report and did not receive any interest in any securities of each of Sierra Madre and Goldshore, or of any Associate or Affiliate of either of them, in connection with the preparation of the Technical Report.

Neither of the Qualified Persons are currently, nor are they expected to be elected, appointed or employed as, a director, officer or employee of Sierra Madre, Goldshore or the Resulting Issuer, or of any Associate or Affiliate of the Resulting Issuer.

Baker Tilly WM LLP is the auditor of Sierra Madre and is independent of Sierra Madre within the meaning of the Rules of Professional Conduct of the Chartered Professional Accountants of British Columbia.

Davidson & Company LLP is the auditor of Goldshore and is independent of Goldshore within the meaning of the Rules of Professional Conduct of the Chartered Professional Accountants of British Columbia.

Grant Thornton LLP is the auditor of Wesdome and is independent of Wesdome within the meaning of the Rules of Professional Conduct of the Chartered Professional Accountants of Ontario.

Other than as mentioned above, no Person or Company whose profession or business gives authority to a statement made by the Person or Company and who is named as having prepared or certified a part of this Filing Statement or as having prepared or certified a report or valuation described or included in this Filing Statement holds any beneficial interest, direct or indirect, in any property of Sierra Madre, Goldshore or the Resulting Issuer or of an Associate or Affiliate of Sierra Madre, Goldshore or the Resulting Issuer and no such Person is expected to be elected, appointed or employed as a director, senior officer or employee of Sierra Madre, Goldshore or the Resulting Issuer or of an Associate or Affiliate of Sierra Madre, Goldshore or the Resulting Issuer and no such Person is a promoter of Sierra Madre, Goldshore or the Resulting Issuer or an Associate or Affiliate of Sierra Madre, Goldshore or the Resulting Issuer.

There is no expertised report prepared to support the recommendation(s) of the Sierra Madre Board.

Other Material Facts

There are no material facts about Sierra Madre or the Transaction and, to the knowledge of Sierra Madre, about Goldshore or the Resulting Issuer that are not disclosed under the preceding items and are necessary in order for this Filing Statement to contain full, true and plain disclosure of all material facts relating to Sierra Madre, Goldshore and the Resulting Issuer, assuming completion of the Transaction.

Board Approval

The Sierra Madre Board has approved this Filing Statement.

APPENDIX A

MOSS LAKE PROPERTY

Unless stated otherwise, the information in this Appendix A is based on the Technical Report, is effective as of the date of the Technical Report and was reviewed by, and included with the consent of the authors of the Technical Report. Portions of the following information are based on assumptions, qualifications and procedures which are not fully described herein. Reference should be made to the full text of Technical Report which is available for review on SEDAR at www.sedar.com. The Technical Report is not and will not be deemed to be incorporated by reference in this Filing Statement.

Capitalized terms used but not defined in this Appendix A have the meanings given to them in the Technical Report.

Property Description and Location

Location

The Moss Lake Project comprises three contiguous claim blocks located in Moss Township, and the Burchell Lake, Powell Lake, and Nelson Lake areas. The three groups of claims have been historically referred to as the Moss Lake, Coldstream, and the Hamlin claim groups. The Project is located approximately 110 km west of the city of Thunder Bay, in the province of Ontario, Canada (see Figure 4-1 in the Technical Report). The Property lies within the Canadian National Topographic System (NTS) map sheet 52B/10 at approximately 48°32'17.0”N latitude and 90°41'38.0”W longitude. The Property is located within Zone 23 of the Universal Transverse Mercator (UTM) projection system at approximately 5,378,670 m north by 670,223 m east, using the North American Datum (NAD) 83 datum.

Land Tenure

Under the Ontario Mining Act, title to mineral lands are assigned on a two-tiered basis that begins with mining claims where the rights to legally access and explore for the presence of minerals are acquired by means of map staking of individual claim units ranging from 17.7 ha to 23 ha in size. These mining claims do not convey ownership and have no expiry date provided sufficient work is carried out on the property each year to maintain the claim in good standing. The claims are administered by the Mining Lands Branch of the Ontario Ministry of Energy, Northern Development and Mines (ENDM). Information relating to mining lands is available from the internet-based Mining Lands Assessment System (MLAS) and can be accessed at no charge.

On April 10, 2018, the Ontario Mining Act was modernized with the implementation of the online MLAS. In brief, this new system for mining claims modifies the manner in which mining claims are acquired from the previous method of physical ground staking to a fully digital system known as map staking. There are two categories of mining claims under this new system. Boundary cells are created for those areas where the current mining claims overlap previously staked mining claims that have two or more owners. For all other claims, the minimum unit size for a single unit is 16 ha, and single units can be combined into multicell units with the same owner up to a maximum of 25 single-cell units.

The amount of work required to maintain a claim in good standing is $400 per cell annually for single cell and multi-cell claims and $200 per cell for boundary cell claims. The assessment work is required to be applied prior to the anniversary date.

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In a bulletin issued by the ENDM on April 17, 2020, the ministry acknowledged that the COVID-19 outbreak and related health requirements are special circumstances that have created challenges for all claim holders in Ontario. As a result, they have granted an extension of time for applying assessment work credits for mining claims for all claim holders with anniversary dates on or before July 31, 2021. Claim holders with claim anniversary dates on or before July 31, 2021 will be given an exclusion order if they make a brief request via e-mail citing COVID-19 as the reason the exclusion order is requested. The exclusion orders will remove the requirement to perform and file assessment work for a period of time of up to 12 months (ENDM, 2021).

Once a concentration of minerals has been discovered, the next tier of mineral tenure includes the issuance of mining leases. A lease grants its owner title and ownership to the land, permits the legal access and extraction and sale of extracted resources, and removes the requirement to perform yearly assessment work. To maintain a lease, rent must be paid annually at a rate of $3.00/ha. Mining leases are issued for terms of 21 years and can be renewed for additional 21-year periods with conditions. To convert a mining claim into a mining lease, a letter of intent must be submitted to the Provincial Recording Office’s Technical Services Unit any time after assessment work has been performed on the land and the work has been submitted and approved. After submitting the letter of intent, the land covered by the mining claim must be surveyed and the surface rights to the land must be acquired (EMNDM, 2021a). Mining leases can comprise the rights to the sub-surface minerals only (known as mining rights), or can include the rights to the surface as well (known as surface rights). The surface rights typically include those materials located between the current topographic surface and the top of the bedrock surface.

SLR recommends that copies of the information contained within the perimeter survey of the mining leases located on the Moss Lake claim block be obtained and converted into digital format suitable for use in the proposed activities for the Moss Lake Project.

An older form of mineral tenure is known as patented mining claims. This type of mineral tenure conveys full title and ownership to the land, permits legal access to the land, permits the sale of extracted resources, and has no fixed expiry time provided the annual taxes are paid at a rate of $4.00/ha. This form of mineral tenure is a legacy of previous versions of the Ontario Mining Act and is no longer issued. As with mining leases, patented mining claims can comprise the ownership to the sub-surface minerals only, or can include the rights to the surface as well.

A licence of occupation is a legal agreement authorizing the temporary occupation and use of Crown land for such a period of time and under such terms and conditions as the Minister determines to be appropriate. A licence and any renewals cannot exceed twenty years in total. Licences of occupation are subject to annual rent payments in the amount of $5.00/ha.

The Project consists of three blocks of contiguous mining claims comprising mining claims, mineral leases (mining rights only and surface plus mining rights), patented claims (mining rights only and surface plus mining rights), and licences of occupation. The total area of the mining claims alone are estimated at approximately 12,800 ha.

A listing of the mining claims is provided in Table 4 1 and a listing of the patented claims, mining leases, and mining licences of occupation is provided in Table 4-2 in the Technical Report. It is to be noted that three of the patented mining claims consist of both mineral rights and surface rights. These claims are PAT52255, PAT-52256, and PAT-52257 which cover a combined area of approximately 113.312 ha. In addition, mining lease LEA-107488 also comprises access to both the mineral rights and surface rights. The surface rights of this lease total approximately 95.66 ha.

The locations of all the mining titles are shown in Figure 4-2 in the Technical Report.

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In addition, the Project is subject to annual Provincial Land and Education taxes that amount to $289.83 for 2021.

The Project is also subject to a land use permit for which annual taxes are due in the amount of $115.00.

Goldshore confirms that all rents and taxes have been paid in respect of the mineral titles and land holdings comprising the Moss Lake Project.

Encumbrances

SLR is not aware of any encumbrances in respect of the mineral properties relating to the Project.

Royalties

A number of royalties exist in respect of the mineral titles that form the Project including Net Smelter Return (NSR) royalties, Net Profits Royalty (NPR) royalties, rights of first refusals, and advance royalty payments. A summary of the royalties for each individual claim block is provided in Table 4-3 in the Technical Report.

It is important to note that the royalty information provided is for information purposes only. Interested parties are directed to consult the original royalty agreements for full descriptions of the terms and conditions relating to each royalty agreement.

In addition to the royalties described below, as part of the 2021 agreement with Wesdome, Goldshore will grant Wesdome a 1% NSR royalty on all metal production from the three claim blocks that comprise the Project (i.e., the Coldstream claim block, Moss Lake claim block, and Hamlin claim block) (Goldshore, 2021).

SLR recommends that, to the extent possible, field activities be carried out to locate and record the position of the corners of those original staked mining claims that cover the extents of the known mineralized zones.

Coldstream Claim Block

The following summary of the various royalty agreements relating to the Coldstream claim block was provided in Tetratech (2011).

Four underlying agreements for NSR royalties exist on claims within the Property optioned and purchased from other parties.

In August 2002, Alto Ventures Ltd. (Alto) entered into an agreement with The Other Mining Company (US) Inc. (TOMC) giving Alto exclusive rights to acquire a 100% interest in a property consisting of 71 patented claims and licences of occupation. Alto earned the 100% interest by issuing 800,000 shares and spending $100,000 on exploration over three years, plus maintaining claims and licences including taxes, fees, and rentals. Thereafter, TOMC was entitled to a 2% NSR on mineral production inclusive of a 1% NSR payable pursuant to an underlying agreement with Newhawk Gold Mines Ltd. and John Prochnau.

Also in August 2002, Alto purchased five claims, known as the Mealey Claims, from Larry Mealey. Three of the five claims are part of the current Property (TB938975, TB938976, and TB938977), while the other two claims have been allowed to expire. Alto purchased a 100% interest in the Mealey Claims subject to a 1% NSR. The Mealey Royalty can be purchased for $500,000.

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In May 2006, Alto optioned claims TB1187652, TB1238679, TB1239688, TB3001509, TB3010485, and TB3010486 from Canadian Trillium Resources (Canadian Trillium) and Canadian Golden Dragon. Alto has earned a 100% interest in the claims, subject to a 1% NSR to Canadian Trillium and Canadian Golden Dragon and original underlying vendors retain a 2% NSR.

Also in May 2006, Alto purchased claims 4211656, 4211658, and 4211659 from Dino D’Angelo and Peter D.F. Young. D’Angelo and Young retain a 2% NSR.

When Foundation Resources Inc. (Foundation) acquired the Coldstream property from Alto, Alto was granted a 0.5% NSR on claims where there existed an underlying royalty and a 1.5% royalty in areas where there was no underlying royalty.

Moss Lake Claim Block

The following summary of the various royalty agreements relating to the Moss Lake claim block was provided in InnovExplo (2013).

In September 1982, Tandem Resources Ltd (Tandem) entered into an agreement (the underlying agreement) whereby it could acquire a 100% interest in a group of 42 contiguous staked claims, including the 15 brought to lease in 1983 and 1986 from a group composed of three individuals and two junior companies (the Group). The claims were centred on the original Snodgrass Lake showing dating from the 1930s. Storimin Exploration Ltd (Storimin) entered into a joint venture (JV) agreement covering the 42 claims with Tandem in 1984. The Tandem/Storimin JV earned the 100% interest and thereafter the Group was entitled to the greater of a collective $25,000 annual advance royalty payment or a collective 10% NPR.

In September 1990, Central Crude Limited (CCL) optioned the same property from Tandem/Storimin JV, inheriting the underlying agreement. CCL thereby obtained the right to earn a 51% interest in the property by fulfilling expenditure and cash payment obligations, and the right to earn an additional 9% to earn a 60% interest in the property by fulfilling additional obligations. CCL staked and optioned new claims adjacent or close to the 42-claim group, however, these were not included in the underlying agreement. Many of these additional claims have lapsed and some, if not all, have been re-staked by third parties since that time. CCL fulfilled its obligations to earn a 51% interest in the 42 claims, and reorganized in 1994 to become Moss Lake Gold Mines. Tandem/Storimin JV exchanged its collective 49% interest in the original 42-claim property for shares in Moss Lake Gold Mines.

Moss Lake Gold Mines subsequently optioned additional claims from other parties, as detailed below, all contiguous with the original 42 claims to form one large block. Moss Lake Gold Mines also staked a small number of additional claims, largely to replace the Moss Lake Gold Mines claims that came open.

In June 1999, Moss Lake Gold Mines purchased the 1.25% royalty held by Golden Hart Explorations Inc. (formerly known as Belore Mines Limited), one of the parties to the underlying agreement. Thereafter and to the time of writing of the 2010 report by Risto and Breede (2010), the four remaining members of the Group remained entitled to the greater of a collective $21,875 annual advance royalty payment or collective 8.75% NPR.

In early 1998, 16 claims forming part of the north portion of the original 42-claim property came open and were re-staked by Berland Resources Ltd. and Benton Resources Corp. as three mining claims (1232109, 1232111, and 1232112) totalling 15 single-unit claims. In July 1998, Moss Lake Gold Mines purchased a 100% interest in these three claims. The two vendors are entitled to a collective 1% NSR. These three “new” claims are included in the underlying agreement; therefore this portion of the underlying agreement portion of the overall property is subject to a 1% NSR and an 8.75% NPR.

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In September 1999, Moss Lake Gold Mines acquired a 100% interest in the Fountain Lake property consisting of 99 mining claims with a surface area equivalent to 149 single unit claims, adjacent to the Moss Lake property, from Landis Mining Corporation, John Ternowesky, Eugene Belisle, and Noel Belisle. In return, the vendors received one-time cash payments and shares in Moss Lake Gold Mines. They are entitled to a collective 2.5% NSR. Moss Lake Gold Mines may purchase 40% of the 2.5% NSR for $1,000,000. Since the Fountain Lake agreement came into effect, a small number of claims have come open and been re-staked by or for Moss Lake Gold Mines and remain part of the agreement. One claim that came open was re-staked by a third party and is no longer part of the agreement. The Fountain Lake property remains essentially the same size and shape it was in September 1999.

Hamlin Lake Claim Block

The following summary of the various royalty agreements relating to the Hamlin claim block was provided in Clark and Forslund (2014).

On May 12, 2014, Canoe Mining Ventures Corp. (Canoe Mining) signed binding letters of intent to purchase a 100% interest in the Hamlin property. The previous ownership of the property was held in a joint venture between Glencore Canada Corp. (Glencore), Mega Uranium Ltd. (Mega Uranium), and Rainy Mountain Royalty Corp. (Rainy Mountain) where Glencore was the operator and owner of a 51% interest, with Rainy Mountain and Mega Uranium each holding a 24.5% interest. The property was initially acquired by East West Resource Corporation (now Rainy Mountain) in 2003 and a partnership was formed with Mega Uranium to explore and develop the property. In 2011, Glencore earned a 51% interest by spending $3.0 million in addition to the $1.5 million spent by previous operators.

In accordance with the terms of the agreement, and subject to the receipt of all required regulatory and exchange approvals, in consideration for the property, Canoe Mining had agreed to make a cash payment of $50,000 to Glencore and grant Glencore a 1% NSR together with a right of first refusal for an off-take agreement. Additionally, Rainy Mountain and Mega Uranium were each issued one million common shares of Canoe Mining.

The underlying 2% NSR held by the original vending prospectors may be purchased by Canoe Mining under the following terms: a 1% NSR may be purchased at any time for $1.0 million, and Canoe Mining has the first right of refusal to purchase the remaining 1% NSR.

Environmental, Social, and Permitting Considerations

SLR is not aware of any significant environmental liabilities on the Property. The past producing Coldstream Mine is located on the Coldstream claim group approximately one kilometre east of Burchell Lake. This former mine site has been substantially rehabilitated ( see Section 6.3.1 of the Technical Report).

Project planning is at a preliminary stage and to date, limited work has been done to characterize the Project setting from an environmental and social perspective. An early priority for Goldshore will be to initiate environmental and social studies as part of the mineral exploration program, in support of mine planning and development studies.

SLR anticipates that baseline studies will include at least the following principal components:

Climate and air quality.
Noise and vibration.
Surface water quality and quantity.

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Groundwater quality and quantity.
Aquatic environment.
Terrestrial environment.
Soils and environmental geochemistry.
Socioeconomics.
Land and resource use.
Use of lands and resources for traditional purposes.
Visual quality.
Archaeology and cultural heritage resources.
Human health and ecological risk assessment.

Project planning will incorporate the early and ongoing results of the baseline studies, in addition to input from Indigenous and other stakeholders, in shaping the Project design and execution plan. Potential impacts to water, fish, and fish habitat are obvious key environmental issues for Project development.

Approvals and Permitting

Goldshore will be making applications to acquire all required permits to conduct the proposed work on the Property. The key permit in respect of the proposed work is an exploration permit that is issued by ENDM. SLR is not aware of any other significant factors and risks that may affect access, title, or the right or ability to perform the proposed work program on the Property.

The Ontario Mining Act requires an exploration permit or plans for exploration on Crown lands. The permit and plans are obtained from ENDM. The processing periods are 50 days for a permit and 30 days for a plan while the documents are reviewed by the Ministry and presented to the First Nations communities whose traditional lands will be impacted by the work (Forslund and Laarman, 2017b). Exploration permits are not required to carry out exploration activities on patented claims or on mining licences of occupation.

Social Aspects

The nearest local communities are the village of Kashabowie, located 20 km northeast of the claim groups, and the village of Shebandowan, which has residences around Shebandowan Lake between 20 km and 50 km northeast and east-northeast of the Project site. The nearest Indigenous community is at Lac des Milles Lacs, approximately 50 km northeast of the site. The claims groups lie within the boundaries of the Robinson-Superior Treaty of 1850 area, near its western boundary with Treaty 3 of 1873. The 2013 Technical Report (InnovExplo, 2013) indicated that (at that time) the ENDM had identified five Aboriginal communities with traditional land use areas in Moss Township and the adjacent Burchell Lake area:

Grand Council Treaty 3,
Métis Nation of Ontario,

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Fort William First Nations,
Whitewater Lake First Nation, and
Lac La Croix First Nation.

While Goldshore has not yet initiated formal engagement with these parties, establishing an appropriate working relationship and consultation program will need to be commenced as a priority as part of the future work program in accordance with Ontario legislation and regulations.

Accessibility, Climate, Local Resources, Infrastructure and Physiography

Accessibility

The Moss Lake, Coldstream, and Hamlin claim groups are situated in Moss Township approximately 110 km by road west of Thunder Bay, a few kilometres south of the Trans-Canada Highway (#11).

The Coldstream claim group is accessible via Tertiary Highway 802, a local highway that serves as an access road from Highway 11 northerly to the community of Kashabowie and southwesterly as an access road to the now-abandoned copper mining town of Burchell Lake. Highway 802 is maintained year-round by the province of Ontario and ends at the entrance to the abandoned Burchell Lake Townsite. The former Coldstream Mine, which closed in the mid-1960s and was reclaimed approximately ten years ago (see Section 6.3.1 of the Technical Report) is located a short distance off Highway 802.

The Moss Lake and Hamlin claim groups are accessible via an unpaved road known as Swamp Road, which branches from Highway 11 to the south, 12 km west of Kashabowie, and is part of a network of sporadically used logging roads. The distance from Highway 11 to the Moss Lake property is approximately 15 km in a direct line, and 21 road km. The Swamp Road is not maintained by the province and a four-wheel-drive vehicle is necessary, particularly for the last segment of the drive after reaching Hermia Lake Road.

Climate and Physiography

The Project area is located on the Precambrian Shield and is part of the Pigeon River Ecoregion (4W) of Ontario (Crins et al., 2009). Ecoregion 4W is characterized by a cool and relatively dry climate. Average annual precipitation likely ranges between 700 mm and 800 mm with up to 300 mm of this falling as rain during the summer months. Summers are short and mild while winters are long and cold; the mean annual temperature is expected to range between 0.2°C and 2.7°C.

Bedrock types are dominated by areas of granites with bands of base-rich, ultramafic and greenstone materials. The terrain is irregular and there are numerous lakes. Drainage is toward the southwest into Quetico Provincial Park through a series of stream/creek and lake systems. The elevation of the claim groups ranges from approximately 440 MASL to 490 MASL.

The Precambrian bedrock is generally overlain with thin, coarse ground moraine (till). Vegetation communities consist of a mixture of boreal and Great Lakes-St. Lawrence species. Eastern white pine, white spruce, jack pine, and red pine grow on well-drained sites. Pure or mixed stands of jack pine, trembling aspen, large-tooth aspen, white birch, balsam fir, white spruce, and/or black spruce frequent areas where fires or logging have occurred. Lowland habitats contain black spruce, white spruce, balsam fir, tamarack, and eastern white cedar. Moose, black bears, and snowshoe hares are common wildlife species.

Predominant land uses in the area include forestry and resource-based tourism. The area has a history of mining, notably the now-reclaimed Coldstream Mine that operated for several decades until its closure in

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the mid-1960s (see Section 6.3 of the Technical Report). There are no protected areas within the three claim groups; the nearest are Quetico Provincial Park, located approximately 20 km to the west, and Little Greenwater Lake Provincial Nature Reserve, located approximately 20 km to the east. The Matawin River Provincial Nature Reserve and La Verendrye Provincial Park are located to the southeast, at distances of approximately 40 km and 80 km, respectively.

Local Resources and Infrastructure

There are no permanent inhabitants on the claim groups, and the town of Burchell Lake, which supported the operation of the Coldstream Mine, was abandoned after the mine closed in the mid-1960s. Much of the Property is accessible by road (see Section 5.1 of the Technical Report) due to the development of logging roads over the past several decades.

The nearest settlement is Kashabowie, with a small number of year-round residents and limited services. Atikokan, located near Highway 11 approximately 80 km west of the Project area, is a former mining community with a population of approximately 2,800 and services including a hospital, schools, government and commercial services, and a supply of labour.

Thunder Bay, a 90-minute drive to the east, is the largest city in northwestern Ontario with a population of approximately 120,000. All services required to support a mining operation are available in Thunder Bay. A regional airport provides regularly scheduled commercial flights to Toronto, Winnipeg, and other regional centers. Port facilities are available for most of the year, generally from late March to late December.

Grid power is available along Highway 11 and natural gas is available at Shabaqua Corners, approximately 40 km east of Kashabowie, and in Atikokan. A branch of the CN railway parallels Highway 11 near Kashabowie. There are ample supplies of fresh water for ore processing although stream flows are low during the winter months suggesting that a sizeable fresh-water storage pond will be needed to assure year-round supply.

The 2013 Technical Report (InnovExplo, 2013) identified suitable areas on the Moss Lake claims block for the establishment of the mine and process plant, waste rock and overburden stockpiles, and a tailings storage facility (TSF). Further studies will be needed to optimize the layout of Project infrastructure.

History

Prior Ownership, Exploration, and Development History

The Project is currently owned by Wesdome which acquired the remaining outstanding shares that it did not already own of Moss Lake Gold Mines in 2014 by means of a business combination agreement (Wesdome, 2014). This transaction resulted in Wesdome acquiring a 100% ownership of the Moss Lake claim block containing the Moss Lake Deposit.

In a second transaction with Canoe Mining in 2016, Wesdome acquired the Coldstream and Hamlin claim blocks by issuing shares in Wesdome and providing cash payments (Wesdome, 2016).

Coldstream Claim Block

The exploration history of the Coldstream claim block dates back to the early 1900s when the region was experiencing the initial phases of the prospecting and discovery cycle. A detailed summary of the exploration and development history of the project was provided in Tetratech (2011) and the references contained therein, and is shown in Table 6-1 in the Technical Report.

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The property has a long exploration history that began when copper mineralization was first discovered at what is now known as the Coldstream Mine as a result of prospecting activities. Initial production of approximately 1,300,000 pounds (approximately 600 tonnes) of copper was obtained from the Coldstream Mine during the 1902 to 1917 period by the New York and Canadian Copper Company. Production ceased in 1917 and the property experienced only limited exploration activities through to approximately 1960. Production of copper from the mine was restarted in 1960 by Noranda Ltd. (Noranda), which produced approximately 103 million pounds (approximately 46.8 kt) of copper, approximately 22,000 ounces of gold, and approximately 440,000 ounces of silver from approximately 2.7 million tons of ore.

Limited exploration activities took place on the claim group during the 1967 to 2000 period.

In 2000, Alto acquired the Coldstream property and began to carry out exploration activities that included prospecting, geologic mapping, airborne and ground-based geophysical surveys, and limited diamond drilling programs.

In 2010 and 2011, a large diamond drilling campaign was carried out by Foundation and Alto at the Osmani (East Coldstream) Deposit. The results of this drilling were incorporated in a Mineral Resource estimate and Technical Report in 2011 (Tetratech, 2011).

Moss Lake Gold Mines completed additional geophysical surveying and diamond drilling programs in 2016 and 2017. The geophysical surveys consisted of induced polarization (IP) surveys carried out in the area of the Osmani (East Coldstream) Deposit. The drilling programs were carried out to test selected targets identified by the IP surveys for their potential of hosting gold mineralization and to follow up on interesting results encountered by the drilling completed by Foundation and Alto.

Moss Lake Claim Block

The exploration history of the Moss Lake claim block dates back to the mid-1930s. A detailed summary of the exploration and development history of the project was provided in InnovExplo (2013) and the references contained therein, and is detailed in Table 6-2 in the Technical Report.

The property has a long exploration history that began when gold mineralization was first discovered on the Moss Lake claim block in 1936 as a result of prospecting activities. Through to the mid-1980s, the area was the subject of sporadic exploration activities consisting of various airborne and ground-based geophysical surveys, geological mapping programs, and limited diamond drilling programs aiming to test selected targets for the presence of gold mineralization.

Starting in the mid-1980s, the area received increased exploration activities as a result of increases in the prices of gold. During the mid-1980s to late 1980s, a significant amount of work was carried out on the Moss Lake claim block by a joint venture that was formed between Tandem and Storimin. From 1986 to 1989, the Tandem/Storimin JV completed 204 surface holes totalling 164,743 ft (50,213.6 m) in length. The objective of these drilling campaigns was to define the Main Zone as it was traced along strike and downdip from the original showing. In 1987 and 1988, the JV carried out an underground exploration program via a decline and drifts. The underground development included 2,217 ft (675.7 m) of decline, 183 ft (55.8 m) of cross cuts, and 904 ft (275.5 m) of drifting on the Main Zone. This development reached a vertical depth of 316 ft (96.3 m). The JV drilled 32 underground holes totalling 4,967 ft (1,513.9 m) and carried out extensive muck, face, and back sampling.

In 1987, Tamavack Resources Inc. (Tamavack) and International Maple Leaf Resource Corp. (Maple Leaf) were granted an option to acquire a 100% interest in part of the property. They subsequently carried out various exploration surveys and completed a total of 25,038 ft (7,632 m) of core drilling in 41 drill holes that tested gold targets near Fountain Lake and targets located just south of the Moss Lake Deposit.

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In September 1990, CCL optioned the 42-claim Moss Lake property, and an intensive surface exploration program began in January 1990 following the signing of a letter of intent. Sixty-nine holes totalling 80,399 ft (24,506 m) in length were completed by June 1991, largely on the QES Zone found by Noranda while testing for an east-northeast extension of the Main Zone. In late 1992, an additional seven holes totalling 14,380 ft (4,383.0 m) were drilled at depth on the QES Zone.

Beginning in 2000, Moss Lake Gold Mines carried out exploration activities consisting of airborne and ground-based geophysical surveying, geological mapping, and diamond drilling programs. This work led to the preparation of a Mineral Resource estimate by Watts, Griffis, and McOuat (WGM) in 2010, the results of which are summarized in Risto and Breed (2010).

Moss Lake Gold Mines engaged InnovExplo to complete an updated Mineral Resource estimate and a Preliminary Economic Assessment (PEA) in 2013 (InnovExplo, 2013). The results of the updated Mineral Resource estimate are summarized in Section 6.2.2 of the Technical Report. The scope of the PEA included excavation of the mineralized material by means of open pit mining methods and recovery of the gold using conventional cyanidation processing technologies. The study scope considered all necessary infrastructure items such as power, access roads, worker accommodation camp, shops, administration building, a Tailings Storage Facility (TSF), water treatment plants, and waste rock and overburden storage areas.

Moss Lake Gold Mines completed additional geophysical surveying and diamond drilling programs in 2016 and 2017. The geophysical surveys consisted of IP surveys carried out along the northeastern strike extension of the Moss Lake Deposit (in an area known as the Span Lake area), and the southwestern strike extension (known as the South grid). The drilling programs were carried out to test selected targets identified by the IP surveys for their potential of hosting gold mineralization.

Hamlin Lake Claim Block

Exploration in the Hamlin Lake area has been ongoing since the mid 1950s when the first copper showing was discovered by Ray Smith. Thirty-one claims were optioned to Noranda in 1956, and since then the property has been held by various groups. A summary of the exploration and development history of the project was provided in Clark and Forslund (2014) and the references contained therein, and is summarized in Table 6-3 of the Technical Report.

Historical Resource Estimates

Historical Mineral Resource estimates have been prepared for two mineral deposits that are located on the Moss Lake Project. These include estimates for the mineralized zones found on the Coldstream and Moss Lake claim blocks. Brief summaries of the relevant parameters relating to the Mineral Resource estimates are provided below.

Coldstream Claim Block

A Mineral Resource estimate of the mineralization found at the Osmani Gold Deposit (also referred to as East Coldstream) was prepared for Foundation in 2011 and was disclosed in a Technical Report with an effective date of December 12, 2011 (Tetratech, 2011). The Osmani Deposit is located approximately two kilometers east of the past producing Coldstream Mine and is comprised of two sub-domains (EC-1 and EC-2) (see Figure 6-1 in the Technical Report).

The Mineral Resource estimate was prepared using available drill hole and assay information as at April 5, 2011. Wireframe interpretations were prepared of the mineralization using a threshold grade of 0.2 g/t Au and a minimum horizontal width of two metres. Gold grades were estimated with the Datamine Studio

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software package and using the nearest neighbour (NN), inverse distance squared (ID2), and ordinary kriging (OK) interpolation algorithms. The statement of the Mineral Resources is presented in Table 6-4 of the Technical Report using a cut-off grade of 0.4 g/t Au and the following parameters:

4:1 stripping ratio
operating cost of $15.00/t at 5,000 tpd
gold price of US$1,139/troy oz
US$ to C$ conversion of 1.00
gold recovery of 95%.

This estimate is considered to be historical in nature and should not be relied upon. A QP has not completed sufficient work to classify the historical estimate as a current Mineral Resource. Goldshore is not treating the historical estimates as current Mineral Resources.

Additional work is required to upgrade and verify this historical estimate prior to considering it as a current Mineral Resource estimate. Additional activities can include such items as validation of the historic drill hole data by means of re-surveying selected collar locations to confirm their locations, re-logging and resampling of selected drill core as available, and completion of a small number of new drill holes to confirm the presence and approximate grades of the historical mineralized wireframe interpretations. Additional validation activities can include review and updating of the input parameters used to prepare the mineralization wireframes, updating the input parameters used to prepare the Mineral Resource statement, review and confirmation of the historical metallurgical test work results, and updating of the reporting surface used to prepare the Mineral Resource statements.

Moss Lake Claim Block

A number of historical Mineral Resource estimates have been prepared for the mineralization found at the Moss Lake Deposit. A summary of these estimates has been presented in InnovExplo (2013) and is shown in Table 6-5 in the Technical Report.

These estimates are considered to be historical in nature, are provided for general information purposes only, and should not be relied upon. A QP has not completed sufficient work to classify the historical estimates as current Mineral Resources. Goldshore is not treating the historical estimates as current Mineral Resources.

An NI 43-101 compliant Mineral Resource estimate of the mineralization found at the Moss Lake Deposit was prepared for Moss Lake Gold Mines in 2013 and was disclosed in a Technical Report with an effective date of May 31, 2013 (InnovExplo, 2013) (see Figure 6-2 in the Technical Report).

The Mineral Resource estimate was prepared using 3D block modelling and the ID2 interpolation method for a corridor of the Moss Lake Project with a strike length of 3.2 km and a width of approximately 1.2 km, down to a vertical depth of 750 m below surface. Eighteen mineralized zones have been interpreted in transverse sections spaced 50 ft (approximately 15 m) apart and confirmed/adjusted in plan views spaced 100 ft (approximately 30 m) apart. The Geovia GEMS software package was used to prepare the Mineral Resource estimate from a drill hole database containing a total of 352 drill holes.

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The Mineral Resource statement contains mineralization located within a potential open pit operating scenario as well as mineralization that is located within an underground mining scenario. A pit surface was created as a criterion in preparing the Mineral Resource statement using the following parameters:

Gold Price: US$1,500/oz
Exchange Rate: 1.00 USD : 1.00 CAD
Overall Slope Angle: 50 degrees
Mining Cost (rock): C$2.28/t moved
Mining Recovery: 95%
Mining Dilution: 5%
Processing Cost: C$9.55/t milled
Mill Recovery: 80% to 85%

The underground Mineral Resources were estimated using different gold cut-off grades and a minimum width of 5.0 m (true width). The selected underground cut-off grade of 2.0 g/t Au allowed the mineral potential of the deposit to be outlined for the underground mining option, outside the Whittle-optimized pit shell.

The historical Mineral Resources are summarized in Table 6-6 in the Technical Report.

Hamlin Claim Block

No historical Mineral Resource estimates have been prepared for the mineralization that has been discovered at the Hamlin Lake deposit.

Past Production

Coldstream Claim Block

Copper was discovered at the site during the 1870s. Between 1902 and 1917 the site was mined intermittently by the New York and Canadian Copper Company operating under the name of the Tip-Top

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Mine, producing approximately 1.3 million lbs of copper (ENDM, 2019). The mine was operated intermittently from 1957 until 1959 and continuously from 1960 to 1967 by Canadian mining company Noranda. Production ceased in 1967 when reserves were depleted and the mine was closed permanently. ProMin (2002) reported that 102 million pounds of copper, 440,000 ounces of silver, and 22,000 ounces of gold were produced from a total of 2.7 million tons of ore mined.

The mine and adjacent town of Burchell Lake were abandoned when mine operations ceased. Then-owner Conwest undertook rehabilitation work in the mid-1990s in response to an order from the Ontario Mining and Lands Commissioner. This included the removal of most surface infrastructure including the headframe and mill buildings. Subsequent owner EWL Management Ltd., a subsidiary of Encana Corporation, has undertaken additional reclamation work since 2005, mainly to address acid rock drainage (ARD) from tailings that had been deposited outside the main tailings management area (TMA) and to seal mine openings. These tailings are referred to as the orphan tailings.

In 2011, EWL excavated the orphan tailings and put them into the tailings relocation area (TRA) that sits on top of and within the TMA. The relocated tailings were covered with an engineered soil structure to minimize ARD. A few residual concerns by the Ontario Ministry of Environment (MOE) required further site investigations into 2013. According to EWL, MNDM concluded after a 2017 site inspection that the site no longer presents an environmental risk due to ARD (EWL 2017).

Work on mine openings continued into 2018 (EWL, 2018). It is unclear whether MNDM has confirmed that this rehabilitation work conforms with their requirements.

The concrete foundation of the mill buildings is now used for exploration drill core storage.

SLR visited the Coldstream site in February 2021. SLR did not visit the adjacent townsite of Burchell Lake, where little or no rehabilitation work has apparently been undertaken since the town was abandoned in the 1960s.

Based on the site visit and review of available documentation, SLR believes that the Coldstream site is substantially reclaimed and that additional liabilities, which SLR understands to be the responsibility of EWL, are minimal. SLR recommends that an additional site inspection be undertaken during the summer months, including the TMA and Burchell Lake townsite, to confirm this.

Moss Lake Claim Block

There has been no record of any production from the Moss Lake claim block.

Hamlin Lake Claim Block

There has been no record of any production from the Hamlin Lake claim block.

Geology Setting

Regional Geology

The Moss Lake Property is located in the central portion of the Shebandowan Greenstone Belt, within the Wawa-Abitibi Terrane of the Superior Province (see Figure 7-1 in the Technical Report). The Shebandowan Greenstone Belt is comprised of three assemblages that are distinguished by their age. These are the Greenwater-Burchell assemblage, the Kashabowie assemblage, and the Auto Road assemblage (Corfu and Stott, 1998). The Greenwater-Burchell assemblage is dated at 2,720 Ma and is composed of volcanic cycles represented by tholeiitic basalt and an upper sequence of calc-alkaline intermediate to felsic volcanic rocks.

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The Kashabowie assemblage is represented by Timiskaming type (2,695Ma; Corfu and Stott, 1998) calcalkalic to alkalic, mafic to felsic volcanic rocks and clastic sedimentary rocks.

The Auto Road assemblage has not been dated, but is comprised of a small sedimentary basin that stratigraphically overlies the Kashabowie assemblage in the northeast part of the greenstone belt (Clark and Forslund, 2014).

The supracrustal rocks within the western Shebandowan Greenstone Belt are intruded by syn- to post tectonic composite plutons (e.g., Moss Lake, Burchell Lake, Hermia Lake, and Hood Lake), and intermediate to felsic hypabyssal intrusive rocks (quartz and quartz-feldspar porphyry sills/dikes).

There are three major regional trends of shearing/faulting within the western Shebandowan Greenstone Belt:

east-northeast
northwest
north to northeast

The east-northeast trending shear/fault zones, generally displaying sinistral sense of strike-slip movement, have been linked to the gold mineralization event or events in the western Shebandowan Greenstone Belt. These shear zones are characterized by strongly developed D2 schistosity and gently to moderately eastplunging lineations superimposed upon rarely preserved D1 tectonic fabrics.

The two most economically significant D2 shears and associated splays hosting gold mineralization in the Property area are:

the east to northeast striking North Coldstream Shear Zone
the northeast-southwest striking Span-Moss Shear Zone

The Span-Moss Shear Zone is considered to be the southwest extension of the North Coldstream Shear Zone, which is offset by the Burchell Lake Fault along the eastern shores of Burchell Lake (Tetratech, 2011).

Local Geology

Coldstream Claim Block

The following is excerpted from Tetratech (2011).

Mafic, intermediate and felsic metavolcanic rocks underlie the Coldstream Claim Block, which have been intruded concordantly by numerous sills and dikes of gabbro, diorite, quartz, and quartz-feldspar porphyries (see Figure 7-2 in the Technical Report). The mafic metavolcanic rocks predominantly consist of pillowed and massive flows with minor tuff horizons. The intermediate metavolcanics are chiefly composed of tuff, lapilli tuff, and minor massive flows. These rocks occur as discontinuous lenses, measuring a few metres wide and several hundred metres in strike length. The felsic metavolcanics are rare in the Osmani Gold Deposit area but are relatively abundant north of North Coldstream Mine and Lacombe Lake. These rocks consist of massive, aphyric to porphyritic flows and fragmental rocks consisting of tuff, lapilli tuff, auto-breccias, and derived schists. All lithologies except the syenite and diabase dikes are cut by numerous east-northeast striking, ductile to brittle shear zones. Of these, the most prominent structure is the North Coldstream Shear Zone system, extending from the northeastern end of

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the property for approximately 4.2 km to the west-southwest in the North Coldstream Mine area. The North Coldstream Shear Zone is offset immediately west of the North Coldstream Mine, in a sinistral sense of horizontal movement, by the Burchell Lake Fault. The offset portion of the North Coldstream Shear Zone is interpreted as the Span-Moss Shear Zone system for several kilometres passing beyond Pearce Lake in south-central Moss Township.

Near the western end of the Burchell East Block, the former North Coldstream Copper-Gold Mine, hosted within an intensely silicified (cherty) gabbro sill-like body, lies along the sheared and altered contact between mafic and felsic metavolcanic rocks (Osmani 1997). The gabbro body is the footwall to the complex. Foliation/schistosity fabrics at the mine site trend east but swing northeast, aligning itself with the regional deformation trend, approximately one kilometre east of the mine.

Moss Lake Claim Block

The following is excerpted from InnovExplo (2013).

A considerable portion of the Moss Lake property is underlain by intermediate to felsic volcaniclastic rocks of the northeast trending, fault bounded central intermediate to felsic metavolcanic belt (CFB) (Osmani, 1997). The CFB is buttressed by two large syenitic intrusions, the Moss Lake Stock and Hood Lake Stock respectively to the northwest and southeast. The width of the CFB in the Snodgrass Lake area is approximately 2.5 km to 3.0 km (see Figure 7-3 in the Technical Report).

The CFB consists mainly of aphanitic to fine grained massive or porphyritic (plagioclase ±quartz) flows and associated autoclastic breccias ranging from 60.2% SiO2 to 69.9% SiO2 (intermediate to felsic composition). The pyroclastic rocks, including tuff and pyroclastic breccias, tuff and lapilli tuff, are abundant to the east-southeast of Pearce Lake, to the west-southwest of Fountain Lake, and in the Snodgrass Lake area. The entire package of rocks is bounded by the Burchell Lake Fault along the south contact and the Snodgrass Lake Fault along the north contact and is dissected by numerous sub-parallel splay faults and crosscutting transcurrent faults.

Thin interbeds of mafic volcanics occur locally throughout the CFB sequence, as noted in outcrop and drill logs. A continuous unit of mafic volcanics, the southern mafic metavolcanic belt (SMB), occurs on the southern contact of the CFB to the south and southwest of Fountain Lake, between the intermediate volcaniclastic package and the Hood Lake Stock to the south. A thicker sequence of mafic metavolcanics, the northern mafic metavolcanic belt (NMB), contains abundant banded iron formations and cherty interflow sediments, which host the Ardeen mine horizon, and is in fault-bounded contact to the north of the CFB. Stratigraphic top indicators from pillowed mafic flows indicate a northward younging direction for the sequence.

Projections from drill logs in the Boundary Zone and Moss Lake Deposit areas demonstrate that the CFB stratigraphy is vertical to steeply southeast dipping and possibly overturned. Most volcanic rocks on the property are strongly foliated, sheared, and faulted in a northeasterly direction. The foliation is steep, varying from vertical to steeply dipping to the north or south. Foliation strike directions are generally subparallel to stratigraphy but also appear to delineate small-scale folds and other such features near the boundaries of the Moss Lake Stock. Hunt (2000) has noted evidence of sub-horizontal southwest plunging lineations (10° to 30° on the flanks of outcrop).

Minor mafic to intermediate intrusions are common throughout the property, but especially in a swarmlike zone extending from west of Snodgrass Lake in a northeast direction to Span Lake. These sheet- or silllike intrusions vary in composition from diorite to syenite to quartz-feldspar porphyry. The intrusions appear as late features cutting across stratigraphic and fault boundaries and are probably related to the emplacement of the Moss Lake Stock (Osmani, 1997). Significant gold mineralization in the area is almost

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always closely spatially related to, or hosted by, these predominantly mafic to intermediate intrusions. Alteration within the CFB is moderately strong and pervasive. Silicification, carbonatization (calcite and ankerite), chloritization, hematization, sericitization, albitization, sulphidation (pyrite), and potassic alteration are commonly noted in outcrop and drill core. The intensity of alteration combined with the degree of foliation and local-scale shearing on the property has made protolith recognition difficult, as demonstrated by contrasting drill core and outcrop descriptions noted in the historical records.

Two northeast trending regional fault structures cross the property from northeast to southwest: the Wawiag Fault Zone, which hosts the Moss Lake Deposit, and the Boundary Fault Zone, located approximately 125 m southeast of the deposit. Much of the bedrock in these fault zones is covered by swamp of the Wawiag River valley. This package may in fact be a deformation zone up to 450 m wide containing numerous minor faults and shear zones. Strong gold mineralization has been identified within individual shear structures in or closely associated with these fault zones.

The second regional structure is the Knife Lake Fault, 2.5 km to the southeast, which has been traced over a strike length of at least 60 km. It crosses the property through Fountain Lake. The Knife Lake Fault defines the boundary between felsic metavolcanics to the northwest and intermediate to mafic metavolcanics to the southeast. The past-producing North Coldstream base metal mine lies on this fault, approximately five kilometres to the northeast.

Between the two major fault structures, numerous schistose zones and minor faults parallel to the regional trend were observed. Both brittle and ductile deformation has been recognized in areas of strong shearing and alteration. No evidence of folding was observed on the property, although the entire metavolcanic sequence has previously been interpreted as a large-scale regional antiform.

Hamlin Lake Claim Block

The following is excerpted from Clark and Forslund (2014).

The following descriptions are taken from mapping projects that have been completed by the Ontario Geological Survey in the area. The area hosts a wide array of rock types ranging from calc-alkalic to shoshonitic felsic to intermediate volcanic rocks with textures ranging from massive to porphyritic, volcaniclastic rocks dominated by tuffaceous rocks, debris flows, iron formation, as well as intrusive rocks ranging from felsic to mafic in composition (see Figure 7-4 in the Technical Report).

Volcanogenic units ranging from felsic to mafic with a variety of volcanic textures have been mapped on the property. Units that were mapped by Shute (2009) include massive to porphyritic to tuffaceous rhyolite to dacite and andesite. Several outcrops of felsic debris flow were also mapped. Rhyolites were observed and ranged from massive porphyritic flows to rhyolitic tuff. Dacite is rare, but where observed, it often exhibits a banded texture. Andesites are present, but cannot be distinguished from rhyolites on field observations alone; however, they are geochemically distinct (Shute, 2009). Mafic volcanic rocks have been mapped on the Deaty’s Creek side of the Property and are typically massive fine grained units, often altered by silicification or chloritization.

Detailed studies on the intrusive rocks near Hamlin Lake do not exist; however, these units have been broadly mapped across the property. Outcrops of the Powell Lake granite on the north shore of Hamlin Lake have been described as pink in colour with equigranular grains of plagioclase and quartz. Smaller outcrops of gabbro have been traced from Hamlin Lake to as far as east of Deaty’s Creek. The gabbro is usually heavily altered to chlorite-biotite-epidote, but faint ophitic textures are usually preserved.

Mineralization

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Coldstream Claim Block

The Osmani Gold Deposit is located within the north-central part of the Burchell East Block and comprises two zones, the EC-1 and EC-2 zones. Gold mineralization is associated with intensely altered volcanic rocks, quartz and quartz- feldspar porphyry dikes and sills, which lie along the North Coldstream Shear zone. The dikes are variably sheared and intensely altered, often mineralized with pyrite and locally magnetite. Major alteration associated with this gold zone includes silica, carbonate, albite, sericite, potassium, and hematite (Tetratech, 2011).

The gold mineralization at the Osmani Deposit has been traced by drill hole information along a strike length of approximately 1,300 m and from surface to a depth of approximately 500 m.

A sample cross section is presented in Figure 7-5 in the Technical Report. The location of the cross section is provided in Section 10.

Moss Lake Claim Block

Gold mineralization at the Moss Lake Deposit, between Snodgrass Lake and Span Lake, occurs in sheared intermediate to felsic metavolcanic rocks and in sheared and fractured diorite to gabbro or feldspar and quartz-feldspar porphyry bodies emplaced within intermediate to felsic metavolcanic rocks of the CFB. Gold mineralization in the Snodgrass Lake area has been described in detail by Chorlton (1987) and Harris (1970). At the Moss Lake Deposit, the diorite to gabbro bodies, the quartz-feldspar and feldspar porphyries, and the felsic metavolcanics are all cut by the Snodgrass Shear Zone, a steeply dipping ductile shear zone up to 4.5 m wide and striking northeast (N040°) to east-northeast (N060°-N075°).

Other anomalous gold values were also obtained from fractured diorite, sheared feldspar porphyry, and a moderately deformed, pink-weathering quartz-amphibole porphyritic intrusion. This relatively late porphyry dike or sill intrudes the diorite and felsic schist. In hand specimen, the quartz-amphibole porphyritic intrusion is said to show a strong resemblance to the syenogranitic rocks of the Moss Lake Stock, suggesting both may be related to the same magmatic event.

Similar lithologic packages, structures, and alteration also occur with gold mineralization in the northeast extensions of the Moss Lake Deposit (Span Lake area). Gold also occurs in similar lithologic packages along the northeast striking Boundary Fault Zone southeast of Snodgrass Lake. This shear zone, which marked the approximate boundary between the former Tandem/Storimin and Tamavack/Maple Leaf properties, extends northeastward from the eastern shore of Snodgrass Lake and passes through Span Lake up to Burchell Lake.

In the Pearce Lake area, several northeast- to east-northeast trending shear zones appear to play an important role in localizing gold mineralization (InnovExplo, 2013).

To date, the gold mineralization at the Moss Lake Deposit has been traced by historical drill hole information along a strike length of approximately 2,400 m and from surface to a nominal depth of approximately 300 m to 400 m. The limits of the gold mineralization along the strike extensions and to depth have not been fully evaluated by drill hole information. Example cross sections of the mineralization encountered in the historical drill holes completed to date is provided in Figures 7-6 and 7-7. The locations of these cross sections are provided in Section 10 of the Technical Report.

Hamlin Lake Claim Block

The bulk of known mineralization on the Hamlin Lake property is found on the north shore of Hamlin Lake. A thorough description of the mineralization at Hamlin Lake can be found in Forslund (2012).

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Mineralization is hosted in a polymictic breccia. The breccia encompasses a large area on the north shore of Hamlin Lake. It has been traced approximately 1.2 km in length striking to the northeast. The brecciated body is up to 200 m wide and has been traced to approximately 350 m vertical depth. The contacts with the surrounding volcanic rocks and intrusions are gradual and have not been detected on surface. The breccia is sub-vertical or steeply dipping to the north, with no apparent plunge.

Economic mineralization within the breccia consists of pyrite-chalcopyrite-magnetite with minor amounts of molybdenite, scheelite, and gold and silver tellurides. Mineralization is concentrated in the breccia matrix, and is contemporaneous with brecciation. In 2006, East West Resource Corporation had a sample of molybdenite analyzed for a Re-Os age date, and this returned an age of 2692 ±12 Ma (Clark and Forslund, 2014).

Exploration

Goldshore has not carried out any exploration activities on the Moss Lake Project.

A great deal of exploration activities comprising geological, geophysical, and geochemical surveys have been completed on the Project by previous explorers of the Property. These activities have been summarized in Section 6 iofn the Technical Report. Some of the results from these exploration activities have been placed into the public domain and are available for viewing from the Assessment Work database maintained by the ENDM on the Geology Ontario website at http://www.geologyontario.mndm.gov.on.ca/index.html.

The information relating to these previous exploration activities is generally available for viewing in PDF format only and the source digital data for such items as geophysical surveys are generally not available from this website. The only digital geophysical data available to Goldshore is that which was collected from the IP survey completed by Moss Lake Gold Mines in 2016-2017.

SLR agrees with Goldshore’s opinion that completion of a detailed helicopter-based Versatile Time Domain Electromagnetic (VTEM) and magnetic survey on the Project is warranted. The results of these surveys will be useful in understanding the detailed geological and structural features of the Property and will aid in the selection of drilling targets.

SLR recommends that a detailed topographic survey be carried out concurrently with the geophysical survey. This topographic information will be useful in subsequent Project planning activities.

Mineralization

The styles of mineralization at the various deposits present on the Moss Lake Project to date are considered to fall into three main categories. The mineralization observed at the Osmani and the Moss Lake deposits is considered to be exemplary of Archean-aged mesothermal gold deposits. The mineralization observed at the Hamlin Deposit is most recently considered to be analogous to an IOCG style of mineralization. Previous explorers considered that the mineralization observed at the Hamlin Deposit represented a Volcanic-Associated Massive Sulphide (VMS) style of mineralization.

Archean-aged Mesothermal Gold Deposits

The following general description of Archean-aged mesothermal gold deposits has been presented in Dubé and Gosselin (2007).

Greenstone hosted quartz-carbonate vein deposits typically occur in deformed greenstone belts of all ages, especially those with variolitic tholeiitic basalts and ultramafic komatiitic flows intruded by intermediate

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to felsic porphyry intrusions, and sometimes with swarms of albitite or lamprophyre dike (Figure 8-1). They are distributed along major compressional to trans-tensional crustal-scale fault zones in deformed greenstone terranes commonly marking the convergent margins between major lithological boundaries, such as volcano-plutonic and sedimentary domains. The large greenstone hosted quartz-carbonate vein deposits are commonly spatially associated with fluvio-alluvial conglomerate (e.g., Timiskaming conglomerate) distributed along major crustal fault zones (e.g., Destor Porcupine Fault). This association suggests an empirical time and space relationship between large-scale deposits and regional unconformities.

These types of deposits are most abundant and significant, in terms of total gold content, in Archean terranes, however, a significant number of world-class deposits are also found in Proterozoic and Paleozoic terranes. In Canada, they represent the main source of gold and are mainly located in the Archean greenstone belts of the Superior and Slave provinces. They also occur in the Paleozoic greenstone terranes of the Appalachian orogen and in the oceanic terranes of the Cordillera.

The greenstone hosted quartz-carbonate vein deposits correspond to structurally controlled complex epigenetic deposits characterized by simple to complex networks of gold bearing, laminated quartzcarbonate fault-fill veins. These veins are hosted by moderately to steeply dipping, compressional brittleductile shear zones and faults with locally associated shallow dipping extensional veins and hydrothermal breccias. The deposits are hosted by greenschist to locally amphibolite facies metamorphic rocks of dominantly mafic composition and formed at intermediate depth (5 km to 10 km). The mineralization is syn- to late-deformation and typically post-peak greenschist facies or syn-peak amphibolite facies metamorphism. The deposits are typically associated with iron-carbonate alteration. Gold is largely confined to the quartz-carbonate vein network but may also be present in significant amounts within iron rich sulphidized wall-rock selvages or within silicified and arsenopyrite rich replacement zones.

There is a general consensus that the greenstone hosted quartz-carbonate vein deposits are related to metamorphic fluids from accretionary processes and generated by prograde metamorphism and thermal re-equilibration of subducted volcano-sedimentary terranes. The deep seated, gold transporting metamorphic fluid has been channelled to higher crustal levels through major crustal faults or deformation zones. Along its pathway, the fluid has dissolved various components - notably gold - from the volcanosedimentary packages, including a potential gold rich precursor. The fluid then precipitated as vein material or wall-rock replacement in second and third order structures at higher crustal levels through fluid-pressure cycling processes and temperature, pH, and other physio-chemical variations.

Iron Oxide Copper Gold Deposits

The following is excerpted from Clark and Forslund (2014).

Many similarities between the iron oxide copper gold (IOCG) deposits and occurrences located since the early 1990’s and the Hamlin Lake mineralization have been noted. Studies by Bennett (2007) and Forslund (2012) highlight some of these similarities, which has focused the exploration of the area on the IOCG model. Alteration in and around the breccia host rock is very similar to that which is seen in many IOCG deposits in South America. With the variation between proximal and distal alteration styles, the IOCG model provides an excellent starting point from which known mineralization can be expanded and new prospective areas can be discovered.

IOCG deposits exhibit an extreme diversity of deposit styles, including age, host rocks, mineralogy, geochemical signatures and even geologic setting (Williams et al., 2005). Despite such a broad definition, some common characteristics between IOCG deposits still make them worthy of their own classification. As the name implies the most notable feature that is common to these deposits is the association of iron

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oxides with copper and gold mineralization. Other elements that are commonly enriched in these deposits include Ag, U, Ba, F and light rare earth elements (LREE).

Other common features include a strong spatial and temporal relationship with regional I-type to A-type granitic suites, and proximity to crustal scale faults or shear zones (Williams et al., 2005). Respectively, these are responsible for driving and channeling the fluids involved, and they produce extensive alteration signatures, brecciation, and ore systems. Some deposits might even be in direct contact or even partly hosted by the intrusions, but this is not encountered in all cases as it is in some other types of hydrothermal ore deposits (e.g., porphyry and skarn type deposits). In rare cases syn-mineralization intrusive suites have not been noted, and it is thought that fluid flow may have been triggered by magmatic events in the mantle or lower crust. For this reason the exposure of coeval, regional scale intrusive bodies is not regarded as an essential characteristic for IOCG deposits.

Alteration at IOCG deposits may appear highly variable from deposit to deposit; however, some general similarities can be observed when deposits are compared in both space (through mapping, drilling, etc.) and through time (paragenetic studies). There are two subclasses of IOCG deposits recognized based on the dominant Fe-oxide species present. Hamlin Lake falls into the magnetite dominant class, which are thought to form in deeper crustal environments and at higher temperatures than the hematite dominant classes (Williams, 2010). The alteration seen in the magnetite class of IOCG deposits can be zoned with respect to fluid pathways and heat sources, but these types of hydrothermal systems are often complex and display styles of alteration that overprint one another depending on the paragenetic history of the deposit. Figure 8-2 in the Technical Report shows how alteration can be used as a vector to find mineralization.

Regional sodic to calcic halos are the most widespread style of alteration in an IOCG district, and these can extend 10’s to 100’s of kilometers around an IOCG system. This alteration style can be observed in the form of pervasive albitization that often gives the rocks a pinkish hue. It is thought to form early in the history of mineralization in moderate to high temperature environments (Oliver et al., 2004). Figure 8-3 in the Technical Report is a cartoon illustrating where sodic-calcic alteration can develop from a genetic sense. As IOCG systems retrogress, the fluids concentrate to more localized regions (often along fault zones, or breccias) and the alteration transitions to calcic and iron enrichment. This is the stage where iron oxides (usually magnetite) begin to form with calcium silicates (pyroxenes, amphiboles and epidote). Many hydrothermal systems cease at this point, and result in mineralization rich in Fe, but poor in base metals. The systems that are active through this stage evolve into the polymetallic magnetite rich IOCG deposits found around the world (e.g. the Cloncurry district in Australia, Williams and Skirrow, 2000). These types of deposits have Cu and Au mineralization associated with potassium silicates (K-feldspar, biotite, sericite), but this usually overprints the earlier stages of iron oxide alteration.

IOCG systems can continue to evolve into even more complex systems. When the systems remain active into relatively shallow and cooler environments, they begin to overlap with, and transition to epithermal and porphyry systems (Mumin et al., 2010). Stockworks of quartz veins can overprint early generations of breccias and are clues that the IOCG system evolved to such an environment. At such low temperatures, hematite often becomes stable; however, its presence is also reliant on an oxygen rich fluid.

Volcanic-Associated Massive Sulphide Deposits

In Canada, VMS deposits are commonly found in Precambrian volcano-sedimentary greenstone belts (2,730 Ma – 2,650 Ma) in extensional arc environments such as a right or caldera. VMS deposits are synvolcanic accumulations of sulphide mineral that occur in geological domains characterized by submarine volcanic rocks. The associated volcanic rocks are commonly relatively primitive (tholeiitic to transitional in composition), bimodal, and submarine in origin (Galley et al., 2005). The spatial relationship of VMS deposits to syn-volcanic faults, rhyolite domes, or paleo-topographic depressions, caldera rims, or

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subvolcanic intrusions suggests that the deposits were closely related to particular and coincident hydrologic, topographic, and geothermal features on the ocean floor (Lydon, 1990).

VMS sulphides are exhalative deposits, formed through the focussed discharge of hot, metal rich hydrothermal fluids. In many cases, it can be demonstrated that the sub-seafloor fluid convection system was apparently driven by a large, 15 km to 25 km long, mafic to composite, high level subvolcanic intrusion. The distribution of syn-volcanic faults relative to the underlying intrusion determines the size and areal morphology of the camp alteration system and ultimately the size and distribution of the VMS deposit cluster. These fault systems, which act as conduits for volcanic feeder systems and hydrothermal fluids, may remain active through several cycles of volcanic and hydrothermal activity. These can result in several periods of VMS formation at different stratigraphic levels (Galley et al., 2005).

The idealized, un-deformed and un-metamorphosed Archean VMS deposit typically consists of a concordant lens of massive sulphides, composed of 60% or more sulphide minerals (Sangster and Scott, 1976). In the Matagami case, the massive sulphide lens dominantly consists of an assemblage of pyritepyrrhotite, sphalerite-chalcopyrite-magnetite that is stratigraphically underlain by a discordant stockwork or stringer zone of vein-type sulphide mineralization (pyrite-pyrrhotite-chalcopyrite-magnetite) contained in a pipe of hydrothermally altered rock. The upper contact of the massive sulphide lens with hanging wall rocks is usually extremely sharp while the lower contact is gradational into the stringer zone. A single deposit or mine may consist of several individual massive sulphide lenses and their underlying stockwork zones. It is thought that the stockwork zone represents the near-surface channel ways of a submarine hydrothermal system and the massive sulphide lens represents the accumulation of sulphides precipitated from the hydrothermal solutions on the sea floor above and around the discharge vent (Lydon, 1990).

The morphology of a single massive sulphide lens can vary from a steep-sided cone to that of a tabular sheet. The majority of cone-shaped deposits appear to have accumulated on the top or flanks of a positive topographic feature, such as a rhyolite dome, whereas the majority of sheet-like deposits appear to have accumulated in topographic depressions (Lydon, 1990). Judging from examples in un-deformed areas, the original form of massive sulphide bodies was probably roughly circular or oval in plan, with dimensions parallel to bedding being several times greater than thickness (Sangster, 1972).

Archean VMS deposits are typically grouped according to their Cu-Zn or Zn-Cu content, and usually have modest gold and/or silver values and little or no lead content. Sangster (1977) determined that for Canadian Archean VMS deposits the most likely combined grade is approximately 6%, roughly in the ratio of 4:1:1 for Zn:Cu:Pb. Most Canadian VMS deposits are characterized by discordant stockwork vein systems or pipes that, unless transposed by structure, commonly underlie the massive sulphide lenses, but may also be present in the immediate stratigraphic hanging wall strata. These pipes, comprised of inner chlorite cores surrounded by an outer zone of sericitization, occur at the centre of more extensive, discordant alteration zones. The alteration zones and pipe systems may extend vertically below a deposit for several hundred metres or may continue above the deposit for tens to hundreds of metres as a discordant alteration zone (e.g., the Ansil deposit, Noranda, Québec). In some cases, the proximal alteration zone and attendant stockwork/pipe vein mineralization connects a series of stacked massive sulphide lenses (e.g., the Amulet deposit, Noranda, Québec, and the LaRonde deposit, Cadillac, Québec), representing synchronous and/or sequential phases of mineralization process during successive breaks in volcanic activity (Galley, 2005, see Figure 8-4 in the Technical Report).

Drilling

No drilling activities have been carried out by Goldshore on the Moss Lake Project. All drill hole information currently available has been collected by previous explorers of the Property. Goldshore has been carrying out compilation activities to collate and integrate all available results from previous exploration programs carried out on the Project. These compilation activities have included a combined

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total of 603 drill holes totalling approximately 164,800 m in length that are located on the Coldstream, Moss Lake, and Hamlin Lake claim blocks (see Table 10-1 and Figure 10-1 in the Technical Report). A summary of the more recent drilling programs carried out for each of the three claim blocks is provided below.

Coldstream Claim Block

2010 Drilling Program

Two drilling phases were completed by Foundation and Alto at the Osmani Gold Deposit from February 8 to March 18, 2010 and from May 28 to October 9, 2010 to begin in-filling gaps between the widely spaced historic drill holes (Tetratech 2011). A total of 36 diamond drill holes were completed on the Osmani Gold Deposit (EC-1 and EC-2 zones), totalling 9,725 m in length. The drilling work was performed by Bodnar Drilling Ltd. of Ste. Rose Du Lac, Manitoba using conventional wireline drilling equipment to produce NQ sized (47.6 mm) drill core. While no information is available regarding the core recoveries experienced during these drilling programs, core recoveries in the region have historically been very good.

Downhole surveys were conducted from approximately 15 m below casing and at 50 m intervals thereafter by means of a digital Ranger multi-shot instrument. Drill hole positions were located using a standard handheld global positioning system (GPS) device with an accuracy of approximately 5 m. The work associated with the drilling programs was completed by a field crew consisting of a project geologist, two core logging geologists, and two geo-technicians from Coast Mountain Geological Ltd. (Coast Mountain) of Vancouver, British Columbia.

All holes intersected anomalous to highly anomalous gold mineralization, within and beyond the previously defined zones of the Osmani Gold Deposit, confirming gold continuity at approximately 50 m pierce point spacing. All holes drilled with the intention of testing the down-plunge extension of each zone within the Osmani Gold Deposit returned encouraging results. These results included:

4.88 g/t Au over 27.28 m in hole C-10-15 (EC-1 zone)
1.12 g/t Au over 111.30 m in hole C-10-16 (EC-1 zone)
3.06 g/t Au over 13 m in hole C-10-25 (EC-2 zone)
1.84 g/t Au over 34.80 m in hole C-10-32 (EC-2 zone)
2.10 g/t Au over 35.65 m in hole C-10-39 (EC-1 zone)
1.01 g/t Au over 49.90 m in hole C-10-49 (EC-1 zone)

SLR notes that the intervals represent downhole core lengths and not true widths.

Foundation also tested the eastern extent of the EC-1 zone with four drill holes, to investigate an area of mineralization that had not been included in the historical resource estimation. These holes intersected highly anomalous gold values over variable core lengths, including results of 1.67 g/t Au over 27.46 m (C10-22) and 1.06 g/t Au over 27.35 m (C-10-38).

2011 Drilling Program

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A two-phase drill program was conducted by Foundation and Alto on the Property from January 28 to March 6, 2011 and again from June 21 to August 25, 2011 (Tetratech, 2011). A total of 30 diamond drill holes were completed on the Osmani Gold Deposit (EC-1 and EC-2 zones), totalling 7,263 m in length. The drilling work was performed by More Core Diamond Drilling Services Ltd. and Cobra Drilling of Stewart, British Columbia and Thunder Bay, Ontario, respectively, using standard wireline core drilling equipment. While no information is available regarding the core recoveries experienced during these drilling programs, core recoveries in the region have historically been very good.

Downhole surveys were conducted from approximately 15 m below casing and at 50 m intervals hereinafter by means of a digital Reflex multi-shot instrument. Drill hole positions were located using a standard handheld GPS device with an accuracy of approximately 5 m. The work associated with the drilling program was completed by a field crew consisting of a project geologist, two core logging geologists, and two geo-technicians from Coast Mountain.

This two-phase drill program was completed to extend the lateral and down-plunge gold continuity of the anomalous Osmani Gold Deposit and to delineate a resource. Under the 2011 drilling program, thirty holes (C-11-52 through C-11-84) totalling 7,263 m in length were drilled into the EC-1 and EC-2 zones of the Osmani Gold Deposit as well as geophysical anomalies in the area.

Several of these holes intersected anomalous to highly anomalous gold mineralization beyond the previously defined zones of the Osmani Gold Deposit suggesting that these zone could remain open both at depth and along strike. These results included:

1.10 g/t Au over 38.25 m in hole C-11-66 (EC-2 zone)
1.06 g/t Au over 16 m in hole C-11-62 (EC-1 zone)
1.04 g/t Au over 23 m in hole C-11-62 (EC-2 zone)

2017 Drilling Program

A total of nine drill holes totalling 5,101.95 m in length were completed to target the North Coldstream Zone by Moss Lake Gold Mines. Targets were selected eastward along strike of the known mineralization at the North Coldstream underground mine workings. A total of 22 drill holes totalling 5,615 m in length were completed on the East Coldstream Zone (Osmani Deposit). The targets were selected to the southwest of the East Coldstream Zone (Osmani Deposit) with the goal of extending the footprint of known mineralization (Forslund and Laarman, 2017a).

The drilling was completed by drilling contractor Niigaani Drilling based in Thunder Bay, Ontario using two core drilling rigs equipped with conventional wireline equipment to produce NQ sized (47.6 mm) drill core. Core recoveries were generally very good throughout the entire length of the drill holes.

Drill holes were positioned and oriented by chaining from previous casings along cut lines of the established grid or by GPS and compass where there was no grid. Upon completion of each hole, the casing location was recorded using a handheld GPS in UTM projection NAD 83 for Zone 15. Handheld GPS units typically have a nominal horizontal accuracy on the order of several metres. The vertical accuracy is typically not as precise. All casings were left in the holes, the holes capped, and pickets placed to mark their locations in the field.

The contractor set the diamond drill onto the drill site and aligned it under the direction of supervising drill geologist using front and back sights emplaced prior to start of drilling. Drill core was placed by the drillers into wooden core boxes with lids affixed to them prior to being transported by pickup truck to the

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core shack. Once at the core shack, the boxes were loaded on to racks for examination and subsequent core logging by the drill geologist.

The orientation of all drill holes were surveyed within ten metres past the end of the casing using a Reflex Instruments EZ-Shot downhole survey instrument to ensure the departing hole orientation and inclination were correct. Measurements were taken of the drill hole azimuth and dip on a regular basis at 50 m intervals, beginning at a depth of 50 m. A measurement of the drill hole orientation was also taken at the end of each drill hole.

The locations of the available historical drill holes completed at the Osmani Gold Deposit are shown in Figure 10-2 in the Technical Report.

Core Logging and Sampling Procedures

2010 and 2011 Drilling Programs (Foundation and Alto)

Core was delivered by the drillers to the secure logging facility on a daily basis. Box intervals were converted from imperial to metric units and rounded to the nearest 5 cm. Scratch tags were stapled onto the end of the core boxes stating hole-id, box number, and the interval contained in the box in metres.

Geo-technicians fit the core together to the best of their ability so that the recovery and rock quality designation (RQD) could be determined. Recovery was calculated by measuring the recovered core length divided by the true length. RQD was based on the total length of core greater than twice the diameter within an interval divided by the length of the interval. Driller’s breaks were discounted. Any issues with core fit, blocks, or recovery were brought to the project geologist’s attention.

Sample intervals were determined by lithology, mineralization, and alteration. Samples did not cross lithological breaks unless a unit was less than 0.5 m wide. Within lithological units, sample breaks were chosen based on a variation of mineralization and alteration. No samples were taken in isolation. Maximum samples lengths were up to 3.0 m with minimum sample length being 0.5 m. When significant mineralization was present, sample lengths were kept to a 1.0 m maximum length.

Core logging information was entered directly into a laptop computer, utilizing Microsoft Excel. Sample intervals were selected, marked, numbered, recorded in assay booklets, and then entered by the supervising geologist.

Drill logs contained a cover sheet, core box intervals, RQD, and recovery and downhole survey information, along with individual attributes and detailed lithological descriptions.

Prior to taking core photos, core was orientated to show the dominant foliation, shearing or bedding, making a mirror image of the split core once it was cut, and was hosed wet. Core photos were taken with the hole-id, box number, and from-to intervals. A series of photos were taken and then stitched using a photo stitch program. This was completed immediately after photographing the core and before core was split to ensure a high quality image was retained.

During core cutting, care was taken to ensure that the two core halves were as equal as possible perpendicular to the foliation and shearing. One half of the core was retained in the core box for future reference, with the other half being placed in a sample bag with the sample tag for the interval. Sample bags were pre-labelled with a sample number, and sample tags were inserted at the bottom of the bag before core was added. The sample bags were subsequently sealed with a zip tie. Quality assurance/quality control (QA/QC) sample numbers were double-checked against what had been recorded in the log, prior to shipping.

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When shipping samples to the laboratory, an inventory list was checked-off and then double-checked against a laboratory submittal form, when bags were loaded into rice bags for transport. A record of the samples contained in each rice bag was kept for each shipment. Rice bags were labelled with sample numbers contained in the bag as well as client name, address, and phone number. Core samples were kept in a secure location in camp at all times. Samples were submitted directly to the laboratory by employees of Coast Mountain.

2017 Drilling Program (Moss Lake Gold Mines)

At the core shack, the core from the 2017 drilling was re-aligned by the logging geologist to a consistent orientation and was measured to confirm the accuracy of the depth markers places in the core boxes by the diamond drilling crews. The core was then examined and the depths of the geological, structural, or alteration features were marked out. Descriptions of the lithologies, alteration styles and intensities, structural features, occurrences and orientations of quartz veins, occurrences of visible gold, and the style, amount, and distribution of sulphide minerals were then recorded in the diamond drill logs by the logging geologist.

The geologist marked those intervals of core to be sampled for analysis. The length of the samples ranged from a minimum of 0.3 m to a nominal maximum of 1.5 m. Care was taken to ensure that the samples corresponded to either geological, alteration, or mineralization intervals present in the core. Aside from a few narrow intervals of fault gouge and blocky core, no drilling, sampling, or recovery factors were encountered that would materially impact the accuracy and reliability of the analytical results from samples of this drill core. The drill core provided samples of high quality which were representative of any alteration, veining, or sulphide accumulations that were intersected by the drill hole.

The core was then transferred to a core technician who cut the core into two halves using a core saw equipped with a diamond blade. One half of the core was placed into a 6-mil plastic bag, and the remaining half was placed back into the core box for future reference. The core technician assigned an identification number to the sample using a uniquely numbered sample tag. One sample identification tag was placed into the sample bag along with the cut drill core while the second sample tag was placed in the core box at the appropriate location. Once sufficient samples had been accumulated at the core shack, they were transported by company personnel to the sample receiving facilities of the assay laboratory.

A total of 6,413 samples were collected from the drilling completed in 2017 on the Coldstream claim block.

Summaries of the significant intersections encountered by the drill holes completed in the 2017 drilling program are presented in Table 10-2 in the Technical Report (Forslund and Laarman, 2017a).

SLR notes that the intervals presented above represent downhole core lengths and not true widths. The relationship between core length and true width is not known at present.

SLR recommends that a set of fully interpreted cross sections and longitudinal sections be prepared of the geology, structures, and distribution of the gold grades that are present at the Coldstream deposit as aids for target generation and for planning future drilling programs.

Moss Lake Claim Block

A large amount of drilling has been completed on the Moss Lake claim block by previous explorers of the property. This work has been summarized in Section 6 of the Technical Report report and was focussed primarily on outlining the extent and grade distribution of the mineralized zones comprising the Moss Lake Deposit. Sample cross sections of the historical drilling results from the Moss Lake Deposit were provided in Section 7 of the Technical Report. Much of this drilling was completed prior to the

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implementation of NI 43-101 and so limited details are available regarding the drilling procedures applied for these drilling programs. Limited information is available in the publicly accessible assessment file database maintained by the ENDM at http://www.geologyontario.mndm.gov.on.ca/index.html.

The most recent drilling programs on the Moss Lake claim block were carried out by Moss Lake Gold Mines in 2017 with the goal of evaluating selected IP targets for their potential of hosting potentially economic quantities of gold mineralization along the strike extensions of the Moss Lake Deposit. Seven drill holes totalling 3,182.6 m in length were completed on the South grid, and an additional 25 drill holes totalling 15,514.7 m in length were completed on the Span grid. There was no drilling in 2017 over the Main or QES Zones, which were the focus of historic drill programs conducted by previous explorers of the property. The locations of all available historical drill holes completed on the Moss Lake claim block are shown in Figure 10-3 in the Technical Report.

2017 Drilling Program, South Grid and Span Grid

The drilling was completed for Moss Lake Gold Mines by drilling contractor Niigaani Drilling based in Thunder Bay, Ontario using two core drilling rigs equipped with wireline equipment to produce NQ-sized (47.6 mm) drill core. Core recoveries were generally very good throughout the entire length of the drill holes.

Drill holes were positioned and oriented by chaining from previous casings along cut lines of the established grid or by GPS and compass where there was no grid. Upon completion of each hole, the casing location was recorded using a Garmin GPS 60Cx handheld GPS unit in UTM projection NAD 83 for Zone 15. Handheld GPS units typically have a nominal horizontal accuracy in the order of several metres. The vertical accuracy is typically not as precise. All casings were left in the holes, the holes capped, and pickets placed to mark their locations in the field.

The orientation of all drill holes was surveyed within ten metres past the end of the casing using a Reflex Instruments EZ-Shot downhole survey instrument to ensure the departing hole orientation and inclination were correct. Measurements were taken of the drill hole azimuth and dip on a regular basis at 50 m intervals, beginning at a depth of 50 m. A measurement of the drill hole orientation was also taken at the end of each drill hole.

Core Logging and Sampling Procedures

At the core shack, the core was re-aligned by the logging geologist to a consistent orientation and was measured to confirm the accuracy of the depth markers places in the core boxes by the diamond drilling crews. The core was then examined and the depths of the geological, structural, or alteration features were marked out. Descriptions of the lithologies, alteration styles and intensities, structural features, occurrences and orientations of quartz veins, occurrences of visible gold, and the style, amount, and distribution of sulphide minerals were then recorded in the diamond drill logs by the logging geologist.

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encountered that would materially impact the accuracy and reliability of the analytical results from samples of this drill core. The drill core provided samples of high quality which were representative of any alteration, veining, or sulphide accumulations that were intersected by the drill hole.

A total of 18,961 samples were collected from the drilling completed in 2017.

Summaries of the significant intersections encountered by the drill holes completed in the 2017 drilling program are presented in Table 10-3 in the Technical Report (Forslund and Laarman, 2017b). The Span Lake grid is located along the northeastern strike extension of the Moss Lake Deposit while the South grid is located along the southwest strike extension.

SLR notes that the intervals presented above represent downhole core lengths and not true widths. The relationship between core length and true width is not known at present.

The 2017 drill program was successful in expanding patchy low grade mineralized zones 1.6 km to the southwest along strike of the Moss Lake Deposit (Lines 900E to 2500E). Additional high and low grade gold intercepts have also been intercepted in Lines 3100 to 3300E east of Span Lake and indicate the presence of gold bearing structures two kilometres further along strike from the known deposit.

In the QP’s opinion further work is warranted. SLR recommends that additional drilling be carried out on the Moss Lake claim group to evaluate the continuity and dimensions of the mineralization discovered on the Span Lake grid and the South grid that could potentially be exploited by means of open pit mining methods, and to search for the presence of additional zones of potentially economic gold mineralization located elsewhere on the Project.

Subject to validation of the historical drilling data completed on the Moss Lake Deposit to-date, SLR recommends that additional drilling be carried out to provide sufficient information to upgrade those portions of the historical Moss Lake Deposit Mineral Resource estimate that were classified into the Inferred Mineral Resource category to the Indicated Mineral Resource category.

SLR recommends that a variography study be completed using the existing geology and assay data from the known mineralization to estimate the optimal drill hole spacing required for an in-fill drilling program to support the classification of material into the Indicated Mineral Resource category.

SLR recommends that a set of fully interpreted cross sections and longitudinal sections be prepared of the geology, structures, and distribution of the gold grades that are present at the Moss Lake Deposit as aids to planning future drilling programs.

Hamlin Lake Claim Block

No additional drilling has been carried out on the Hamlin Lake claim block since the programs completed by Xstrata Canada Corporation (Xstrata) between 2008 and 2011. In total, Xstrata completed 23 drill holes (21 drill holes and two hole deepenings) totaling 8,376 m in length between 2008 and 2011 (see Figure 10-4 in the Technical Report). The drilling was carried out by Bradley Brothers Ltd., Foraco International, and

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Logan Drilling Ltd. using conventional wireline drilling equipment to produce NQ sized (47.6 mm) drill core (Keogh, 2011 and Dagenais and Wilson, 2013). While little information is available in the public domain documents regarding the core recoveries, in general the core recoveries in the region have been very good.

Drill holes were positioned and oriented by field technicians by chaining from previous casings along cut lines of the established grid or by GPS and compass where there was no grid. While no information is available regarding the detailed procedures that were followed in carrying out the drilling programs or for logging and sampling of the drill core, SLR is of the opinion that the drilling programs were carried out using standard industry practices used by the exploration community in northwestern Ontario. The drill logs from the 2008, 2009, 2010, and 2011 drilling programs indicated that the core was transported and stored at an address located in Thunder Bay, Ontario.

The drill hole deviations were determined using a Flexit survey instrument. Measurements were taken at varying intervals down the hole ranging from a nominal interval spacing of 30 m to more than 100 m.

Assaying for the 2008 and 2009 drilling programs was completed by Accurassay Laboratories Ltd. (Accurassay) located in Thunder Bay, Ontario using their multi-element package. The assaying for the 2010 drilling program was carried out by ALS Chemex located in Thunder Bay, Ontario using their MEICP61a multi-element package and the gold contents were determined using their Au-AA23 method code (Fire Assay, with the gold values determined by means of Atomic Absorption Spectroscopy). The assaying for the 2011 drilling program was carried out by Activation Laboratories using their multi-element package and the gold contents were determined using their Fire Assay-Atomic Absorption assay method.

The QP is not aware of any drilling, sampling, or recovery factors that could materially impact the accuracy and reliability of the drilling results for the historical drilling completed on the Moss Lake Project. Additional work is required.

SLR recommends that validation activities be carried out to upgrade, verify, and validate the historical exploration data prior to considering it as suitable for preparation of a current Mineral Resource estimate. Validation activities can include such items as re-surveying available collar locations to confirm their locations, detailed reviews and audits of the drill hole databases, re-logging and re-sampling of selected drill core as available using current QA/QC samples, and completion of a small number of new drill holes to confirm the presence and approximate grades of the historical mineralized zones.

Sampling Preparation, Analysis and Security

Goldshore has not carried out any sample preparation, analytical, or QA/QC activities on the Moss Lake Project. The following descriptions of the sample preparation and analysis, sample security, and QA/QC relate to activities carried out by previous explorers of the Property.

Sample Preparation and Analysis

Coldstream Claim Block

While historical drilling programs have been carried out on the Coldstream claim block, other than the drilling completed in 2010, 2011, and 2017, few details are available from publicly available sources regarding the sample preparation and analysis procedures and practices followed for any drilling completed prior to 2010. Similarly, little information is available regarding the sample preparation and analysis procedures and practices carried out in relation to any historical geological mapping activities or any historical geochemical sampling programs.

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2010 and 2011 Drilling Programs

Drill core from the 2010 and 2011 drilling programs carried out by Foundation and Alto on the Coldstream claim block was sampled by cutting the core into two equal halves using a stationary rock saw at the field camp in Kashabowie, Ontario. One half of the core was placed in a sample bag with the corresponding numbered sample tag, while the other half was retained in the core box for future reference. Samples were submitted directly to the ALS Laboratory in Thunder Bay, Ontario by employees of Coast Mountain.

Multi-element inductively coupled plasma (ICP) analysis was carried out on all samples using four acid near total digestion with ICP-atomic emission spectroscopy (ICP-AES) determination for 33 elements. Fire assay for gold was completed with an ICP-AES finish. Any samples exceeding the upper detection limit of 10 ppm Au were re-analyzed by fire assay with a gravimetric finish.

Core was stored at the residence of Joe Hackl. At the end of the drill programs, all core remained at the Hackl residence for the long-term storage (Tetratech, 2011).

As of 2011, ALS Chemex laboratories in North America were registered to ISO 9001:2000 for the “provision of assay and geochemical analytical services” by QMI Management Systems Registrars. In addition to ISO 9001:2000 registration, ALS Chemex has successfully completed the audit required for accreditation to ISO 17025 under CAN-P-1579 “Guidelines for Accreditation of Mineral Analysis Testing Laboratories”, and is in the final stages of completing the accreditation process. CAN-P-1579 is the Amplification and Interpretation of CAN-P-4 “General Requirements for the Accreditation of Calibration and Testing Laboratories” (Standards Council of Canada ISO/IEC Guide 25:1997(E)). The scope of accreditation includes the following methods offered by ALS Chemex:

Au by Fire Assay/AAS
Au and Ag by Fire Assay/Gravimetric
Au, Pt & Pd by Fire Assay/ICP
Cu, Ni & Co by Sodium Peroxide Fusion/ICP
Co & Ni by 4-Acid Digestion/AAS
Ag, Cu, Pb & Zn by Aqua Regia Digestion/AAS
Multi-Element package by Aqua Regia Digestion/ICP

The ISO 9001:2000 registration provides evidence of a quality management system covering all aspects of our organization. ISO 17025 accreditation provides specific assessment of the laboratory’s analytical capabilities. The combination of the two ISO standards provides complete assurance regarding the quality of every aspect of ALS Chemex operations (ALS Chemex, 2021). ALS Chemex is independent of Foundation and Alto.

2017 Drilling Program

All samples were sent to an ALS preparation laboratory in Thunder Bay, Ontario (Forslund and Laarman, 2017a). These were crushed to 70% passing a 2mm sieve and pulverized to a further 85% passing 75 μm sieve. The pulps were sent to ALS Minerals in North Vancouver, British Columbia for gold and multielement analysis. ALS Minerals is accredited by the SCC for specific tests listed in its Scope of Accreditation No. 579. This accreditation is based on ISO 17025:2005 international standards and involves extensive site

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audits and performance evaluations. All samples underwent a fire assay with ICP-AES finish (ALS code Au-ICP21) and multi-element analysis by aqua regia digestion and ICP-MS finish. Those samples that returned gold values greater than 3.0 g/t were subject to fire assay and atomic absorption finish (ALS code Au-AA23), and samples that returned gold values greater than 10.0 g/t were subject to re-assay by fire assay with gravimetric finish (ALS code Au-GRA21). ALS Minerals is independent of Moss Lake Gold Mines.

Moss Lake Claim Block

While historical drilling programs have been carried out on the Moss Lake claim block, other than the drilling completed in 2017, few details are available from publicly available sources regarding the sample preparation and analysis procedures and practices followed for any historical drilling programs. Similarly, little information is available regarding the sample preparation and analysis procedures and practices carried out in relation to any historical geological mapping activities or any historical geochemical sampling programs.

The following description of the sample preparation, analysis, and security procedures in relation to the drilling program completed in 2017 is excerpted from Forslund and Laarman (2017b).

All samples (except those rush samples sent to Wawa as described below) were sent to an ALS preparation laboratory in Thunder Bay, Ontario. These were crushed to 70% passing a 2mm sieve and pulverized to a further 85% passing 75 μm sieve. The pulps were sent to ALS Minerals in North Vancouver, British Columbia for gold and multi-element analysis. ALS Minerals is accredited by the SCC for specific tests listed in its Scope of Accreditation No. 579. This accreditation is based on ISO 17025:2005 international standards and involves extensive site audits and performance evaluations. ALS Minerals is independent of Wesdome.

All samples underwent a fire assay with ICP-AES finish (ALS code Au-ICP21) and multi-element analysis by aqua regia digestion and ICP-MS finish. Those samples that returned gold values greater than 3.0 g/t were subject to fire assay and atomic absorption finish (ALS code Au-AA23), and samples that returned gold values greater than 10.0 g/t were subject to re-assay by fire assay with gravimetric finish (ALS code Au-GRA21).

Results from ALS Minerals were often delayed by a three week turn-around period. The dynamic drill program often required results much faster than this in order to prioritize targets. In such cases, samples were sent to Wesdome’s internal laboratory (Wawa Lab) in Wawa, Ontario for analysis by fire assay with gravimetric finish. Turn-around times at this laboratory were in the order of one or two days, however, the laboratory was not accredited. Therefore, pulps from one in 20 samples were sent to ALS Minerals in North Vancouver, British Columbia for an external gold check by the methods described above.

No check assays were performed by a second laboratory.

Hamlin Lake Claim Block

A summary of the sample preparation, analysis, and security procedures employed for exploration programs carried out on the Hamlin Lake claim block has been provided in Clark and Forslund (2014) as follows.

Soils

During the 2008 soil sampling program, samples were dug using a shovel or garden tool to access the first 10 cm of the B-horizon soil layer. Samples were then labelled, bagged and a brief description of the sample

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was recorded including a GPS coordinate. Locations were marked in the field using flagging tape. The samples were dried with precautions taken to avoid cross contamination, and then delivered to Accurassay in Thunder Bay, Ontario for 32 element ICP analysis by aqua regia digestion.

Accurassay is accredited by the SCC for specific tests listed in its Scope of Accreditation No. 434. This accreditation is based on ISO 17025:2005 international standards and involves extensive site audits and performance evaluations.

The Mobile Metal Ion (MMI) samples were collected using procedures recommended by SGS Laboratories (SGS) for MMI sampling in boreal climates. This was performed by first cleaning the sampling equipment before taking each sample to avoid contamination, then scraping away extensive organic material surrounding the sample area, followed by digging a hole deep enough to expose the soil horizons (approximately 50 cm deep). The samples were collected 10 cm to 25 cm below the A horizon. The focus was put on sampling from a consistent depth rather than a particular soil horizon. The 300 g to 400 g samples were collected using a plastic scoop and deposited into labelled Ziploc bags ensuring no organic material was included in the sample. The samples were then dried separately to avoid cross contamination and shipped to SGS for MMI analysis.

SGS is accredited by the SCC for specific tests listed in its Scope of Accreditation No. 184. This accreditation is based on ISO 17025:2005 international standards and involves extensive site audits and performance evaluations.

Surface Samples

A total of 112 rock samples were taken from the field between June and October 2009 of which 111 (including 10 standards) were sent for analysis to ALS Chemex in Thunder Bay, Ontario for preparation and then to North Vancouver, British Columbia for analyses. The samples were analyzed for gold by fire assay with AES finish (50 g) and for copper via a 48 element ICP with rare earth package for a total of 59 elements.

ALS is accredited by the SCC for specific tests listed in their Scope of Accreditation No. 579. This accreditation is based on ISO 17025:2005 international standards and involves extensive site audits and performance evaluations.

Drill Core

All core was logged for lithology, alteration, structure, and mineralization prior to sampling. Sample intervals were selected by the logging geologist in approximately 1.0 m to 1.5 m intervals. Samples were selected based on visual estimates of favourable sulphides, alteration, and brecciation. Each sample was given a sample tag, which was placed in a plastic bag. A duplicate tag was also stapled to the core box to mark the sample location. No samples were taken across lithology contacts.

The whole core was cut into halves using a diamond blade core saw at a core processing facility in Thunder Bay, Ontario. One half was placed in the sample bag with the corresponding tag, while the other half was placed back in the core box.

In each year of drilling by Glencore, samples were shipped to different laboratories, and different analytical techniques were used as described below.

In 2008-2009, a total of 1,185 samples were sent to Accurassay in Thunder Bay, Ontario for ICP-aqua regia digestion as well as fire assay for gold. All core samples were dried and crushed until 90% of the sample passed through a -8 mesh screen. The crushed samples were then further crushed using a Jones Riffler into

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two 250 g to 450 g subsamples. The subsamples were then pulverized to 90% passing through a 150 mesh sieve using a ring and puck pulverizer and then homogenized. Silica and air cleaning was performed on the preparation equipment between each batch of samples to prevent cross contamination. The 30 g samples were selected from the homogenized subsamples for fire assay, and one gram samples for ICP.

Accurassay is accredited by the SCC for specific tests listed in their Scope of Accreditation No. 434. This accreditation is based on ISO 17025:2005 international standards and involves extensive site audits and performance evaluations.

Following the 2009 drilling program, Robert Bannville of R/Exploration Ltd. was hired to review Glencore’s data collection procedures. The study reviewed assays from the 2008-2009 program. The study compared results of the aqua regia digestion with that of a four acid method and showed that aqua regia digestion imparted 2 to 3 standard deviation error (20% to 30% for Au and 8% to 12% for Cu) due to the magnetite rich nature of the samples. For this reason, the assays reported from the 2008-2009 drill program were not considered to be reliable by Clark and Forslund (2014).

In 2010, a total of 715 samples were sent to ALS Chemex by the four acid technique ME-ICP61 with an AuAA23 finish on Au assays greater than 1 ppm.

ALS is accredited by the SCC for specific tests listed in its Scope of Accreditation No. 579. This accreditation is based on ISO 17025:2005 international standards and involves extensive site audits and performance evaluations.

In 2011, a total of 2,606 samples were sent to Activation Laboratories Ltd. (ActLabs) for analysis by fire assay with total digestion (ActLabs code 1A2-50, prep code 1F2).

ActLabs is accredited by the SCC for specific tests listed in its Scope of Accreditation No. 266. This accreditation is based on ISO 17025:2005 international standards and involves extensive site audits and performance evaluations.

Security

Few details are known regarding the sample security procedures for any historical samples collected on the Moss Lake Project.

All drill core from the 2017 drilling campaigns completed on the Coldstream and Moss Lake claim blocks is stored within a fenced off area on the Coldstream property located at approximately 678000mE, 5386000mN (NAD83, UTM Zone 15).

Core from historical drill holes from the Moss Lake Deposit is stored in unsecured core racks and cross piles located at approximately UTM coordinate 668860 m E, 5379100 m W (NAD83, UTM Zone 15).

All drill core and pulps from the Hamlin property are stored at AGAT Laboratories in Rosslyn, Ontario. Drill core from the Xstrata drilling programs was stored at the core processing facility in Thunder Bay, Ontario (Keogh, 2011).

Quality Assurance and Quality Control

Coldstream Claim Block

2010 and 2011 Drilling Programs

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A summary of the QA/QC programs employed for the drilling programs carried out on the Coldstream claim block has been provided in Tetratech (2011) as follows.

A QA/QC program was put in place for the sampling and analysis of the drill core from the 2010 and 2011 drilling programs carried out on the Coldstream claim block. Sampling intervals were determined by changes in lithology, mineralization, and alteration. Sample length typically varied between one metre and two metres, with samples up to three metres, and as short as 0.5 m used sparingly.

The QA/QC program for the Winter 2010 drilling program included the insertion of one standard, one blank, one coarse reject duplicate, and one pulp duplicate in each batch of 20 samples. The QA/QC programs for the Summer 2010 and Winter 2011 drilling programs included the insertion of one standard and one blank in each batch of 20 samples. One coarse reject duplicate and one pulp duplicate were inserted in each batch of 40 samples.

Certified reference materials (standards) were randomly inserted within each batch of 20 samples. The standards comprised sachets of 100 g. Four to ten standards were employed with gold values ranging between 0.29 g/t and 4.75 g/t. The standards were sourced from WCM Minerals, of Burnaby, British Columbia. The standards used were PM 197, PM 404, PM 410, PM 427, PM 428, PM 431, PM 434, PM 438, PM 439, PM 441, and PM 443.

Coarse duplicate samples are best selected from within mineralized zones. The sample material for coarse reject duplicates comprised preparing a second pulp from the coarse reject. This was done after crushing of entire drill core sample to better than 90% -2 mm. For most samples at this stage, a 250 g split from the coarse reject was selected for preparation of the pulp sample. This sample was assigned a separate sample number and assayed in a separate batch (fire assay + ICP).

Pulp duplicates comprised a second 30 g sample split-off from the 250 g pulp for fire assay. The sample was assigned a separate sample number and was fire assayed in a separate batch (different furnace load). Blank samples were inserted before, within, or immediately after a mineralized zone. The blanks comprised 750 g of white marble.

Five percent of the pulps from the 2010 winter drill program were submitted to the Acme Analytical Labs Ltd. (Acme) for check assays. These pulps were selected randomly from results over 0.15 g/t Au.

2017 Drilling Program

A total of 340 diabase blanks sourced from an outcrop near the Terry Fox Monument on Highway 11/17 were submitted at a rate of one blank per 20 samples (Forslund and Laarman, 2017a).

A total of 340 standards submitted were from CDN Resource Laboratories Ltd. (CDN). Standards were sent to ALS Minerals as part of the regular sample stream. Primary standards used in the Coldstream drilling were CDN-CM-26 and CDN-CM-39. Of 197 samples of CDN-CM-26, 182 (92%) passed within the reported error range for gold and 194 (98%) passed within the reported error range for copper. Of 129 samples of CDN-CM-39, 113 (88%) passed within the reported error range for gold and 101 (78%) passed within the reported error range for copper.

Moss Lake Claim Block

A summary of the QA/QC programs employed for the drilling program carried out on the Moss Lake claim block in 2017 has been provided in Forslund and Laarman (2017b) as follows.

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A total of 1,054 diabase blanks sourced from an outcrop near the Terry Fox Monument on Highway 11/17 were submitted at a rate of one blank per 20 samples. Of the 1,054 blanks, 146 were sent to Wawa Lab and the remaining 908 were analyzed at ALS Minerals. Of the 146 samples sent to Wawa, 145 samples returned gold values below 0.01 g/t Au. Of the 908 samples sent to ALS Minerals, 901 returned gold values below 0.01 g/t Au.

A total of 1,051 standards submitted were from CDN. Standards were sent to the two different laboratories (ALS Minerals and Wawa Lab). Standards sent to ALS Minerals generally passed at a higher rate than those sent to Wawa Lab, although sample population was much larger for ALS Minerals. Primary standards used in the Moss Lake drilling were CDN-GS-1P5P and CDN-GS-P4F. Of the 414 samples of CDN- GS1P5P sent to ALS Minerals, 374 passed within the reported error range, or approximately a 90% pass rate. The standards analyzed at Wawa Lab returned 53 of 75 samples within the acceptance range, or approximately a 71% pass rate. Of 436 samples of CDN-GS-P4F sent to ALS Minerals, 312 passed, or a rate of 72%. Only 19 of 73 samples of CDN-GS-P4F fall within the range of error at Wawa Lab (approximately 26%).

A total of 1,045 sample pulps were re-analyzed at ALS Minerals and a further 156 pulps were re-analyzed internally at Wawa Lab. Both sets of internal duplicates (ALS Minerals and Wawa Lab) correlate well with the original data. R2 values were 0.9973 and 0.9868 respectively.

External duplicates were also completed for the holes originally sent only to Wawa Lab for the reasons discussed above. Drill holes MLS-17-09, MLS-17-10, MLS-17-16, MLS-17-18, and MLS- 17-20 were originally assayed at Wawa Lab, so 149 pulps were sent to an external laboratory (ALS Minerals) for testing.

Hamlin Lake Claim Block

No description of any QA/QC results obtained from surface sampling and drilling programs carried out on the Hamlin Lake claim block were provided in Clark and Forslund (2014).

In the QP’s opinion, the sample preparation, analysis, and security procedures at the Moss Lake Project are generally adequate for use in the planning and execution of exploration programs.

Mineral Resources

No Mineral Resource estimates have been completed on the Moss Lake project by Goldshore.

Recommendations

SLR presents the following recommendations:

Geology and Mineral Resources

Obtain copies of the information for the perimeter survey of the mining leases located on the Moss Lake claim block and convert them into digital format suitable for use in the proposed activities for the Moss Lake Project.
To the extent possible, carry out field activities to locate and record the position of the corners of those original staked mining claims that cover the extents of the known mineralized zones.
Complete a detailed helicopter-based VTEM and magnetic survey. The results of these surveys will be useful in understanding the detailed geological and structural features of the Property and will aid in the selection of drilling targets.

A-34

Complete a detailed topographic survey concurrently with the airborne geophysical surveys. The topographic information will be useful in subsequent Project planning activities.
Carry out validation activities to upgrade, verify, and validate the historical exploration data prior to considering it as suitable for preparation of a current Mineral Resource estimate. Validation activities can include such items as re-surveying available collar locations to confirm their locations, detailed reviews and audits of the drill hole databases, re-logging and re-sampling of selected drill core as available using current QA/QC samples, and completion of a small number of new drill holes to confirm the presence and approximate grades of the historical mineralized zones.
Prepare a set of fully interpreted cross sections and longitudinal sections of the geology, structures, and distribution of the gold grades that are present at the Coldstream and Moss Lake deposits as aids for target generation and for planning future drilling programs.
Carry out a variography study using the existing geology and assay data from the known mineralization at the Moss Lake Deposit to estimate the optimal drill hole spacing required for an in-fill drilling program to support the classification of material into the Indicated Mineral Resource category.
Complete additional drilling on the Moss Lake claim group to evaluate the continuity and dimensions of the mineralization discovered on the Span Lake grid and the South grid that could potentially be exploited by means of open pit mining methods, and to search for the presence of additional zones of potentially economic gold mineralization located elsewhere on the Project.
Complete additional drilling to provide sufficient information to upgrade those portions of the historical Moss Lake Deposit Mineral Resource estimate that were classified into the Inferred Mineral Resource category to the Indicated Mineral Resource category.
Pending successful outcomes of the work recommended above, update the Mineral Resource estimates for the Moss Lake and Coldstream deposits with newly acquired drill hole information and current technical and economic parameters.
Prepare a study to evaluate the technical and economic potential of the gold mineralization found on the Project.

SLR has reviewed the proposed exploration program, environmental baseline surveys, and proposed budget (Table 26-1) and considers the proposed expenditures to be reasonable and warranted.

Environment

Initiate environmental and social baselines studies in support of exploration, mine development planning, and eventual permitting.
Initiate an engagement program with stakeholders including Indigenous Peoples, regional land users, and government authorities.
Carry out a site visit of the North Coldstream Mine and adjacent ghost town of Burchell Lake after the spring freshet, and review publicly available surface water and groundwater monitoring data available from the ENDM.

A-35

APPENDIX B

FINANCIAL STATEMENTS AND MD&A OF SIERRA MADRE DEVELOPMENTS INC.

Description	Page
Condensed consolidated interim financial statements for the nine months ended December 31,2020 and 2019	B-2
Management’s discussion and analysis for the nine months ended December 31,2020	B-11
Consolidated financial statements for theyears ended March 31,2020 and 2019	B-18
Management’s discussion and analysis for theyear ended March 31,2020	B-37
Consolidated financial statements for theyears ended March 31,2019 and 2018	B-44
Management’s discussion and analysis for theyear ended March 31,2019	B-65
Consolidated financial statements for theyears ended March 31,2018 and 2017	B-72
Management’s discussion and analysis for theyear ended March 31,2018	B-88

B-1

SIERRA MADRE DEVELOPMENTS INC. (An Exploration Stage Company)

Condensed Consolidated Interim Financial Statements For The Nine Months Ended December 31, 2020 and 2019

In Canadian Dollars (unaudited)

B-2

SIERRA MADRE DEVELOPMENTS INC. (AN EXPLORATION STAGE COMPANY) Condensed Consolidated Interim Statements of Financial Position

(in Canadian Dollars)

	December 31, 2020	December 31, 2020
		(unaudited)		March 31, 2020
ASSETS
Current assets
Cash	$	432,937	$	5,882
Amounts receivable		-		15,733
TOTAL ASSETS	$	432,937	$	21,615
LIABILITIES
Current liabilities
Accountspayable and accrued liabilities(Note 4)	$	20,080	$	488,612
TOTAL LIABILITIES		20,080		488,612
SHAREHOLDERS’ EQUITY
Share capital (Note 3)		8,437,198		7,437,198
Reserve (Note 3)		1,203,271		1,203,271
Accumulated deficit		(9,227,612)		(9,107,466)
TOTAL SHAREHOLDERS’ EQUITY (DEFICIT)		412,857		(466,997)
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	432,937	$	21,615

Nature and continuance of operations (Note 1)

These condensed consolidated interim financial statements were authorized for issue by the Board of Directors on February 25, 2021. They are signed on behalf of the Board of Directors by:

"Hani Zabaneh"	“Gavin Cooper”
Director	Director

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

B-3

SIERRA MADRE DEVELOPMENTS INC. (AN EXPLORATION STAGE COMPANY) Condensed Consolidated Interim Statements of Loss and Comprehensive Loss

(in Canadian Dollars - unaudited)

	For the Three Months Ended	For the Nine Months Ended	For the Nine Months Ended
December 31, 2020 December 31, 2019 December 31, 2020			December 31, 2019
EXPENSES
Bank charges $ 65 $ 18 $ 224			$ 79
General and administrative fees 17,147 169 17,147			169
Professional fees (Note 4) 14,052 1,298 87,065			59,538
Regulatory fees (Note 4) 4,399 2,653 15,710			17,168
LOSS BEFORE OTHER ITEMS $ 35,663 $ 4,138 $ 120,146			$ 79,954
Reversal of exploration expenditures - (42,765) -			(42,765)
NET AND COMPREHENSIVE (INCOME) LOSS FOR THE PERIOD 35,663 (38,627) 120,146			34,189

Basic and diluted (income) loss per share for the period $ 0.00 $ 0.00 $ 0.01			$ 0.00
Weighted average number of common shares outstanding 22,065,722 10,798,082 14,462,316			10,798,082

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

B-4

SIERRA MADRE DEVELOPMENTS INC. (AN EXPLORATION STAGE COMPANY) Condensed Consolidated Interim Statements of Changes in Shareholders’ Equity (in Canadian Dollars)

	Number of
	shares	Amount	Reserve	Accumulated deficit	Total
Balance at March 31, 2019	5,399,055	$ 7,437,198	$ 930,281	$(9,067,599)	$(700,120)
Restatement for disposal of subsidiary	-	-	294,830	-	294,830
Net loss for theperiod	-	-	-	(34,189)	(34,189)
Balance at December 31, 2019	5,399,055	$ 7,437,198	$ 1,225,111	$(9,101,788)	$(439,479)
Balance at March 31, 2020	5,399,055	$ 7,437,198	$ 1,203,271	$ (9,107,466)	$ (466,997)
Common shares issued	16,666,667	1,000,000	-	-	1,000,000
Net loss for theperiod	-	-	-	(120,146)	(120,146)
Balance at December 31, 2020	22,065,722	$ 8,437,198	$ 1,203,271	$(9,227,612)	$ 412,857

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

B-5

SIERRA MADRE DEVELOPMENTS INC. (AN EXPLORATION STAGE COMPANY) Condensed Consolidated Interim Statements of Cash Flows

(in Canadian Dollars - unaudited)

		For the Nine	Months	Ended
	December 31,		December 31,
		2020		2019
Cash flows provided from (used in):
OPERATING ACTIVITIES
Net loss for the period	$	(120,146)	$	(34,189)
Net changes in non-cash working capital items:
Restatement on balance sheet from disposal of subsidiary		-		294,830
Amounts receivable		15,733		13,103
Accounts payable and accrued liabilities		(468,532)		12,816
Due to related parties		-		(437,787)
Net cash flows used in operating activities		(572,945)		(151,227)
FINANCING ACTIVITIES
Proceeds from issuance of shares		1,000,000		-
Net cash provided by financing activities		1,000,000		-
Net increase (decrease) in cash		427,055		(151,227)
Cash, beginning of period		5,882		162,128
Cash, end of period	$	432,937	$	10,901
Supplemental cash flow information:
Taxes paid	$	-	$	-
Interest paid		-		-

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

B-6

SIERRA MADRE DEVELOPMENTS INC. (An Exploration Stage Company) Notes to the Condensed Consolidated Interim Financial Statements For the nine months ended December 31, 2020 and 2019 (in Canadian Dollars - unaudited)

1. NATURE AND CONTINUANCE OF OPERATIONS

Sierra Madre Developments Inc. (“the Company”) is a gold and silver focused Canadian exploration company. The Company’s head office is located at 918 – 1030 West Georgia Street, Vancouver, British Columbia, V6E 2Y3 and its registered and records office is at 400 – 725 Granville Street, Vancouver, British Columbia, V7Y 1G5.

The Company’s shares are listed on the NEX branch of the TSX Venture Exchange under the symbol SMG.H.

These condensed consolidated interim financial statements have been prepared on the assumption that the Company will continue as a going concern, meaning it will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities in the ordinary course of operations. There is a material uncertainty related to conditions and events that may cast significant doubt on the Company’s ability to continue as a going concern, and it may be unable to realize its assets and discharge its liabilities in the normal course of business. As at December 31, 2020, the Company’s current assets exceeded its current liabilities by $412,857 (March 31, 2020 – deficiency of $466,997) and had an accumulated deficit of $9,227,612 (March 31, 2020 - $9,107,466). The Company currently has no active business and no source of revenue.

On March 11 2020, the World Health Organization characterized the outbreak of a strain of the novel coronavirus (“COVID-19”) as a pandemic which has resulted in a series of public health and emergency measures that have been put in place to combat the spread of the virus. The duration and impact of COVID-19 is unknown at this time and it is not possible to reliably estimate the impact that the length and severity of these developments will have on the financial results and condition of the Company in future periods, including the possible impact on future financing opportunities.

The Company’s ability to continue as a going concern is dependent upon its ability to raise equity capital or borrowings sufficient to meet current and future obligations. The business of mining and exploration involves a high degree of risk and there can be no assurance that management’s plans will be successful. These condensed consolidated interim financial statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Company be unable to continue as a going concern. Such adjustments could be material.

2. SIGNIFICANT ACCOUNTING POLICIES

These condensed consolidated interim financial statements have been prepared in accordance with International Accounting Standard (“IAS”) 34, Interim Financial Reporting , as issued by the International Accounting Standards Board (“IASB”). Accordingly, certain information and footnote disclosure normally included in annual financial statements prepared in accordance with International Financial Reporting Standards (“IFRS”) have been omitted or condensed, and therefore these financial statements should be read in conjunction with the Company’s March 31, 2020 audited annual consolidated financial statements and notes thereto.

These condensed consolidated interim financial statements are based on the IFRS issued and effective as of February 25, 2021, the date these financial statements were authorized for issuance by the Company’s Board of Directors, and follow the same accounting policies and methods of computation as the most recent annual consolidated financial statements, except for the impact of the changes in accounting policies disclosed below.

a) New accounting standard and amendments

The Company adopted the following new accounting standard and amendment:

Amendments to IFRS 3, Business Combinations (effective January 1, 2020) assist in determining whether a transaction should be accounted for as a business combination or an asset acquisition. It amends the definition of a business to include an input and a substantive process that together significantly contribute to the ability to create goods and services provided to customers, generating investment and other income, and it excludes returns in the form of lower costs and other economic benefits. The amendment had no impact on the Company.

2. SIGNIFICANT ACCOUNTING POLICIES (continued)

B-7

b) Significant accounting judgments and key sources of estimation uncertainty

Going concern

The assessment of the Company’s ability to continue as a going concern and to raise sufficient funds to pay for its ongoing operating expenditures and meet its liabilities for the ensuing year involves significant judgment based on historical experience and other factors, including expectation of future events that are believed to be reasonable under the circumstances.

3. SHARE CAPITAL

Authorized share capital

Unlimited number of common shares without par value.

Issued share capital

At December 31, 2020, there were 22,065,722 issued and fully paid common shares (March 31, 2020 – 5,399,055). On August 4, 2020, the Company completed a share consolidation of 1 new share for every 2 outstanding shares. All share and per share amounts in these condensed interim financial statements have been retroactively restated to reflect this consolidation.

On August 4, 2020 the Company closed a private placement for gross proceeds of $1,000,000 through the issuance of 16,666,667 shares at $0.06 per share.

There were no common share transactions in the nine months ended December 31, 2019.

Stock options

The Company has adopted a 10% rolling Stock Option Plan (the “Plan”). Under the Plan, the Company may grant stock options to directors, officers, employees and consultants of the Company. The terms and conditions of the options are determined by the Board of Directors. As at December 31, 2020 and March 31, 2020, the Company had no stock options outstanding.

4. RELATED PARTIES

Key management is considered to include the Company’s directors and officers. For the three and nine months ended December 31, 2020 and 2019, the Company incurred the following transactions with related parties:

	For the three months ended	For the three months ended	For the nine	months ended
	December 31,	December 31,	December 31,	December 31,
	2020	2019	2020	2019
	$	$	$	$
Accounting and compliance services	-	1,600	35,622	14,700
Consultingservices	16,800	-	16,800	-
Total	16,800	1,600	52,422	14,700

B-8

SIERRA MADRE DEVELOPMENTS INC. (An Exploration Stage Company) Notes to the Condensed Consolidated Interim Financial Statements For the nine months ended December 31, 2020 and 2019

(in Canadian Dollars - unaudited)

4. RELATED PARTIES (continued)

At December 31, 2020, the Company owed $4,725 (March 31, 2020 - $6,000) in respect of services provided to and payments made on behalf of the Company. These amounts are unsecured, non-interest-bearing and have no specific terms of repayment. These transactions occurred in the normal course of business and were measured at the exchange amount, which was the amount of consideration agreed upon between the related parties.

5. FINANCIAL INSTRUMENTS

a) Categories of financial instruments and fair value measurements

The Company’s financial assets and liabilities are classified as follows:

	December 31,	March 31,
	2020	2020
Financial assets:
*Fair value through profit and loss*
Cash	$432,937	$5,882
Financial liabilities:
*Other financial liabilities*
Accounts payable and accruedliabilities	$20,080	$488,612

The amount of accounts payable and accrued liabilities includes amounts due to related parties.

The fair values of the Company’s cash and accounts payable and accrued liabilities approximate their carrying amounts due to the short-term nature of these instruments.

b) Management of financial risks

The Company's risk exposures arising from financial instruments and the impact on the Company's condensed consolidated interim financial statements are summarized below:

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. As at December 31, 2020, the Company was exposed to credit risk on its cash. The Company’s cash is held with a high credit quality financial institution in Canada and as at December 31, 2020, management considers its exposure to credit risk to be low.

Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with its financial liabilities. The Company manages liquidity risk by maintaining adequate cash and managing its capital and expenditures.

At December 31, 2020, the Company had cash of $432,937 (March 31, 2020 - $5,882) and accounts payable and accrued liabilities of $20,080 (March 31, 2020 - $488,612) with contractual maturities of less than one year. The Company had sufficient cash to meet its current liabilities as at December 31, 2020. The Company assessed its liquidity risk as low as at December 31, 2020.

Market risk

The risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: currency risk, interest rate risk and other price risk. The Company is not exposed to significant currency, interest or other price risk.

B-9

6. CAPITAL MANAGEMENT

The Company considers its capital structure to consist of shareholders’ equity (deficit), which at December 31, 2020 was $412,857. 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, 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 the Company’s management to sustain future development of the business.

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.

7. SUBSEQUENT EVENT

On January 26, 2021 the Company announced that it entered into an amalgamation agreement with Goldshore Resources Inc. (“Goldshore”), pursuant to which the Company will acquire all of the issued and outstanding shares of Goldshore. The completion of the amalgamation agreement will result in the reverse takeover of Sierra Madre by Goldshore pursuant to the policies of the TSX Venture Exchange (“TSX-V”).

On February 26, 2021 the Company and Goldshore completed its brokered private placement offerings, pursuant to which Goldshore issued an aggregate of 23,076,924 subscription receipts at a price of $0.65 per subscription receipt and the Company issued an aggregate of 13,333,335 flow-through subscription receipts at a price of $0.75 per flow-through subscription receipt, for combined aggregate proceeds of $25,000,002. The gross proceeds will be held in escrow pending satisfaction of certain conditions (“Escrow Release Conditions”), including the closing of the amalgamation with Goldshore, and receiving conditional approval for the resulting issuer shares being listed on the TSX-V.

In connection with the offerings, the agents are entitled to cash fee equal to 6% of the aggregate gross proceeds of the offerings (4% for president’s list subscribers) and were issued such number of compensation options equal to 6% of the number of offered securities sold under the offerings (4% for president’s list subscribers). Each compensation option issued by Goldshore is exercisable for one Goldshore share for a period of two years from the satisfaction of the Escrow Release Conditions (the “Expiry Date”) at a price of $0.65 per Goldshore share. Each compensation option issued by Sierra Madre is exercisable for one Sierra Madre share until the expiry date at a price of $0.75 per Sierra Madre share.

B-10

SIERRA MADRE DEVELOPMENTS INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE NINE MONTHS ENDED DECEMBER 31, 2020

In Canadian Dollars

B-11

SIERRA MADRE DEVELOPMENTS INC. MANAGEMENT’S DISCUSSION AND ANALYSIS For the nine months ended December 31, 2020

This management’s discussion and analysis (“MD&A”) is management's interpretation of the financial condition and results of operations of Sierra Madre Developments Inc. (the “Company” or “Sierra Madre”) for the nine month period ended December 31, 2020. This MD&A should be read in conjunction with the audited consolidated financial statements of the Company for the fiscal year ended March 31, 2020 and condensed consolidated interim financial statements for the three and nine months ended December 31, 2020, prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). This MD&A complements and supplements, but does not form part of, the Company’s condensed consolidated interim financial statements.

This MD&A contains forward-looking statements. Statements regarding the adequacy of cash resources to carry out the Company’s exploration programs or the need for future financing are forward-looking statements. All forward-looking statements, including those not specifically identified herein, are made subject to cautionary language included in this MD&A. Readers are advised to refer to the cautionary language when reading any forward-looking statements.

All dollar amounts contained herein are expressed in Canadian dollars unless otherwise indicated. This MD&A has been prepared as of February 25, 2021.

DESCRIPTION AND OVERVIEW OF BUSINESS

Sierra Madre was incorporated under the Business Corporations Act (British Columbia) on April 30, 2009. The Company’s shares are listed for trading on the NEX branch of the TSX Venture Exchange under the symbol SMG.H.

Sierra Madre is a mineral exploration company focused on the acquisition and evaluation of precious metal mineral properties in Canada. The Company had one wholly owned subsidiary - Bear Mountain Gold Mines Ltd. (“Bear Mountain” or “BMGM”), a British Columbia company – which was spun-out to shareholders during the year ended March 31, 2020. As at December 31, 2020, the Company did not hold title to, or an interest in, any mineral exploration properties.

On April 3, 2020, the Company announced that it would not be proceeding with the previously announced acquisition of claims in the Urban-Barry Gold Camp area in Quebec, share consolidation and private placement financing. For further details, refer to the Company's February 26, 2021 news release on the Company's profile on www.sedar.com.

On August 4, 2020, the Company completed a share consolidation of 1 new share for every 2 outstanding shares. All share and per share amounts in this MD&A have been retroactively restated to reflect this consolidation.

On August 4, 2020, the company closed a private placement of 16,666,667 shares at a price of $0.06 per share for gross proceeds of $1,000,000.

RESULTS OF OPERATIONS

The Company posted a loss of $35,663 for the three months ended December 31, 2020 (2019 – income of $38,627). The main components of this were general and administrative fees of $17,147 (2019 - $169), professional fees of $14,052 (2019 - $1,298), and regulatory fees of $4,399 (2019 - $2,653). The income in 2019 is a result of a one-time reversal of exploration expenditures. Normalizing for this, the Company earned a net loss of $4,138 for the three months ended December 31, 2019. The increased loss in the period is a result of the increased activity during the quarter.

For the nine months ended December 31, 2020, the Company posted a loss of $120,146 (2019 - $34,189). The main components of this loss were professional fees of $87,065 (2019 - $59,538), general and administrative fees of $17,147 (2019 - $169) and regulatory fees of $15,710 (2019 - $17,168). The increased loss in the quarter is a result of increased activity during the quarter.

B-12

SIERRA MADRE DEVELOPMENTS INC. MANAGEMENT’S DISCUSSION AND ANALYSIS For the nine months ended December 31, 2020

The following is a summary of the Company's results for the eight most recently completed quarters:

Financial Results Net income (loss) for period Per share Balance Sheet Data Cash Total assets Shareholder's equity (deficit)	Q3 ‘21 Q2 ‘21	Q1 ‘21 Q4 ‘20 Q3 ‘20 Q2 ‘20 Q1 ‘20 Q4 ‘19
	(35,663) (73,393) (11,090) (5,678) 38,627 (56,649) (16,167) (25,839) $0.00 $0.00 $0.00 $0.00 $0.00 $0.01 $0.00 $0.00 432,937 329,693 2,333 5,882 10,901 50,382 161,691 162,128 432,937 471,234 18,234 21,615 26,634 64,237 190,546 190,963 412,857 448,520 (478,087) (466,997) (439,478) (478,105) (716,287) (700,120)

LIQUIDITY AND CAPITAL RESOURCES

Sierra Madre has no operations that generate cash flows and the Company’s future financial success will depend on the discovery of one or more economic mineral deposits. This process can take years, can consume significant resources and is largely based on factors that are beyond the control of the Company’s management.

For the foreseeable future the Company will continue to rely upon its ability to raise financing through the sale of equity. This will be dependent on the Company identifying suitable projects that will attract investors. Which will also require a general positive investor sentiment, which in turn will be influenced by a positive climate for precious metals exploration, a Company’s track record and the experience and calibre of the Company’s management, as well as global economic outlook.

There is no assurance that the Company will be able to access equity funding at the times and in the amounts

required to meet the Company’s obligations and fund activities.

At December 31, 2020 the Company’s current assets exceeded its current liabilities by $412,857 (March 31, 2020 – deficiency of $466,997). The Company has no loans or bank debt and there are no restrictions on the use of its cash resources. The Company has not paid any cash dividends and management does not expect this will change in the foreseeable future.

RELATED PARTY TRANSACTIONS

For the	three months ended	three months ended	For the nine	months ended
December 31,		December 31,	December 31,	December 31,
	2020	2019	2020	2019
	$	$	$	$
Accounting and compliance services	-	1,600	35,622	14,700
Consultingservices	16,800	-	16,800	-
Total	16,800	1,600	52,422	14,700

B-13

SIERRA MADRE DEVELOPMENTS INC. MANAGEMENT’S DISCUSSION AND ANALYSIS For the nine months ended December 31, 2020

OFF-BALANCE SHEET ARRANGEMENTS

The Company did not enter into any off-balance sheet arrangements during the nine months ended December 31, 2020.

COMMITMENTS

The Company has not entered into any material contractual commitments as of the date of this MD&A.

PROPOSED TRANSACTIONS

In connection with the offerings, the agents are entitled to cash fee equal to 6% of the aggregate gross proceeds of the offerings (4% for president’s list subscribers) and were issued such number of compensation options equal to 6% of the number of offered securities sold under the offerings (4% for president’s list subscribers). Each compensation option issued by Goldshore is exercisable for one Goldshore share for a period of two years from the satisfaction of the escrow release conditions (the “Expiry Date”) at a price of $0.65 per Goldshore share. Each compensation option issued by Sierra Madre is exercisable for one Sierra Madre share until the expiry date at a price of $0.75 per Sierra Madre share.

SIGNIFICANT ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

The critical judgements and estimates that management has made in the process of applying the Company’s accounting policies and that have the most significant effect on the amounts recognized in the condensed interim financial statements for the nine months ended December 31, 2020 are as follows:

Going concern

NEW ACCOUNTING STANDARDS AND ACCOUNTING STANDARDS NOT YET EFFECTIVE

The Company adopted the following new accounting standard and amendment:

B-14

SIERRA MADRE DEVELOPMENTS INC. MANAGEMENT’S DISCUSSION AND ANALYSIS For the nine months ended December 31, 2020

OUTLOOK

As a result of the private placement closed in August 2020, the Company’s working capital position has improved significantly. The Company entered into an amalgamation agreement with Goldshore on January 26, 2021 which will result in the reverse take over of Sierra Madre by Goldshore. Additionally, the Company is completing a subscription receipt financing of as outlined in “Proposed “Transactions”.

FINANCIAL AND OTHER INSTRUMENTS

The Company’s financial assets and liabilities are classified as follows:

	December 31,	March 31,
	2020	2020
Financial assets:
*Fair value through profit and loss*
Cash	$432,937	$5,882
Financial liabilities:
*Other financial liabilities*
Accounts payable and accruedliabilities	$20,080	$488,612

The amount of accounts payable and accrued liabilities, includes amounts due to related parties.

The fair values of the Company’s cash and accounts payable and accrued liabilities approximate their carrying amounts due to the short-term nature of these instruments.

The Company's risk exposures arising from financial instruments and the impact on the Company's financial statements are summarized below:

Credit risk

Liquidity risk

Market risk

OUTSTANDING SHARE DATA

B-15

SIERRA MADRE DEVELOPMENTS INC. MANAGEMENT’S DISCUSSION AND ANALYSIS For the nine months ended December 31, 2020

As at the date of this MD&A, the Company had 22,065,722 common shares issued and outstanding, and there are no options, warrants or other securities convertible into common shares outstanding.

The Company has authorized an unlimited number of common shares without par value.

RISKS AND UNCERTAINTIES

The Company is in the mineral exploration and development business and as such is exposed to a number of risks and uncertainties that are not uncommon to other companies in the same business.

Some of the possible risks include the following:

a) The Company currently has no properties nor producing operations and as a consequence, the Company does not generate any operating income or positive cash flow. Its ability to continue as a going concern is entirely dependent upon the Company’s ability to find suitable projects and access public equity markets to raise sufficient capital.
b) The only source of future funds to source and acquire projects which may become available to the Company is through the sale of equity capital.
c) Any future equity financings by the Company for the purpose of raising additional capital may result in substantial dilution to the holdings of existing shareholders.
d) Any future operations of the Company may require added personnel; licenses and permits; and many other potential risks that the Company has no way of determining at this time. As such, there is no assurance that the Company will be successful in obtaining what is required to obtain and operate new activities in the future.
e) On March 11 2020, the World Health Organization characterized the outbreak of a strain of the novel coronavirus (“COVID-19”) as a pandemic which has resulted in a series of public health and emergency measures that have been put in place to combat the spread of the virus. The duration and impact of COVID-19 is unknown at this time and it is not possible to reliably estimate the impact that the length and severity of these developments will have on the financial results and condition of the Company in future periods, including the possible impact on future financing opportunities.

CAUTION REGARDING FORWARD LOOKING STATEMENTS

Some of the statements contained in this MD&A are forward-looking statements, such as estimates and statements that describe the Company’s future plans, objectives or goals, including words to the effect that the Company or management expects a stated condition or result to occur.

Forward-looking statements may be identified by such terms as “believes”, “if”, “expects”, “estimates”, “may”, “could”, “should”, “will”, “intends” and similar expressions. Since forward-looking statements are based on assumptions and address future events and conditions, by their very nature they involve inherent risks and uncertainties.

Although the Company believes that the expectations represented by such forward-looking information or statements are reasonable, there is significant risk that the forward-looking information or statements may not be achieved, and the underlying assumptions thereto will not prove to be accurate. Forward-looking information or statements in this MD&A include, but are not limited to, information or statements concerning the Company’s expectations for results on the Company’s operations; capital costs anticipated; the Company’s current financial resources being sufficient to fund operations; and the Company’s ability to obtain additional funds through the sale of equity.

B-16

SIERRA MADRE DEVELOPMENTS INC. MANAGEMENT’S DISCUSSION AND ANALYSIS For the nine months ended December 31, 2020

result of numerous risks, uncertainties and other factors including: changes in general economic conditions and conditions in the financial markets; litigation, legislative, environmental and other judicial, regulatory, political and competitive developments; technological and operational difficulties encountered in connection with the Company’s activities; and other matters discussed in this MD&A.

This list is not exhaustive of the factors that may affect any of the Company’s forward-looking statements. These and other factors should be considered carefully and readers should not place undue reliance on the Company’s forward-looking statements. Further information regarding these and other factors, which may cause results to differ materially from those projected in forward-looking statements, are included in the filings by the Company with securities regulatory authorities. The Company does not undertake to update any forward-looking statement that may be made from time to time by the Company or on its behalf, except in accordance with applicable securities law.

B-17

SIERRA MADRE DEVELOPMENTS INC.

(An Exploration Stage Company)

Consolidated Financial Statements

For The Years Ended March 31, 2020 and 2019

In Canadian Dollars

B-18

SIERRA MADRE DEVELOPMENTS INC. (AN EXPLORATION STAGE COMPANY) Consolidated Financial Statements

For the Years Ended March 31, 2020 and 2019

INDEX Independent Auditors’ Report Consolidated Statements of Financial Position Consolidated Statements of Comprehensive Loss Consolidated Statements of Changes in Equity (Deficit) Consolidated Statements of Cash Flows Notes to the Consolidated Financial Statements	Page 3 6 7 8 9 10-19

B-19

Baker Tilly WM LLP 900 – 400 Burrard Street Vancouver, British Columbia Canada V6C 3B7 T: +1 604.684.6212 F: +1 604.688.3497

[email protected] www.bakertilly.ca

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INDEPENDENT AUDITOR'S REPORT

To the Shareholders of Sierra Madre Developments Inc.:

Opinion

We have audited the consolidated financial statements of Sierra Madre Developments Inc. (the “Company”), which comprise the consolidated statements of financial position as at March 31, 2020 and 2019, and the consolidated statements of comprehensive loss, consolidated statements of changes in equity (deficit) and consolidated statements of cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as at March 31, 2020 and 2019, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with International Financial Reporting Standards.

Basis for Opinion

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

Material Uncertainty Related to Going Concern

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

Other Information

Management is responsible for the other information. The other information comprises the information included in the Management’s Discussion and Analysis filed with the relevant Canadian securities commissions.

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 audits of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audits and remain alert for indications that the other information 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 in this auditor’s report. We have nothing to report in this regard.

ASSURANCE • TAX • ADVISORY

Baker Tilly WM LLP is a member of Baker Tilly Canada Cooperative, which is a member of the global network of Baker Tilly International Limited.

All members of Baker Tilly Canada Cooperative and Baker Tilly International Limited are separate and independent legal entities.

B-20

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

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

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

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

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

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

As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional 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.

B-21

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

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

The engagement partner on the audit resulting in this independent auditor's report is Graeme L. Cocke.

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CHARTERED PROFESSIONAL ACCOUNTANTS

Vancouver, B.C. July 28, 2020

B-22

SIERRA MADRE DEVELOPMENTS INC. (AN EXPLORATION STAGE COMPANY) Consolidated Statements of Financial Position As at,

(in Canadian Dollars)


	March 31, 2020 March 31, 2019
ASSETS Current Cash Amounts receivable Reclamation bond	$ $ 5,882 162,128 15,733 13,835 - 15,000
Total Assets	21,615 190,963
LIABILITIES Current
Accounts payable and accrued liabilities Due to relatedparties(note 8)	482,612 89,940 6,000 801,143
Total Liabilities	488,612 891,083
SHAREHOLDERS' EQUITY (DEFICIT) Capital stock (note 7) Contributed surplus	7,437,198 7,437,198 1,203,271 930,281
Deficit	(9,107,466) (9,067,599)
Total Shareholders' Equity (Deficit)	(466,997) (700,120)
Total Liabilities and Shareholders' Equity (Deficit)	21,615 190,963

Nature and continuance of operations (Note 1)

Approved on behalf of the Board on July 28, 2020:

“”Raymond Wladichuk” ..................................................................... Director Raymond Wladichuk

“Robert Anderson” ..................................................................... Director Robert Anderson

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

B-23

SIERRA MADRE DEVELOPMENTS INC. (AN EXPLORATION STAGE COMPANY) Consolidated Statements of Comprehensive Loss

(in Canadian Dollars)

		Year ended		Year ended
	March 31, 2020		March 31, 2019
Expenses		$		$
Bank charges		97		73
Exploration and evaluation expenditures (notes 6 and 8)		(35,200)		40,200
Insurance		(2,565)		2,565
Management fees (note 8)		-		18,000
Other		169		-
Professional fees (note 8)		59,698		96,737
Regulatory fees		17,668		58,582
Rent (note 8)		-		6,000
Loss before other items		39,867		222,157
Reversal of outstanding accrued liabilities		-		(14,363)
Net Loss and Comprehensive Loss for the Year		39,867		207,794
Basic and Diluted Loss per Share	$	(0.00)	$	(0.04)
Weighted Average Number of Common Shares Outstanding (note 7)		10,798,082		5,501,644

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

B-24

SIERRA MADRE DEVELOPMENTS INC. (An Exploration Stage Company) Consolidated Statements of Changes in Equity (Deficit) (in Canadian Dollars)


	Number of
	Shares (restated -		Contributed
	note 2)	Amount	Surplus	Deficit	Total
		$	$	$	$
Balance at March 31, 2018	5,398,082	7,167,198	930,281	(8,859,805)	(762,326)
Private placement	5,400,000	270,000	-	-	270,000
Net loss for the year	-	-	-	(207,794)	(207,794)
Balance at March 31, 2019	10,798,082	7,437,198	930,281	(9,067,599)	(700,120)
Disposal of Bear Mountain	-	-	272,990	-	272,990
Net loss for the year	-	-	-	(39,867)	(39,867)
Balance at March 31, 2020	10,798,082	7,437,198	1,203,271	(9,107,466)	(466,997)

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

B-25

SIERRA MADRE DEVELOPMENTS INC. (AN EXPLORATION STAGE COMPANY) Consolidated Statements of Cash Flows

(in Canadian Dollars)


	Year ended March 31, 2020 Year ended March 31, 2019
Operating Activities	$ $
Net loss for the year	(39,867) (207,794)
Less non-cash items: Reversal of outstanding accrued liabilities Changes in non-cash working capital items: Amounts receivable and Reclamation Bond	- 14,363 (1,898) (2,922)
Accounts payable and accrued liabilities Due to related parties	29,316 21,745 (143,797) 46,965
Cash Used in Operating Activities	(156,246) (127,643)
Financing Activities Issuance of shares for private placement	- 270,000
Cash Provided by Investing Activities	- 270,000
Increase (Decrease) in Cash Cash, Beginning of Year	(156,246) 142,357 162,128 19,771
Cash, End of Year	5,882 162,128

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

B-26

SIERRA MADRE DEVELOPMENTS INC. (An Exploration Stage Company) Notes to the Consolidated Financial Statements For the years ended March 31, 2020 and March 31, 2019 (in Canadian Dollars)

1. NATURE AND CONTINUANCE OF OPERATIONS

Sierra Madre Developments Inc. (“the Company”) is a gold and silver focused Canadian exploration company. The Company has not yet located a suitable property. The Company’s head office and principal address is 8792 Shook Road, Mission BC, V2V 7N1.

The Company’s shares are listed on the NEX branch of the TSX Venture Exchange under the symbol SMG.H.

These consolidated financial statements have been prepared on the assumption that the Company will continue as a going concern, meaning they will continue in operation for the foreseeable future and will be able to realize assets and discharge liabilities in the ordinary course of operations. There is a material uncertainty related to conditions and events that may cast significant doubt on the Company’s ability to continue as a going concern, and it may be unable to realize its assets and discharge its liabilities in the normal course of business. As at March 31, 2020, the Company had a working capital deficiency of $466,997 (2019 - $700,120) and an accumulated deficit of $9,107,466 (2019 - $9,067,599). The Company has no source of revenue and does not have sufficient cash to meet its administrative overhead.

On March 11, 2020, the World Health Organization categorized COVID-19 as a pandemic. The potential economic effects within the Company’s environment and in the global markets, possible disruption in supply chains, and measures being introduced at various levels of government to curtail the spread of the virus (such as travel restrictions, closures of non-essential municipal and private operations, imposition of quarantines and social distancing) could have a material impact on the Company’s activities. The extent of the impact of this outbreak and related containment measures on the Company’s activities cannot be reliably estimated at the date of approval of these consolidated financial statements.

The Company’s ability to continue as a going concern is dependent upon the successful results from its mineral property exploration activities and its ability to attain profitable operations and generate funds therefrom and/or to raise equity capital or borrowings sufficient to meet current and future obligations. The business of mining and exploration involves a high degree of risk and there can be no assurance that management’s plans will be successful. These consolidated financial statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Company be unable to continue as a going concern. Such adjustments could be material.

2. BASIS OF PRESENTATION

Statement of Compliance

These consolidated financial statements, including comparatives, have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and Interpretations of the IFRS Interpretations Committee (“IFRIC”) applicable to the preparation of consolidated financial statements. The significant accounting policies have been applied consistently to all periods presented in these consolidated financial statements.

Basis of Preparation

These consolidated financial statements have been prepared on an accrual basis, except for cash flow information, and are based on historical costs, except for certain financial instruments carried at fair value. The Company’s functional and presentation currency is the Canadian dollar.

On February 15, 2019, the Company enacted a 1:10 share consolidation. The number of shares and per share amounts throughout the consolidated financial statements have been retroactively restated to reflect that share consolidation.

B-27

SIERRA MADRE DEVELOPMENTS INC. (An Exploration Stage Company) Notes to the Consolidated Financial Statements For the years ended March 31, 2020 and March 31, 2019 (in Canadian Dollars)

2. BASIS OF PRESENTATION (continued

Basis of Consolidation

For the year ended March 31, 2019 the consolidated financial statements included the accounts of the Company and the Company’s wholly owned subsidiary, Bear Mountain Gold Mines Ltd. Inter-company balances and transactions are eliminated on consolidation.

3. SIGNIFICANT ACCOUNTING POLICIES

a) Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, bank deposits and short-term investments with original maturity dates of three months or less which are readily convertible into a known amount of cash and subject to insignificant risk of changes in value. As at March 31, 2020 and 2019, the Company had no cash equivalents.

b) Foreign Currency Translation

The functional and presentation currency of the Company is the Canadian dollar. Transactions in foreign currencies are translated to the functional currency of the entity at the exchange rate at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the consolidated statements of financial position date are retranslated at the period-end date exchange rates. Non-monetary items which are measured using historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.

c) Exploration and Evaluation Expenditures

Exploration and evaluation activities involve the search for minerals, the determination of technical feasibility, and the assessment of commercial viability of an identified resource.

The Company expenses all costs related to expenditures on mineral property interests, for which the Company does not possess unrestricted ownership and exploration rights, on a property-by-property basis. Such costs include mineral property acquisition costs pursuant to option agreements and exploration and development expenditures, net of any recoveries. Costs are expensed until such time as the extent of mineralization has been determined and mineral property interests are developed.

From time-to-time, the Company may acquire or dispose of a mineral property interest pursuant to the terms of an option agreement. As such options are exercisable entirely at the discretion of the optionee the amounts payable or receivable are not recorded at the time of the agreement. Option payments are recorded as property costs or recoveries when the payments are made or received.

d) Long-lived Assets and Impairment

Long-lived assets are reviewed by management for possible impairment whenever events or changes in circumstances indicate that their carrying value may not be recoverable. An impairment loss is recognized when the carrying amount of an asset exceeds the estimated undiscounted future cash flow expected to result from the use of the asset and its eventual disposition.

B-28

SIERRA MADRE DEVELOPMENTS INC. (An Exploration Stage Company) Notes to the Consolidated Financial Statements For the years ended March 31, 2020 and March 31, 2019 (in Canadian Dollars)

3. SIGNIFICANT ACCOUNTING POLICIES (continued)

e) Earnings/Loss per Share

Earnings (loss) per share is calculated using the weighted average number of shares outstanding during the reporting period. The Company uses the treasury stock method for computing diluted earnings per share. This method assumes that any proceeds obtained upon exercise of dilutive outstanding options or warrants would be used to purchase common shares at the average market price during the period. Diluted loss per share is equivalent to basic loss per share, as the potentially dilutive securities would be anti-dilutive.

f) Share Issue Costs

Professional, consulting, regulatory and other costs directly attributable to financing transactions are recorded as deferred financing costs until the financing transactions are completed, if the completion of the transaction is considered likely; otherwise they are expensed as incurred. Share issue costs are charged to share capital when the related shares are issued. Deferred financing costs related to financing transactions that are not completed are charged to profit or loss.

g) Estimates and Judgements

The preparation of the consolidated financial statements requires management to make certain judgements, estimates and assumptions which affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of expenses during the period. Significant areas requiring the use of management estimates include fair value measurements for financial instruments. Financial results as determined by actual events could differ from those estimates.

Management has applied its judgement in evaluating the Company’s ability to continue as a going concern and related disclosures.

h) Financial Instruments

The Company recognizes a financial asset or financial liability on the statement of financial position when it becomes party to the contractual provisions of the financial instrument. Financial assets are initially measured at fair value, and are derecognized either when the Company has transferred substantially all the risks and rewards of ownership of the financial asset, or when cash flows expire. Financial liabilities are initially measured at fair value and are derecognized when the obligation specified in the contract is discharged, cancelled or expired.

A write-off of a financial asset (or a portion thereof) constitutes a de-recognition event. Write-off occurs when the Company has no reasonable expectations of recovering the contractual cash flows on a financial asset.

Classification and Measurement

The Company determines the classification of its financial instruments at initial recognition. Financial assets and financial liabilities are classified according to the following measurement categories:

i. those to be measured subsequently at fair value, either through profit or loss (“FVTPL”) or through other comprehensive income (“FVTOCI”); and,
ii. those to be measured subsequently at amortized cost.

B-29

SIERRA MADRE DEVELOPMENTS INC. (An Exploration Stage Company) Notes to the Consolidated Financial Statements For the years ended March 31, 2020 and March 31, 2019 (in Canadian Dollars)

3. SIGNIFICANT ACCOUNTING POLICIES (continued)

h) Financial Instruments (continued)

The classification and measurement of financial assets after initial recognition at fair value depends on the business model for managing the financial asset and the contractual terms of the cash flows. Financial assets that are held within a business model whose objective is to collect the contractual cash flows, and that have contractual cash flows that are solely payments of principal and interest on the principal outstanding, are generally measured at amortized cost at each subsequent reporting period. All other financial assets are measured at their fair values at each subsequent reporting period, with any changes recorded through profit or loss or through other comprehensive income (which designation is made as an irrevocable election at the time of recognition).

After initial recognition at fair value, financial liabilities are classified and measured at either:

i. amortized cost;
ii. FVTPL, if the Company has made an irrevocable election at the time of recognition, or when required (for items such as instruments held for trading or derivatives); or,
iii. FVTOCI, when the change in fair value is attributable to changes in the Company’s credit risk.

The Company reclassifies financial assets when and only when its business model for managing those assets changes. Financial liabilities are not reclassified.

Transaction costs that are directly attributable to the acquisition or issuance of a financial asset or financial liability classified as subsequently measured at FVTOCI or amortized cost are included in the fair value of the instrument on initial recognition. Transaction costs for financial assets and financial liabilities classified at FVTPL are expensed in profit or loss.

The Company’s financial assets consists of cash, which is classified and measured at FVTPL, with realized and unrealized gains or losses related to changes in fair value reported in net loss, and reclamation bond, which is classified and measured at amortized cost using the effective interest method. The Company’s financial liabilities consist of accounts payable and accrued liabilities, and amounts due to related parties, which are classified and measured at amortized cost using the effective interest method. Interest expense is reported in net loss.

The effective interest method is a method of calculating the amortized cost of a financial asset or liability and of allocating interest income or expense over the relevant period. The effective interest rate is the rate that discounts estimated future cash payments through the expected life of the financial asset or liability, or where appropriate, a shorter period.

Impairment

The Company assesses all information available, including on a forward-looking basis the expected credit losses associated with any financial assets carried at amortized cost. The impairment methodology applied depends on whether there has been a significant increase in credit risk. To assess whether there is a significant increase in credit risk, the Company compares the risk of a default occurring on the asset as at the reporting date with the risk of default as at the date of initial recognition based on all information available, and reasonable and supportive forwardlooking information.

B-30

SIERRA MADRE DEVELOPMENTS INC. (An Exploration Stage Company) Notes to the Consolidated Financial Statements For the years ended March 31, 2020 and March 31, 2019 (in Canadian Dollars)

3. SIGNIFICANT ACCOUNTING POLICIES (continued)

h). Financial Instruments (continued)

Assets carried at amortized cost

If there is objective evidence that an impairment loss on assets carried at amortized cost has been incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the financial asset’s original effective interest rate. The carrying amount of the asset is then reduced by the amount of the impairment. The amount of the loss is recognized in profit or loss.

If, in a subsequent period, the amount of the impairment loss decreases, and the decrease can be related objectively to an event occurring after the impairment was recognized, the previously recognized impairment loss is reversed to the extent that the carrying value of the asset does not exceed what the amortized cost would have been had the impairment not been recognized. Any subsequent reversal of an impairment loss is recognized in net loss.

i) Income Taxes

Current income taxes are recognized for the estimated income taxes payable or recoverable for the current year. Deferred income tax assets and liabilities are recognized for temporary differences between the tax and accounting bases of assets and liabilities. Deferred income tax assets and liabilities are measured using substantially enacted tax rates that apply for the years in which the temporary differences are expected to be recovered or settled. Deferred income tax assets are recognized to the extent that it is probable the asset will be realized.

j) Flow-through Shares

Flow-through shares are accounted for as compound instruments comprising liability and equity components upon issuance, with any premium received that can be reasonably determined being attributed to the tax benefit provided and considered a liability. Upon qualifying expenditures being incurred, this liability is reversed and recognized in net loss. Costs related to the liability component are also charged to net loss.

The Company estimates the value of the liability component using the residual method, whereby the quoted price of the Company’s non-flow-through shares issued is compared to the price investors paid for the flow-through shares and any difference forms the premium amount.

k) Share-based compensation

The Company records all share-based payments at fair value. Share-based compensation expense for share option grants to employees and others providing similar services is based on the fair value of the stock options issued at the grant date, which is determined using the Black-Scholes Option Pricing Model. Where equity instruments are granted to non-employees, they are recorded at the fair value of goods or services received. When the value of goods or services cannot be reliably estimated, the Black-Scholes Option Pricing Model is used. Compensation expense for share options granted to non-employees is recognized as the options are earned and the services are provided. Compensation expense for share options granted to employees is amortized over the vesting period using the graded vesting model. On exercise of stock options, consideration paid together with the fair value amount previously credited to contributed surplus is recorded as share capital. On expiry of share options, the related sharebased compensation previously credited to contributed surplus, remains in contributed surplus.

l) New Accounting Standards Issued and Adopted

Certain new standards, and amendments to existing standards have been issued by the IASB that are mandatory for accounting periods subsequent to March 31, 2020. The forthcoming updates are not expected to be applicable or are not expected to have a material impact to the Company, and have therefore not been specifically detailed.

B-31

SIERRA MADRE DEVELOPMENTS INC. (An Exploration Stage Company) Notes to the Consolidated Financial Statements For the years ended March 31, 2020 and March 31, 2019 (in Canadian Dollars)

3. SIGNIFICANT ACCOUNTING POLICIES (continued)

l). New Accounting Standards Issued and Adopted (continued)

The Company adopted IFRS 16 - Leases (“IFRS 16”) on April 1, 2019. The objective of the new standard is to eliminate the classification of leases as either operating or financing leases for a lessee and report all leases on the statement of financial position. The only exemption to this will be for leases that are one year or less in duration or for leases of assets with low values. Under IFRS 16 a lessee is required to recognize a right-of-use asset, representing its right to use the underlying asset, and a lease liability, representing its obligations to make lease payments. IFRS 16 also changes the nature of expenses relating to leases, as lease expenses previously recognized for operating leases are replaced with depreciation expense on capitalized right-of-use assets and finance or interest expense for the corresponding lease liabilities associated with the capitalized right-of-use leased assets. The application of IFRS 16 had no impact on the Company’s results and financial position.

4. CAPITAL MANAGEMENT

The Company considers its capital structure to consist of shareholders’ equity (deficit), which at March 31, 2020 was a deficit of $466,997. 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, 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 the Company’s management to sustain future development of the business.

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

5. FINANCIAL INSTRUMENTS

Fair value of financial instruments

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy establishes three levels to classify the inputs to valuation techniques used to measure fair value, by reference to the reliability of the inputs used to estimate the fair values:

Level 1: Valuations based on quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2: Valuations based on directly or indirectly observable inputs in active markets for similar assets or liabilities, other than Level 1 prices such as quoted interest or currency exchange rates; and

Level 3: Valuations based on significant inputs that are not derived from observable market data, such as discounted cash flow methodologies based on internal cash flow forecasts.

As at March 31, 2020, the Company’s financial instruments consisted of cash, reclamation bond, accounts payable and accrued liabilities, and amounts due to related parties. Cash is stated at fair value and classified within Level 1. The fair values of the reclamation bond, accounts payable and accrued liabilities, and amounts due to related parties approximate their carrying values because of the short-term nature of these instruments.

Financial risks

The Company's risk exposures arising from financial instruments and the impact on the Company's consolidated financial statements are summarized below:

B-32

SIERRA MADRE DEVELOPMENTS INC. (An Exploration Stage Company) Notes to the Consolidated Financial Statements For the years ended March 31, 2020 and March 31, 2019 (in Canadian Dollars)

5. FINANCIAL INSTRUMENTS (continued)

Financial risks (continued)

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 a major bank in Canada; accordingly, there is a concentration of credit risk, but it is not considered to be significant.

Liquidity risk

Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset. 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's approach to managing liquidity risk is to ensure that it will have sufficient funds available to meet liabilities when due. The Company’s primary source of funding has been the issuance of equity securities for cash, primarily through private placements, and amounts from related parties. The Company’s access to financing is always uncertain. There can be no assurance of continued access to significant equity funding.

Market risk

The risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: currency risk, interest rate risk and other price risk. Management does not believe the Company is exposed to significant currency, interest or other price risk.

6. EXPLORATION AND EVALUATION EXPENDITURES

The Company spun out its wholly owned subsidiary, Bear Mountain Gold Mines Ltd. (“BMGML”) in the second quarter of the year ended March 31, 2020. The Company has divested title to all of its mineral properties. Effective November 9, 2018 Shareholders approved the transfer of all the Company’s rights to the Harrison Gold Property to Bear Mountain. These rights included the $15,000 reclamation bond that is included in the Company’s consolidated statement of financial position for the year ended March 31, 2019

Title to mineral properties involves certain inherent risks due to the difficulties of determining the validity of certain claims that may be impacted by the frequently ambiguous conveyancing history characteristic of many mineral properties. Up to the point of the BMGML divestiture, the Company had investigated title to the Harrison Gold Property and, to the best of its knowledge, title was in good standing.

7. CAPITAL STOCK

Authorized share capital

Unlimited number of common shares without par value.

Issued share capital

At March 31, 2020, there were 10,798,082 issued and fully paid common shares (March 31, 2019 – 10,798,082).

During the year ended March 31, 2019, the Company issued through a private placement, 5,400,000 common shares at $0.05 per share for gross proceeds of $270,000.

There were no common share transactions in the year ended March 31, 2020.

B-33

SIERRA MADRE DEVELOPMENTS INC. (An Exploration Stage Company) Notes to the Consolidated Financial Statements For the years ended March 31, 2020 and March 31, 2019 (in Canadian Dollars)

7. CAPITAL STOCK (continued)

Stock options

At March 31, 2020 and 2019, the Company had no stock options outstanding.

8. RELATED PARTY TRANSACTIONS

Key management is considered to include the Company’s directors and officers. For the years ended March 31, 2020 and 2019, the Company incurred the following transactions with the President/CEO, the CFO and companies controlled by the President/CEO and a director of the Company:

controlled by the President/CEO and a director of the Company:

Year ended March 31,	2020	2019
	$	$
Management fees	-	18,000
Bear Mountain project management	-	24,000
Accounting and compliance services	22,500	29,600
Rent	-	6,000
	22,500	77,600

At March 31, 2020, the Company owed $6,000 (2019 - $801,143) in respect of services provided to and payments made on behalf of the Company.

	2020 2019
Amounts owed to a company controlled by the CEO	$ $ - 768,615
Amounts owed to a company controlled by a director	- 28,328
Amounts owed to a company controlled by a director Amounts owed to a companycontrolled bya director	3,000 3,800 3,000 400
	6,000 801,143

These amounts are unsecured, non-interest-bearing and have no specific terms of repayment.

These transactions occurred in the normal course of business and were measured at the exchange amount, which was the amount of consideration agreed upon between the related parties.

B-34

SIERRA MADRE DEVELOPMENTS INC. (An Exploration Stage Company) Notes to the Consolidated Financial Statements For the years ended March 31, 2020 and March 31, 2019 (in Canadian Dollars)

9. INCOME TAX

a) Reconciliation of Canadian income taxes at statutory rates with the reported income taxes is as follows:


Year ended March 31,	2020 2019
	$ $
Net loss for the year	39,867 207,794
Statutory tax rate	27.00% 27.00%
Expected income tax recovery Change in unrecognized temporary differences	(10,764) (56,104) 10,764 56,104
Total income tax recovery	- -

b) The significant components of deferred tax assets are as follows:

	2020 2019 $ $

Non capital losses carried forward	2,795,000 2,754,695
Exploration and evaluation costs	232,696 232,696
Deductible temporary differences Unrecognized deductible temporary differences	3,027,696 2,987,391 (3,027,696) (2,987,391)
	- -

Deferred tax asset items have not been recognized in these consolidated financial statements and have been offset by a valuation allowance due to the uncertainty as to their realizability.

c) As at March 31, 2020, the Company has available non-capital losses for Canadian income tax purposes of approximately $2,795,000 which may be carried forward and applied against future taxable income as follows:

	$
2030	319,000
2031	379,000
2032	665,000
2033	462,000
2034	451,000
2035	77,000
2036	62,000
2037	72,000
2038	60,000
2039	208,000
2040	40,000
	2,795,000

B-35

SIERRA MADRE DEVELOPMENTS INC. (An Exploration Stage Company) Notes to the Consolidated Financial Statements For the years ended March 31, 2020 and March 31, 2019 (in Canadian Dollars)

10. SEGMENTED INFORMATION

The Company has one operating segment – the acquisition, exploration and development of mineral properties. As at March 31, 2019, the Company had only one mineral property, located in Canada. As at March 31, 2020, the Company had no mineral properties.

11. SUBSEQUENT EVENTS

Subsequent to the year end, the Company announced it is undertaking, subject to the approval of the TSX Venture Exchange, a share consolidation of 1 new share for every 2 outstanding shares. The share consolidation has not been implemented as of the date of this report.

The Company is also undertaking a private placement of up to $1,000,000 through the issuance of postconsolidated shares at $0.06 per share. The private placement has not closed as of the date of this report.

B-36

SIERRA MADRE DEVELOPMENTS INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE YEAR ENDED MARCH 31, 2020

In Canadian Dollars

B-37

SIERRA MADRE DEVELOPMENTS INC. MANAGEMENT’S DISCUSSION AND ANALYSIS For the year ended March 31, 2020

INTRODUCTION

This Management’s Discussion and Analysis (“MD&A”) of Sierra Madre Developments Inc.’s (“Sierra Madre”, or the “Company”) performance, financial condition, and future prospects has been prepared as of July 29, 2020. This MD&A should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto for the years ended March 31, 2020 and 2019 which have been prepared using International Financial Reporting Standards (“IFRS”).

DESCRIPTION AND OVERVIEW OF BUSINESS

Sierra Madre was incorporated under the Business Corporations Act (British Columbia) on April 30, 2009. The Company had one wholly owned subsidiary - Bear Mountain Gold Mines Ltd. (“Bear Mountain”), a British Columbia company – which was spun-out to shareholders during the year ended March 31, 2020.

Sierra Madre is a mineral exploration company focused on the acquisition and evaluation of precious metal mineral properties in Canada. In December of 2011 the Company acquired an option to earn a 100% interest in the Harrison Gold Project located near Agassiz in southwestern British Columbia. The Harrison Gold Project was disposed of during the year ended March 31, 2020 as part of the spin-out transaction of BMGM. At March 31, 2020, the Company did not hold title to any mineral exploration properties.

The Company’s shares are listed for trading on the NEX branch of the TSX Venture Exchange under the symbol SMG.H. The Company was previously subject to three cease trade orders (CTOs) as a result of the Company’s failure to file its financial statements for the year ended March 31, 2014, as issued on August 6, 2014 by the BC Securities Commission, on August 25, 2014 by the Ontario Securities Commission, and on November 5, 2014 by the Alberta Securities Commission. Following application by the Company, each of those CTOs were revoked on October 2, 2018. The Company’s shares resumed trading on January 30, 2019.

On October 22, 2018 the Company announced its intention to dispose of its interest in the Harrison Gold Property to its subsidiary BMGM. On November 9, 2018 shareholders approved such sale. Under the terms of such sale, BMGM issued 2,699,041 common shares in its capital to the Company, accepted transfer of the Harrison Gold Project and the associated $15,000 reclamation bond, and assumed $287,822 of debt owed by the Company, which amount relates primarily to expenditures incurred by the Company with respect to the Harrison Gold Project. On August 9, 2019 the TSX Venture Exchange approved this arrangement. Pursuant to the terms of the arrangement, the Company was to distribute the shares of BMGM to its shareholders as a return on capital, with a concurrent reduction of the Company’s capital rather than as a capital dividend. The distribution to the Company’s shareholders was initiated on September 19, 2019. The entire disposition transaction is described in greater detail in the Company’s Information Circular dated October 12, 2018.

On November 15, 2018 the Company announced that the directors had approved:

(i) a consolidation of the Company’s 53,980,860 issued and outstanding common shares on the basis of 1 new share for every 10 outstanding shares; and
(ii) a private placement to raise up to $270,000 through the distribution of 5,400,000 postconsolidated shares at $0.05 per share. Funds will be used for costs associated with its corporate reorganization with BMGM, payment of certain debts, and for working capital purposes.

On February 15, 2019 the common shares of the Company were consolidated on a 10 old for 1 new basis to 5,398,082 issued and outstanding.

B-38

SIERRA MADRE DEVELOPMENTS INC. MANAGEMENT’S DISCUSSION AND ANALYSIS For the year ended March 31, 2020

On March 25, 2019 the announced private placement of 5,400,000 shares for $270,000 closed.

On February 25, 2020, the Company announced that it proposes to acquire a prospective gold property in a prolific Quebec gold district, to carry out a share consolidation, name change, and non-brokered private placement financing, and to seek reinstatement on Tier 2 of the TSX Venture Exchange.

The Company announced that it has entered into an acquisition agreement with an arm’s length consortium to acquire 161 claims covering 8,867 hectares (the “Property”) located in close proximity to the major deposits (Osisko Mining’s Windfall Deposit, and Bonterra Resources’ Gladiator and Barry Deposits) of the emerging Urban-Barry Gold Camp in Quebec.

Pursuant to the acquisition agreement, subject the approval of the TSX Venture Exchange, the Company would acquire the Property by the issuance of 7,000,000 post-consolidated common shares of the Company.

On April 3, 2020, the Company announced that it will not be proceeding with the previously announced acquisition of claims in the Urban-Barry Gold Camp area in Quebec, share consolidation and private placement financing.

On June 18, 2020, the Company announced it is undertaking, subject to the approval of the TSX Venture Exchange, a share consolidation of 1 new share for every 2 outstanding shares. The share consolidation has not been implemented as of the date of this report.

On March 11, 2020, the World Health Organization categorized COVID-19 as a pandemic. The potential economic effects within the Company’s environment and in the global markets, possible disruption in supply chains, and measures being introduced at various levels of government to curtail the spread of the virus (such as travel restrictions, closures of non-essential municipal and private operations, imposition of quarantines and social distancing) could have a material impact on the Company’s operations. The extent of the impact of this outbreak and related containment measures on the Company’s operations cannot be reliably estimated at the date of these condensed interim financial statements.

Sierra Madre has no properties nor producing operations and as a consequence, the Company does not generate any operating income or positive cash flow. Its ability to continue as a going concern is entirely dependent upon the Company’s ability to find suitable projects and access public equity markets to raise sufficient capital.

Selected Annual Information

Selected Annual Information
Total revenues	2020 2019 2018 $ $ $ Years ended March 31,
	- - -
Loss for the year	(39,867)	(207,794)	(59,672)
Basic and diluted loss per share Total assets Total long term liabilities Cash dividends declared per share	$0.00 $0.04 $0.00 21,615 190,963 45,684 - - - $0.00 $0.00 $0.00

B-39

SIERRA MADRE DEVELOPMENTS INC. MANAGEMENT’S DISCUSSION AND ANALYSIS For the year ended March 31, 2020

RESULTS OF OPERATIONS – QUARTER

The Company posted a loss of $5,678 for the three months ended March 31, 2020 (2019 – loss of $25,839). The main components of this were professional fees of $160 (2019 - $9,775) and transfer agent and regulatory fees of $500 (2019 - $3,844). Exploration expenditures of $5,000 (2019 – 12,200) were incurred primarily for review and technical report on claims in the Urban-Barry Gold Camp area in Quebec. As previously announced this project was dropped.

RESULTS OF OPERATIONS – YEAR TO DATE

The Company posted a loss of $39,867 loss for the year ended March 31, 2020 (2019 – loss $207,794). The main components of this were professional fees of $59,698 (2019 - $96,737), and transfer agent and filing fees of $17,668 (2019 - $58,582). The decrease from 2019 was due primarily to exploration expenditures that were reversed and transferred to Bear Mountain Gold Mines as part of the split from the Company of $35,765. The costs incurred in audit and legal costs were lower this year by $26,139.

The following is a summary of the Company's results for the eight most recently completed quarters:

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

For the quarters ended
2020 2019
Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1
Financial Results
Net income / (loss) for period (5,678) 38,627 (56,649) (16,167) (25,839) (22,308) (133,429) (26,218)
Per share $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.04 $0.00
Balance Sheet Data
Cash and cash equivalents 5,882 10,901 50,382 161,691 162,128 13,844 40,414 7,542
Total assets 21,615 26,634 64,237 190,546 190,963 41,854 67,812 34,239
Shareholder's equity (deficit) (466,997) (439,478) (478,105) (716,287) (700,120) (919,282) (921,973) (788,544)
----- End of picture text -----

LIQUIDITY AND CAPITAL RESOURCES

For the foreseeable future the Company will continue to rely upon its ability to raise financing through the sale of equity. This will be dependent on the Company identifying suitable projects that will attract investors. Which will also require a general positive investor sentiment, which in turn will be influenced by a positive climate for precious metal exploration generally, a Company’s track record and the experience and calibre of the Company’s management, as well as global economic outlook.

There is no assurance that the Company will be able to access equity funding at the times and in the amounts required to meet the Company’s obligations and fund activities.

At March 31, 2020 the Company had a working capital deficit of $466,997 (2019 - $700,120).

The Company has no loans or bank debt and there are no restrictions on the use of its cash resources. The Company has not paid any cash dividends and management does not expect this will change in the foreseeable future.

B-40

SIERRA MADRE DEVELOPMENTS INC. MANAGEMENT’S DISCUSSION AND ANALYSIS For the year ended March 31, 2020

OUTSTANDING SHARE DATA

Authorized Share capital: unlimited common shares without par value

SHARE DATA AT THE REPORT DATE

Issued and outstanding shares 10,798,082 as at July 29, 2020.

There are no options, warrants or other securities convertible into common shares outstanding.

RELATED PARTY TRANSACTIONS

companies controlled by the President/CEO and a director of the	Company:

YearendedMarch31,	2020	2019
	$	$
Management fees	-	18,000
Bear Mountain project management	-	24,000
Accounting and compliance services	22,500	29,600
Rent	-	6,000
	22,500	77,600

At March 31, 2020, the Company owed $6,000 (2019 - $801,143) in respect of services provided to and payments made on behalf of the Company.

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

2020 2019
$ $
-
Amounts owed to a company controlled by the CEO 768,615
Amounts owed to a company controlled by a director 28,328
Amounts owed to a company controlled by a director 3,000 3,800
Amounts owed to a company controlled by a director 3,000 400
6,000 801,143
----- End of picture text -----

These amounts are unsecured, non-interest-bearing and have no specific terms of repayment.

These transactions occurred in the normal course of business and were measured at the exchange amount, which was the amount of consideration agreed upon between the related parties.

COMMITMENTS

Other than the transaction detailed below, the Company has not entered into any material contractual commitments as at the Report Date.

B-41

SIERRA MADRE DEVELOPMENTS INC. MANAGEMENT’S DISCUSSION AND ANALYSIS For the year ended March 31, 2020

RECENT EVENTS AND OUTLOOK

As outlined above, the Company has transferred all of its interests in the Harrison Gold Property to BMGM in exchange for shares of BMGM and the assumption of some outstanding debts. As a result, BMGM holds all of the Company’s interest in the Omineca Option Agreement, in addition to the Harrison South Mineral Tenures and the Harrison Development Operations Mineral Tenures. The Company distributed the BMGM Shares to the Company’s shareholders on a pro-rata basis, as a return of capital (collectively the “ Reorganization ”).

As a result of the Reorganization, (i) all interests in and to the Omineca Option Agreement are held by BMGM, (ii) the Company’s shareholders and Omineca are currently the sole shareholders of BMGM (pro-rata as to their current shareholdings in SMG); (iii) BMGM will continue to develop the Harrison Gold Property, to build out its board of directors and management team, and to seek a listing on a Canadian stock exchange; (iv) it is hoped that it will allow BMGM to secure the financing necessary to allow it to undertake some additional work on the Harrison Gold Property so as to maintain the Omineca Option Agreement in good standing; and (v) it will allow Sierra Madre to investigate alternative business opportunities.

Additional information regarding the Reorganization and the Harrison Gold Property is contained in the Company’s Information Circular dated October 12, 2018.

FINANCIAL AND OTHER INSTRUMENTS

As at March 31, 2020, the Company’s financial instruments consisted of cash and cash equivalents, accounts payable, accrued liabilities and due to related parties. The fair values of accounts payable, accrued liabilities and due to related parties approximate their carrying values because of the short-term nature of these instruments. It is management’s opinion that the Company is not exposed to significant interest, currency or credit risks arising from the financial instruments.

RISKS AND UNCERTAINTIES

The Company is in the mineral exploration and development business and as such is exposed to a number of risks and uncertainties that are not uncommon to other companies in the same business.

Some of the possible risks include the following:

a) The Company currently has no business operations.

b) The only source of future funds to source and acquire projects which may become available to the Company is through the sale of equity capital.

c) Any future equity financings by the Company for the purpose of raising additional capital may result in substantial dilution to the holdings of existing shareholders.

f) Any future operations of the Company may require added personnel; licenses and permits; and many other potential risks that the Company has no way of determining at this time. As such, there is no assurance that the Company will be successful in obtaining what is required to obtain and operate new activities in the future.

B-42

SIERRA MADRE DEVELOPMENTS INC. MANAGEMENT’S DISCUSSION AND ANALYSIS For the year ended March 31, 2020

CAUTION REGARDING FORWARD LOOKING STATEMENTS

Actual results or events could differ materially from the plans, intentions and expectations expressed or implied in any forward-looking information or statements, including the underlying assumptions thereto, as a result of numerous risks, uncertainties and other factors including: changes in general economic conditions and conditions in the financial markets; litigation, legislative, environmental and other judicial, regulatory, political and competitive developments; technological and operational difficulties encountered in connection with the Company’s activities; and other matters discussed in this MD&A.

B-43

SIERRA MADRE DEVELOPMENTS INC.

(An Exploration Stage Company)

Consolidated Financial Statements

For The Years Ended March 31, 2019 and 2018

In Canadian Dollars

B-44

SIERRA MADRE DEVELOPMENTS INC. (AN EXPLORATION STAGE COMPANY) Consolidated Financial Statements

For the Years Ended March 31, 2019 and 2018

INDEX Independent Auditors’ Report Consolidated Statements of Financial Position Consolidated Statements of Comprehensive Loss Consolidated Statements of Changes in Equity Consolidated Statements of Cash Flows Notes to the Consolidated Financial Statements	Page 3 6 7 8 9 10-18

B-45

Baker Tilly WM LLP 900 – 400 Burrard Street Vancouver, British Columbia Canada V6C 3B7 T: +1 604.684.6212 F: +1 604.688.3497

[email protected] www.bakertilly.ca

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INDEPENDENT AUDITOR'S REPORT

To the Shareholders of Sierra Madre Developments Inc.:

Opinion

We have audited the consolidated financial statements of Sierra Madre Developments Inc., and its subsidiary (the “Company”), which comprise the consolidated statements of financial position as at March 31, 2019 and 2018, and the consolidated statements of comprehensive loss, consolidated statements of changes in equity and consolidated statements of cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as at March 31, 2019 and 2018, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with International Financial Reporting Standards.

Basis for Opinion

Material Uncertainty Related to Going Concern

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

Other Information

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

ASSURANCE • TAX • ADVISORY

Baker Tilly WM LLP is a member of Baker Tilly Canada Cooperative, which is a member of the global network of Baker Tilly International Limited. All members of Baker Tilly Canada Cooperative and Baker Tilly International Limited are separate and independent legal entities.

B-46

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

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

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.

B-47

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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.

The engagement partner on the audit resulting in this independent auditor's report is Graeme L. Cocke.

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CHARTERED PROFESSIONAL ACCOUNTANTS

Vancouver, B.C. July 28, 2019

B-48

SIERRA MADRE DEVELOPMENTS INC. (AN EXPLORATION STAGE COMPANY) Consolidated Statements of Financial Position As at,

(in Canadian Dollars)


	March 31, 2019	March 31, 2018
	$	$
ASSETS
Current
Cash	162,128	19,771
Amounts receivable	13,835	10,913
Reclamation bond	15,000	15,000
Total Assets	190,963	45,684
LIABILITIES
Current
Accounts payable and accrued liabilities	89,940	53,832
Due to relatedparties(note 8)	801,143	754,178
Total Liabilities	891,083	808,010
SHAREHOLDERS' EQUITY (DEFICIT)
Capital stock (note 7)	7,437,198	7,167,198
Contributed surplus	930,281	930,281
Deficit	(9,067,599)	(8,859,805)
Total Shareholders' Equity (Deficit)	(700,120)	(762,326)
Total Liabilities and Shareholders' Equity (Deficit)	190,963	45,684

Nature and continuance of operations (Note 1)

Approved on behalf of the Board:

“Carl von Einsiedel”

..................................................................... Director Carl von Einsiedel

“Robert Anderson” ..................................................................... Director Robert Anderson

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

B-49

SIERRA MADRE DEVELOPMENTS INC. (AN EXPLORATION STAGE COMPANY) Consolidated Statements of Comprehensive Loss

(in Canadian Dollars)

		Year ended		Year ended
	March 31, 2019		March 31, 2018
Expenses		$		$
Bank charges		73		72
Exploration and evaluation expenditures (notes 6 and 8)		40,200		-
Insurance		2,565		-
Management fees (note 8)		18,000		36,000
Professional fees (note 8)		96,737		11,600
Regulatory fees		58,582		-
Rent (note 8)		6,000		12,000
Loss before other items		222,157		59,672
Reversalofoutstanding accruedliabilities		(14,363)		-
Net Loss and Comprehensive Loss for the Year		207,794		59,672
Basic and Diluted Lossper Share	$	(0.04)	$	(0.01)
Weighted Average Number of Common Shares Outstanding (note 7)		5,501,644		5,398,082

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

B-50

SIERRA MADRE DEVELOPMENTS INC. (An Exploration Stage Company) Consolidated Statements of Changes in Equity

(in Canadian Dollars)


	Number of
	Shares (restated -		Contributed
	note 2)	Amount	Surplus	Deficit	Total
		$	$	$	$
Balance at March 31, 2017	5,398,082	7,167,198	930,281	(8,800,133)	(702,654)
Netlossforthe year	-	-	-	(59,672)	(59,672)
Balance at March 31, 2018	5,398,082	7,167,198	930,281	(8,859,805)	(762,326)
Private placement	5,400,000	270,000	-	-	270,000
Netlossforthe year	-	-	-	(207,794)	(207,794)
Balance at March 31, 2019	10,798,082	7,437,198	930,281	(9,067,599)	(700,120)

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

B-51

SIERRA MADRE DEVELOPMENTS INC. (AN EXPLORATION STAGE COMPANY) Consolidated Statements of Cash Flows

(in Canadian Dollars)

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

Year ended Year ended
March 31, 2019 March 31, 2018
$ $
Operating Activities
Net loss for the year (207,794) (59,672)
Less non-cash items:
-
Reversal of outstanding accrued liabilities 14,363
Changes in non-cash working capital items:
Amounts receivable (2,922) (2,576)
Accounts payable and accrued liabilities 21,745 3,752
Due to related parties 46,965 47,924
Cash Used in Operating Activities (127,643) (10,572)
Financing Activities
Issuance of shares for private placement 270,000 -
Cash Provided by Investing Activities 270,000 -
Increase (Decrease) in Cash 142,357 (10,572)
Cash, Beginning of Year 19,771 30,343
Cash, End of Year 162,128 19,771
----- End of picture text -----

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

B-52

SIERRA MADRE DEVELOPMENTS INC. (An Exploration Stage Company) Notes to the Consolidated Financial Statements For the years ended March 31, 2019 and 2018 (in Canadian Dollars)

1. NATURE AND CONTINUANCE OF OPERATIONS

Sierra Madre Developments Inc. (“the Company”) is a gold and silver focused exploration company with an interest in a mineral property in Canada. The Company has not yet been able to determine whether this property contains resources that are economically recoverable. The Company’s head office and principal address is 8792 Shook Road, Mission BC, V2V 7N1.

The Company’s shares are listed on the NEX branch of the TSX Venture Exchange under the symbol SMG.H.

These consolidated financial statements have been prepared on the assumption that the Company and its subsidiary will continue as a going concern, meaning they will continue in operation for the foreseeable future and will be able to realize assets and discharge liabilities in the ordinary course of operations. There are conditions and events that may cast significant doubt on the validity of this assumption. As at March 31, 2019, the Company had a working capital deficiency of $700,120 (2018 - $762,326) and an accumulated deficit of $9,067,599 (2018 - $8,859,805). The Company has no source of revenue and does not have sufficient cash to meet its administrative overhead and maintain its mineral property interests. The Company’s ability to continue as a going concern is dependent upon the successful results from its mineral property exploration activities and its ability to attain profitable operations and generate funds therefrom and/or to raise equity capital or borrowings sufficient to meet current and future obligations. The business of mining and exploration involves a high degree of risk and there can be no assurance that management’s plans will be successful. These consolidated financial statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Company be unable to continue as a going concern. Such adjustments could be material.

The consolidated financial statements for the years ended March 31, 2019 and 2018 were reviewed by the audit committee and approved for issue by the board of directors on July 28, 2019.

2. BASIS OF PRESENTATION

Statement of Compliance

These consolidated financial statements, including comparatives, have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) applicable to the preparation of consolidated financial statements. The significant accounting policies have been applied consistently to all periods presented in these consolidated financial statements.

Basis of Preparation

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SIERRA MADRE DEVELOPMENTS INC. (An Exploration Stage Company) Notes to the Consolidated Financial Statements For the years ended March 31, 2019 and 2018 (in Canadian Dollars)

2. BASIS OF PRESENTATION (continued)

Basis of Consolidation

For the years ended March 31, 2019, and 2018 the consolidated financial statements included the accounts of the Company and the Company’s wholly owned subsidiary, Bear Mountain Gold Mines Ltd. Inter-company balances and transactions are eliminated on consolidation.

3. SIGNIFICANT ACCOUNTING POLICIES

a) Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, bank deposits and short-term investments with original maturity dates of three months or less. As at March 31, 2019 and 2018, the Company had no cash equivalents.

b) Foreign Currency Translation

c) Exploration and Evaluation Expenditures

Exploration and evaluation activities involve the search for minerals, the determination of technical feasibility, and the assessment of commercial viability of an identified resource.

d) Long-lived Assets and Impairment

e) Earnings/Loss per Share

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SIERRA MADRE DEVELOPMENTS INC. (An Exploration Stage Company) Notes to the Consolidated Financial Statements For the years ended March 31, 2019 and 2018 (in Canadian Dollars)

3. SIGNIFICANT ACCOUNTING POLICIES (continued)

f) Share Issue Costs

g) Estimates and Judgements

Management has applied its judgement in evaluating the Company’s ability to continue as a going concern and related disclosures.

h) Financial Instruments

The Company recognizes a financial asset or financial liability on the consolidated statement of financial position when it becomes party to the contractual provisions of the financial instrument. Financial assets are initially measured at fair value, and are derecognized either when the Company has transferred substantially all the risks and rewards of ownership of the financial asset, or when cash flows expire. Financial liabilities are initially measured at fair value and are derecognized when the obligation specified in the contract is discharged, cancelled or expired. A write-off of a financial asset (or a portion thereof) constitutes a de-recognition event. Write-off occurs when the Company has no reasonable expectations of recovering the contractual cash flows on a financial asset.

Classification and Measurement

i. those to be measured subsequently at fair value, either through profit or loss (“FVTPL”) or through other comprehensive income (“FVTOCI”); and,
ii. those to be measured subsequently at amortized cost.

After initial recognition at fair value, financial liabilities are classified and measured at either:

i. amortized cost;
ii. FVTPL, if the Company has made an irrevocable election at the time of recognition, or when required (for items such as instruments held for trading or derivatives); or,
iii. FVTOCI, when the change in fair value is attributable to changes in the Company’s credit risk.

B-55

SIERRA MADRE DEVELOPMENTS INC. (An Exploration Stage Company) Notes to the Consolidated Financial Statements For the years ended March 31, 2019 and 2018 (in Canadian Dollars)

3. SIGNIFICANT ACCOUNTING POLICIES (continued)

h) Financial Instruments (continued)

The Company reclassifies financial assets when and only when its business model for managing those assets changes. Financial liabilities are not reclassified.

Impairment

Assets carried at amortized cost

i) Income Taxes

B-56

SIERRA MADRE DEVELOPMENTS INC. (An Exploration Stage Company) Notes to the Consolidated Financial Statements For the years ended March 31, 2019 and 2018 (in Canadian Dollars)

3. SIGNIFICANT ACCOUNTING POLICIES (continued)

j) Flow-through Shares

Flow-through shares are accounted for as compound instruments comprising liability and equity components upon issuance, with any premium received that can be reasonably determined being attributed to the tax benefit provided and considered a liability. Upon qualifying expenditures being incurred, this liability is reversed and recognized in profit or loss. Costs related to the liability component are also charged to profit or loss.

k) Share-based compensation

l) New Accounting Standards Issued but Not Yet Effective

Certain new standards, and amendments to existing standards have been issued by the IASB that are mandatory for accounting periods noted below. The Company has not early adopted the following new and revised standards that have been issued but are not yet effective. Some updates that are not applicable or are not consequential to the Company have been excluded from the list below.

New accounting standards effective for the Company April 1, 2019:

IFRS 16 Leases (New in 2016; to replace IAS 17, IFRIC 4, SIC-15 and SIC-27); and
IAS 12 Income Taxes (Annual improvements to IFRS Standards 2015-2017 Cycle).

The Company anticipates that the application of the above new and revised standards and amendments will have no material impact on its consolidated results and financial position.

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SIERRA MADRE DEVELOPMENTS INC. (An Exploration Stage Company) Notes to the Consolidated Financial Statements For the years ended March 31, 2019 and 2018 (in Canadian Dollars)

4. CAPITAL MANAGEMENT

The Company considers its capital structure to consist of equity, which at March 31, 2019 was a deficit of $700,120. 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, 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 the Company’s management to sustain future development of the business.

The property in which the Company currently has an interest is in the exploration stage; as such the Company is dependent on external financing to fund its activities. In order to carry out the planned exploration and pay for administrative costs, the Company expects 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.

5. FINANCIAL INSTRUMENTS

Fair value of financial instruments

Level 1: Valuations based on quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 3: Valuations based on significant inputs that are not derived from observable market data, such as discounted cash flow methodologies based on internal cash flow forecasts.

As at March 31, 2019, the Company’s financial instruments consisted of cash, reclamation bond, accounts payable and accrued liabilities, and amounts due to related parties. Cash is stated at fair value and classified within Level 1. The fair values of the reclamation bond, accounts payable and accrued liabilities, and amounts due to related parties approximate their carrying values because of the short-term nature of these instruments.

Financial risks

The Company's risk exposures arising from financial instruments and the impact on the Company's consolidated financial statements are summarized below:

Credit risk

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SIERRA MADRE DEVELOPMENTS INC. (An Exploration Stage Company) Notes to the Consolidated Financial Statements For the years ended March 31, 2019 and 2018 (in Canadian Dollars)

5. FINANCIAL INSTRUMENTS (continued)

Liquidity risk

Market risk

The risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: currency risk, interest rate risk and other price risk. Management does not believe the Company is exposed to significant currency, interest or other price risk.

B-59

SIERRA MADRE DEVELOPMENTS INC. (An Exploration Stage Company) Notes to the Consolidated Financial Statements For the years ended March 31, 2019 and 2018 (in Canadian Dollars)

6. EXPLORATION AND EVALUATION EXPENDITURES

Title to mineral properties involves certain inherent risks due to the difficulties of determining the validity of certain claims that may be impacted by the frequently ambiguous conveyancing history characteristic of many mineral properties. The Company has investigated title to all of its mineral properties and, to the best of its knowledge, titles to all of its properties are in good standing.

Harrison Gold (Abo) Project

On November 17, 2011, the Company signed an Option to Purchase Agreement with Omineca Mining and Metals Ltd. (“Omineca”) to acquire a 100% interest in mineral claims located near Harrison Lake, British Columbia (the “Abo property”). In order to exercise the option, the Company agreed to make cash payments of $1,000,000, issue 133,333 shares and incur exploration expenditures of at least $3,000,000 over five years from November 21, 2011. The vendor will retain a 2% Net Smelter Return royalty (“NSR”). The Company, at any time on or before three years following commencement of commercial production from the property, has the right to purchase one-half of the NSR (1%) for $1,000,000 in cash.

On April 16, 2012, the Company incorporated a wholly owned subsidiary Bear Mountain Gold Mines Ltd. (“Bear Mountain”) to hold title to any additional claims acquired within the Area of Interest established under the option agreement with Omineca.

On May 21, 2015, the Company and Omineca amended the option agreement by agreeing to extend the share payment and expenditure due dates for a period of one year and to reduce the total expenditures requirements to $2,000,000; and by amending the terms of the cash payments such that $400,000 may be made in shares of the Company and the balance of $500,000 paid in instalments by way of an Advanced Preferred Royalty. In consideration, the Company agreed to issue an additional 150,000 shares.

On February 20, 2017, the Company and Omineca further amended the option agreement on the Abo property changing the definition of “Triggering Event”, adding Bear Mountain to the agreement as a third party and amending the option payments schedule. As consideration, Bear Mountain (as amended, and previously the Company) agreed to issue an additional 500,000 shares to Omineca.

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SIERRA MADRE DEVELOPMENTS INC. (An Exploration Stage Company) Notes to the Consolidated Financial Statements For the years ended March 31, 2019 and 2018 (in Canadian Dollars)

6. EXPLORATION AND EVALUATION EXPENDITURES (continued)

A fourth amending agreement was signed on December 31, 2018. The fourth amending agreement acknowledged that the rights and obligations of the agreement had been transferred from the Company to Bear Mountain, and that all future expenditures, share issuances and payments would be delivered from Bear Mountain. In addition, the issuance of 666,666 common shares to Omineca was amended to be due April 30, 2019, instead of the previously agreed December 31, 2018 (such change is reflected in the below table).

Payments, share issuances and exploration expenditures are now due as follows:

Cash	Share		Exploration
Payments	Issuances		Expenditures	DueDates
$			$
25,000	-	*	-	On execution date (paid)
25,000	6,667	*	-	December 5, 2011 (paid and issued)
50,000	10,000	*	-	December 5, 2012 (paid and issued)
-	-	*	50,000	December 31, 2017 (incurred)
-	-	*	100,000	December 31, 2018 (incurred)
-	666,666	**	-	April 30, 2019 (issued subsequent to year-end)
-	500,000	**	100,000	December 31, 2019
400,000	2,000,000	**	1,750,000	December 31, 2020
500,000	-	**	-	Preferred Advance Royalty payments
1,000,000	3,183,333		2,000,000

*Paid or incurred by the Company. As per note 2, share issuances have been restated for the 1:10 consolidation. ** Paid, incurred, or will be paid or incurred by Bear Mountain.

The Preferred Advance Royalty payments of $500,000 start with the beginning of commercial production or the sale of the property.

Haro Option & Joint Venture Agreement.

On November 30, 2017, Bear Mountain signed a property option and joint venture agreement with Haro Metals Corp. (“ Haro ”). The agreement was amended subsequent to year-end on May 23, 2019; the amendments have been identified below. This agreement grants to Haro the sole and exclusive right and option (the “ Option ”) to acquire from Bear Mountain up to an undivided 60% right, title and interest in and to mineral claims collectively referred to as the Harrison South Gold Property, as staked by Bear Mountain.

To exercise the Option, Haro must pay an aggregate of $100,000 to Bear Mountain (either in cash or Shares, at Haro’s election), and incur an aggregate of $500,000 of expenditures on the property in accordance with the following:

(i) on or before December 31, 2017, incur at least $100,000 of expenditures on the property (incurred);
(ii) on or before June 30, 2019 (amended to December 31, 2019), incur an additional $100,000 of expenditures on the property;
(iii) on or before December 31, 2020, incur an additional $300,000 of expenditures on the property, and pay the sum of $100,000 to Bear Mountain (either in cash or shares, at Haro’s election).

B-61

SIERRA MADRE DEVELOPMENTS INC. (An Exploration Stage Company) Notes to the Consolidated Financial Statements For the years ended March 31, 2019 and 2018 (in Canadian Dollars)

6. EXPLORATION AND EVALUATION EXPENDITURES (continued)

Exploration Expenditures

Exploration expenditures incurred during the year related to Bear Mountain were as follows:

YearendedMarch31,	2019	2018
	$	$
Metallurgical testing	8,000		-
Office rent	6,000		-
Geological fieldwork	2,000		-
Project management	18,000		-
Reports, drafting and maps	6,000		-
Legal	200		-
	40,200		-

7. CAPITAL STOCK

Authorized share capital

Unlimited number of common shares without par value.

Issued share capital

At March 31, 2019, there were 10,798,082 issued and fully paid common shares (March 31, 2018 – 5,398,082).

On February 15, 2019, the Company consolidated the outstanding common shares on a 10 for 1 basis.

During the year ended March 31, 2019, the Company issued through a private placement, 5,400,000 common shares at $0.05 per share for gross proceeds of $270,000.

There were no common share transactions in the year ended March 31, 2018.

Stock options

At March 31, 2019 and 2018, the Company had no stock options outstanding.

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SIERRA MADRE DEVELOPMENTS INC. (An Exploration Stage Company) Notes to the Consolidated Financial Statements For the years ended March 31, 2019 and 2018 (in Canadian Dollars)

8. RELATED PARTY TRANSACTIONS

Key management is considered to include the Company’s directors and officers. For the years ended March 31, 2019 and 2018, the Company incurred the following transactions with the President/CEO, the CFO and companies controlled by the President/CEO and a director of the Company:

YearendedMarch31,	2019	2018
	$	$
Management fees	18,000	36,000
Bear Mountain project management	24,000	-
Accounting and compliance services	29,600	-
Rent	6,000	12,000
	77,600	48,000

At March 31, 2019, the Company owed $733,177 (2018 - $754,178) in respect of services provided to and payments made on behalf of the Company.

	2019	2018
	$	$
Amounts owed to a company controlled by the CEO	768,615	725,850
Amounts owed to a company controlled by a director	28,328	28,328
Amounts owed to a company controlled by a director	3,800	-
Amounts owed to a companycontrolled bya director	400	-
	801,143	754,178

These amounts are unsecured, non-interest-bearing and have no specific terms of repayment.

These transactions occurred in the normal course of business and were measured at the exchange amount, which was the amount of consideration agreed upon between the related parties.

9. INCOME TAX

a) Reconciliation of Canadian income taxes at statutory rates with the reported income taxes is as follows:

YearendedMarch31,	2019	2018
	$	$
Net loss for the year	207,794	59,672
Statutory tax rate	27.00%	26.25%
Expected income tax recovery	(56,104)	(15,664)
Changeinunrecognized temporary differences	56,104	15,664
Total income tax recovery	-	-

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SIERRA MADRE DEVELOPMENTS INC. (An Exploration Stage Company) Notes to the Consolidated Financial Statements For the years ended March 31, 2019 and 2018 (in Canadian Dollars)

9. INCOME TAX (continued)

b) The significant components of deferred tax assets are as follows:

	2019 2018
	$ $ Non capital losses carried forward 2,715,000 2,547,000 Exploration and evaluation costs 273,000 233,000 Shareissue costs 696,000 696,000
	Deductible temporary differences 3,684,000 3,476,000 Unrecognized deductible temporary differences (3,684,000) (3,476,000)
	- -

Deferred tax asset items have not been recognized in these consolidated financial statements and have been offset by a valuation allowance due to the uncertainty as to their realizability.

c) As at March 31, 2019, the Company has available non-capital losses for Canadian income tax purposes of approximately $2,715,000 which may be carried forward and applied against future taxable income as follows:

	$
2030	319,000
2031	379,000
2032	665,000
2033	462,000
2034	451,000
2035	77,000
2036	62,000
2037	72,000
2038	60,000
2039	168,000
	2,715,000

10. SEGMENTED INFORMATION

The Company has one operating segment – the acquisition, exploration and development of mineral properties. As at March 31, 2019, the Company had only one property, located in Canada.

11. SUBSEQUENT EVENTS

On October 22, 2018 the Company announced its intention to dispose of its interest in the Harrison Gold Property to its subsidiary Bear Mountain Gold Mines Ltd. (“BMGM”). On November 9, 2018 shareholders approved such sale. Under the terms of such sale, BMGM issued 2,699,041 common shares in its capital to the Company, and assumed $287,822 of debt owed by the Company, which amount relates primarily to expenditures incurred by the Company with respect to the Harrison Gold Property. As at March 31, 2019, the Company had not yet completed the distribution of the BMGM shares to the shareholders of the Company. It is expected that this transaction will occur before the end of the second quarter of fiscal 2020.

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SIERRA MADRE DEVELOPMENTS INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE YEAR ENDED MARCH 31, 2019

In Canadian Dollars

B-65

SIERRA MADRE DEVELOPMENTS INC. MANAGEMENT’S DISCUSSION AND ANALYSIS For the year ended March 31, 2019

INTRODUCTION

This Management’s Discussion and Analysis (“MD&A”) of Sierra Madre Developments Inc.’s (“Sierra Madre”, or the “Company”) performance, financial condition, and future prospects has been prepared as of July 28, 2019. This MD&A should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto for the years ended March 31, 2019 and 2018 which have been prepared using International Financial Reporting Standards (“IFRS”).

DESCRIPTION AND OVERVIEW OF BUSINESS

Sierra Madre was incorporated under the Business Corporations Act (British Columbia) on April 30, 2009. The Company has one wholly owned subsidiary - Bear Mountain Gold Mines Ltd. (“Bear Mountain”), a British Columbia company.

The Company’s shares are listed for trading on the NEX branch of the TSX Venture Exchange under the symbol SMG.H. The Company was previously subject to three cease trade orders (CTOs) as a result of the Company’s failure to file its financial statements for the year ended March 31, 2014, as issued August 6, 2014 by the BC Securities Commission, on August 25, 2014 by the Ontario Securities Commission, and on November 5, 2014 by the Alberta Securities Commission. Following application by the Company, each of those CTOs were revoked on October 2, 2018. The Company’s shares resumed trading on January 30, 2019.

On October 22, 2018 the Company announced its intention to dispose of its interest in the Harrison Gold Property to its subsidiary Bear Mountain Gold Mines Ltd. (“BMGM”). On November 9, 2018 shareholders approved such sale. Under the terms of such sale, BMGM issued 2,699,041 common shares in its capital to the Company, and assumed $287,822 of debt owed by the Company, which amount relates primarily to expenditures incurred by the Company with respect to the Harrison Gold Property. As of the date hereof, the Company has not yet initiated the distribution of the BMGM shares to the shareholders of the Company as described in greater detail in the Company’s Information Circular dated October 12, 2018.

On November 15, 2018 the Company announced that the directors had approved:

(i) a consolidation of the Company’s 53,980,827 issued and outstanding common shares on the basis of one new share for every 10 outstanding shares; and
(ii) a private placement to raise up to $270,000 through the distribution of 5,400,000 postconsolidated shares at $0.05 per share. Funds will be used for costs associated with its corporate reorganization with BMGM, payment of certain debts, and for working capital purposes.

On February 15, 2019 the common shares of the Company were consolidated on a 10 old for 1 new basis to 5,398,082 issued and outstanding.

On March 25, 2019 the announced private placement of 5,400,000 shares for $270,000 closed.

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SIERRA MADRE DEVELOPMENTS INC. MANAGEMENT’S DISCUSSION AND ANALYSIS For the year ended March 31, 2019

Sierra Madre has no producing operations and as a consequence, the Company does not generate any operating income or positive cash flow. Its ability to continue as a going concern is entirely dependent upon the Company’s ability to access public equity markets to raise sufficient capital.

Selected Annual Information

Selected Annual Information
Total revenues Loss for the year Basic and diluted loss per share Total assets Total long term liabilities Cash dividends declared per share	2019 2018 2017 $ $ $ Years ended March 31,
	- - - (207,794) (59,672) (74,678) $0.04 $0.01 $0.00 190,963 45,684 53,680 - - - $0.00 $0.00 $0.00

RESULTS OF OPERATIONS – YEAR TO DATE

The Company posted a loss of $207,794 for the year ended March 31, 2019 (2018 - $59,672). The main - components of this were professional fees of $96,737 (2018 $11,600), exploration expenditures of - - $40,200 (2018 $nil), management fees of $18,000 (2018 $36,000) and transfer agent and filing fees of - $58,582 (2018 $nil). The increase was due primarily to the costs incurred in audit and legal costs associated with obtaining revocation orders to the CTOs, and associated filing fees with the British Columbia, Alberta and Ontario securities commissions.

RESULTS OF OPERATIONS – QUARTER

The Company posted a $25,839 loss for the three months ended March 31, 2019 (2018 - $23,618). The main components of this were exploration expenditures of $12,200 (2018 - $nil), professional fees of $9,775 - (2018 $11,600). A gain was realized from the reversal of expenditures incurred in 2013 on the Penoles project in Mexico that did not relate to the Company. The increased exploration was for field work on the Harrison Gold Project required to meet the exploration expenditures requirements under the option agreement.

The following is a summary of the Company's results for the eight most recently completed quarters:

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SIERRA MADRE DEVELOPMENTS INC. MANAGEMENT’S DISCUSSION AND ANALYSIS For the year ended March 31, 2019

Financial Results Net income / (loss) for period Per share Balance Sheet Data Cash and cash equivalents Total assets Shareholder's equity	Years ended March 31 2018 2019
	Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1
	(25,839) (22,308) (133,429) (26,218) (23,618) (12,018) (12,018) (12,018) $0.00 $0.00 -$0.02 $0.00 $0.00 $0.00 $0.00 $0.00 162,128 13,844 40,414 7,542 19,771 30,289 30,307 30,325 190,963 41,854 67,812 34,239 45,684 55,810 55,228 54,646 (700,120) (919,282) (921,973) (788,544) (762,326) (738,707) (726,689) (714,671)

LIQUIDITY AND CAPITAL RESOURCES

For the foreseeable future the Company will continue to rely upon its ability to raise financing through the sale of equity. This will be dependent on positive investor sentiment, which in turn will be influenced by a positive climate for precious metal exploration generally, a Company’s track record and the experience and calibre of the Company’s management, as well as global economic outlook.

There is no assurance that the Company will be able to access equity funding at the times and in the amounts required to meet the Company’s obligations and fund activities.

At March 31, 2019 the Company had a working capital deficit of $700,120 (2018 - $762,326).

The Company has no loans or bank debt and there are no restrictions on the use of its cash resources. The Company has not paid any dividends and management does not expect this will change in the foreseeable future.

OUTSTANDING SHARE DATA

Authorized Share capital: unlimited common shares without par value

SHARE DATA AT THE REPORT DATE

Issued and outstanding shares 10,798,082

There are no options, warrants or other securities convertible into common shares outstanding.

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SIERRA MADRE DEVELOPMENTS INC. MANAGEMENT’S DISCUSSION AND ANALYSIS For the year ended March 31, 2019

RELATED PARTY TRANSACTIONS

Period ended March 31,	2019	2018
	$	$
Management fees	18,000	36,000
Bear Mountain project management	24,000	-
Accounting and complience services	29,600	-
Rent	6,000	12,000
	77,600	48,000

At March 31, 2019, the Company owed $733,177 (2018 - $754,178) in respect of services provided to and payments made on behalf of the Company.

	2019	2018
	$	$
Amounts owed to a company controlled by the CEO	768,615	725,850
Amounts owed to a company controlled by a director	28,328	28,328
Amounts owed to a company controlled by a director	3,800	-
Amounts owed to a companycontrolled bya director	400	-
	801,143	754,178

These amounts are unsecured, non-interest-bearing and have no specific terms of repayment.

These transactions occurred in the normal course of business and were measured at the exchange amount, which was the amount of consideration agreed upon between the related parties.

COMMITMENTS

Other than the transaction detailed below, the Company has not entered into any material contractual commitments as at the Report Date.

RECENT EVENTS AND OUTLOOK

As outlined above, the Company has transferred all of its interests in the Harrison Gold Property to BMGM in exchange for shares of BMGM and the assumption of some outstanding debts. As a result, BMGM holds all of the Company’s interest in the Omineca Option Agreement, in addition to the Harrison South Mineral Tenures, the Harrison Development Operations Mineral Tenures, and the Haro Option. It is the Company’s intention to distribute the BMGM Shares to the Company’s shareholders on a pro-rata basis, as a return of capital (collectively the “ Reorganization ”). As of the date of this report the Company has not yet distributed the BMGM shares.

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SIERRA MADRE DEVELOPMENTS INC. MANAGEMENT’S DISCUSSION AND ANALYSIS For the year ended March 31, 2019

As a result of the Reorganization, (i) all interests in and to the Omineca Option Agreement will be held by BMGM, (ii) the Company’s shareholders will become the sole shareholders of BMGM (pro-rata as to their current shareholdings in SMG); (iii) BMGM will continue to develop the Harrison Gold Property, to build out its board of directors and management team, and to seek a listing on a Canadian stock exchange; (iv) it is hoped that it will allow BMGM to secure the financing necessary to allow it to undertake some additional work on the Harrison Gold Property so as to maintain the Omineca Option Agreement in good standing; and (v) it will allow Sierra Madre to investigate alternative business opportunities.

Additional information regarding the Reorganization and the Harrison Gold Property is contained in the Company’s Information Circular dated October 12, 2018.

FINANCIAL AND OTHER INSTRUMENTS

As at March 31, 2019, the Company’s financial instruments consisted of cash and cash equivalents, accounts payable, accrued liabilities and due to related parties. The fair values of accounts payable, accrued liabilities and due to related parties approximate their carrying values because of the short-term nature of these instruments. It is management’s opinion that the Company is not exposed to significant interest, currency or credit risks arising from the financial instruments.

RISKS AND UNCERTAINTIES

The Company is in the mineral exploration and development business and as such is exposed to a number of risks and uncertainties that are not uncommon to other companies in the same business.

Some of the possible risks include the following:

a) The industry is capital intensive and subject to fluctuations in metal prices, market sentiment, foreign exchange and interest rates.

b) The Reorganization has not yet been completed in its entirety, and there is no assurance it will be completed in the manner described above, or at all.

c) The only source of future funds for further exploration programs, or if such exploration programs are successful for the development of economic ore bodies and commencement of commercial production thereon, which may become available to the Company is the sale of equity capital or the offering by the Company of an interest in its properties to be earned by another party carrying out further exploration or development.

d) The Company is very reliant upon its existing management and if the services of such personnel were withdrawn for any reason, this could have a material adverse impact on the Company’s operating activities.

e) Any future equity financings by the Company for the purpose of raising additional capital may result in substantial dilution to the holdings of existing shareholders.

f) The Company must comply with environmental regulations governing air and water quality and land disturbance and provide for mine reclamation and closure costs.

g) The operations of the Company will require various licenses and permits from various governmental authorities. There is no assurance that the Company will be successful in obtaining the necessary licenses and permits to continue its exploration and development activities in the future.

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SIERRA MADRE DEVELOPMENTS INC. MANAGEMENT’S DISCUSSION AND ANALYSIS For the year ended March 31, 2019

Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, then actual results may vary materially from those described in forward-looking statements. The Company has not completed a feasibility study on any of its deposits to determine if it hosts a mineral resource that can be economically developed and profitably mined.

All disclosure of scientific or technical information pertaining to the Property contained herein has been reviewed and approved by Carl von Einsiedel, a qualified person as defined in NI 43-101 – Standards of Disclosure for Mineral Projects .

CAUTION REGARDING FORWARD LOOKING STATEMENTS

Although the Company believes that the expectations represented by such forward-looking information or statements are reasonable, there is significant risk that the forward-looking information or statements may not be achieved, and the underlying assumptions thereto will not prove to be accurate. Forward-looking information or statements in this MD&A include, but are not limited to, information or statements concerning the Company’s expectations for: exploration results on the Company’s exploration properties; capital costs anticipated on the Company’s exploration properties; the Company’s current financial resources being sufficient to fund operations; and the Company’s ability to obtain additional funds through the sale of equity and/or the optioning of its mineral property interests via option or joint venture agreements.

Actual results or events could differ materially from the plans, intentions and expectations expressed or implied in any forward-looking information or statements, including the underlying assumptions thereto, as a result of numerous risks, uncertainties and other factors including: changes in general economic conditions and conditions in the financial markets; changes in demand and prices for the minerals the Company expects to produce; litigation, legislative, environmental and other judicial, regulatory, political and competitive developments; technological and operational difficulties encountered in connection with the Company’s activities; and other matters discussed in this MD&A.

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SIERRA MADRE DEVELOPMENTS INC.

(An Exploration Stage Company)

Consolidated Financial Statements

For The Years Ended March 31, 2018 and 2017

In Canadian Dollars

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SIERRA MADRE DEVELOPMENTS INC. (AN EXPLORATION STAGE COMPANY) Consolidated Financial Statements

For the Years Ended March 31, 2018 and 2017

INDEX Independent Auditor’s Report Consolidated Statements of Financial Position Consolidated Statements of Comprehensive Loss Consolidated Statements of Changes in Equity Consolidated Statements of Cash Flows Notes to the Consolidated Financial Statements	Page 3 4 5 6 7 8-16

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INDEPENDENT AUDITOR’S REPORT

To the Shareholders of Sierra Madre Developments Inc.

We have audited the accompanying consolidated financial statements of Sierra Madre Developments Inc. and its subsidiary, which comprise the consolidated statements of financial position as at March 31, 2018 and 2017, and the consolidated statements of comprehensive loss, consolidated statements of changes in equity and consolidated statements of cash flows for the years then ended, and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Consolidated financial statements

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

Auditor’s Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the consolidated financial statements 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 entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

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

Opinion

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of Sierra Madre Developments Inc. and its subsidiary as at March 31, 2018 and 2017, and their financial performance and cash flows for the years then ended in accordance with International Financial Reporting Standards.

Emphasis of Matter

Without modifying our opinion, we draw attention to note 1 in the consolidated financial statements which indicates the existence of material uncertainties that may cast significant doubt on the ability of Sierra Madre Developments Inc. and its subsidiary to continue as a going concern.

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CHARTERED PROFESSIONAL ACCOUNTANTS

July 30, 2018 Vancouver, B.C.

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SIERRA MADRE DEVELOPMENTS INC. (AN EXPLORATION STAGE COMPANY) Consolidated Statements of Financial Position

(in Canadian Dollars)

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

March 31, 2018 March 31, 2017
$ $
ASSETS
Current
Cash 19,771 30,343
Amounts receivable 10,913 8,337
Reclamation bond 15,000 15,000
Total Assets 45,684 53,680
LIABILITIES
Current
Accounts payable and accrued liabilities 53,832 50,080
Due to related parties (note 9) 754,178 706,254
Total Liabilities 808,010 756,334
SHAREHOLDERS' EQUITY
Capital stock (note 7) 7,167,198 7,167,198
Contributed surplus (note 8) 930,281 930,281
Deficit (8,859,805) (8,800,133)
Total Shareholders' Equity (762,326) (702,654)
Total Liabilities and Shareholders' Equity 45,684 53,680
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Nature and continuance of operations (Note 1)

Approved on behalf of the Board:

“Carl von Einsiedel”

..................................................................... Director Carl von Einsiedel

“Garth Kirkham”

..................................................................... Director Garth Kirkham

See Accompanying Notes to the Consolidated Financial Statements

B-75

SIERRA MADRE DEVELOPMENTS INC. (AN EXPLORATION STAGE COMPANY) Consolidated Statements of Comprehensive Loss

(in Canadian Dollars)

	Year ended	Year ended
	March 31, 2018	March 31, 2017
Expenses	$	$
Bank charges	72	102
Exploration and evaluation expenditures	-	2,500
Insurance	-	5,310
Management fees (note 9)	36,000	39,000
Professional fees	11,600	7,000
Regulatory fees	-	8,766
Rent (note 9)	12,000	12,000
Net Loss and Comprehensive Loss for the Year	59,672	74,678
Basic and Diluted Lossper Share	0.00	0.00
Weighted Average Number of Common Shares Outstanding	53,980,827	53,980,827

See Accompanying Notes to the Consolidated Financial Statements

B-76

SIERRA MADRE DEVELOPMENTS INC. (An Exploration Stage Company) Consolidated Statements of Changes in Equity

(in Canadian Dollars)

	Number of		Contributed
	Shares	Amount	Surplus	Deficit	Total
		$	$	$	$
Balance at March 31, 2016	53,980,827	7,167,198	930,281	(8,725,455)	(627,976)
Netlossforthe year	-	-	-	(74,678)	(74,678)
Balance at March 31, 2017	53,980,827	7,167,198	930,281	(8,800,133)	(702,654)
Netlossforthe year	-	-	-	(59,672)	(59,672)
Balance at March 31, 2018	53,980,827	7,167,198	930,281	(8,859,805)	(762,326)

See Accompanying Notes to the Consolidated Financial Statements

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SIERRA MADRE DEVELOPMENTS INC. (AN EXPLORATION STAGE COMPANY) Consolidated Statements of Cash Flows

(in Canadian Dollars)

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Year ended Year ended
March 31, 2018 March 31, 2017
$ $
Operating Activities
Net loss for the year (59,672) (74,678)
Changes in non-cash working capital items:
Amounts receivable (2,576) 113,598
-
Accounts payable and accrued liabilities 3,752
Due to related parties 47,924 400
Cash (Used in) Provided By Operating Activities (10,572) 39,320
Investing Activity
Reclamation bond - (10,000)
Cash (Used in) Provided By Investing Activity - (10,000)
Increase (Decrease) in Cash (10,572) 29,320
Cash, Beginning of Year 30,343 1,023
Cash, End of Year 19,771 30,343
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See Accompanying Notes to the Consolidated Financial Statements

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SIERRA MADRE DEVELOPMENTS INC. (An Exploration Stage Company) Notes to the Consolidated Financial Statements For the years ended March 31, 2018 and 2017 (in Canadian Dollars)

1. NATURE AND CONTINUANCE OF OPERATIONS

On August 6, 2014, the BC Securities Commission issued a cease trade order (“CTO”) as a result of the Company’s failure to file its financial statements for the year ended March 31, 2014. Prior to the CTO, the Company’s shares traded on the TSX Venture Exchange (“TSX-V”) under the symbol SMG.

These consolidated financial statements have been prepared on the assumption that the Company and its subsidiary will continue as a going concern, meaning they will continue in operation for the foreseeable future and will be able to realize assets and discharge liabilities in the ordinary course of operations. There are conditions and events that cast significant doubt on the validity of this assumption. As at March 31, 2018, the Company had a working capital deficiency of $762,326 (2017 – $702,654) and an accumulated deficit of $8,859,805 (2017- $8,800,133). The Company has no source of revenue and does not have sufficient cash to meet its administrative overhead and maintain its mineral property interests. The Company’s ability to continue as a going concern is dependent upon the successful results from its mineral property exploration activities and its ability to attain profitable operations and generate funds therefrom and/or to raise equity capital or borrowings sufficient to meet current and future obligations. However, the CTO precludes the Company from raising any money. The business of mining and exploration involves a high degree of risk and there can be no assurance that management’s plans will be successful. Different bases of measurement may be appropriate if the Company is not expected to continue operations for the foreseeable future. These consolidated financial statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Company be unable to continue as a going concern. Such adjustments could be material.

2. BASIS OF PRESENTATION

Statement of Compliance

These financial statements are prepared in accordance with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board (“IASB”) and interpretations of the IFRS Interpretations Committee (“IFRIC”).

Basis of Preparation

These financial statements have been prepared on an accrual basis, except for cash flow information, and are based on historical costs, except for financial instruments measured at fair value. The Company’s functional and presentation currency is the Canadian dollar.

Basis of Consolidation

For the years ended March 31, 2018, and 2017 the financial statements included the accounts of the Company’s wholly owned subsidiary, Bear Mountain Gold Mines Ltd. Inter-company balances and transactions are eliminated on consolidation.

3. SIGNIFICANT ACCOUNTING POLICIES

a) Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, bank deposits and short-term investments with original maturity dates of three months or less. As at March 31, 2018 and 2017, the Company had no cash equivalents.

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SIERRA MADRE DEVELOPMENTS INC. (An Exploration Stage Company) Notes to the Consolidated Financial Statements For the years ended March 31, 2018 and 2017 (in Canadian Dollars)

3. SIGNIFICANT ACCOUNTING POLICIES (continued)

b) Foreign Currency Translation

The functional and presentation currency of the Company is the Canadian dollar. Transactions in foreign currencies are translated to the functional currency of the entity at the exchange rate at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the statements of financial position date are retranslated at the period-end date exchange rates. Non-monetary items which are measured using historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.

c) Exploration and Evaluation Expenditures

Exploration and evaluation activities involve the search for minerals, the determination of technical feasibility, and the assessment of commercial viability of an identified resource.

d) Long-lived Assets and Impairment

e) Earnings/Loss per Share

Earnings (loss) per share is calculated using the weighted average number of shares outstanding during the reporting period. The Company uses the treasury stock method for computing diluted loss per share. This method assumes that any proceeds obtained upon exercise of outstanding options or warrants would be used to purchase common shares at the average market price during the period.

f) Share Issue Costs

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SIERRA MADRE DEVELOPMENTS INC. (An Exploration Stage Company) Notes to the Consolidated Financial Statements For the years ended March 31, 2018 and 2017 (in Canadian Dollars)

3. SIGNIFICANT ACCOUNTING POLICIES (continued)

g) Estimates and Judgements

The preparation of the financial statements requires management to make certain judgements, estimates and assumptions which affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of expenses during the period. Significant areas requiring the use of management estimates include expected future tax rates and fair value measurements for financial instruments. Financial results as determined by actual events could differ from those estimates.

Management has applied its judgement in evaluating the Company’s ability to continue as a going concern prospects and related disclosures.

h) Financial Instruments

All financial assets are initially recorded at fair value and classified into one of four categories: held to maturity, available for sale, loans and receivables or at fair value through profit or loss (“FVTPL”). All financial liabilities are initially recorded at fair value and classified as either FVTPL or other financial liabilities. Financial instruments comprise cash, reclamation bond, accounts payable and accrued liabilities and amounts due to related parties. Management has classified financial assets and liabilities as follows:

1) Financial assets

The Company has classified its cash at FVTPL and its reclamation bond as loans and receivables. A financial instrument is classified at FVTPL if it is held for trading or is designated as such upon initial recognition. Transaction costs associated with financial instruments classified at FVTPL are expensed as incurred. Financial instruments at FVTPL are measured at fair value and changes therein are recognized in profit or loss.

2) Financial liabilities

The Company has classified its accounts payable and accrued liabilities and amounts due to related parties as other financial liabilities. The Company derecognizes a financial liability when its contractual obligations are discharged, cancelled or expire. Financial liabilities classified as other financial liabilities are initially recognized at fair value less directly attributable transaction costs. After initial recognition, other financial liabilities are subsequently measured at amortized cost using the effective interest rate method. The effective interest rate method is a method of calculating the amortized cost of a financial liability and allocating interest expense over the relevant period. The effective interest rate is the rate that discounts estimated future cash payments through the expected life of the financial liability, or where appropriate, a shorter period.

i) Income Taxes

Flow-through shares are accounted for as compound instruments comprising liability and equity components upon issuance, with any premium received that can be reasonably determined being attributed to the tax benefit provided and considered a liability. Upon qualifying expenditures being incurred, this liability is reversed and recognized in profit or loss. Costs related to the liability component are also charged to profit or loss.

B-81

SIERRA MADRE DEVELOPMENTS INC. (An Exploration Stage Company) Notes to the Consolidated Financial Statements For the years ended March 31, 2018 and 2017 (in Canadian Dollars)

3. SIGNIFICANT ACCOUNTING POLICIES (continued)

j) Share-based compensation

The Company records all share-based payments at fair value. Share-based compensation expense for share option grants to employees and others providing similar services is based on the fair value of the stock options issued at the grant date, which is determined using the Black-Scholes Option-Pricing Model. Where equity instruments are granted to non-employees, they are recorded at the fair value of goods or services received. When the value of goods or services cannot be reliably estimated, the Black-Scholes Option Pricing Model is used. Compensation expense for share options granted to non-employees is recognized as the options are earned and the services are provided. Compensation expense for share options granted to employees is amortized over the vesting period using the graded vesting model. On exercise of stock options, consideration paid together with the fair value amount previously credited to contributed surplus is recorded as share capital.

k) New Accounting Standards Issued but Not Yet Effective

New accounting standards effective for the Company April 1, 2018

IFRS 9 Financial instruments
IFRS 15 Revenue from contracts with customers.

New accounting standards effective for the Company April 1, 2019

IFRS 16 Leases (New in 2016; to replace IAS 17, IFRIC 4, SIC-15 and SIC-27); and
IAS 12 Income Taxes (Annual improvements to IFRS Standards 2015-2017 Cycle).

The Company anticipates that the application of the above new and revised standards and amendments will have no material impact on its results and financial position.

4. CAPITAL MANAGEMENT

The Company considers its capital structure to consist of equity, which at March 31, 2018 was a deficit of $762,326. 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, 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 the Company’s management to sustain future development of the business.

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

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SIERRA MADRE DEVELOPMENTS INC. (An Exploration Stage Company) Notes to the Consolidated Financial Statements For the years ended March 31, 2018 and 2017 (in Canadian Dollars)

5. FINANCIAL INSTRUMENTS

Fair value of financial instruments

Level 1: Valuations based on quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 3: Valuations based on significant inputs that are not derived from observable market data, such as discounted cash flow methodologies based on internal cash flow forecasts.

As at March 31, 2018, the Company’s financial instruments consisted of cash, reclamation bond, accounts payable and accrued liabilities and amounts due to related parties. Cash is stated at fair value and classified within Level 1. The reclamation bond is classified as loans or receivables and carried at amortized cost. The fair values of the reclamation bond, accounts payable and accrued liabilities and amounts due to related parties approximate their carrying values because of the short-term nature of these instruments.

Financial risks

The Company's risk exposures arising from financial instruments and the impact on the Company's financial statements are summarized below:

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 a major bank in Canada. Accordingly, there is a concentration of credit risk.

Liquidity risk

Liquidity risk is that an entity will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset. 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's approach to managing liquidity risk is to ensure that it will have sufficient funds available to meet liabilities when due. The Company’s primary source of funding has been the issuance of equity securities for cash, primarily through private placements, and amounts from related parties. The Company’s access to financing is always uncertain. There can be no assurance of continued access to significant equity funding.

Market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: currency risk, interest rate risk and other price risk. Management does not believe the Company is exposed to significant currency or other price risk.

(a) 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. Interest rate risk is considered to be minimal.

B-83

SIERRA MADRE DEVELOPMENTS INC. (An Exploration Stage Company) Notes to the Consolidated Financial Statements For the years ended March 31, 2018 and 2017 (in Canadian Dollars)

6. EXPLORATION AND EVALUATION EXPENDITURES

Title to mineral properties involves certain inherent risks due to the difficulties of determining the validity of certain claims that may be impacted by the frequently ambiguous conveyancing history characteristic of many mineral properties. The Company has investigated title to all of its mineral properties and, to the best of its knowledge, titles to all of its properties are in good standing.

Harrison Gold (Abo) Project

On November 17, 2011, the Company signed an Option to Purchase Agreement with Omineca Mining and Metals Ltd. (“Omineca”) to acquire a 100% interest in 11 mineral claims comprising approximately 2,427 hectares located near Harrison Lake, British Columbia. In order to exercise the option, the Company agreed to make cash payments of $1,000,000, issue 1,333,334 post-consolidated shares and incur exploration expenditures of at least $3,000,000 over five years from November 21, 2011. The vendor will retain a 2% Net Smelter Return royalty (“NSR”). The Company, at any time on or before three years following commencement of commercial production from the property, has the right to purchase one-half of the NSR (1%) for $1,000,000 in cash.

On May 21, 2015, the Company and Omineca amended the option agreement by agreeing to extend the share payment and expenditure due dates for a period of one year and to reduce the total expenditures requirements to $2,000,000; and by amending the terms of the cash payments such that $400,000 may be made in shares of the Company and the balance of $500,000 paid in instalments by way of an Advanced Preferred Royalty, to be paid a minimum of $100,000 per year commencing 60 days after the Triggering Event (as defined). In consideration, the Company agreed to issue an additional 1,500,000 shares.

On February 20, 2017, the Company and Omineca further amended the option agreement on the Abo property changing the definition of “Triggering Event”, adding Bear Mountain Gold Mines Ltd. to the agreement as a third party and amending the option payments schedule. As consideration, the Company agreed to issue an additional 500,000 shares to Omineca. Payments, share issuances and exploration expenditures are now due as follows:

Cash	Share	Exploration
Payments	Issuances	Expenditures	DueDates
$		$
25,000	-	-	On execution date (paid)
25,000	66,667	-	December 5, 2011 (paid and issued)
50,000	100,000	-	December 5, 2012 (paid and issued)
-	-	50,000	December 31, 2017 (incurred)
-	666,666	100,000	December 31, 2018
-	500,000	100,000	December 31, 2019
400,000	2,000,000	1,750,000	December 31, 2020
500,000	-	-	Preferred Advance Royalty payments
1,000,000	3,333,333	2,000,000

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SIERRA MADRE DEVELOPMENTS INC. (An Exploration Stage Company) Notes to the Consolidated Financial Statements For the years ended March 31, 2018 and 2017 (in Canadian Dollars)

6. EXPLORATION AND EVALUATION EXPENDITURES – continued

Haro Option & Joint Venture Agreement

On November 30, 2017, Bear Mountain signed a property option and joint venture agreement with Haro Metals Corp. (“ Haro ”). This agreement grants to Haro the sole and exclusive right and option (the “ Option ”) to acquire from Bear Mountain up to an undivided 60% right, title and interest in and to five mineral claims totaling approximately 74.41 hectares, collectively referred to as the Harrison South Gold Property, as staked by Bear Mountain.

(i) on or before December 31, 2017, incur at least $100,000 of expenditures on the property (incurred);
(ii) on or before June 30, 2019, incur an additional $100,000 of expenditures on the property;
(iii) on or before December 31, 2020, incur an additional $300,000 of expenditures on the property, and pay the sum of $100,000 to Bear Mountain (either in cash or shares, at Haro’s election).

7. CAPITAL STOCK

Authorized share capital

Unlimited number of common shares without par value.

Issued share capital

At March 31, 2018, there were 53,980,827 issued and fully paid common shares (March 31, 2017 – 53,980,827).

Stock options

At March 31, 2018 and 2017, the Company had no stock options outstanding.

8. CONTRIBUTED SURPLUS

The fair value of share-based compensation is recognized as equity and recorded in contributed surplus until such time that the options are exercised, at which time the corresponding amount is transferred to share capital.

B-85

SIERRA MADRE DEVELOPMENTS INC. (An Exploration Stage Company) Notes to the Consolidated Financial Statements For the years ended March 31, 2018 and 2017 (in Canadian Dollars)

9. RELATED PARTY TRANSACTIONS

The Company incurred the following transactions with the President/CEO, the CFO and companies controlled by the President/CEO and a director of the Company:

YearendedMarch31,	2018	2017
	$	$
Management fees	36,000	39,000
Rent	12,000	12,000
	48,000	51,000

At March 31, 2018, the Company owed $754,178 (2017 - $706,254) in respect of services provided to and payments made on behalf of the Company.

	2018	2017
	$	$
Amounts owed to a company controlled by the CEO	725,850	671,926
Amounts owed to a company controlled by a director	28,328	28,328
Amounts owed to the CFO	-	6,000

These amounts are unsecured, non-interest-bearing and have no specific terms of repayment.

These transactions occurred in the normal course of business and were measured at the exchange amount, which was the amount of consideration agreed upon between the related parties.

10. INCOME TAX

a) Reconciliation of Canadian income taxes at statutory rates with the reported income taxes is as follows:

YearendedMarch31,	2018	2017
	$	$
Net loss for the year	59,672	74,678
Statutory tax rate	26.25%	26.00%
Expected income tax recovery	(15,664)	(19,416)
Deductible and non-deductible amounts	-	650
Changeinunrecognized termporary differences	15,664	18,766
Total income tax recovery	-	-

B-86

SIERRA MADRE DEVELOPMENTS INC. (An Exploration Stage Company) Notes to the Consolidated Financial Statements For the years ended March 31, 2018 and 2017 (in Canadian Dollars)

10. INCOME TAX - continued

b) The significant components of deferred tax assets are as follows:

	2018 2017
	$ $ Non capital losses carried forward 2,547,000 2,487,000 Exploration and evaluation costs 233,000 233,000 Shareissue costs 696,000 696,000
	Deductible temporary differences 3,476,000 3,416,000 Unrecognized deductible temporary differences (3,476,000) (3,416,000)
	- -

Deferred tax assets items have not been recognized in these consolidated financial statements as their realization is not considered probable.

c) As at March 31, 2018, the Company has available non-capital losses for Canadian income tax purposes of approximately $2,547,000 which may be carried forward and applied against future taxable income as follows:

	$
2030	319,000
2031	379,000
2032	665,000
2033	462,000
2034	451,000
2035	77,000
2036	62,000
2037	72,000
2038	60,000
	2,547,000

11. SEGMENTED INFORMATION

The Company has one operating segment – the acquisition, exploration and development of mineral properties. As at March 31, 2018, the Company had only one property, located in Canada.

B-87

SIERRA MADRE DEVELOPMENTS INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE YEAR ENDED MARCH 31, 2018

In Canadian Dollars

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B-88

SIERRA MADRE DEVELOPMENTS INC. MANAGEMENT’S DISCUSSION AND ANALYSIS For the year ended March 31, 2018

INTRODUCTION

This Management’s Discussion and Analysis (“MD&A”) of Sierra Madre Developments Inc.’s (“Sierra Madre”, or the “Company”) performance, financial condition, and future prospects has been prepared as of July 30, 2018. This MD&A should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto for the year ended March 31, 2018 and 2017 which have been prepared using International Financial Reporting Standards (“IFRS”).

DESCRIPTION AND OVERVIEW OF BUSINESS

Sierra Madre is a mineral exploration company focused on the acquisition and evaluation of precious metal mineral properties in Canada. Sierra Madre currently holds an option to acquire one property – the Harrison Gold Project located near Harrison, British Columbia.

On August 6, 2014 the BC Securities Commission issued a cease trade order (“ CTO ”) against the Company as a result of the Company’s failure to file its financial statements for the year ended March 31, 2014. That CTO remains in place as of the date of this MD&A. The Company’s shares were traded on the TSX Venture Exchange (“TSX-V”) under the symbol SMG from December 1, 2010 to August 7, 2014, but trading was suspended due to the CTO (and such trading suspension remains in place as of the date of this MD&A).

Sierra Madre has no producing operations and as a consequence, the Company does not generate any operating income or positive cash flow. Its ability to continue exploration of the Harrison Gold Project is entirely dependent upon the Company’s ability to access public equity markets to raise sufficient capital and/or its ability to attract joint venture partners to finance further work on its properties. The Company will also need to raise further capital for general and administrative purposes. However, with the CTO in place, there is no opportunity to raise any capital.

EXPLORATION AND EVALUATION EXPENDITURES

Harrison Gold Property

Sierra Madre’s primary focus is the Harrison Gold Project located in south-western British Columbia (the “Property”). The Company has an option to acquire a 100% interest in the Property from Omineca Mining and Metals Ltd. (“Omineca”).

Omineca Option Agreement

On November 17, 2011 the Company signed an Option to Purchase Agreement with Omineca (the “Option Agreement”) whereby Sierra Madre can acquire a 100% interest in the 2,427 ha Property. To exercise the option, the Company agreed to, on or before the fifth anniversary of TSXV approval, (a) to pay to Omineca an aggregate $1,000,000; (b) to deliver an aggregate of 4,000,000 common shares of Sierra Madre; and (c) to incur an aggregate of at least $3,000,000 of expenditures on the Property.

First Amending Agreement

On December 27, 2012 the Company consolidated its share capital on a one new for three old share basis which reduced the share consideration payable to Omineca. On December 5, 2013 the Company and Omineca amended the Option Agreement to include a provision whereby the number of shares payable to Omineca would remain unaltered in the event of future share consolidations. In consideration

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B-89

SIERRA MADRE DEVELOPMENTS INC. MANAGEMENT’S DISCUSSION AND ANALYSIS For the year ended March 31, 2018

of the amendment, Omineca agreed to defer all payments, share issuances and expenditures due for one year.

Second Amending Agreement

On May 21, 2015, the Company and Omineca further amended the Option Agreement by (i) extending the share payment and expenditure due dates for a period of one year, (ii) reducing the total expenditures requirements to $2,000,000; and (iii) amending the terms of the cash payments such that $400,000 may be made in shares of the Company and the balance of $500,000 to be paid in instalments by way of an Advanced Preferred Royalty. In consideration, the Company agreed to issue an additional 1,500,000 shares.

Third Amending Agreement

On February 20, 2017, the Company and Omineca further amended the Option Agreement by adding Bear Mountain Gold Mines Ltd. (“Bear Mountain”, the Company’s wholly owned subsidiary) to the agreement as a third party and amending the option payments schedule. This amendment also included a provision whereby Bear Mountain could assume responsibility for the cash and share consideration payable to Omineca and assume responsibility for the exploration expenditures. As consideration, Sierra Madre agreed to issue an additional 500,000 shares to Omineca, and Bear Mountain agreed to incur a minimum of $50,000 in exploration expenditures on the Property on or before December 31, 2017.

Payments, share issuances and expenditures are now due as follows:

Cash Payments	Share Payments	Exploration Expenditures	DueDates
$		$
25,000	-	-	Onexecutiondate (paid)
25,000	66,667	-	December5,2011(paid andissued)
50,000	100,000	-	December5,2012(paid andissued)
-	-	50,000	December31,2017(incurred)
-	666,666	100,000	December31,2018
-	500,000	100,000	December31,2019
400,000	2,000,000	1,750,000	December31,2020
500,000	-	-	PreferredAdvanceRoyalty payments
1,000,000	3,333,333	2,000,000

As of the date of the Company’s last audited financial statements (March 31, 2013) the Company had incurred exploration expenditures of $358,471 on the Property.

As at March 31, 2018 the Company had incurred a total of $710,250 ($586,474 as of March 31, 2017) in exploration expenditures on the Property.

Bear Mountain Gold Mines Ltd. Mineral Tenures

Based on management’s assessment of the Harrison Gold Project a decision was made to acquire additional mineral tenures to the south of the mineral tenures owned by Omineca (referred to as the Harrison South Tenures) and to acquire additional mineral tenures to the north and east of the mineral tenures owned by Omineca (referred to as the Harrison Development Operations Tenures).

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B-90

SIERRA MADRE DEVELOPMENTS INC. MANAGEMENT’S DISCUSSION AND ANALYSIS For the year ended March 31, 2018

Sierra Madre incorporated Bear Mountain Gold Mines Ltd. to hold title to all mineral tenures acquired on behalf of the Company within the Area of Mutual Interest defined in the agreement.

The Harrison Development Operations tenures are as follows:

Title Number	Owner	Title Type	Title Sub Type	Map Number	Issue Date	Good To Date	Status	Area(ha)
951229	276870(100%)	Mineral	Claim	092H	2012/FEB/20	2019/DEC/30	GOOD	84.1936
1013819	276870(100%)	Mineral	Claim	092H	2012/OCT/17	2019/DEC/30	GOOD	315.6077
1013821	276870(100%)	Mineral	Claim	092H	2012/OCT/17	2019/DEC/30	GOOD	610.4242
1016752	276870(100%)	Mineral	Claim	092H	2013/FEB/07	2019/DEC/30	GOOD	63.1753
1016754	276870(100%)	Mineral	Claim	092H	2013/FEB/07	2019/DEC/30	GOOD	21.0624
1017121	276870(100%)	Mineral	Claim	092H	2013/FEB/22	2019/DEC/30	GOOD	231.5103
1017622	276870(100%)	Mineral	Claim	092H	2013/MAR/07	2019/DEC/30	GOOD	189.4648
1018277	276870(100%)	Mineral	Claim	092H	2013/APR/04	2019/DEC/30	GOOD	147.3253
1019719	276870(100%)	Mineral	Claim	092H	2013/MAY/22	2019/DEC/30	GOOD	21.0623
1027708	276870(100%)	Mineral	Claim	092H	2014/APR/20	2019/DEC/30	GOOD	84.1465
1035351	276870(100%)	Mineral	Claim	092H	2015/APR/07	2019/DEC/30	GOOD	105.2981
1047317	276870(100%)	Mineral	Claim	092H	2016/OCT/18	2019/DEC/30	GOOD	63.1398
								1936.4103

The Harrison South Mineral tenures are as follows:

Title Number	Owner	Title Type	Title Sub Type	Map Number	Issue Date	Good To Date	Status	Area(ha)
834382	276870(100%)	Mineral	Claim	092H	2010/SEP/27	2021/DEC/30	GOOD	210.6509
951791	276870(100%)	Mineral	Claim	092H	2012/FEB/21	2021/DEC/30	GOOD	358.1523
983427	276870(100%)	Mineral	Claim	092H	2012/MAY/02	2021/DEC/30	GOOD	21.0715
993682	276870(100%)	Mineral	Claim	092H	2012/JUN/04	2021/DEC/30	GOOD	21.0738
1012805	276870(100%)	Mineral	Claim	092H	2012/SEP/12	2021/DEC/30	GOOD	105.3589
								716.3074

The Harrison South Tenures and the Development Operations Tenures are within the Area of Mutual Interest defined in the Option Agreement and therefore form part of the Harrison Gold Property. In the event that Sierra Madre and Bear Mountain do not meet the terms of the Option Agreement, ownership of the Harrison South Tenures and the Harrison Development Operations Tenures will be transferred to Omineca.

Project Summary

The Harrison Gold Property claims cover several intrusion related gold occurrences that have been intermittently explored by various operators since the early 1970's. Approximately $4.0 - $7.0 million was expended by Abo Resources, Kerr Addison Mines Ltd., Bema International Resources Ltd. and Northern Continental Resources over the last 35 years.

Exploration work since 1970 has included a total of 19,490m (64,000') of diamond drilling in 161 drill holes and small-scale underground development work. Most of the historic work was focused on the northern part of the Property in the area of the Jenner and Portal Zones. Drill results reported from the Portal Zone include 30 meters averaging 3.17 grams per tonne gold (EMPR ASS RPT 19584). Drill results reported

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B-91

SIERRA MADRE DEVELOPMENTS INC. MANAGEMENT’S DISCUSSION AND ANALYSIS For the year ended March 31, 2018

from the Jenner Zone include 64m averaging 3.77 g/t (EMPR ASS RPT 20144). In addition to the Jenner and Portal Zones the Property hosts numerous additional target areas located within a plateau area referred to as Bear Mountain. Other gold-bearing zones identified by previous operators on the Property include the Hill and Lake Stock Zones. These areas have seen limited exploration in comparison to the Jenner and Portal Zones.

Since acquiring an option on the Property, the Company (operating through Bear Mountain) completed extensive repairs to the core storage area and the existing underground workings, completed orientation soil surveys over several known mineralized zones, staked several mineral claims adjoining the Harrison Gold Project and completed extensive soil geochemical surveys of the central and southern part of the plateau area on Bear Mountain. The objectives of the soil surveys were to determine the trace element signature of known mineralized zones (an extensive previous soil survey by Kerr Addison Mines (ARIS 15904) only reported gold values) and to define exploration target areas which may represent additional mineralized zones in the central and southern extension of the Bear Mountain plateau area.

Since 2014 the Company has focused on evaluating potential development options for the project that would minimize the impact on local communities. On January 30, 2016 the Company submitted an application to the Ministry of Mines for an amended exploration permit that would allow the Company to complete a verification drilling program to confirm the historic results reported by previous operators and re-open existing underground workings and extract a mini bulk sample for metallurgical and environmental test work.

Total exploration expenditures incurred directly by the Company and Bear Mountain for the fiscal year ended 2018 were $nil (2017 - $2,500).

The following table summarizes the project exploration expenditures and acquisition costs of the Harrison Gold Project as at March 31, 2018.

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B-92

SIERRA MADRE DEVELOPMENTS INC. MANAGEMENT’S DISCUSSION AND ANALYSIS For the year ended March 31, 2018

			Year end	Year end	Year end	Year end	Year end
	March 31, 2012	March 31, 2013	March 31, 2014	March 31, 2015	March 31, 2016	March 31, 2017	March 31, 2018 *

Acquisition costs
Balance,beginningofyer	-	74,000	130,000	130,000	130,000	130,000	130,000
Additions	74,000	56,000	-	-	-	-	-
Balance,end ofyear	74,000	130,000	130,000	130,000	130,000	130,000	130,000
Exploration expenses
Balance,beginningofperiod	-	106,449	358,471	533,955	557,485	583,974	586,474
Assaying	-	27,528	24,719	-	-	2,500	22,269
Equipment rental	2,800	2,090	23,610	4,500	4,500	-	2,508
Field office	-	-	3,775	-	-	-	-
Geological fieldwork	94,800	194,831	68,236	8,167	20,489	-	32,703
Engineering	-	-	-	10,863	-	-	-
Materials and supplies	4,349	5,491	3,677	-	-	-	29,479
Metallurgical Testing	-	-	-	-	1,500	-	-
Other costs	-	9,570	-	-	-	-	5,170
Project management	4,500	-	-	-	-	-	-
Reports,draftingand maps	-	10,773	51,467	-	-	-	31,647
Travel	-	1,739	-	-	-	-	-
Total for theperiod	106,449	252,022	175,484	23,530	26,489	2,500	123,776
Project to date exploration expenses	106,449	358,471	533,955	557,485	583,974	586,474	710,250
Total spending project to date	180,449	488,471	663,955	687,485	713,974	716,474	840,250
* all 2018 expenditures w ere incurred byHaro Metals Corp. a			spart of the JV agreement

Selected Annual Information

	Years ended March 31,	Years ended March 31,	Years ended March 31,
	2018 audited	2017 audited	2016 unaudited
	$	$	$
Total revenues	-	-	-
Loss for theyear	(59,672)	(74,678)	(88,407)
Basic and diluted lossper share	$0.00	$0.00	$0.00
Total assets	45,684	53,680	127,958
Total longterm liabilities	-	-	-
Cash dividends declaredper share	$0.00	$0.00	$0.00

RESULTS OF OPERATIONS – QUARTER

The Company posted a $23,618 loss for the three months ended March 31, 2018. The main components of this were professional fees of $11,600 (2017-$nil), management fees of $9,000 (2017-$9,000) and rent of $3,000 (2017-$3,000).

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SIERRA MADRE DEVELOPMENTS INC. MANAGEMENT’S DISCUSSION AND ANALYSIS For the year ended March 31, 2018

SUMMARY OF FINANCIAL RESULTS OF OPERATIONS – YEAR ENDED MARCH 31, 2018

The Company posted a $59,672 loss for fiscal 2018 as compared to a loss of $74,678 in fiscal 2017. The main components of this were management fees of $36,000 (2017-$39,000), rent costs of $12,000 (2017$12,000), professional fees of $11,600 (2017-$7,000), exploration and evaluation expenditures of $nil (2017-$2,500). The main reasons for the decreased loss in fiscal 2018 were (i) reduction of insurance costs ($nil in 2018; $5,310 in 2017), and (ii) reduction of regulatory fees ($nil in 2018; $8,766 in 2017).

The following is a summary of the Company's results for the eight most recently completed quarters:

	Years ended December 31	Years ended December 31	Years ended December 31	Years ended December 31	Years ended December 31	Years ended December 31	Years ended December 31	Years ended December 31
	2018				2017
	Q4	Q3	Q2	Q1	Q4	Q3	Q2	Q1
Financial Results
Net income /(loss)forperiod	(23,618)	(12,018)	(12,018)	(12,018)	(12,018)	(29,913)	(12,022)	(20,725)
Per share	$0.00	$0.00	$0.00	$0.00	$0.00	$0.00	$0.00	$0.00
Balance Sheet Data
Cash and cash equivalents	19,771	30,289	30,307	30,325	30,343	30,361	58,399	108,420
Total assets	45,684	55,810	55,228	54,646	53,680	45,744	70,795	113,803
Shareholder's equity	(762,326)	(738,707)	(726,689)	(714,671)	(702,654)	(690,252)	(660,339)	(648,317)

LIQUIDITY AND CAPITAL RESOURCES

For the foreseeable future, and provided the Company is successful in having the CTO rescinded, the Company will continue to rely upon its ability to raise financing through the sale of equity. This will be dependent on positive investor sentiment, which in turn will be influenced by a positive climate for precious metal exploration generally, a company’s track record and the experience and calibre of a company’s management, as well as global economic outlook.

There is no assurance that the Company will be able to access equity funding at the times and in the amounts required to meet the Company’s obligations and fund activities. The outlook for the world economy remains uncertain and vulnerable to various shocks that could adversely affect the Company’s ability to raise additional funding going forward.

At March 31, 2018 the Company had a working capital deficit of $762,326 (2017-deficit of $702,654).

OUTSTANDING SHARE DATA

Authorized Share capital: unlimited common shares without par value

SHARE DATA AT THE REPORT DATE

Issued and outstanding shares 53,980,827

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B-94

SIERRA MADRE DEVELOPMENTS INC. MANAGEMENT’S DISCUSSION AND ANALYSIS For the year ended March 31, 2018

RELATED PARTY TRANSACTIONS

The Company incurred the following transactions with the President/CEO, CFO and companies controlled by the President/CEO and a director of the Company:

by the President/CEO and a director of the Company:
YearendedMarch31,	2018	2017
	$	$
Managementfees	36,000	39,000
Rent	12,000	12,000
	48,000	51,000

None of the above amounts were paid by the Company. At March 31, 2018, the Company owed $754,178 (2017 - $706,254) in respect of services and payments made on behalf of the Company.

March 31,	2018	2017
	$	$
Amounts owed to a company controlled by the CEO	725,850	671,926
Amounts owed to a company controlled by a director	28,328	28,328
Amounts owed to the CFO	-	6,000
	754,178	706,254

These amounts are unsecured, non-interest-bearing and have no specific terms of repayment.

These transactions occurred in the normal course of business and were measured at the exchange amount, which was the amount of consideration agreed upon between the related parties.

COMMITMENTS

Other than the proposed acquisition of the Harrison Gold Properties the Company has not entered into any material contractual commitments as at the Report Date.

RECENT EVENTS AND OUTLOOK

Pursuant to an option agreement dated November 30, 2017 Bear Mountain granted an option to Haro Metals Corp. (“Haro”) whereby Haro could earn a 60% interest in the Harrison South Mineral Tenures. Haro can acquire its interest by incurring $500,000 in exploration expenditures and paying $100,000 in cash or shares (at Haro’s election) on or before December 30, 2020. According to Haro’s financial statements for the period ended March 31, 2018 Haro incurred exploration expenditures of $123,776 during December 2017.

The Company is continuing to work with the Ministry of Mines to secure the permits required to carry out the proposed verification drilling and mini bulk sampling program outlined in the project summary.

The Company intends to make application to the BC Securities Commission for revocation of the CTO in July of 2018.

FINANCIAL AND OTHER INSTRUMENTS

As at March 31, 2018, the Company’s financial instruments consisted of cash and cash equivalents, accounts payable, accrued liabilities and due to related parties. The fair values of accounts payable,

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B-95

SIERRA MADRE DEVELOPMENTS INC. MANAGEMENT’S DISCUSSION AND ANALYSIS For the year ended March 31, 2018

accrued liabilities and due to related parties approximate their carrying values because of the short-term nature of these instruments. It is management’s opinion that the Company is not exposed to significant interest, currency or credit risks arising from the financial instruments.

RISKS AND UNCERTAINTIES

The Company is in the mineral exploration and development business and as such is exposed to a number of risks and uncertainties that are not uncommon to other companies in the same business.

Some of the possible risks include the following:

a) The industry is capital intensive and subject to fluctuations in metal prices, market sentiment, foreign exchange and interest rates.

b) The Company is subject to the CTO, and there is no assurance the same will be rescinded.

e) Any future equity financings by the Company for the purpose of raising additional capital may result in substantial dilution to the holdings of existing shareholders.

f) The Company must comply with environmental regulations governing air and water quality and land disturbance and provide for mine reclamation and closure costs.

CAUTION REGARDING FORWARD LOOKING STATEMENTS

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SIERRA MADRE DEVELOPMENTS INC. MANAGEMENT’S DISCUSSION AND ANALYSIS For the year ended March 31, 2018

based on assumptions and address future events and conditions, by their very nature they involve inherent risks and uncertainties.

Although the Company believes that the expectations represented by such forward-looking information or statements are reasonable, there is significant risk that the forward-looking information or statements may not be achieved, and the underlying assumptions thereto will not prove to be accurate. Forward-looking information or statements in this MD&A include, but are not limited to, information or statements concerning the Company’s expectations for: exploration results on the Company’s exploration properties; capital costs anticipated on the Company’s exploration properties; the Company’s current financial resources being sufficient to fund operations; and the Company’s ability to obtain additional funds through the sale of equity and/or the optioning of its mineral property interests via option or joint venture agreements.

Actual results or events could differ materially from the plans, intentions and expectations expressed or implied in any forward-looking information or statements, including the underlying assumptions thereto, as a result of numerous risks, uncertainties and other factors including: changes in general economic conditions and conditions in the financial markets; changes in demand and prices for the minerals the Company expects to produce; litigation, legislative, environmental and other judicial, regulatory, political and competitive developments; technological and operational difficulties encountered in connection with the Company’s activities; and other matters discussed in this MD&A.

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B-97

APPENDIX C

FINANCIAL STATEMENTS AND MD&A OF GOLDSHORE RESOURCES INC.

Description	Page
Financial statements for theperiod from incorporation on October 23,2020 to March 31,2021	C-2
Management’s discussion and analysis for the period from incorporation on October 23, 2020 to March 31,2021	C-20

C-1

GOLDSHORE RESOURCES INC.

Financial Statements

For the period from incorporation on October 23, 2020 to March 31, 2021 (Expressed in Canadian Dollars)

C-2

INDEPENDENT AUDITOR’S REPORT

To the Director of Goldshore Resources Inc.

Opinion

We have audited the accompanying financial statements of Goldshore Resources Inc. (the “Company”), which comprise the statement of financial position as at March 31, 2021, and the statements of loss and comprehensive loss, cash flows, and changes in shareholders’ equity for the period from incorporation on October 23, 2020 to March 31, 2021, and notes to the financial statements, including a summary of significant accounting policies.

In our opinion, these financial statements present fairly, in all material respects, the financial position of the Company as at March 31, 2021, and its financial performance and its cash flows for the period from incorporation on October 23, 2020 to March 31, 2021 in accordance with International Financial Reporting Standards (“IFRS”).

Basis for Opinion

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

Other Information

Management is responsible for the other information. The other information obtained at the date of this auditor's report includes Management’s Discussion and Analysis.

Our opinion on the 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 financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

We obtained Management’s Discussion and Analysis prior to the date of this auditor’s report. 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 Financial Statements

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

C-3

In preparing the 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 Financial Statements

Our objectives are to obtain reasonable assurance about whether the 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 financial statements.

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

Identify and assess the risks of material misstatement of the 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 financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

The engagement partner on the audit resulting in this independent auditor’s report is Alyson Neil.

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Vancouver, Canada

Chartered Professional Accountants

May 10, 2021

C-4

GOLDSHORE RESOURCES INC. Statement of Financial Position

(Expressed in Canadian Dollars)

GOLDSHORE RESOURCES INC. Statement of Financial Position (Expressed in Canadian Dollars)
	March 31, 2021
ASSETS
Current assets
Cash	$	2,225,896
Restricted cash (Note 10)		14,359,805
GST receivable		23,205
Prepaid expenses and deposits		9,175
Deferred transaction costs (Note 6)		15,533
Deferred financing costs (Note 10)		1,068,717
		17,702,331
Right-of-use assets (Note 7)		21,915
Mineral property deposit (Note 5)		1,000,000
Long-term deposit		6,400
TOTAL ASSETS	$	18,730,646
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities (Note 8)	$	171,953
Current portion of lease liability (Note 9)		17,783
Subscriptions received in advance(Note 10)		15,000,000
		15,189,736
Non-current portion of lease liability (Note 9)		4,491
TOTAL LIABILITIES		15,194,227
SHAREHOLDERS’ EQUITY
Share capital (Note 10)		3,858,467
Reserves (Note 10)		428,522
Accumulated deficit		(750,570)
TOTAL SHAREHOLDERS’ EQUITY		3,536,419
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	18,730,646

These financial statements were authorized for issue by the Board of Directors on May 10, 2021. They are signed on behalf of the Board of Directors by:

"Galen McNamara"

CEO and Director

The accompanying notes form an integral part of these financial statements.

C-5

GOLDSHORE RESOURCES INC. Statement of Loss and Comprehensive Loss

(Expressed in Canadian Dollars)

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		For the period from incorporation on October 23, 2020 to March 31, 2021

EXPENSES
General and administrative costs		$ 12,422
Amortization (Note 7)		953
Interest expense (Note 9)		888
Marketing fees		37,726
Consulting fees		191,368
Professional fees		113,743
Property investigation costs (Note 5)		393,470

LOSS AND COMPREHENSIVE LOSS FOR THE PERIOD		$750,570

Basic and diluted loss per share for the period		$ 0.06
Weighted average number of common shares outstanding		13,244,858

The accompanying notes form an integral part of these financial statements.

C-6

GOLDSHORE RESOURCES INC. Statement of Cash Flows

(Expressed in Canadian Dollars)

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	For the period from incorporation on October 23, 2020 to March 31, 2021
	Cash flows provided from (used in): OPERATING ACTIVITIES Loss for the period $ (750,570) Non-cash items: Amortization 953 Interest expense 888 Changes in non-cash working capital items: GST receivable (23,205) Prepaid expenses (9,175) Accounts payable and accruedliabilities 171,953









	Cash flows used inoperating activities (609,156)
	INVESTING ACTIVITIES Long-term deposit (6,400) Deferred transaction costs (15,533) Mineral property deposit (1,000,000)




	Cash flows used in investing activity (1,021,933)
	FINANCING ACTIVITIES Proceeds from private placement, net of share issuance costs 3,858,467 Deferred financing costs (640,195) Subscriptions received in advance 15,000,000 Proceeds from issuance of promissory notes 47,500 Repayment of promissory notes (47,500) Repayment of lease obligations (1,482)







	Cash flows provided by financing activity 18,216,790
	increase in cash and restricted cash 16,585,701 Cash and restricted cash, beginning of period -


	Cash and restricted cash, end of period $ 16,585,701

During the period from incorporation on October 23, 2020 to March 31, 2021, the Company did not pay any income taxes.

Non-cash investing and financing activities:

Fair value of compensation options recorded in deferred financing costs $ 428,522

The accompanying notes form an integral part of these financial statements.

C-7

GOLDSHORE RESOURCES INC. Statement of Changes in Shareholders’ Equity

(Expressed in Canadian Dollars)

	Number of			Accumulated
	shares	Amount	Reserves	deficit	Total
Balance at October 23, 2020	-	$ -	$ -	$ -	$ -
Incorporation share	1	-	-	-	-
Shares issued for private placements (Note 10)	30,122,380	4,002,057	-	-	4,002,057
Share issuance costs (Note 10)	-	(143,590)	-	-	(143,590)
Fair value of compensation options granted (Note 10)	-	-	428,522	-	(428,522)
Loss and comprehensive loss for theperiod	-	-	-	(750,570)	(750,570)
Balance at March 31, 2021	30,122,381	$ 3,858,467	$ 428,522	$(750,570)	$ 3,536,419

The accompanying notes form an integral part of these financial statements.

C-8

GOLDSHORE RESOURCES INC. Notes to the Financial Statements For the period from incorporation on October 23, 2020 to March 31, 2021 (Expressed in Canadian Dollars)

1. NATURE OF OPERATIONS AND GOING CONCERN

Goldshore Resources Inc. (the “Company” or “Goldshore”) was incorporated under the provincial laws of the Province of British Columbia on October 23, 2020. The Company’s registered office is located at Suite 2200, 885 West Georgia Street, Vancouver, BC, V6C 3E8. The Company is in the process of acquiring a 100% interest in the Moss Lake gold project located in Ontario, Canada (Note 5) and completing an amalgamation transaction with Sierra Madre Developments Inc. (Note 6).

At March 31, 2021, the Company had cash and restricted cash of $16,585,701 and its current assets exceed its current liabilities by $2,512,595. The Company had sufficient cash to continue operations for at least the next twelve months.

2. BASIS OF PREPARATION

(a) Statement of compliance

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

(b) Basis of presentation

These financial statements have been prepared on a historical cost basis, except for financial instruments classified as financial instruments at fair value through profit or loss (“FVTPL”), which are stated at their fair value. In addition, these financial statements have been prepared using the accrual basis of accounting, except for cash flow information. The significant accounting policies, as disclosed, have been applied consistently to all periods presented in these financial statements.

(c) Presentation and functional currency

The presentation and functional currency of the Company is the Canadian dollar. All amounts in these financial statements are expressed in Canadian dollars, unless otherwise indicated.

(d) Significant accounting judgments and estimates

The preparation of financial statements in accordance with IFRS requires management to make certain critical accounting estimates and assumptions about the future and to exercise judgment in applying the Company’s accounting policies. Actual results could differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. The impacts of changes to estimates are recognized in the period estimates are revised and in future periods affected. The critical judgments and assumptions made by management and other major sources of measurement uncertainty are discussed in Note 4.

C-9

GOLDSHORE RESOURCES INC. Notes to the Financial Statements For the period from incorporation on October 23, 2020 to March 31, 2021 (Expressed in Canadian Dollars)

3. SIGNIFICANT ACCOUNTING POLICIES

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

(a) Foreign currency transactions

Transactions in currencies other than the Canadian dollar (“foreign currencies”), the Company’s functional currency, are recorded at the rates of exchange prevailing on the dates of the transactions. At each reporting date, monetary assets and liabilities that are denominated in foreign currencies are translated at the rates prevailing at the date of the statement of financial position. Non-monetary items that are denominated in foreign currencies and measured at other than fair value are translated using the rates of exchange at the transaction dates. Foreign exchange gains and losses are included in net loss for the period.

(b) Financial instruments

i) Classification and measurement

Financial asset

The classification and measurement of financial assets is based on the Company’s business models for managing its financial assets and whether the contractual cash flows represent solely payments of principal and interest (“SPPI”). Financial assets are initially measured at fair value less, for an item not at fair value through profit or loss, transaction costs directly attributable to its acquisition or issue, and are subsequently measured at either (i) amortized cost; (ii) fair value through other comprehensive income, or (iii) at fair value through profit or loss.

Amortized cost

Financial assets classified and measured at amortized cost are those assets that are held within a business model whose objective is to hold financial assets in order to collect contractual cash flows, and the contractual terms of the financial asset give rise to cash flows that are SPPI. Financial assets classified at amortized cost are measured using the effective interest method. The Company does not have any assets classified and measured at amortized cost.

Fair value through other comprehensive income (“FVTOCI”)

Financial assets classified and measured at FVTOCI are those assets that are held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets, and the contractual terms of the financial asset give rise to cash flows that are SPPI. The Company does not have any assets classified and measured at FVTOCI.

Fair value through profit or loss (“FVTPL”)

Financial assets classified and measured at FVTPL are those assets that do not meet the criteria to be classified at amortized cost or at FVTOCI. Realized and unrealized gains and losses arising from changes in the fair value of the financial assets held at FVTPL are included in profit or loss in the period in which they arise. The Company’s cash is classified in this category.

C-10

GOLDSHORE RESOURCES INC. Notes to the Financial Statements For the period from incorporation on October 23, 2020 to March 31, 2021 (Expressed in Canadian Dollars)

3. SIGNIFICANT ACCOUNTING POLICIES (continued)

(b) Financial instruments (continued)

Financial liabilities

Financial liabilities are recognized when the Company becomes a party to the contractual provisions of the financial instrument. A financial liability is derecognized when it is extinguished, discharged, cancelled or when it expires. Financial liabilities are classified as either financial liabilities at fair value through profit or loss or financial liabilities subsequently measured at amortized cost. All interest-related charges are reported in profit or loss within interest expense, if applicable.

Other financial liabilities are non-derivatives and are initially recognized at fair value net of any transaction costs directly attributable to the issuance of the instrument and subsequently carried at amortized cost using the effective interest rate method. This ensures that any interest expense over the period to repayment is at a constant rate on the balance of the liability carried in the statements of financial position. Interest expense in this context includes initial transaction costs and premiums payable on redemption, as well as any interest or coupon payable while the liability is outstanding. Accounts payable and accrued liabilities are included in this category and represent liabilities for goods and services provided to the Company prior to the end of the period that are unpaid.

ii) Derecognition of 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 profit or loss. However, gains and losses on derecognition of financial assets classified as FVTOCI remain within accumulated other comprehensive income (loss).

iii) Impairment of financial assets

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 twelve month expected credit losses. The Company shall recognize in the 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.

(c) Restoration, rehabilitation, and environmental obligations

The Company recognizes liabilities for statutory, contractual, constructive or legal obligations associated with the retirement of long-term assets, when those obligations result from the acquisition, construction, development or normal operation of the assets. The net present value of future restoration cost estimates arising from the decommissioning of plant and other site preparation work is capitalized to exploration and evaluation assets along with a corresponding increase in the restoration provision in the period incurred. Discount rates using a pre-tax rate that reflect the time value of money are used to calculate the net present value. The restoration asset will be depreciated on the same basis as other assets.

The increase in the restoration provision due to the passage of time is recognized as interest expense.

The costs of restoration projects that were included in the provision are recorded against the provision as incurred. The costs to prevent and control environmental impacts at specific properties are capitalized in accordance with the Company’s accounting policy for exploration and evaluation assets. For the period presented, the Company did not have any restoration provisions.

C-11

GOLDSHORE RESOURCES INC. Notes to the Financial Statements For the period from incorporation on October 23, 2020 to March 31, 2021 (Expressed in Canadian Dollars)

3. SIGNIFICANT ACCOUNTING POLICIES (continued)

(d) Exploration and evaluation expenditures

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

Government tax credits are recorded as a reduction to the cumulative costs incurred and capitalized on the related property in the period it is received.

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

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

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

(e) Leases

At the inception of a lease contract, the Company assesses whether the contract is or contains a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assess whether: (i) the contract involves the use of an identified asset; (ii) the Company has the right to obtain substantially all the economic benefits from the use of the asset throughout the period, and; (iii) the Company has the right to direct the use of the asset.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term plus expected renewal options which are available to the Company. The estimated useful life of right-of-use assets is determined on the same basis as Property and Equipment.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company’s incremental borrowing rate. Generally, the Company uses the rate implicit in the lease as the discount rate for leases.

Lease payments included in the measurement of the lease liability comprise of: (i) fixed payments; (ii) amounts expected to be payable under a residual value guarantee; (iii) the exercise price under purchase option that the Company is reasonably certain to exercise; (iv) lease payments in an optional renewal period if the Company is reasonably certain to exercise an extension option; and (v) penalties for early termination of a lease unless the Company is reasonably certain not to terminate early.

The lease liability is measured at amortized cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in index or rate, if there is a change in the Company’s estimate of the amount expected to be payable under a residual value guarantee, or if the Company changes its assessment of whether it will exercise a purchase extension or termination option. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.

The Company recognizes depreciation for right-of-use assets and interest expense on lease liabilities in the consolidated statements of loss and comprehensive loss.

C-12

GOLDSHORE RESOURCES INC. Notes to the Financial Statements For the period from incorporation on October 23, 2020 to March 31, 2021 (Expressed in Canadian Dollars)

3. SIGNIFICANT ACCOUNTING POLICIES (continued)

(e) Leases (continued)

In the statement of cash flows, the Company includes repayments of the principal portion of the lease liabilities under financing activities. Lease payments for short-term leases, lease payment for leases of low-value assets that are not included in the measurement of the lease liability are classified as cash flows from operating activities.

(f) Share capital

Common shares

Common shares issued are classified as share capital, a component of shareholders’ equity. Transaction costs directly attributable to the issuance of common shares are recognized as a deduction from share capital.

Equity units

Proceeds received on the issuance of units, comprised of common shares and warrants, are allocated using the residual value method. Under the residual value method, proceeds are allocated to the common shares up to their fair value, determined by reference to the quoted market price of the common shares on the issuance date, and the remaining balance, if any, to the reserve for warrants.

(g) Income taxes

Income tax on profit or loss comprises current and deferred tax. Income tax is recognized in profit or loss, except to the extent that it relates to items recognized directly in equity, in which case it is recognized in equity. Current tax expense is the expected tax payable on taxable income for the period.

Deferred tax is provided for using the asset and liability method of accounting, whereby deferred tax assets and liabilities are recognized for the future tax effects of differences between the carrying amounts of assets and liabilities in the statement of financial position and the tax bases of the assets and liabilities (temporary differences), unused tax losses and other income tax deductions. Temporary differences on the initial recognition of assets or liabilities that affect neither accounting nor taxable profit or loss are not provided for. Deferred tax assets and liabilities are measured based on the expected manner of realization or settlement of the carrying amounts of the related assets and liabilities, using tax rates enacted or substantively enacted at the statement of financial position date. Deferred tax assets are recognized for deductible temporary differences, unused tax losses and other income tax deductions only to the extent that it is probable that future taxable profits will be available against which those deductible temporary differences, unused tax losses and other income tax deductions can be utilized.

Income tax on profit or loss comprises current and deferred tax. Income tax is recognized in profit or loss, except deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Company intends to settle its current tax assets and liabilities on a net basis.

(h) Loss per share

Loss per share is calculated by dividing loss attributable to common shareholders of the Company by the weighted average number of shares outstanding during the period. Diluted loss per share is determined by adjusting loss attributable to common shareholders and the weighted average number of common shares outstanding for the effects of all dilutive potential common shares. The calculation of diluted loss per share excludes the effects of various conversions and exercises of options and warrants that would be anti-dilutive.

C-13

GOLDSHORE RESOURCES INC. Notes to the Financial Statements For the period from incorporation on October 23, 2020 to March 31, 2021 (Expressed in Canadian Dollars)

3. SIGNIFICANT ACCOUNTING POLICIES (continued)

(i) Impairment of non-financial assets

Impairment tests on non-financial assets, including exploration and evaluation assets are undertaken whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Where the carrying value of an asset exceeds its recoverable amount, which is the higher of value in use and fair value less costs to sell, the asset is written down accordingly.

The Company assesses exploration and evaluation assets for impairment when facts and circumstances suggest that the carrying amount of an 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.

Where it is not possible to estimate the recoverable amount of an individual asset, the impairment test is carried out on the asset's cash-generating unit, which is the lowest group of assets in which the asset belongs for which there are separately identifiable cash inflows that are largely independent of the cash inflows from other assets.

An impairment loss is charged to profit or loss. Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but to an amount that does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset in prior years. A reversal of an impairment loss is recognized immediately in profit or loss.

4. SIGNIFICANT ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

Significant accounting judgments

The critical judgments, apart from those involving estimations, that management has made in the process of applying the Company’s accounting policies and that have the most significant effect on the amounts recognized in the financial statements are as follows:

Going concern

Key sources of estimation uncertainty

The key assumptions management has made about the future and other major sources of estimation uncertainty at the date of the statement of financial position that have significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities within the next financial year are as follows:

Income taxes

The Company recognizes deferred tax assets for deductible temporary differences, unused tax losses and other income tax deductions only to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, unused tax losses and other income tax deductions can be utilized. In assessing the probability of realizing the income tax benefits of deductible temporary differences, unused tax losses and other income tax deductions, management makes estimates related to expectations of future taxable income, applicable tax planning opportunities, expected timing of reversals of existing temporary differences and the likelihood that tax positions taken will be sustained upon examination by applicable tax authorities. The likelihood that tax positions taken will be sustained upon examination by applicable tax authorities is assessed based on individual facts and circumstances of the relevant tax position evaluated in light of all available evidence.

C-14

GOLDSHORE RESOURCES INC. Notes to the Financial Statements For the period from incorporation on October 23, 2020 to March 31, 2021 (Expressed in Canadian Dollars)

4. SIGNIFICANT ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY (continued)

As at March 31, 2021, the Company has not recognized any deferred tax assets for deductible temporary differences. Changes in any of the above-mentioned estimates can materially affect the amount of income tax assets recognized. In addition, where applicable tax laws and regulations are either unclear or subject to varying interpretations, changes in these estimates can occur that materially affect the amounts of income tax assets recognized. The Company reassesses unrecognized income tax assets at the end of each reporting period.

5. MINERAL PROPERTY DEPOSIT

On January 25, 2021, the Company entered into a purchase agreement (the “Moss Lake Agreement”) with Moss Lake Gold Mines Ltd. and Wesdome Gold Mines Ltd. (“Wesdome”) to acquire a 100% interest in the Moss Lake gold project (“Moss Lake”) located in Ontario, Canada (the “Transaction”).

In exchange for 100% interest in the project, the Company will:

Pay $12,500,000 cash to Wesdome upon closing;
Issue common shares with a fair value equal to the greater of a) $19,500,000 and b) 30% of the issued and outstanding common shares of the Company to Wesdome at closing;
Issue $20,000,000 in common shares to Wesdome in the form of milestone payments consisting of: o $5,000,000 within 12 months of closing;
$7,500,000 upon the earlier of (i) the Company completing an updated Preliminary Economic Assessment (“PEA”) or pre-feasibility study; and (ii) 30 months from closing; and
$7,500,000 upon the earlier of (i) the Company completing a feasibility study, (ii) the date on which the Company makes a development decision on Moss Lake, and (iii) 48 months from closing.
Grant to Wesdome a 1.00% net smelter royalty (“NSR”) on all metal production from Moss Lake. The Company shall have the right to repurchase the NSR for (i) $5,000,000 within 30 months of closing or (ii) $7,500,000 between 30 and 48 months after closing. The NSR buyback shall expire if not exercised within 48 months of closing.
Grant Wesdome representation on the Company’s Board of Directors with two appointees.

The Company paid Wesdome a refundable deposit of $1,000,000 concurrent with executing the Moss Lake Agreement. The deposit will be applied to the cash payment due on closing.

As of March 31, 2021 and the issue date of these financial statements, the Transaction has not closed.

6. AMALGAMATION AGREEMENT

On January 26, 2021, the Company entered into an amalgamation agreement (the “Amalgamation Agreement”) with Sierra Madre Developments Inc. (“Sierra Madre”), whereby Sierra Madre will acquire all of the issued and outstanding common shares of the Company (the “Resulting Issuer”, following final approval from the TSX Venture Exchange). The completion of the Amalgamation Agreement with result in the reverse takeover of Sierra Madre by the Company pursuant to the policies of the TSX Venture Exchange (“TSX-V”) (the “Amalgamation). As of March 31, 2021 and the issue date of these financial statements, the Amalgamation has not closed and the Company has recorded $15,533 in deferred transaction costs in relation to the Amalgamation.

C-15

GOLDSHORE RESOURCES INC. Notes to the Financial Statements For the period from incorporation on October 23, 2020 to March 31, 2021 (Expressed in Canadian Dollars)

7. RIGHT-OF-USE ASSETS

	Right-of-use	assets
Cost
Balance, October 23, 2020	$	-
Additions		22,868
Balance,March31,2021	$	22,868
Accumulated amortization
Balance, October 23, 2020	$	-
Depreciation		953
Balance, March 31, 2021	$	953
Net book value
Balance,October 23,2020	$	-
Balance, March 31, 2021	$	21,915

8. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

The Company’s accounts payable and accrued liabilities are comprised of the following:

		March 31, 2021
Accounts payable		$ 166,104
Accrued liabilities		5,849
Total		$ 171,953

9. LEASES

The Company leases furniture and equipment for its office. The leased assets and liabilities were measured at the present value of the lease payments plus the anticipated exercise of renewal options, discounted using the rate implicit in the leases which was determined to be 47%.

The Company’s lease liabilities are as follows:

			March 31, 2021
Current portion of lease obligations		$	17,783
Non-currentportion of lease obligations			4,491
		$ 22,274
e lease liability interest expense recognized in profit and loss and lease payments recognized in the financing
mponent of statement of cash flows is	as follows:
Balance, October 23, 2020		$	-
New leases			22,868
Interest expense			888
Payments			(1,482)
Balance, March 31, 2021		$	22,274

The lease liability interest expense recognized in profit and loss and lease payments recognized in the financing component of statement of cash flows is as follows:

C-16

GOLDSHORE RESOURCES INC. Notes to the Financial Statements For the period from incorporation on October 23, 2020 to March 31, 2021 (Expressed in Canadian Dollars)

9. LEASES (continued)

As at March 31, 2021, the Company is committed to minimum lease payments as follows:

		March 31, 2021
Less than one year	$	17,783
One to five years		16,301
More than five years		-
Total undiscounted lease liabilities	$	34,084

During the period ended March 31, 2021, the Company designated one office lease as short-term and no leases as low-value under IFRS 16.

10. SHARE CAPITAL

a) Authorized

Unlimited number of common shares without par value.

b) Issued

On October 23, 2020, the Company issued 1 common share for proceeds of $0.01 in conjunction with the incorporation of the Company.

On December 31, 2020, the Company closed a non-brokered private placement by issuing 6,850,000 common shares at a price of $0.05 per common share for gross proceeds of $342,500.

On December 31, 2020, the Company closed a non-brokered private placement by issuing 5,150,000 Subscription Receipts at a price of $0.05 per Subscription Receipt for gross proceeds of $257,500.

On January 6, 2021, the Company closed a non-brokered private placement by issuing 7,700,000 Subscription Receipts at a price of $0.10 per Subscription Receipt for gross proceeds of $770,000.

On January 11, 2021, the Company closed a non-brokered private placement by issuing 7,000,000 Subscription Receipts at a price of $0.20 per Subscription Receipt for gross proceeds of $1,400,000.

On January 13, 2021, the Company closed a non-brokered private placement by issuing 3,422,380 Subscription Receipts at a price of $0.36 per Subscription Receipt for gross proceeds of $1,232,057.

On February 26, 2021, the Company closed a brokered private placement by issuing 23,076,924 Subscription Receipts at a price of $0.65 per Subscription Receipt for gross proceeds of $15,000,000. The gross proceeds will be held in escrow pending satisfaction of certain conditions (“Escrow Release Conditions”), including the closing of the Amalgamation and receiving conditional approval for the Resulting Issuer’s shares being listed on the TSXV. The Escrowed Funds, including any accrued interest, are held in escrow by a subscription receipt agent and will be released to the Resulting Issuer upon the satisfaction of the Escrow Release Conditions (the “Escrow Release Date”), provided that the Escrow Release Conditions are satisfied at or prior to June 30, 2021.

In connection with the closing of the private placements, the Company incurred cash share issuance costs of $143,590. Additionally, $410,775 in cash commissions and $229,420 in closing expenses were incurred in conjunction with the brokered private placements and have been paid from the Escrowed Funds. The Subscription Receipts issued on December 31, 2020, January 6, 2021, January 11, 2021 and January 13, 2021, converted into common shares of the Company on January 25, 2021 pursuant to execution of the Moss Lake Agreement.

In connection with the February 26, 2021 brokered private placement, the company also issued a total of 1,263,924 non-transferrable compensation options (“Goldshore Compensation Options”) to agents. In connection with the Amalgamation, each Goldshore Compensation Option will be exchanged for one compensation option of the Resulting Issuer, which will be exercisable for one Resulting Issuer common share at a price of $0.65 for 24 months after the Escrow Release Date. The remaining agents’ commission of $410,775 will be paid on the Escrow Release Date. The fair value of the Goldshore Compensation Options was determined to be $428,522 using the Black Scholes Option Pricing Model using the following assumptions: risk-free rate of 0.23%, expected life of 2 years, volatility factor of $100% and dividend yield of Nil. The fair value of the Goldshore Compensation Options was recorded as deferred financing costs and the corresponding entry within reserve on the statement of financial position.

C-17

GOLDSHORE RESOURCES INC. Notes to the Financial Statements For the period from incorporation on October 23, 2020 to March 31, 2021 (Expressed in Canadian Dollars)

11. RELATED PARTY TRANSACTIONS

The Company’s related parties consist of its key management personnel, including its directors and officers.

During the normal course of business, the Company enters into transactions with its related parties that are considered to be arm’s length transactions and made at normal market prices and on normal commercial terms.

There were no key management compensation or other related party transactions during the period ended March 31, 2021. At March 31, 2021, the Company had $Nil owing to related parties.

12. FINANCIAL INSTRUMENTS

a) Categories of financial instruments and fair value measurements

The Company’s financial assets and liabilities are classified as follows:

	March 31, 2021	March 31, 2021
Financial assets:
*Fair value through profit and loss*
Cash and restricted cash	$	16,585,701
Financial liabilities:
*Amortized cost*
Accountspayable and accrued liabilities	$	171,953

The fair values of the Company’s cash and accounts payable and accrued liabilities approximate their carrying amounts due to the short-term nature of these instruments.

b) Management of financial risks

The Company’s financial instruments expose the Company to certain financial risks, including credit risk, liquidity risk, interest rate risk and foreign currency risk.

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. At March 31, 2021, the Company was exposed to credit risk on its cash.

The Company’s cash is held with a high credit quality financial institution in Canada and as at March 31, 2021, management considers its exposure to credit risk to be low.

Liquidity risk

At March 31, 2021, the Company had cash and restricted cash of $16,585,701 and accounts payable and accrued liabilities of $171,953 with contractual maturities of less than one year. The Company had sufficient cash to meet its current liabilities at March 31, 2021. The Company assessed its liquidity risk as low as at March 31, 2021.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market interest rates.

The Company’s financial assets and financial liabilities are not exposed to interest rate risk due to their short-term nature and maturity. The Company is not exposed to interest rate risk at March 31, 2021.

C-18

GOLDSHORE RESOURCES INC. Notes to the Financial Statements For the period from incorporation on October 23, 2020 to March 31, 2021 (Expressed in Canadian Dollars)

12. FINANCIAL INSTRUMENTS (continued)

b) Management of financial risks (continued)

Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in foreign exchange rates. The Company is exposed to foreign currency risk to the extent that it has monetary assets and liabilities denominated in foreign currencies. As at March 31, 2021, the Company was not exposed to foreign currency risk.

13. CAPITAL MANAGEMENT

The Company manages its capital to maintain its ability to continue as a going concern and to provide returns to shareholders and benefits to other stakeholders. The capital structure of the Company consists of cash and equity composed of issued share capital.

The Company manages its capital structure and makes adjustments to it in light of economic conditions. The Company, upon approval from its Board of Directors, will balance its overall capital structure through new share issues or by undertaking other activities as deemed appropriate under the specific circumstances.

The Company is not subject to externally imposed capital requirements.

14. INCOME TAXES

The tax effect (computed by applying the Canadian federal and provincial statutory rate) of the significant temporary differences, which comprise deferred income tax assets and liabilities, are as follows:

	March 31, 2021
	$
Net loss for the period	(750,570)
Canadian statutory income tax rate	27%
Income tax recovery at statutory rate	(203,000)
Tax effect of:
Share issue costs	(38,000)
Change in unrecognized deferred income tax assets	241,000
Income taxprovision	–
The significant components of the Company’s deferred income tax assets and liabilities are as follows:
	March 31,
	2021
	$
Deferred income tax assets
Share issue costs	31,000
Non-capital losses carried forward	210,000
Unrecognized deferred income tax assets	(241,000)
Net deferred income tax asset	–

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

As at March 31, 2021, the Company has non-capital losses carried forward of $777,000, which are available to offset future years’ taxable income. These losses expire in 2041.

C-19

GOLDSHORE RESOURCES INC. Management Discussion and Analysis For the period from incorporation on October 23, 2020 to March 31, 2021

This management’s discussion and analysis (“MD&A”) is management's interpretation of the financial condition and results of operations of Goldshore Resources Inc. (the “Company” or “Goldshore”) for the period from incorporation on October 23, 2020 to March 31, 2021. This MD&A should be read in conjunction with the audited financial statements of the Company for the period from incorporation on October 23, 2020 to March 31, 2021, prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). This MD&A complements and supplements, but does not form part of, the Company’s financial statements.

All dollar amounts contained herein are expressed in Canadian dollars unless otherwise indicated. This MD&A has been prepared as of May 10, 2021.

BUSINESS OVERVIEW

The Company was incorporated under the Business Corporations Act of British Columbia on October 23, 2020. The Company is in the process of completing an amalgamation transaction with Sierra Madre Developments Inc., which is listed on the TSX Venture Exchange (“TSX-V”).

The Company is a junior mineral exploration stage company in the business of acquiring, exploring, and evaluating natural resource properties, and either developing these properties further or disposing of them when the evaluation is complete. As at the date of this MD&A, the Company is in the process of acquiring a 100% interest in the Moss Lake gold project located in Ontario, Canada.

The Company’s ability to continue its operations is dependent on its success in raising equity through share issuances, suitable debt financing and/or other financing arrangements. While the Company has been successful in raising equity in the past, there can be no guarantee that it will be able to raise sufficient funds to fund its activities and general and administrative costs in the future. Many factors influence the Company’s ability to raise funds, including the health of the capital market, the climate for mineral exploration investment and the Company’s track record. Actual funding requirements may vary from those planned due to a number of factors, including the acquisition of new projects. There is no guarantee that the Company will be able to secure additional financings in the future at terms that are favourable, or at all.

On March 11, 2020, the World Health Organization characterized the outbreak of a strain of the novel coronavirus (“COVID-19”) as a pandemic which has resulted in a series of public health and emergency measures that have been put in place to combat the spread of the virus. The duration and impact of COVID-19 is unknown at this time and it is not possible to reliably estimate the impact that the length and severity of these developments will have on the financial results and condition of the Company in future periods, including the possible impact on future financing opportunities.

Moss Lake Gold Project, Ontario, Canada

In exchange for 100% interest in the project, the Company will:

Pay $12,500,000 cash to Wesdome upon closing;
Issue common shares with a fair value equal to the greater of a) $19,500,000 and b) 30% of the issued and outstanding common shares of the Company to Wesdome at closing;
Issue $20,000,000 in common shares to Wesdome in the form of milestone payments consisting of: o $5,000,000 within 12 months of closing;
$7,500,000 upon the earlier of (i) the Company completing an updated Preliminary Economic Assessment (“PEA”) or pre-feasibility study; and (ii) 30 months from closing; and
$7,500,000 upon the earlier of (i) the Company completing a feasibility study, (ii) the date on which the Company makes a development decision on Moss Lake, and (iii) 48 months from closing.
Grant to Wesdome a 1.00% net smelter royalty (“NSR”) on all metal production from Moss Lake. The Company shall have the right to repurchase the NSR for (i) $5,000,000 within 30 months of closing or (ii) $7,500,000 between 30 and 48 months after closing. The NSR buyback shall expire if not exercised within 48 months of closing.
Grant Wesdome representation on the Company’s Board of Directors with two appointees.

Page 1 of 5

C-20

The Company paid Wesdome a refundable deposit of $1,000,000 concurrent with executing the Moss Lake Agreement. The deposit will be applied to the cash payment due on closing.

As of March 31, 2021 and the issue date of this MD&A, the Transaction has not closed.

Amalgamation Agreement

On January 26, 2021, the Company entered into an amalgamation agreement (the “Amalgamation Agreement”) with Sierra Madre Development Inc. (“Sierra Madre”), whereby Sierra Madre will acquire all of the issued and outstanding common shares of the Company. The completion of the Amalgamation Agreement with result in the reverse takeover of Sierra Madre by the Company pursuant to the policies of the TSX Venture Exchange (“TSX-V”) (the “Amalgamation). As of March 31, 2021 and the issue date of this MD&A, the Amalgamation has not closed and the Company has recorded $15,533 in deferred transaction costs in relation to the Amalgamation.

Subscription Receipt Financings

On February 26, 2021, the Company and Sierra Madre completed brokered private placement offerings, pursuant to which the Company issued an aggregate of 23,076,924 subscription receipts at a price of $0.65 per subscription receipt and Sierra Madre issued an aggregate of 13,333,335 flow-through subscription receipts at a price of $0.75 per flow-through subscription receipt, for aggregate gross proceeds of $25,000,002 (the “Escrowed Funds”). The gross proceeds will be held in escrow pending satisfaction of certain conditions (“Escrow Release Conditions”), including the closing of the Amalgamation and receiving conditional approval for the Resulting Issuer’s shares being listed on the TSX-V.

The Escrowed Funds, including any accrued interest, are held in escrow by a subscription receipt agent and will be released to the Resulting Issuer upon the satisfaction of the Escrow Release Conditions (the “Escrow Release Date”), provided that the Escrow Release Conditions are satisfied at or prior to June 30, 2021.

On February 26, 2021, Goldshore paid $410,775 in cash commission to agents and $229,420 in closing expenses from Escrowed Funds and issued a total of 1,263,924 non-transferrable compensation options (“Goldshore Compensation Options”) to agents. In connection with the Amalgamation, each Goldshore Compensation Option will be exchanged for one compensation option of the Resulting Issuer, which will be exercisable for one Resulting Issuer common share at a price of $0.65 for 24 months after the Escrow Release Date. The remaining agents’ commission of $410,775 will be paid on the Escrow Release Date. The fair value of the Goldshore Compensation Options was determined to be $428,522 using the Black Scholes Option Pricing Model using the following assumptions: risk-free rate of 0.23%, expected life of 2 years, volatility factor of $100% and dividend yield of Nil. The fair value of the Goldshore Compensation Options was recorded as deferred financing costs and the corresponding entry within reserve on the statement of financial position.

On February 26, 2021, Sierra Madre issued a total of 772,650 non-transferrable compensation options (“Sierra Madre Compensation Options”) to agents. Each Sierra Madre Compensation Option is exercisable at $0.75 per Sierra Madre Share until the Compensation Option Expiry Date. Sierra Madre will pay $579,420 in commissions to the agents on the Escrow Release Date.

For a discussion of the factors affecting the Company’s losses see “Summary of quarterly results” and “Results of operations” below.

Results of operations for the period from incorporation on October 23, 2020 to March 31, 2021

The Company incurred a loss and comprehensive loss of $750,570 for the period from incorporation on October 23, 2020 to March 31, 2021. The Company was incorporated on October 23, 2020, and as a result, there is no comparative period. The loss and comprehensive loss was primarily driven by:

Consulting fees of $191,368;
Professional fees of $113,743; and,
Property investigation costs of $393,470.

Summary of quarterly results

The following table provides a summary of financial data for the Company since incorporation on October 23, 2020:

	Quarter ended Loss and comprehensive loss Basic and diluted income (loss) per common share Q4/21 March 31, 2021 $ (710,727) $ (0.06) Q3/21 December 31, 2020 $ (39,843) $ (0.01)
	Page 2 of 5

C-21

LIQUIDITY AND CAPITAL RESOURCES

Cash flows

Cash used in operating activities for the period from incorporation on October 23, 2020 to March 31, 2021 was $609,156.

Cash used in investing activities for the period from incorporation on October 23, 2020 to March 31, 2021 was $1,021,933. Investing activities related mostly to the deposit paid for the Moss Lake gold project in accordance with the Moss Lake Agreement.

Cash provided by financing activities for the period from incorporation on October 23, 2020 to March 31, 2021 was $18,216,790. Financing activities related mostly to cash generated from private placements net of share issuance costs.

TRANSACTIONS WITH RELATED PARTIES

The Company’s related parties consist of its key management personnel, including its directors and officers.

There were no key management compensation or other related party transactions during the period ended March 31, 2021. At March 31, 2021, the Company had $Nil owing to related parties.

CRITICAL JUDGMENTS IN APPLYING ACCOUNTING POLICIES AND KEY SOURCES OF ESTIMATION UNCERTAINTY

The critical judgements and estimates that management has made in the process of applying the Company’s accounting policies and that have the most significant effect on the amounts recognized in the financial statements for the period from incorporation on October 23, 2020 to March 31, 2021 are as follows:

Going concern

Key sources of estimation uncertainty

Income taxes

NEW ACCOUNTING STANDARDS AND ACCOUNTING STANDARDS NOT YET EFFECTIVE

None.

Page 3 of 5

C-22

OFF-BALANCE SHEET ARRANGEMENTS

The Company did not enter into any off-balance sheet arrangements during the period from incorporation on October 23, 2020 to March 31, 2021.

FINANCIAL INSTRUMENTS AND RELATED RISKS

Classifications

The Company’s financial assets and liabilities are classified as follows:

	March 31, 2021	March 31, 2021
Financial assets:
*Fair value through profit and loss*
Cash and restricted cash	$	16,585,701
Financial liabilities:
*Amortized cost*
Accountspayable and accrued liabilities	$	171,953

The fair values of the Company’s cash and accounts payable and accrued liabilities approximate their carrying amounts due to the short-term nature of these instruments.

Financial instrument risk exposure

The Company’s financial instruments expose the Company to certain financial risks, including credit risk, liquidity risk, interest rate risk and foreign currency risk.

Credit risk

The Company’s cash is held with a high credit quality financial institution in Canada and as at March 31, 2021, management considers its exposure to credit risk to be low.

Liquidity risk

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market interest rates.

Foreign currency risk

As at March 31, 2021, the Company was not exposed to foreign currency risk.

Page 4 of 5

C-23

RISKS AND UNCERTAINTIES

The Company’s business remains mineral property acquisition, exploration and development business and as a result it may be exposed to a number of operational, financial, regulatory and other risks and uncertainties that are typical in the natural resource industry and common to other companies in the exploration and development stage. These risks may not be the only risks faced by the Company. Additional risks and uncertainties not presently known by the Company or which are presently considered immaterial could adversely impact the Company’s business, results of operations, and financial performance in future periods.

OUTSTANDING SHARE CAPITAL DATA

At the date of this MD&A, the Company had 30,122,381 common shares issued and outstanding.

The Company has authorized an unlimited number of common shares without par value.

At the date of this MD&A, the Company has no share purchase warrants outstanding.

At the date of this MD&A, the Company has 1,263,924 non-transferrable compensation options outstanding.

CONFLICTS OF INTEREST

The Company’s directors and officers may serve as directors or officers, or may be associated with, other reporting companies, or have significant shareholdings in other companies. To the extent that such other companies may participate in business or asset acquisitions, dispositions, or ventures in which the Company may participate, the directors and officers of the Company may have a conflict of interest in negotiating and concluding on terms with respect to the transaction. If a conflict of interest arises, the Company will follow the provisions of the BC Business Corporations Act (“BCBCA”) dealing with conflict of interest. These provisions state that where a director has such a conflict, that director must, at a meeting of the Company’s directors, disclose his or her interest and refrain from voting on the matter unless otherwise permitted by the BCBCA. In accordance with the laws of the Province of British Columbia, the directors and officers of Goldshore are required to act honestly, in good faith, and in the best interest of Goldshore.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION

This MD&A includes “forward-looking statements” and “forward-looking information” within the meaning of Canadian securities legislation. All statements included in this MD&A, other than statements of historical fact, are forward-looking statements. When used in this MD&A, words such as “may”, “would”, “could”, “will”, “intend”, “expect”, “believe”, “plan”, “anticipate”, “estimate”, “scheduled”, “forecast”, “predict”, “foresee” and other similar terminology, or sentences/statements that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved are intended to identify forward-looking statements, which, by their very nature, are not guarantees of the Company’s future operational or financial performance.

These statements reflect the Company's current expectations regarding future events, performance and results, and is accurate only at the time of this MD&A, and may be superseded by more current information. Forward-looking statements also involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the Company or its mineral projects to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements or information.

In making such statements, the Company has made assumptions regarding, among other things: general business and economic conditions; the availability of additional; the supply and demand for, inventories of, and the level and volatility of the prices of metals;; the timing and receipt of governmental permits and approvals; changes in regulations; political factors; the accuracy of the Company’s interpretation of the geology of the Company’s properties and prospective properties; the availability of equipment, skilled labour and services needed for the exploration of mineral properties; and currency fluctuations.

Although the forward-looking statements or information contained in this MD&A are based upon what management of the Company believes are reasonable assumptions, the Company cannot assure investors that actual results will be consistent with these forward-looking statements. They should not be read as guarantees of future performance or results. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements, including, but not limited to: the factors discussed below and under "Risks and Uncertainties"; unanticipated changes in general business and economic conditions or conditions in the financial markets; fluctuations in the price of metals; stock market volatility; the availability of exploration capital and financing generally; changes in national and local government legislation; changes to taxation; changes in interest or currency exchange rates; loss of key personnel; inaccurate geological assumptions; competition; unavailability of materials and equipment; government action or delays in the receipt of permits or government approvals; and unanticipated events related to health, safety and environmental matters, including the impact of epidemics.

Forward-looking information is designed to help readers understand management’s current views of the Company’s near and longer-term prospects, and it may not be appropriate for other purposes. The Company will not update any forward-looking statements or forward-looking information unless required to by applicable securities laws.

Page 5 of 5

C-24

APPENDIX D

PRO FORMA FINANCIAL STATEMENTS OF GOLDSHORE RESOURCES INC.

Description	Page
Pro forma consolidated financial statements for theperiod ended March 31,2021	D-2

D-1

Goldshore Resources Inc.

(formerly Sierra Madre Developments Inc.) Pro-forma Consolidated Financial Statements March 31, 2021

Unaudited – Prepared by Management

Expressed in Canadian Dollars

D-2

Goldshore Resources Inc.

(formerly Sierra Madre Developments Inc.)

Pro-forma Consolidated Statement of Financial Position

As at March 31, 2021

(Expressed in Canadian Dollars – Unaudited)

		Sierra Madre	Goldshore		Moss Lake Gold		Pro-forma	Pro-forma
	Developments Inc.		Resources Inc.	Mines Ltd. carve-out		Notes	Adjustments	Consolidated
		(Unaudited)			(Unaudited)			(Unaudited)
ASSETS
Current assets
Cash	$	432,937 $	2,225,896	$	-	$	11,980,996 $	14,639,829
Subscription receipt financing						3(c)	23,550,996
Transaction costs						3	(70,000)
Purchase of Moss Lake						3(d)	(11,500,000)
Restricted cash		-	14,359,805		-		(14,359,805)	-
GST Receivable		-	23,205		-		-	23,205
Deferred transaction costs		-	15,533		-		(15,533)	-
Deferred financing costs		-	1,068,717		-		(1,068,717)	-
Prepaid expenses and deposits		-	9,175		-		-	9,175
		432,937	17,702,331		-		(3,463,059)	14,672,209
Mineral property deposit		-	1,000,000		-		(1,000,000)	-
Purchase of Moss Lake Gold Mines Ltd.						3(d)	(1,000,000)
Right of use assets		-	21,915		-		-	21,915
Long-term deposit		-	6,400		-		-	6,400
Exploration and evaluation asset		-	-		10,129,364		21,870,636	32,000,000
Purchase of Moss Lake Gold Mines Ltd.						3(d)	21,870,636
TOTAL ASSETS	$	432,937$	18,730,646		$ 10,129,364	$	17,407,577 $	46,700,524
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities	$	20,080 $	171,953		$ -	$	- $	192,033
Lease liability		-	17,783		-		-	17,783
Subscriptions received in advance		-	15,000,000		-		(15,000,000)	-
Flow-through share premium liability		-	-		-		1,333,334	1,333,334
Subscription receipt financing						3(c)	1,333,334
		20,080	15,189,736		-		(13,666,666)	1,543,150
Lease liability–non-current		-	4,491		-		-	4,491
TOTAL LIABILITIES		20,080	15,194,227		-		(13,666,666)	1,547,641
SHAREHOLDERS’ EQUITY
Share capital		8,437,198	3,858,467		-		34,939,939	47,235,604
Elimination of Sierra Madre equity						3(a)	(8,437,198)
Value of Sierra Madre shares						3(b)	2,390,453
Subscription receipt financing						3(c)	21,486,684
Purchase of Moss Lake						3(d)	19,500,000
Reserve		1,203,271	428,522		-		(900,815)	730,978
Elimination of Sierra Madre equity						3(a)	(1,203,271)
Subscription receipt financing						3(c)	302,456
Contributions from Wesdome Gold Mines Ltd.		-	-		20,083,752		(20,083,752)	-
Purchase of Moss Lake Gold Mines Ltd.						3(d)	(20,083,752)
Deficit		(9,227,612)	(750,570)		(9,954,388)		17,118,871	(2,813,699)
Elimination of Sierra Madre equity						3(a)	9,227,612
Listing expense						3(a)	(1,977,596)
Purchase of Moss Lake Gold Mines Ltd.						3(d)	9,954,388
Transaction costs						3	(85,533)
TOTAL SHAREHOLDERS’ EQUITY		412,857	3,536,419		10,129,364		31,074,243	45,152,883
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	432,937$	18,730,646		$ 10,129,364	$	17,407,577 $	46,700,524

The accompanying notes form an integral part of these unaudited pro-forma consolidated financial statements.

D-3

Goldshore Resources Inc.

(formerly Sierra Madre Developments Inc.)

Pro-forma Consolidated Statement of Loss and Comprehensive Loss

For the period ended March 31, 2021

(Expressed in Canadian Dollars – Unaudited)

				Moss Lake Gold	Moss Lake Gold
		Sierra Madre	Goldshore		Mines Ltd.			Pro-forma	Pro-forma
	Developments Inc.		Resources Inc.		carve-out	Notes		Adjustments	Consolidated
		(Unaudited)			(Unaudited)				(Unaudited)
EXPENSES
General and administrative costs	$	17,212 $	12,422	$	336		$	- $	29,970
Marketing fees		-	37,726		-			-	37,726
Consulting fees		-	191,368		-			-	191,368
Professional fees		14,052	113,743		-	3		50,000	177,795
Regulatory fees		4,399	-		-	3		20,000	24,399
Amortization		-	953		-				953
Travel		-	-		-			-	-
Property investigation costs		-	393,470		-			-	393,470
Interest expense		-	888		-				888
Listing expense		-	-		-			1,977,596	1,977,596
Listing expense						3(a)		1,977,596
NET AND COMPREHENSIVE LOSS	$	35,663$	750,570	$	336		$	2,047,596 $	2,834,165

The accompanying notes form an integral part of these unaudited pro-forma consolidated financial statements

D-4

Goldshore Resources Inc. (formerly Sierra Madre Developments Inc.)

Notes to the Pro-forma Consolidated Financial Statements Unaudited – Prepared by Management

(Expressed in Canadian Dollars)

1. Proposed Transaction

On January 26, 2021, Goldshore Resources Inc. (“Goldshore” or the “Company”) entered into an amalgamation agreement (the “Amalgamation Agreement”) with Sierra Madre Development Inc. (“Sierra Madre”), whereby Sierra Madre will acquire all of the issued and outstanding common shares of the Company (the “Amalgamation”). The completion of the Amalgamation with result in the reverse takeover of Sierra Madre by the Company pursuant to the policies of the TSX Venture Exchange (“TSX-V”).

2. Basis of Presentation

The accompanying unaudited pro-forma consolidated financial statements of the Resulting Issuer have been prepared by management in accordance with International Financial Reporting Standards (“IFRS”) from information derived from the financial statements of Sierra Madre and the financial statements of Goldshore to show the effect of the Amalgamation, as described in Note 1, except for the accounting policy for flow-through shares, which are a new transaction. The Company’s accounting policy is that the value of the flow-through shares is bifurcated into a share component corresponding to the price of a non-flowthrough share, and a liability component representing the premium paid. As eligible expenditures are incurred, the deferred premium liability is reversed into profit or loss on a pro-rata basis.

The unaudited pro-forma consolidated financial statements as at and for the period ended March 31, 2021 of the Company is compiled from and includes:

a) Sierra Madre’s financial statements as at and for the nine months ended December 31, 2020;
b) Goldshore’s financial statements as at and for the period from incorporation on October 23, 2020 to March 31, 2021;
c) Moss Lake Gold Mines Ltd. carve-out financial statements as at and for the period ended March 31, 2021; and,
d) The additional information set out in Note 3.

The unaudited pro-forma consolidated financial statements should be read in conjunction with the financial statements and notes thereto of Sierra Madre and Goldshore, described above. The unaudited pro-forma consolidated financial statements were prepared for the purpose of the pro forma financial statements and do not conform with the actual consolidated financial statements included elsewhere in the filing statement.

D-5

Goldshore Resources Inc. (formerly Sierra Madre Developments Inc.) Notes to the Pro-forma Consolidated Financial Statements Unaudited – Prepared by Management

(Expressed in Canadian Dollars)

3. Pro Forma Assumptions and Adjustments

As a result of the Amalgamation, the shareholders of Goldshore will acquire control of Sierra Madre, thereby constituting a reverse acquisition of Sierra Madre. The Transaction is considered a purchase of Sierra Madre’s net assets by the shareholders of Goldshore.

The Transaction will be accounted for in accordance with guidance provided in IFRS 2, Share-based payments, and IFRS 3, Business combinations. As Sierra Madre did not qualify as a business according to the definition in IFRS 3, this Transaction does not constitute a business combination; rather, it is treated as an issuance of shares by Goldshore for the net assets of Sierra Madre and the listing of Goldshore’s shares.

The purchase price is allocated as follows:

The purchase price is allocated as follows:
		Amount
Fair value of Sierra Madre shares	$	2,390,453
(3,677,620post-consolidation common shares at $0.65per share)
Consideration		2,390,453
Net assets acquired
Cash		432,937
Accountspayable		(20,080)
Net assets		412,857
Listing expense	$	1,977,596

In connection with the closing of the Amalgamation, the Company incurred a total of $70,000 in additional transaction costs including consulting, professional and regulatory fees. In addition, the Company incurred $15,533 in professional fees, which were recorded as deferred transaction costs as at March 31, 2021.

The following pro-forma adjustments (“Adjustments”) correspond with the note references on the pro-forma financial statements and as further set out in these notes thereto.

a) Upon closing of the Amalgamation, the share capital, reserve and deficit of Sierra Madre are eliminated. The difference in value of the shares deemed to have been issued by the accounting acquirer and the fair value of Sierra Madre’s net assets is expensed as a listing expense.
b) The Resulting Issuer shall assume the shares of Sierra Madre at the Amalgamation date, which have been valued at $0.65 per share.
c) In February 2021, Goldshore and Sierra Madre closed a brokered private placement pursuant to which Goldshore issued an aggregate of 23,076,924 subscription receipts at a price of $0.65 and Sierra Madre issued an aggregate of 13,333,335 flow-through subscription receipts at a price of $0.75, for combined aggregate gross proceeds of $25,000,002. In connection with the offering, the agents are entitled to cash consideration of $1,219,585 and legal fees of $229,421, resulting in net proceeds of $23,550,996.

Additionally, the agents are entitled to 1,263,934 Goldshore compensation options and 772,650 Sierra Madre compensation options. Each compensation option issued by Goldshore is exercisable for one Goldshore common share at a price of $0.65. Each compensation option issued by Sierra Madre is exercisable for one Sierra Madre common share at a price of $0.75. The compensation options have a combined fair value of $730,978 using the Black-Scholes Option Pricing Model, using an expected life of 2 years, volatility of 100%, and risk free rate of 0.23-0.30%.

D-6

Goldshore Resources Inc.

(formerly Sierra Madre Developments Inc.)

Notes to the Pro-forma Consolidated Financial Statements

Unaudited – Prepared by Management

(Expressed in Canadian Dollars)

3. Pro Forma Assumptions and Adjustments (continued)

The flow-through subscription receipts were issued at a premium of $0.10 per flow-through subscription receipt, calculated as the difference between the price per subscription receipt and the price per flowthrough subscription receipt. This resulted in the flow-through share premium liability of $1,333,334.

d) On January 25, 2021, the Company entered into a purchase agreement with Moss Lake Gold Mines Ltd. and Wesdome Gold Mines Ltd. (“Wesdome”) to acquire a 100% interest in the Moss Lake gold project located in Ontario, Canada. In exchange for a 100% interest in the project, the Company will:
Pay $12,500,000 cash to Wesdome upon closing
Issue common shares with a fair value equal to the greater of a) $19,500,000 and b) 30% of the issued and outstanding common shares of the Company to Wesdome at closing.

In connection with the purchase agreement, the Company made a $1,000,000 deposit to Wesdome, which will be applied against the cash payment upon closing.

D-7

Goldshore Resources Inc.

(formerly Sierra Madre Developments Inc.)

Notes to the Pro-forma Consolidated Financial Statements

Unaudited – Prepared by Management

(Expressed in Canadian Dollars)

4. Pro Forma Equity

Shareholder’s equity after giving effect to the assumptions and pro forma adjustments discussed in Note 3 is as follows:

		Number of equivalent						Contributions from
		Sierra Madre, post-						Wesdome Gold
		consolidation		Share Capital		Reserves		Mines Ltd.		Deficit		Total Equity
	Note			$		$		$		$		$
Beginning balance of Sierra Madre, December 31, 2020		3,677,620	$	8,437,198	$	1,203,271	$	-	$	(9,227,612)	$	412,857
Adjustments:								-
Shares issued for cash		13,333,335		7,784,791		302,456		-		-		8,087,247
Balance of Sierra Madre, March 31, 2021		17,010,955	$	16,221,989	$	1,505,727	$	-	$	(9,227,612)	$	8,500,104

Balance of Moss Lake Gold Mines carve-out, March 31, 2021		-	$	-	$	-	$	20,083,752	$	(9,954,388)	$	10,129,364
Beginning balance of Goldshore, January 31, 2021		30,122,381		3,858,467		428,522		-		(750,570)		3,536,419
Adjustments:
Shares issued for cash	3(c)	23,076,924		13,701,893		-		-		-		14,130,415
Shares issued to acquire Moss Lake	3(d)	29,230,769		19,500,000		-		-		-		19,500,000
Balance of Goldshore, March 31, 2021		82,430,074	$	37,060,360	$	428,522	$	-	$	(750,570)	$	36,738,312
Adjustments for Resulting Issuer:
Elimination of opening Sierra Madre share equity	3(a)	(3,677,620)		(8,437,198)		(1,203,271)		-		9,640,469		-
Value of Sierra Madre shares	3(b)	3,677,620		2,390,453		-		-		(2,390,453)		-
Elimination of Moss Lake Gold Mines Ltd. carve-out equity	3(d)	-		-		-		(20,083,752)		9,954,388		(10,129,364)
Transaction costs	3	-		-		-		-		(85,533)		(85,533)
Total Adjustments		-	$	(6,046,745)	$	(1,203,271)	$	(20,083,752)	$	17,118,871	$	(10,214,897)
Pro forma, Consolidated Equity,
March 31, 2021		99,441,029	$	47,235,604	$	730,978	$	-	$	(2,813,699)	$	45,152,883

D-8

APPENDIX E

CARVE-OUT FINANCIAL STATEMENTS AND MD&A OF MOSS LAKE GOLD MINES LTD.

Description	Page
Condensed interim financial statements for the three months ended March 31,2021 and 2020	E-2
Management’s discussion and analysis for the three months ended March 31,2021	E-11
Financial statements for theyears ended December 31,2020 and 2019	E-16
Management’s discussion and analysis for theyear ended December 31,2020	E-30

E-1

Moss Lake Gold Mines Ltd. Carve-Out

Condensed Interim Financial Statements For the three months ended March 31, 2021 and 2020 (Expressed in Canadian Dollars - unaudited)

E-2

MOSS LAKE GOLD MINES LTD. CARVE-OUT Condensed Interim Carve-out Statement of Financial Position

(Expressed in Canadian Dollars – unaudited)

MOSS LAKE GOLD MINES LTD. CARVE-OUT Condensed Interim Carve-out Statement of Financial Position (Expressed in Canadian Dollars – unaudited)
			December 31, 2020
	March 31, 2021
ASSETS
Explorationand evaluationasset (Note 5)	$	10,129,364	$	10,115,625
TOTAL ASSETS	$	10,129,364	$	10,115,625
LIABILITIES AND SHAREHOLDERS’ EQUITY
Contributions from Wesdome Gold Mines Ltd.	$	20,083,752	$	20,069,677
Accumulated deficit		(9,954,388)		(9,954,052)
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	10,129,364	$	10,115,625

Going concern (Note 1)

/s/ Duncan Middlemiss Director

/s/ Charles Main

Director

The accompanying notes form an integral part of these condensed interim carve-out financial statements.

E-3

MOSS LAKE GOLD MINES LTD. CARVE-OUT Condensed Interim Carve-out Statement of Loss and Comprehensive Loss (Expressed in Canadian Dollars - unaudited)

==> picture [486 x 34] intentionally omitted <==

	For the Three Months Ended	For the Three Months Ended
	March 31, 2021	March 31, 2020
EXPENSES
General and administrative costs	$ 336	$ 73
LOSS AND COMPREHENSIVE LOSS	$ 336
		$ 73

The accompanying notes form an integral part of these condensed interim carve-out financial statements.

E-4

MOSS LAKE GOLD MINES LTD. CARVE-OUT Condensed Interim Carve-out Statement of Cash Flows

(Expressed in Canadian Dollars - unaudited)

==> picture [314 x 31] intentionally omitted <==

	For the Three Months Ended
	March 31, 2021 March 31, 2020
	Cash flows provided from (used in): OPERATING ACTIVITIES Loss for theperiod $ (336) $ (73)


	Cash flows used in operating activities (336) (73)
	INVESTING ACTIVITIES Exploration and evaluation asset (13,739) (5,936)


	Cash flows used in investing activities (13,739) (5,936)
	FINANCING ACTIVITIES Contributions from Wesdome Gold Mines Ltd. 14,075 6,009


	Cash flowsprovided by financing activities 14,075 6,009
	Increase in cash - - Cash and cash equivalents, beginning ofperiod - -


	Cash and cash equivalents, end ofperiod $ - $ -

During the three months ended March 31, 2021 and 2020, the Entity did not pay any interest or income taxes.

The accompanying notes form an integral part of these condensed interim carve-out financial statements.

E-5

MOSS LAKE GOLD MINES LTD. CARVE-OUT Condensed Interim Carve-out Statement of Changes in Shareholders’ Equity

(Expressed in Canadian Dollars - unaudited)

	Contributions from Wesdome	Contributions from Wesdome
		Gold Mines Ltd.		Accumulated deficit		Total
Balance, December 31, 2019	$	19,980,714	$	(9,952,985)	$	10,027,729
Contributions from Wesdome Gold Mines Ltd.		6,009		-		6,009
Net loss for theperiod		-		(73)		(73)
Balance, March 31, 2020	$	19,986,723	$	(9,953,058)	$	10,033,665
Balance, December 31, 2020	$	20,069,677	$	(9,954,052)	$	10,115,625
Contributions from Wesdome Gold Mines Ltd.		14,075		-		14,075
Net loss for theperiod		-		(336)		(336)
Balance, March 31, 2021	$	20,083,752	$	(9,954,388)	$	10,129,364

The accompanying notes form an integral part of these condensed interim carve-out financial statements.

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MOSS LAKE GOLD MINES LTD. CARVE-OUT Notes to the Condensed Interim Carve-out Financial Statements For the three months ended March 31, 2021

(Expressed in Canadian Dollars – unaudited)

1. NATURE OF OPERATIONS AND GOING CONCERN

Moss Lake Gold Mines Ltd. Carve-Out (the “Entity”) is a mineral exploration and evaluation entity that is engaged in the exploration and evaluation of the Moss Lake Group Properties, comprising Moss Lake, Coldstream and Hamlin properties, located west of Thunder Bay, Ontario, Canada (the “Moss Lake Group Properties”). The Entity’s head office is located at 220 Bay Street, Suite 1200, Toronto, Ontario, Canada, M5J 2W4.

These carve-out financial statements have been prepared in conjunction with the planned transaction described in Note 3 and have been prepared on a going concern basis. At March 31, 2021, the Entity had no cash on hand, had no active business and is not generating any revenues. It has incurred losses since inception and had an accumulated deficit of $9,954,388 as at March 31, 2021. Whether and when the Entity can obtain profitability and positive cash flows from operations is uncertain. These material uncertainties may cast significant doubt on the ability of the Entity to continue as a going concern.

The Entity’s ability to continue its operations is dependent on its ability to obtain necessary financings. Prior to the proposed transaction (Note 3) the Entity has been funded by Wesdome Gold Mines Ltd and after the proposed transaction the Entity will be dependent on financing provided by its new parent, Goldshore Resources Inc. These carve-out financial statements do not give effect to the required adjustments to the carrying amounts and classification of assets and liabilities should the Entity be unable to continue as a going concern. Such adjustments could be material.

On March 11, 2020, the World Health Organization characterized the outbreak of a strain of the novel coronavirus (“COVID-19”) as a pandemic which has resulted in a series of public health and emergency measures that have been put in place to combat the spread of the virus. The duration and impact of COVID-19 is unknown at this time and it is not possible to reliably estimate the impact that the length and severity of these developments will have on the financial results and condition of the Entity in future periods, including the possible impact on future financing opportunities. To date, COVID-19 has had no impact on the Entity.

2. SIGNIFICANT ACCOUNTING POLICIES

These condensed interim carve-out financial statements have been prepared in accordance with International Accounting Standard (“IAS”) 34, Interim Financial Reporting , as issued by the International Accounting Standards Board (“IASB”). Accordingly, certain information and footnote disclosure normally included in annual financial statements prepared in accordance with International Financial Reporting Standards (“IFRS”) have been omitted or condensed, and therefore these condensed interim carve-out financial statements should be read in conjunction with the Entity’s December 31, 2020 audited carve-out financial statements and the notes to such financial statements.

These carve-out financial statements have been prepared on a historical cost basis, except for financial instruments classified as financial instruments at fair value through profit or loss (“FVTPL”), which are stated at their fair value. In addition, these carve-out financial statements have been prepared using the accrual basis of accounting, except for cash flow information. The significant accounting policies have been applied consistently to all periods presented in these carve-out financial statements.

The purpose of these carve-out financial statements is to provide general purpose historical financial information of the Entity in connection with the Agreement (Note 3). Therefore, these carve-out financial statements present the historical financial information of the Entity’s parent company, Wesdome Gold Mines Ltd. (“Wesdome”) that make up the Entity, either fully or partially, where only specifically identifiable assets and liabilities are included, and allocations of shared income and expenses of Wesdome that are attributable to the Entity.

The basis of preparation for the carve-out financial statements of financial position, loss and comprehensive loss, cash flows and changes in equity of the Entity have been applied. The carve-out financial statements have been extracted from historical accounting records of Wesdome with estimates used, when necessary, for certain allocations:

The carve-out statements of financial position reflect the assets and liabilities recorded by Wesdome which have been assigned to the Entity on the basis that they are specifically identifiable and attributable to the Entity;

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MOSS LAKE GOLD MINES LTD. CARVE-OUT Notes to the Condensed Interim Carve-out Financial Statements For the three months ended March 31, 2021 (Expressed in Canadian Dollars – unaudited)

2. SIGNIFICANT ACCOUNTING POLICIES (continued)

The carve-out statement of loss and comprehensive loss included a pro-rata allocation of Wesdome’s income and expenses incurred in each of the periods presented based on the percentage of exploration and evaluation activity on the carve-out exploration and evaluation assets, compared to the expenditures incurred on all of Wesdome’s exploration and evaluation assets, and based on specifically identifiable activities attributable to the Entity. As the level of activity at the carve-out exploration and evaluation assets for the periods presented was nominal in relation to the activity of the Wesdome group, no income or expenses were allocated to the Entity for 2021 or 2020. The allocation is considered reasonable under the circumstances; and
Income taxes have been calculated as if the Entity had been a separate legal entity and had filed separate tax returns for the period presented

Management cautions readers of these carve-out financial statements that the Entity’s results do not necessarily reflect what the results of operations, financial position, or cash flows would have been had the Entity been a separate entity. Further, the allocation of income and expense in these carve-out statements of loss and comprehensive loss does not necessarily reflect the nature and level of the Entity’s future income and operating expenses. Wesdome’s investment in the Entity, presented as equity in these carve-out financial statements, includes the accumulated total loss and comprehensive loss of the Entity.

These condensed interim carve-out financial statements were authorized for issuance by the Board of Directors of the Entity on May 18, 2021 and follow the same accounting policies and methods of computation as the most recent annual financial statements.

(a) Significant accounting judgments and key sources of estimation uncertainty

Going concern

The assessment of the Entity’s ability to continue as a going concern for the ensuing year involves significant judgment based on historical experience and other factors, including expectation of future events that are believed to be reasonable under the circumstances.

Carve-out allocation

Management has applied judgement in determining the amounts extracted from Wesdome’s historical financial information which make up the Entity. This includes the assets and liabilities recorded by Wesdome which have been assigned to the Entity, as well as the Entity’s share of income and expenses incurred by Wesdome. The allocations are considered reasonable under the circumstances.

(b) New accounting standards and amendments

The Entity did not adopt any new accounting standards or amendments during the three months ended March 31, 2021.

3. PURCHASE AGREEMENT

On January 26, 2021, Wesdome entered into a definitive purchase agreement (the “Agreement”) with Goldshore Resources Inc. (“Goldshore”) to sell its Moss Group Properties. Pursuant to the Agreement, Goldshore will acquire all of the property, assets and rights related to the Moss Lake Group Properties.

Goldshore will acquire the 100% interest in the Moss Lake Group Properties for:

$12,500,000 cash upon closing;
common shares with a fair value equal to the greater of a) $19,500,000 and b) 30% of the issued and outstanding common shares of the Company to Wesdome at closing;
$20,000,000 in common shares to Wesdome in the form of milestone payments consisting of: o $5,000,000 within 12 months of closing;
$7,500,000 upon the earlier of (i) the Company completing an updated Preliminary Economic Assessment (“PEA”) or pre-feasibility study; and (ii) 30 months from closing; and
$7,500,000 upon the earlier of (i) the Company completing a feasibility study, (ii) the date on which the Company makes a development decision on Moss Lake, and (iii) 48 months from closing;

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MOSS LAKE GOLD MINES LTD. CARVE-OUT Notes to the Condensed Interim Carve-out Financial Statements For the three months ended March 31, 2021 (Expressed in Canadian Dollars – unaudited)

3. PURCHASE AGREEMENT (continued)

A 1.00% net smelter royalty (“NSR”) on all metal production from Moss Lake. The Company shall have the right to repurchase the NSR for (i) $5,000,000 within 30 months of closing or (ii) $7,500,000 between 30 and 48 months after closing. The NSR buyback shall expire if not exercised within 48 months of closing; and
The assumption of the 8.75% net profits royalty on the Moss Lake Group Properties.

These carve-out financial statements reflect the assets, liabilities, expenses and cash flows of the operations included in the exploration asset to be sold by Wesdome.

4. EXPLORATION AND EVALUATION ASSET

For theperiod ended		March 31, 2020	December 31, 2020	December 31, 2020
Balance,beginningofperiod	$	10,115,625	$	10,027,729
Consulting		3,521		45,519
Gold sales royalties		5,313		22,031
Professional fees		-		13,552
Permitting costs		369		6,794
Supplies		4,536		-
Exploration costs		-		-
Balance, end of period	$	10,129,364	$	10,115,625

The Moss Lake Group Properties include Moss Lake, Coldstream and Hamlin properties which are located west of Thunder Bay, Ontario.

Moss Lake

The Moss Lake property is owned by Moss Lake Gold Mines Ltd. (“MLGM”) which is obligated to pay underlying advance royalties of $5,469 per quarter to the vendors of the Moss Lake property until commercial production is achieved. Upon commencement of commercial production, the property is subject to an 8.75% net profits royalty, as defined, to these underlying vendors in lieu of the underlying advance royalty. MLGM owns a 100% interest in the Fountain Lake property which is contiguous to the Moss Lake property to the east, west and south. This property is subject to a 2.5% net smelter return royalty payable to certain original vendors of the property. This royalty is subject to a buyback clause whereby the royalty may be reduced to a 1.5% net smelter return for consideration of $1,000,000.

Coldstream and Hamlin

The Coldstream and Hamlin properties flank the Moss Lake property and include the former producing Coldstream Mine and East Coldstream gold deposit and their potential untested extensions. Some of these properties are subject to net smelter royalties of up to 3%

5. CONTRIBUTIONS FROM WESDOME

Wesdome’s investment in the operations of the Entity is presented as contributions from Wesdome in the carveout financial statements. Deficit represents the accumulated net losses of the carve-out operation and contributions from Wesdome represents the accumulated net contributions from Wesdome.

Net financing transactions with Wesdome as presented in the carve-out statement of cash flows represents the net contributions related to the funding of operations between the Entity and Wesdome.

6. RELATED PARTY TRANSACTIONS

The Entity’s related parties consist of its key management personnel, including its directors and officers. During the normal course of business, the Entity enters into transactions with its related parties that are considered to be arm’s length transactions and made at normal market prices and on normal commercial terms.

As of the and for the period ended March 31, 2021 and December 31, 2020, there were no related party transactions or amounts owing to related parties.

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MOSS LAKE GOLD MINES LTD. CARVE-OUT Notes to the Condensed Interim Carve-out Financial Statements For the three months ended March 31, 2021

(Expressed in Canadian Dollars – unaudited)

7. FINANCIAL INSTRUMENTS

a) Categories of financial instruments and fair value measurements

As of March 31, 2021 and December 31, 2020, the Entity did not have any financial assets or financial liabilities.

b) Management of financial risks

The Entity’s risk exposure, including credit risk, liquidity risk, interest rate risk and foreign currency risk is 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. At March 31, 2021, the Entity was not exposed to credit risk.

b) Management of financial risks (continued)

Liquidity risk

Liquidity risk is the risk that the Entity will encounter difficulty in meeting obligations associated with its financial liabilities. The Entity manages liquidity risk by managing its capital and expenditures.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market interest rates. The Entity is not exposed to interest rate risk at March 31, 2021.

Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in foreign exchange rates. The Entity is exposed to foreign currency risk to the extent that it has monetary assets and liabilities denominated in foreign currencies. As at March 31, 2021, the Entity was not exposed to foreign currency risk.

8. CAPITAL MANAGEMENT

As a separate exploration entity, the Entity does not have share capital and its equity is a carve-out amount from Wesdome’s equity. The Entity manages its capital to maintain its ability to continue as a going concern and to provide returns to shareholders and benefits to other stakeholders.

The Entity manages its capital structure and makes adjustments to it in light of economic conditions. The Entity, upon approval from its Board of Directors, will balance its overall capital structure by undertaking activities as deemed appropriate under the specific circumstances.

The Entity is not subject to externally imposed capital requirements.

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MOSS LAKE GOLD MINES LTD. CARVE-OUT Management Discussion and Analysis For the three months ended March 31, 2021

This management’s discussion and analysis (“MD&A”) is management's interpretation of the financial condition and results of operations of Moss Lake Gold Mines Ltd. Carve-out (the “Entity”) for the three months ended March 31, 2021. This MD&A should be read in conjunction with the audited carve-out financial statements of the Entity for the year ended December 31, 2020 and the condensed interim carve-out financial statements of the Entity for the three months ended March 31, 2021, prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). This MD&A complements and supplements, but does not form part of, the Entity’s carve-out financial statements.

All dollar amounts contained herein are expressed in Canadian dollars unless otherwise indicated. This MD&A has been prepared as of May 18, 2021.

BUSINESS OVERVIEW

The Entity is a junior mineral exploration stage entity in the business of the exploration and evaluation of the Moss Lake Group Properties, comprising Moss Lake, Coldstream and Hamlin properties, located west of Thunder Bay, Ontario, Canada (the “Moss Lake Group Properties”).

The Entity’s ability to continue its operations is dependent on its ability to obtain necessary financings. Prior to the proposed transaction the Entity has been funded by Wesdome Gold Mines Ltd and after the proposed transaction the Entity will be dependent on financing provided by its new parent, Goldshore Resources Inc. There can be no guarantee that it will be able to raise sufficient funds to fund its activities and general and administrative costs in the future. Many factors influence the Entity’s ability to raise funds, including the health of the capital market, the climate for mineral exploration investment and the Entity’s track record. Actual funding requirements may vary from those planned due to a number of factors, including the acquisition of new projects. There is no guarantee that the Entity will be able to secure additional financings in the future at terms that are favourable, or at all.

On March 11, 2020, the World Health Organization characterized the outbreak of a strain of the novel coronavirus (“COVID-19”) as a pandemic which has resulted in a series of public health and emergency measures that have been put in place to combat the spread of the virus. The duration and impact of COVID-19 is unknown at this time and it is not possible to reliably estimate the impact that the length and severity of these developments will have on the financial results and condition of the Entity in future periods, including the possible impact on future financing opportunities. To date, COVID-19 has had no impact on the Entity.

Moss Lake Gold Project, Ontario, Canada

Moss Lake Gold Project, Ontario, Canada
For theperiod ended		March 31, 2020	December 31, 2020
Balance, beginning of period	$	10,115,625	$	10,027,729
Consulting		3,521		45,519
Gold sales royalties		5,313		22,031
Professional fees		-		13,552
Permitting costs		369		6,794
Supplies		4,536		-
Balance, end of period	$	10,129,364	$	10,115,625

The Moss Lake Group Properties include Moss Lake, Coldstream and Hamlin properties which are located 100 kilometres due west of Thunder Bay, Ontario.

Moss Lake

The Moss Lake property is owned by Moss Lake Gold Mines Ltd. (“MLGM”) which is obligated to pay underlying advance royalties of $5,469 per quarter to the original vendors of the Moss Lake property until commercial production is achieved. Upon commencement of commercial production, the property is subject to an 8.75% net profits royalty, as defined, to these underlying original vendors in lieu of the underlying advance royalty. MLGM owns a 100% interest in the Fountain Lake property which is contiguous to the Moss Lake property to the east, west and south. This property is subject to a 2.5% net smelter return royalty

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E-11

payable to certain original vendors of the property. This royalty is subject to a buyback clause whereby the royalty may be reduced to a 1.5% net smelter return for consideration of $1,000,000.

Coldstream and Hamlin

Purchase Agreement

On January 26, 2021, Wesdome Gold Mines Ltd. (“Wesdome”) entered into a definitive purchase agreement (the “Agreement”) with Goldshore Resources Inc. (“Goldshore”) to sell the Moss Lake Group Properties. Pursuant to the Agreement, Goldshore will acquire all of the property, assets and rights related to the Moss Lake Group Properties.

Goldshore will acquire the 100% interest in the Moss Lake Group Properties for:

$12,500,000 cash upon closing;
common shares with a fair value equal to the greater of a) $19,500,000 and b) 30% of the issued and outstanding common shares of the Company to Wesdome at closing;
$20,000,000 in common shares to Wesdome in the form of milestone payments consisting of:
$5,000,000 within 12 months of closing;
$7,500,000 upon the earlier of (i) the Company completing an updated Preliminary Economic Assessment (“PEA”) or pre-feasibility study; and (ii) 30 months from closing; and
$7,500,000 upon the earlier of (i) the Company completing a feasibility study, (ii) the date on which the Company makes a development decision on Moss Lake, and (iii) 48 months from closing;
A 1.00% net smelter royalty (“NSR”) on all metal production from Moss Lake. The Company shall have the right to repurchase the NSR for (i) $5,000,000 within 30 months of closing or (ii) $7,500,000 between 30 and 48 months after closing. The NSR buyback shall expire if not exercised within 48 months of closing; and
The assumption of the 8.75% net profits royalty on the Moss Lake Group Properties.

FINANCIAL REVIEW

For a discussion of the factors affecting the Entity’s losses see “Summary of quarterly results” and “Results of operations” below.

Results of operations for the three months ended March 31, 2021

The Entity incurred a loss and comprehensive loss of $336 for the three months ended March 31, 2021 compared to $73 for the three months ended March 31, 2020, for an increase in loss of $263.

As the Entity is the carve-out financial results of the Moss Lake Group properties, the activity is primarily capital in nature with limited operating expenditures incurred. As a result, the loss and comprehensive loss for both periods is not significant. The loss is a result of general and administrative costs related to routine maintenance and related cost incurred to sustain the operations.

Summary of quarterly results

The following table provides a summary of financial data for the Entity for the previous eight quarters:

			Loss and comprehensive
	Quarter ended	Revenue	loss
Q1/21	March 31, 2021	$ -	$ (336)
Q4/20	December 31, 2020	$ -	$ (434)
Q3/20	September 30, 2020	$ -	$ (220)
Q2/20	June 30, 2020	$ -	$ (340)
Q1/20	March 31, 2020	$ -	$ (73)
Q4/19	December 31, 2019	$ -	$ (4,240)
Q3/19	September 30, 2019	$ -	$ (639)
Q2/19	June 30, 2019	$ -	$ (42)

The primary factors affecting the variations of the Entity’s losses are as follows:

Q4 2019: In Q4, 2019, the Company recognized permitting costs of $3,800 that were not recognized in previous quarters. Reconciling for the $3,800 the loss is consistent with other periods.

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LIQUIDITY AND CAPITAL RESOURCES

The Entity had no working capital or long-term liabilities as of March 31, 2021 or December 31, 2020.

Cash flows

Cash used in operating activities for the three months ended March 31, 2021 was $336 (2020 - $73).

Cash used in investing activities for the three months ended March 31, 2021 was $13,739 (2020 - $5,936). Investing activities relate to activity at the Moss Lake project.

Cash provided by financing activities for the three months ended March 31, 2021 was $14,075 (2020 - $6,009) and is related to capital contributions from Wesdome Gold Mines Ltd.

TRANSACTIONS WITH RELATED PARTIES

As of the and for the period ended March 31, 2021 and December 31, 2020, there were no related party transactions or amounts owing to related parties.

CRITICAL JUDGMENTS IN APPLYING ACCOUNTING POLICIES AND KEY SOURCES OF ESTIMATION UNCERTAINTY

The critical judgments, apart from those involving estimations, that management has made in the process of applying the Entitys accounting policies and that have the most significant effect on the amounts recognized in the financial statements are as follows:

Going concern

The assessment of the Entity’s ability to continue as a going concern for the ensuing period involves significant judgment based on historical experience and other factors, including expectation of future events that are believed to be reasonable under the circumstances.

Carve-out allocation

Key sources of estimation uncertainty

Income taxes

The Entity recognizes deferred tax assets for deductible temporary differences, unused tax losses and other income tax deductions only to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, unused tax losses and other income tax deductions can be utilized. In assessing the probability of realizing the income tax benefits of deductible temporary differences, unused tax losses and other income tax deductions, management makes estimates related to expectations of future taxable income, applicable tax planning opportunities, expected timing of reversals of existing temporary differences and the likelihood that tax positions taken will be sustained upon examination by applicable tax authorities. The likelihood that tax positions taken will be sustained upon examination by applicable tax authorities is assessed based on individual facts and circumstances of the relevant tax position evaluated in light of all available evidence.

As at March 31, 2021, the Entity has not recognized any deferred tax assets for deductible temporary differences. Changes in any of the above-mentioned estimates can materially affect the amount of income tax assets recognized. In addition, where applicable tax laws and regulations are either unclear or subject to varying interpretations, changes in these estimates can occur that materially affect the amounts of income tax assets recognized. The Entity reassesses unrecognized income tax assets at the end of each reporting period.

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NEW ACCOUNTING STANDARDS AND ACCOUNTING STANDARDS NOT YET EFFECTIVE

None.

OFF-BALANCE SHEET ARRANGEMENTS

The Entity did not enter into any off-balance sheet arrangements during the period ended March 31, 2021 or 2020.

PROPOSED TRANSACTIONS

Please refer to “Purchase Agreement” note for details regarding the arrangement with Goldshore.

FINANCIAL INSTRUMENTS AND RELATED RISKS

Classifications

As of March 31, 2021 and December 31, 2020, the Entity did not have any financial assets or financial liabilities.

Management of financial risks

The Entity’s risk exposure, including credit risk, liquidity risk, interest rate risk and foreign currency risk is as follows:

Credit risk

Liquidity risk

Interest rate risk

Foreign currency risk

RISKS AND UNCERTAINTIES

The Entity’s business remains mineral property acquisition, exploration and development business and as a result it may be exposed to a number of operational, financial, regulatory and other risks and uncertainties that are typical in the natural resource industry and common to other companies in the exploration and development stage. These risks may not be the only risks faced by the Entity. Additional risks and uncertainties not presently known by the Entity or which are presently considered immaterial could adversely impact the Entity’s business, results of operations, and financial performance in future periods.

OUTSTANDING SHARE CAPITAL DATA

As a separate exploration entity, the Entity does not have share capital.

CONFLICTS OF INTEREST

The Company’s directors and officers may serve as directors or officers, or may be associated with, other reporting companies, or have significant shareholdings in other companies. To the extent that such other companies may participate in business or asset acquisitions, dispositions, or ventures in which the Entity may participate, the directors and officers of the Entity may have a conflict of interest in negotiating and concluding on terms with respect to the transaction. If a conflict of interest arises, the Entity will follow the provisions of the BC Business Corporations Act (“BCBCA”) dealing with conflict of interest. These provisions state that where a director has such a conflict, that director must, at a meeting of the Company’s directors, disclose his or her interest and refrain from voting on the matter unless otherwise permitted by the BCBCA. In accordance with the laws of the Province of British Columbia, the directors and officers of the Entity are required to act honestly, in good faith, and in the best interest of the Entity.

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION

This MD&A includes “forward-looking statements” and “forward-looking information” within the meaning of Canadian securities legislation. All statements included in this MD&A, other than statements of historical fact, are forward-looking statements. When used in this MD&A, words such as “may”, “would”, “could”, “will”, “intend”, “expect”, “believe”, “plan”, “anticipate”, “estimate”, “scheduled”, “forecast”, “predict”, “foresee” and other similar terminology, or sentences/statements that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved are intended to identify forward-looking statements, which, by their very nature, are not guarantees of the Entity’s future operational or financial performance.

These statements reflect the Entity’s current expectations regarding future events, performance and results, and is accurate only at the time of this MD&A, and may be superseded by more current information. Forward-looking statements also involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the Entity or its mineral projects to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements or information.

In making such statements, the Entity has made assumptions regarding, among other things: general business and economic conditions; the availability of additional; the supply and demand for, inventories of, and the level and volatility of the prices of metals; the timing and receipt of governmental permits and approvals; changes in regulations; political factors; the accuracy of the Entity’s interpretation of the geology of the Entity’s properties and prospective properties; the availability of equipment, skilled labour and services needed for the exploration of mineral properties; and currency fluctuations.

Although the forward-looking statements or information contained in this MD&A are based upon what management of the Entity believes are reasonable assumptions, the Entity cannot assure investors that actual results will be consistent with these forwardlooking statements. They should not be read as guarantees of future performance or results. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements, including, but not limited to: the factors discussed below and under "Risks and Uncertainties"; unanticipated changes in general business and economic conditions or conditions in the financial markets; fluctuations in the price of metals; stock market volatility; the availability of exploration capital and financing generally; changes in national and local government legislation; changes to taxation; changes in interest or currency exchange rates; loss of key personnel; inaccurate geological assumptions; competition; unavailability of materials and equipment; government action or delays in the receipt of permits or government approvals; and unanticipated events related to health, safety and environmental matters, including the impact of epidemics.

Forward-looking information is designed to help readers understand management’s current views of the Entity’s near and longerterm prospects, and it may not be appropriate for other purposes. The Entity will not update any forward-looking statements or forward-looking information unless required to by applicable securities laws.

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Moss Lake Gold Mines Ltd. Carve-Out

Financial Statements

For the years ended December 31, 2020 and 2019 (Expressed in Canadian Dollars)

E-16

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Independent auditor’s report

Grant Thornton LLP 11[th] Floor 200 King Street West, Box 11 Toronto, ON M5H 3T4 T (416) 366-0100 F (416) 360-4949

To the shareholders of Wesdome Gold Mines Ltd.

Opinion

We have audited the financial statements of Moss Lake Gold Mines Ltd. Carve-Out (“the Company”), which comprise the carve-out statements of financial position as at December 31, 2019 and December 31, 2020, and the carve-out statements of loss and comprehensive loss, carve-out statements of changes in shareholders’ equity and carve-out statements of cash flows for the years then ended, and carve-out notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of Moss Lake Gold Mines Ltd. Carve-Out. as at December 31, 2019 and December 31, 2020, and its financial performance and its cash flows for the years then ended in accordance with International Financial Reporting Standards (IFRSs).

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 Financial Statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Material uncertainty related to going concern

Without qualifying our opinion, we draw attention to Note 1 in the financial statements financial statements which indicates that the Company has no active business and has not yet achieved profitable production. It has incurred losses since incorporation and has accumulated deficit of $9,954,052 as at December 31, 2020. This condition, along with other matters as set forth in Note 1, indicate the existence of a material uncertainty that may cast significant doubt about the Corporation’s ability to continue as a going concern.

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

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

In preparing the 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.

Audit | Tax | Advisory

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Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the 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 financial statements.

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

Identify and assess the risks of material misstatement of the 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 financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

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Toronto, Canada May 25, 2021

Chartered Professional Accountants Licensed Public Accountants

MOSS LAKE GOLD MINES LTD. CARVE-OUT Carve-out Statement of Financial Position

(Expressed in Canadian Dollars)

MOSS LAKE GOLD MINES LTD. CARVE-OUT Carve-out Statement of Financial Position (Expressed in Canadian Dollars)
			December 31, 2019
	December 31, 2020
ASSETS
Explorationand evaluationasset (Note 5)	$	10,115,625	$	10,027,729
TOTAL ASSETS	$	10,115,625	$	10,027,729
LIABILITIES AND SHAREHOLDERS’ EQUITY
Contributions from Wesdome Gold Mines Ltd.	$	20,069,677	$	19,980,714
Accumulated deficit		(9,954,052)		(9,952,985)
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	10,115,625	$	10,027,729

Going concern (Note 1) Subsequent Event (Note 11)

/s/ Duncan Middlemiss Director

/s/ Charles Main

Director

The accompanying notes form an integral part of these carve-out financial statements.

E-18

MOSS LAKE GOLD MINES LTD. CARVE-OUT Carve-out Statement of Loss and Comprehensive Loss (Expressed in Canadian Dollars)

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	For the Years Ended	For the Years Ended
	December 31, 2020	December 31, 2019
EXPENSES
General and administrative costs	$ 1,067	$ 5,718
LOSS AND COMPREHENSIVE LOSS	$ 1,067
		$ 5,718

The accompanying notes form an integral part of these carve-out financial statements.

E-19

MOSS LAKE GOLD MINES LTD. CARVE-OUT Carve-out Statement of Cash Flows

(Expressed in Canadian Dollars)

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	For the Years Ended
	December 31, 2020 December 31, 2019
	Cash flows provided from (used in): OPERATING ACTIVITIES Loss for theyear $ (1,067) $ (5,718)


	Cash flows used in operating activities (1,067) (5,718)
	INVESTING ACTIVITIES Exploration and evaluation asset (87,896) (72,503)


	Cash flows used in investing activities (87,896) (72,503)
	FINANCING ACTIVITIES Contributions from Wesdome Gold Mines Ltd. 88,963 78,221


	Cash flowsprovided by financing activities 88,963 78,221
	Increase in cash - - Cash and cash equivalents, beginning ofyear - -


	Cash and cash equivalents, end ofyear $ - $ -

During the years ended December 31, 2020 and 2019, the Entity did not pay any interest or income taxes.

The accompanying notes form an integral part of these carve-out financial statements.

E-20

MOSS LAKE GOLD MINES LTD. CARVE-OUT Carve-out Statement of Changes in Shareholders’ Equity (Expressed in Canadian Dollars)

	Contributions from Wesdome	Contributions from Wesdome
		Gold Mines Ltd.		Accumulated deficit		Total
Balance, December 31, 2018	$	19,902,493	$	(9,947,267)	$	9,955,226
Contributions from Wesdome Gold Mines Ltd.		78,221		-		78,221
Net loss for theyear		-		(5,718)		(5,718)
Balance, December 31, 2019	$	19,980,714	$	(9,952,985)	$	10,027,729
Balance, December 31, 2019	$	19,980,714	$	(9,952,985)	$	10,027,729
Contributions from Wesdome Gold Mines Ltd.		88,963		-		88,963
Net loss for theyear		-		(1,067)		(1,067)
Balance, December 31, 2020	$	20,069,677	$	(9,954,052)	$	10,115,625

The accompanying notes form an integral part of these carve-out financial statements.

E-21

MOSS LAKE GOLD MINES LTD. CARVE-OUT Notes to the Carve-out Financial Statements For the year ended December 31, 2020 (Expressed in Canadian Dollars)

1. NATURE OF OPERATIONS AND GOING CONCERN

These carve-out financial statements have been prepared on a going concern basis, which assumes that the Entity will continue in operation for the foreseeable future and will be able to realize its assets and settle its liabilities in the normal course of business. At December 31, 2020, the Entity had no cash on hand, had no active business and is not generating any revenues. It has incurred losses since inception and had an accumulated deficit of $9,954,052 as at December 31, 2020. Whether and when the Entity can obtain profitability and positive cash flows from operations is uncertain. These material uncertainties may cast significant doubt on the ability of the Entity to continue as a going concern.

The Entity’s ability to continue its operations is dependent on its ability to obtain necessary financings. These carve-out financial statements do not give effect to the required adjustments to the carrying amounts and classification of assets and liabilities should the Entity be unable to continue as a going concern. Such adjustments could be material.

On March 11, 2020, the World Health Organization characterized the outbreak of a strain of the novel coronavirus (“COVID-19”) as a pandemic which has resulted in a series of public health and emergency measures that have been put in place to combat the spread of the virus. The duration and impact of COVID-19 is unknown at this time and it is not possible to reliably estimate the impact that the length and severity of these developments will have on the financial results and condition of the Entity in future periods, including the possible impact on future financing opportunities. To date, COVID-19 has had no impact on the Entity.

2. BASIS OF PREPARATION

(a) Statement of compliance

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

(b) Basis of presentation

These carve-out financial statements have been prepared on a historical cost basis, except for financial instruments classified as financial instruments at fair value through profit or loss (“FVTPL”), which are stated at their fair value. In addition, these carve-out financial statements have been prepared using the accrual basis of accounting, except for cash flow information. The significant accounting policies, as disclosed, have been applied consistently to all periods presented in these carve-out financial statements.

The purpose of these carve-out financial statements is to provide general purpose historical financial information of the Entity in connection with the Agreement (Note 11). Therefore, these carve-out financial statements present the historical financial information of the Entity’s parent company, Wesdome Gold Mines Ltd. (“Wesdome”) that make up the Entity, either fully or partially, where only specifically identifiable assets and liabilities are included, and allocations of shared income and expenses of Wesdome that are attributable to the Entity.

The carve-out statements of financial position reflect the assets and liabilities recorded by Wesdome which have been assigned to the Entity on the basis that they are specifically identifiable and attributable to the Entity;
The carve-out statement of loss and comprehensive loss included a pro-rata allocation of Wesdome’s income and expenses incurred in each of the periods presented based on the percentage of exploration and evaluation activity on the carve-out exploration and evaluation assets, compared to the expenditures incurred on all of Wesdome’s exploration and evaluation assets, and based on specifically identifiable activities attributable to the Entity. As the level of activity at the carve-out exploration and evaluation assets for the periods presented was nominal in relation to the activity of the Wesdome group, no income or expenses were allocated to the Entity for 2020 or 2019. The allocation is considered reasonable under the circumstances; and

E-22

MOSS LAKE GOLD MINES LTD. CARVE-OUT Notes to the Carve-out Financial Statements For the year ended December 31, 2020 (Expressed in Canadian Dollars)

2. BASIS OF PREPARATION (continued)

(b) Basis of presentation (continued)

Income taxes have been calculated as if the Entity had been a separate legal entity and had filed separate tax returns for the period presented

These financial statements were authorized for issuance by the Board of Directors of the Company on May 12, 2021.

(c) Presentation and functional currency

The presentation and functional currency of the Entity is the Canadian dollar. All amounts in these carve-out financial statements are expressed in Canadian dollars, unless otherwise indicated.

(d) Significant accounting judgments and estimates

The preparation of carve-out financial statements in accordance with IFRS requires management to make certain critical accounting estimates and assumptions about the future and to exercise judgment in applying the Entity’s accounting policies. Actual results could differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. The impacts of changes to estimates are recognized in the period estimates are revised and in future periods affected. The critical judgments and assumptions made by management and other major sources of measurement uncertainty are discussed in Note 4.

3. SIGNIFICANT ACCOUNTING POLICIES

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

(a) Foreign currency transactions

Transactions in currencies other than the Canadian dollar (“foreign currencies”), the Entity’s functional currency, are recorded at the rates of exchange prevailing on the dates of the transactions. At each reporting date, monetary assets and liabilities that are denominated in foreign currencies are translated at the rates prevailing at the date of the statement of financial position. Non-monetary items that are denominated in foreign currencies and measured at other than fair value are translated using the rates of exchange at the transaction dates. Foreign exchange gains and losses are included in net loss for the period.

(b) Financial instruments

i) Classification and measurement

Financial asset

The classification and measurement of financial assets is based on the Entity’s business models for managing its financial assets and whether the contractual cash flows represent solely payments of principal and interest (“SPPI”). Financial assets are initially measured at fair value less, for an item not at fair value through profit or loss, transaction costs directly attributable to its acquisition or issue, and are subsequently measured at either (i) amortized cost; (ii) fair value through other comprehensive income, or (iii) at fair value through profit or loss.

Amortized cost

Financial assets classified and measured at amortized cost are those assets that are held within a business model whose objective is to hold financial assets in order to collect contractual cash flows, and the contractual terms of the financial asset give rise to cash flows that are SPPI. Financial assets classified at amortized cost are measured using the effective interest method. The Entity does not have any assets classified and measured at amortized cost.

E-23

MOSS LAKE GOLD MINES LTD. CARVE-OUT Notes to the Carve-out Financial Statements For the year ended December 31, 2020 (Expressed in Canadian Dollars)

3. SIGNIFICANT ACCOUNTING POLICIES (continued)

(b) Financial instruments (continued)

Fair value through other comprehensive income (“FVTOCI”)

Financial assets classified and measured at FVTOCI are those assets that are held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets, and the contractual terms of the financial asset give rise to cash flows that are SPPI. The Entity does not have any assets classified and measured at FVTOCI.

Fair value through profit or loss (“FVTPL”)

Financial liabilities

Financial liabilities are recognized when the Entity becomes a party to the contractual provisions of the financial instrument. A financial liability is derecognized when it is extinguished, discharged, cancelled or when it expires. Financial liabilities are classified as either financial liabilities at fair value through profit or loss or financial liabilities subsequently measured at amortized cost. All interest-related charges are reported in profit or loss within interest expense, if applicable.

Other financial liabilities are non-derivatives and are initially recognized at fair value net of any transaction costs directly attributable to the issuance of the instrument and subsequently carried at amortized cost using the effective interest rate method. This ensures that any interest expense over the period to repayment is at a constant rate on the balance of the liability carried in the statements of financial position. Interest expense in this context includes initial transaction costs and premiums payable on redemption, as well as any interest or coupon payable while the liability is outstanding. Accounts payable and accrued liabilities are included in this category and represent liabilities for goods and services provided to the Entity prior to the end of the period that are unpaid.

ii) Derecognition of financial assets

The Entity 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 profit or loss. However, gains and losses on derecognition of financial assets classified as FVTOCI remain within accumulated other comprehensive income (loss).

iii) Impairment of financial assets

The Entity recognizes a loss allowance for expected credit losses on financial assets that are measured at amortized cost. At each reporting date, the Entity 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 Entity measures the loss allowance for the financial asset at an amount equal to twelve month expected credit losses. The Entity shall recognize in the 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.

(c) Exploration and evaluation expenditures

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

Government tax credits are recorded as a reduction to the cumulative costs incurred and capitalized on the related property in the period it is received.

E-24

MOSS LAKE GOLD MINES LTD. CARVE-OUT Notes to the Carve-out Financial Statements For the year ended December 31, 2020 (Expressed in Canadian Dollars)

3. SIGNIFICANT ACCOUNTING POLICIES (continued)

(c) Exploration and evaluation expenditures (continued)

(d) Income taxes

Income tax on profit or loss comprises current and deferred tax. Income tax is recognized in profit or loss, except deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Entity intends to settle its current tax assets and liabilities on a net basis.

(e) Impairment of non-financial assets

The Entity assesses exploration and evaluation assets for impairment when facts and circumstances suggest that the carrying amount of an 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.

(f) Contributions

Contributions from Wesdome to the Entity are presented as part of equity. The Entity has no share capital, options or warrants, and as a result, there are no share-related disclosures.

E-25

MOSS LAKE GOLD MINES LTD. CARVE-OUT Notes to the Carve-out Financial Statements For the year ended December 31, 2020 (Expressed in Canadian Dollars)

4. SIGNIFICANT ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

Significant accounting judgments

Going concern

Carve-out allocation

Key sources of estimation uncertainty

Income taxes

As at December 31, 2020, the Entity has not recognized any deferred tax assets for deductible temporary differences. Changes in any of the above-mentioned estimates can materially affect the amount of income tax assets recognized. In addition, where applicable tax laws and regulations are either unclear or subject to varying interpretations, changes in these estimates can occur that materially affect the amounts of income tax assets recognized. The Entity reassesses unrecognized income tax assets at the end of each reporting period.

5. EXPLORATION AND EVALUATION ASSET

For theyear ended	December 31, 2020	December 31, 2020	December 31, 2019	December 31, 2019
Balance,beginningofyear	$	10,027,729	$	9,955,226
Consulting		45,519		35,665
Gold sales royalties		22,031		21,719
Professional fees		13,552		-
Permitting costs		6,794		-
Retention costs		-		6,834
Exploration costs		-		8,285
Balance, end ofyear	$	10,115,625	$	10,027,729

The Moss Lake Group Properties include Moss Lake, Coldstream and Hamlin properties which are located west of Thunder Bay, Ontario.

E-26

MOSS LAKE GOLD MINES LTD. CARVE-OUT Notes to the Carve-out Financial Statements For the year ended December 31, 2020

(Expressed in Canadian Dollars)

5. EXPLORATION AND EVALUATION ASSET (continued)

Moss Lake

Coldstream and Hamlin

6. CONTRIBUTIONS FROM WESDOME

Westdome’s investment in the operations of the Entity is presented as contributions from Wesdome in the carveout financial statements. Deficit represents the accumulated net losses of the carve-out operation and contributions from Wesdome represents the accumulated net contributions from Wesdome.

Net financing transactions with Wesdome as presented in the carve-out statement of cash flows represents the net contributions related to the funding of operations between the Entity and Wesdome.

7. RELATED PARTY TRANSACTIONS

As of the and for the years ended December 31, 2020 and 2019, there were no related party transactions or amounts owing to related parties.

8. FINANCIAL INSTRUMENTS

a) Categories of financial instruments and fair value measurements

As of December 31, 2020 and 2019, the Entity did not have any financial assets or financial liabilities.

b) Management of financial risks

The Entity’s risk exposure, including credit risk, liquidity risk, interest rate risk and foreign currency risk is 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. At December 31, 2020, the Entity was not exposed to credit risk.

Liquidity risk

Interest rate risk

E-27

MOSS LAKE GOLD MINES LTD. CARVE-OUT Notes to the Carve-out Financial Statements For the year ended December 31, 2020 (Expressed in Canadian Dollars)

8. FINANCIAL INSTRUMENTS (continued)

b) Management of financial risks (continued)

Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in foreign exchange rates. The Entity is exposed to foreign currency risk to the extent that it has monetary assets and liabilities denominated in foreign currencies. As at December 31, 2020, the Entity was not exposed to foreign currency risk.

9. CAPITAL MANAGEMENT

The Entity manages its capital structure and makes adjustments to it in light of economic conditions. The Company, upon approval from its Board of Directors, will balance its overall capital structure by undertaking activities as deemed appropriate under the specific circumstances.

The Entity is not subject to externally imposed capital requirements.

10. INCOME TAXES

	December 31, 2020 $ December 31, 2019 $
Net loss for the period Canadian statutory income tax rate	(1,067) (5,718) 25.06% 25.05%
Income tax recovery at statutory rate Tax effect of: Unrecognized deferred income tax assets	(267) (1,432) 267 1,432
Income taxprovision	– –

As at December 31, 2020, the Entity has deductible temporary differences and non-capital losses totaling $3,023,388. No tax benefit has been recorded for these temporary differences and non-capital losses. The Entity’s non-capital losses expire between 2026 and 2040.

11. SUBSEQUENT EVENT

Subsequent to December 31, 2020, the Entity entered into the following transactions:

Purchase Agreement with Goldshore

On January 26, 2021, Wesdome Gold Mines Ltd. (“Wesdome”) entered into a definitive purchase agreement (the “Agreement”) with Goldshore Resources Inc. (“Goldshore”) to sell its Moss Group Properties. Pursuant to the Agreement, Goldshore will acquire all of the property, assets and rights related to the Moss Lake Group Properties.

Goldshore will acquire the 100% interest in the Moss Lake Group Properties for:

$12,500,000 cash upon closing;
common shares with a fair value equal to the greater of a) $19,500,000 and b) 30% of the issued and outstanding common shares of the Company to Wesdome at closing;
$20,000,000 in common shares to Wesdome in the form of milestone payments consisting of:
$5,000,000 within 12 months of closing;
$7,500,000 upon the earlier of (i) the Company completing an updated Preliminary Economic Assessment (“PEA”) or pre-feasibility study; and (ii) 30 months from closing; and
$7,500,000 upon the earlier of (i) the Company completing a feasibility study, (ii) the date on which the Company makes a development decision on Moss Lake, and (iii) 48 months from closing;

E-28

MOSS LAKE GOLD MINES LTD. CARVE-OUT Notes to the Carve-out Financial Statements For the year ended December 31, 2020 (Expressed in Canadian Dollars)

11. SUBSEQUENT EVENT (continued)

A 1.00% net smelter royalty (“NSR”) on all metal production from Moss Lake. The Company shall have the right to repurchase the NSR for (i) $5,000,000 within 30 months of closing or (ii) $7,500,000 between 30 and 48 months after closing. The NSR buyback shall expire if not exercised within 48 months of closing; and
The assumption of the 8.75% net profits royalty on the Moss Lake Group Properties.

These carve-out financial statements reflect the assets, liabilities, expenses and cash flows of the operations included in the exploration asset to be sold by Wesdome.

E-29

WESDOME GOLD MINES LTD. CARVE-OUT Management Discussion and Analysis For the year ended December 31, 2020

This management’s discussion and analysis (“MD&A”) is management's interpretation of the financial condition and results of operations of Wesdome Gold Mines Ltd. Carve-out (the “Entity”) for the year ended December 31, 2020. This MD&A should be read in conjunction with the audited carve-out financial statements of the Entity for the year ended December 31, 2020, prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). This MD&A complements and supplements, but does not form part of, the Entity’s carve-out financial statements.

All dollar amounts contained herein are expressed in Canadian dollars unless otherwise indicated. This MD&A has been prepared as of May 12, 2021.

BUSINESS OVERVIEW

The Entity’s ability to continue its operations is dependent on its ability to obtain necessary financings. There can be no guarantee that it will be able to raise sufficient funds to fund its activities and general and administrative costs in the future. Many factors influence the Entity’s ability to raise funds, including the health of the capital market, the climate for mineral exploration investment and the Entity’s track record. Actual funding requirements may vary from those planned due to a number of factors, including the acquisition of new projects. There is no guarantee that the Entity will be able to secure additional financings in the future at terms that are favourable, or at all.

On March 11, 2020, the World Health Organization characterized the outbreak of a strain of the novel coronavirus (“COVID-19”) as a pandemic which has resulted in a series of public health and emergency measures that have been put in place to combat the spread of the virus. The duration and impact of COVID-19 is unknown at this time and it is not possible to reliably estimate the impact that the length and severity of these developments will have on the financial results and condition of the Entity in future periods, including the possible impact on future financing opportunities. To date, COVID-19 has had no impact on the Entity.

Moss Lake Gold Project, Ontario, Canada

Moss Lake Gold Project, Ontario, Canada
For theperiod ended		December 31, 2020		December 31, 2019
Balance, beginning of year	$	10,027,729	$	9,955,226
Consulting		45,519		35,665
Gold sales royalties		22,031		21,719
Professional fees		13,552		-
Permitting costs		6,794		-
Retention costs		-		6,834
Exploration costs		-		8,285
Balance, end of year	$	10,115,625	$	10,027,729

The Moss Lake Group Properties include Moss Lake, Coldstream and Hamlin properties which are located 100 kilometres due west of Thunder Bay, Ontario.

Moss Lake

Page 1 of 6

E-30

Coldstream and Hamlin

Purchase Agreement

Subsequent to December 31, 2020, on January 26, 2021, Wesdome Gold Mines Ltd. (“Wesdome”) entered into a definitive purchase agreement (the “Agreement”) with Goldshore Resources Inc. (“Goldshore”) to sell the Moss Lake Group Properties. Pursuant to the Agreement, Goldshore will acquire all of the property, assets and rights related to the Moss Lake Group Properties.

Goldshore will acquire the 100% interest in the Moss Lake Group Properties for:

$12,500,000 cash upon closing;
common shares with a fair value equal to the greater of a) $19,500,000 and b) 30% of the issued and outstanding common shares of the Company to Wesdome at closing;
$20,000,000 in common shares to Wesdome in the form of milestone payments consisting of:
$5,000,000 within 12 months of closing;
$7,500,000 upon the earlier of (i) the Company completing an updated Preliminary Economic Assessment (“PEA”) or pre-feasibility study; and (ii) 30 months from closing; and
$7,500,000 upon the earlier of (i) the Company completing a feasibility study, (ii) the date on which the Company makes a development decision on Moss Lake, and (iii) 48 months from closing;
A 1.00% net smelter royalty (“NSR”) on all metal production from Moss Lake. The Company shall have the right to repurchase the NSR for (i) $5,000,000 within 30 months of closing or (ii) $7,500,000 between 30 and 48 months after closing. The NSR buyback shall expire if not exercised within 48 months of closing; and
The assumption of the 8.75% net profits royalty on the Moss Lake Group Properties.

ANNUAL FINANCIAL INFORMATION

The selected financial information below is derived from the Entity’s audited carve-out financial statements for the years ended December 31, 2020, 2019 and 2018, prepared in accordance with IFRS. The Entity’s significant accounting policies and new accounting policies applied in the preparation of its carve-out financial statements are outlined in Note 3 to the Entity’s audited carve-out financial statements for the years ended December 31, 2020 and 2019.

	As at and for the year ended
	December31,2020 December31,2019December31,2018 (1)
Revenues Net loss Total assets	$ - $ - $ - 1,067 5,718 16,357 10,115,625 10,027,729 9,955,226

(1) Unaudited

FINANCIAL REVIEW

For a discussion of the factors affecting the Entity’s losses see “Summary of quarterly results” and “Results of operations” below.

Results of operations for the year ended December 31, 2020

The Entity incurred a loss and comprehensive loss of $1,067 for the year ended December 31, 2020 compared to $5,718 for the year ended December 31, 2019, for a decrease in loss of $4,651.

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E-31

Summary of quarterly results

The following table provides a summary of financial data for the Entity for the previous eight quarters:

			Loss and comprehensive
	Quarter ended	Revenue	loss
Q4/20	December 31, 2020	$ -	$ (434)
Q3/20	September 30, 2020	$ -	$ (220)
Q2/20	June 30, 2020	$ -	$ (340)
Q1/20	March 31, 2020	$ -	$ (73)
Q4/19	December 31, 2019	$ -	$ (4,240)
Q3/19	September 30, 2019	$ -	$ (639)
Q2/19	June 30, 2019	$ -	$ (42)
Q1/19	March 31, 2019	$ -	$ (797)

The primary factors affecting the variations of the Entity’s losses are as follows:

Q4 2019: In Q4, 2019, the Company recognized permitting costs of $3,800 that were not recognized in previous quarters. Reconciling for the $3,800 the loss is consistent with other periods.

Fourth quarter

For the three months ended December 31, 2020 the Entity incurred a loss of $434, compared to $4,240 for the three months ended December 31, 2019. The decrease in loss is a result of permitting costs that were expensed in the three months ended December 31, 2019 which were not incurred in the current year.

LIQUIDITY AND CAPITAL RESOURCES

The Entity had no working capital or long-term liabilities as of December 31, 2020 or 2019.

Cash flows

Cash used in operating activities for the year ended December 31, 2020 was $1,067 (2019 - $5,718).

Cash used in investing activities for the year ended December 31, 2020 was $87,896 (2019 - $72,503). Investing activities relate to activity at the Moss Lake project.

Cash provided by financing activities for the year ended December 31, 2020 was $88,963 (2019 - $78,221) and is related to capital contributions from Wesdome Gold Mines Ltd.

TRANSACTIONS WITH RELATED PARTIES

As of the and for the years ended December 31, 2020 and 2019, there were no related party transactions or amounts owing to related parties.

CRITICAL JUDGMENTS IN APPLYING ACCOUNTING POLICIES AND KEY SOURCES OF ESTIMATION UNCERTAINTY

Going concern

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E-32

Carve-out allocation

Key sources of estimation uncertainty

Income taxes

NEW ACCOUNTING STANDARDS AND ACCOUNTING STANDARDS NOT YET EFFECTIVE

None.

OFF-BALANCE SHEET ARRANGEMENTS

The Entity did not enter into any off-balance sheet arrangements during the year ended December 31, 2020 or 2019.

PROPOSED TRANSACTIONS

Please refer to “Purchase Agreement” note for details regarding the arrangement with Goldshore.

FINANCIAL INSTRUMENTS AND RELATED RISKS

Classifications

As of December 31, 2020 and 2019, the Entity did not have any financial assets or financial liabilities.

Management of financial risks

The Entity’s risk exposure, including credit risk, liquidity risk, interest rate risk and foreign currency risk is as follows:

Credit risk

Liquidity risk

Interest rate risk

Page 4 of 6

E-33

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in foreign exchange rates. The Entity is exposed to foreign currency risk to the extent that it has monetary assets and liabilities denominated in foreign currencies. As at December 31, 2020, the Entity was not exposed to foreign currency risk.

RISKS AND UNCERTAINTIES

OUTSTANDING SHARE CAPITAL DATA

As a separate exploration entity, the Entity does not have share capital.

CONFLICTS OF INTEREST

The Company’s directors and officers may serve as directors or officers, or may be associated with, other reporting companies, or have significant shareholdings in other companies. To the extent that such other companies may participate in business or asset acquisitions, dispositions, or ventures in which the Entity may participate, the directors and officers of the Entity may have a conflict of interest in negotiating and concluding on terms with respect to the transaction. If a conflict of interest arises, the Entity will follow the provisions of the BC Business Corporations Act (“BCBCA”) dealing with conflict of interest. These provisions state that where a director has such a conflict, that director must, at a meeting of the Company’s directors, disclose his or her interest and refrain from voting on the matter unless otherwise permitted by the BCBCA. In accordance with the laws of the Province of British Columbia, the directors and officers of the Entity are required to act honestly, in good faith, and in the best interest of the Entity.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION

This MD&A includes “forward-looking statements” and “forward-looking information” within the meaning of Canadian securities legislation. All statements included in this MD&A, other than statements of historical fact, are forward-looking statements. When used in this MD&A, words such as “may”, “would”, “could”, “will”, “intend”, “expect”, “believe”, “plan”, “anticipate”, “estimate”, “scheduled”, “forecast”, “predict”, “foresee” and other similar terminology, or sentences/statements that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved are intended to identify forward-looking statements, which, by their very nature, are not guarantees of the Entity’s future operational or financial performance.

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E-35

CERTIFICATE OF SIERRA MADRE DEVELOPMENTS INC.

Dated: May 26, 2021

The foregoing constitutes full, true and plain disclosure of all material facts relating to the securities of Sierra Madre Developments Inc., assuming completion of the Transaction.

“Hani Zabaneh“ Hani Zabaneh Chief Executive Officer and Director	“Gavin Cooper“
	Gavin Cooper Chief Financial Officer and Director

ON BEHALF OF THE BOARD OF DIRECTORS

“Kathryn Witter“ Kathryn Witter Director

CERTIFICATE OF GOLDSHORE RESOURCES INC.

Dated: May 26, 2021

The foregoing as it relates to Goldshore Resources Inc. (“ Goldshore ”) constitutes full, true and plain disclosure of all material facts relating to the securities Goldshore.

“Galen McNamara“ Galen McNamara Chief Executive Officer

ON BEHALF OF THE BOARD OF DIRECTORS

“Galen McNamara“ Galen McNamara Director

ACKNOWLEDGEMENT

“Personal Information” means any information about an identifiable individual, and includes information contained in any items in the attached filing statement that are analogous to Items 4.2, 11, 12.1, 15, 17.2, 18.2, 23, 24, 26, 31.3, 32, 33, 34, 35, 36, 37, 38, 40 and 41 of Form 3B2 of the Exchange, as applicable.

The undersigned acknowledges and agrees that it has obtained the express written consent of each individual related or connected to the undersigned to:

(a) the disclosure of Personal Information by the undersigned to the Exchange (as defined in Appendix 6B) pursuant to Form 3B2 of the Exchange; and
(b) the collection, use and disclosure of Personal Information by the Exchange for the purposes described in Appendix 6B or as otherwise identified by the Exchange, from time to time.

SIERRA MADRE DEVELOPMENTS INC.

“Hani Zabaneh“ Hani Zabaneh Chief Executive Officer

AI assistant

GOLD X2 MINING INC. — Merger & Acquisition 2021

46623_rns_2021-05-26_4798e2ab-7fb6-40fa-876d-47b1520a7b69.pdf

FILING STATEMENT

OF

SIERRA MADRE DEVELOPMENTS INC.

INVOLVING THE ACQUISITION

OF

GOLDSHORE RESOURCES INC.

May 26, 2021

TABLE OF CONTENTS

INFORMATION CONCERNING SIERRA

APPENDIX A – MOSS LAKE PROPERTY

ACKNOWLEDGEMENT

ABOUT THIS FILING STATEMENT

MEANING OF CERTAIN REFERENCES

FORWARD-LOOKING INFORMATION

MARKET DATA AND INDUSTRY DATA

GLOSSARY OF TERMS

SUMMARY OF FILING STATEMENT

The Companies

Sierra Madre

Sierra Madre Subco

Goldshore

Moss Lake Property

The Transaction

Amalgamation Agreement

Offerings

Directors and Executive Officers

Arm’s Length Transaction

Available Funds and Principal Purposes

Selected Pro Forma Consolidated Financial Information

Exchange Listing and Market Price

Relationships with the Agents

Conflicts of Interest

Risk Factors

Shareholder Approvals

Exchange Acceptance

INFORMATION CONCERNING SIERRA MADRE

Corporate Structure

Name and Incorporation

Intercorporate Relationships

General Development of the Business

Selected Consolidated Financial Information

Management’s Discussion and Analysis

Description of Securities

Stock Option Plan

Consolidated Capitalization

Prior Sales

Stock Exchange Price

Arm’s Length Transactions

Legal Proceedings

Auditor, Transfer Agent and Registrar

Material Contracts

INFORMATION CONCERNING GOLDSHORE

Corporate Structure

Name and Incorporation

Intercorporate Relationships

General Development of the Business

History

Moss Lake Property

Asset Purchase Agreement

Investor Rights Agreement

Significant Acquisitions

Narrative Description of the Property

Selected Consolidated Financial Information

Management’s Discussion and Analysis

Description of Securities

Consolidated Capitalization

Prior Sales

Stock Exchange Price

Executive Compensation

Compensation Discussion and Analysis

Summary Compensation Table

Employment, Consulting and Management Agreements

Director Compensation

Management Contracts

Non-Arm’s Length Party Transactions

Legal Proceedings

Material Contracts

GOLD X2 MINING INC. Merger & Acquisition 2021