Green Shift Commodities — Annual Report 2020

May 15, 2020

U3O8 CORP.

CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED

DECEMBER 31, 2019 AND 2018 (EXPRESSED IN CANADIAN DOLLARS)

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INDEPENDENT AUDITOR’S REPORT

To the Shareholders of U3O8 Corp.

Opinion

We have audited the accompanying consolidated financial statements of U3O8 Corp. (the “Company”), which comprise the consolidated statements of financial position as at December 31, 2019 and 2018 and the consolidated statements of loss and comprehensive loss, changes in cash flows and equity (deficiency) for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2019 and 2018, and its financial performance and its cash flows for the years then ended in accordance with International Financial Reporting Standards (“IFRS”).

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 audit of the consolidated financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained 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 2 of the consolidated financial statements, which indicates that the Company incurred a net loss of $3,581,365 during the year ended December 31, 2019 and, as of that date, the Company’s total deficit was $105,987,207. As stated in Note 2, these events and conditions indicate 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 obtained at the date of this auditor's report includes Management’s Discussion and Analysis.

Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

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 Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with IFRS, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

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

Auditor's Responsibilities for the Audit of the Consolidated Financial Statements

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

As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.

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

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

• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

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

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 Dylan Connelly.

“DAVIDSON & COMPANY LLP”

Vancouver, Canada May 15, 2020

Chartered Professional Accountants

U3O8 Corp.

Consolidated Statements of Financial Position (Expressed in Canadian Dollars)

December 31,		2019		2018
ASSETS
Current assets
Cash	$	77,098	$	94,578
Amounts receivable and other assets(note 8)		22,355		50,232
Total current assets		99,453		144,810
Non-current assets
Equipment (note 7)		-		37,407
South Americanpropertyinterests(note 19)		-		2,807,660
Total non-current assets		-		2,845,067
Total assets	$	99,453	$	2,989,877
EQUITY (DEFICIENCY) AND LIABILITIES
Current liabilities
Amounts payable and other liabilities	$	1,573,545	$	1,395,843
Loanpayable(note 17)		758,666		394,933
		2,332,211		1,790,776
Non-current liabilities
Otherpayable(note 20)		176,000		176,000
		2,508,211		1,966,776
(Deficiency) equity
Share capital (note 6)		96,996,370		95,916,595
Reserves		6,582,079		7,512,348
Deficit		(105,987,207)		(102,405,842)
Total equity (deficiency)		(2,408,758)		1,023,101
Total equity (deficiency) and liabilities	$	99,453	$	2,989,877

The notes to the consolidated audited financial statements are an integral part of these statements.

Going concern (note 2) Subsequent events (note 21)

Approved by the Board of Directors:

"David Franklin"	Director
"David Constable"	Director

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U3O8 Corp.

U3O8 Corp.
Consolidated Statements of Loss and Comprehensive Loss
(Expressed in Canadian Dollars)
Years ended December 31,		2019	2018
Expenses
Exploration and evaluation expenditures (note 12)	$	196,939 $	689,190
General and administrative(note 13)		488,317	688,607
		(685,256)	(1,377,797)
Other items:
Impairment of South American property interests (note 19)		(2,807,660)	-
Interest expense (note 17)		(43,733)	(24,933)
Foreign exchange loss		(44,716)	(1,127)
Loss and comprehensive loss	**$ **	(3,581,365) $	(1,403,857)
Basic and diluted lossper common share(note 11)	$	(0.16) $	(0.07)
Basic and diluted weighted average number of common
shares outstanding		23,043,436	20,644,546

The notes to the consolidated audited financial statements are an integral part of these statements.

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U3O8 Corp.

Consolidated Statements of Cash Flows (Expressed in Canadian Dollars)

U3O8 Corp. Consolidated Statements of Cash Flows (Expressed in Canadian Dollars)
Years ended December 31,		2019		2018
Operating activities
Net loss	**$ **	(3,581,365)	$	(1,403,857)
Adjustment for:
Depreciation		-		9,352
Share-based payments		149,506		135,535
Impairment of South American property interests (note 19)		2,807,660		-
Write-off of equipment		37,407		-
Foreign exchange loss		44,716		1,127
Interest expense		43,733		24,933
Non-cash working capital items:
Amounts receivable and other assets		27,877		(11,264)
Amountspayable and other liabilities		80,280		241,326
Net cash used in operating activities		(390,186)		(1,002,848)
Financing activities
Issue of securities, net of transaction costs		-		660,001
Loanpayable		320,000		370,000
Net cashprovided by financing activities		320,000		1,030,001
Effect of exchange rate changes on cash held in foreign currencies		52,706		1,560
Net change in cash		(17,480)		28,713
Cash, beginning ofyear		94,578		65,865
Cash, end ofyear	$	77,098	$	94,578
Cash paid for interest	$	-	$	-
Cashpaid for taxes	$	-	$	-
Non-cash transactions:
Transfer from reserves to share capital upon expiry of warrants	$	1,079,775	$	166,062
Agents warrants share issuance costs allocated to common shares	$	-	$	5,433
Agents warrants share issuance costs allocated to warrants	$	-	$	4,041
Warrant extension	$	-	$	105,328
Shares for debt	$	-	$	139,768

The notes to the consolidated audited financial statements are an integral part of these statements.

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U3O8 Corp. Consolidated Statements of Equity (Deficiency) (Expressed in Canadian Dollars)

Number of common Share shares capital	Reserves Share-based payments reserve Warrants Deficit Total
Balance, December 31, 2017 19,882,345 $ 95,283,074 Issue of securities, net of transaction costs (note 6(b)(1)(2)) 2,650,720 350,763 Settlement of debt (note 6(b)(3)(4)) 510,371 116,696 Warrants expiry (note 15) - 166,062 Extension of warrants (note 15) - - Share-based payments (note 10) - - Loss for theyear - -	$ 5,507,047 $ 1,611,940 $(100,896,657) $ 1,505,404 - 295,488 - 646,251 - 23,072 - 139,768 - (166,062) - - - 105,328 (105,328) - 135,535 - - 135,535 - - (1,403,857) (1,403,857)
Balance, December 31, 2018 23,043,436 95,916,595 Warrants expiry (note 15) - 1,079,775 Share-based payments (note 10) - - Loss for theyear - -	5,642,582 1,869,766 (102,405,842) 1,023,101 - (1,079,775) - - 149,506 - - 149,506 - - (3,581,365) (3,581,365)
Balance, December 31, 2019 23,043,436 $ 96,996,370	$ 5,792,088 $ 789,991 $(105,987,207) $ (2,408,758)

The notes to the consolidated audited financial statements are an integral part of these statements.

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Notes to Consolidated Financial Statements December 31, 2019 and 2018 (Expressed in Canadian Dollars)

U3O8 Corp.

1. Nature of operations

U3O8 Corp. (the “Company”) is a Canadian exploration company focused on exploration for uranium and related minerals in South America; on the definition of resources and advancing these deposits toward production. The Company was incorporated by articles of incorporation dated December 6, 2005 ("date of incorporation") under the Business Corporations Act (Ontario). The Company’s common shares are listed on the NEX board of the TSX Venture Exchange under the symbol UWE.H, and on the OTC QB International under the symbol UWEFF. The Company maintains a registered and records office at 36 Toronto Street, Suite 1050, Toronto, Ontario, M5C 2C5, Canada.

2. Basis of presentation and going concern

The Company is in the exploration and evaluation stage and as is common with many exploration companies, it raises financing for its exploration and evaluation activities through the sale of equities. The Company has incurred a loss in the current and prior periods, with a net loss for the year ended December 31, 2019 of $3,581,365 (2018 - $1,403,857) and has an accumulated deficit of $105,987,207. In addition, the Company had a working capital deficit balance of $2,232,758 at December 31, 2019 (2018 - $1,645,966).

The Company has taken an impairment allowance against all exploration properties. Additional financings will be required to reinitiate pre-feasibility studies and further develop the properties and to continue operations. There is a significant risk that some, if not all, of the Company's current property holdings may lapse or title to those properties may become uncertain. While the Company's management and board will continue to search for financing, joint venture partners and new assets, there is no guarantee that they will be successful.

The consolidated financial statements have been prepared on a basis which contemplates that the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities in the normal course of business. The certainty of funding future exploration expenditures and availability of sources of additional financing cannot be assured at this time and accordingly, these uncertainties may cast significant doubt about the Company's ability to continue as a going concern. The consolidated financial statements do not include adjustments to the carrying values of recorded liabilities and related expenses that might be necessary should the Company be unable to continue as a going concern.

3. Significant accounting policies

(a) Statement of Compliance

The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) issued by the International Accounting Standards Board (“IASB”) and Interpretations of the International Financial Reporting Interpretations Committee (“IFRIC”), effective for the Company’s reporting for the year ended December 31, 2019. The policies set out below are based on IFRS issued and effective as of May 15, 2020, the date the Board of Directors approved the statements.

(b) Basis of presentation

These audited annual consolidated financial statements have been prepared on a historical cost basis except for the re-valuation of certain financial instruments. In addition, these audited annual consolidated financial statements have been prepared using the accrual basis of accounting except for cash flow information.

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Notes to Consolidated Financial Statements December 31, 2019 and 2018 (Expressed in Canadian Dollars)

U3O8 Corp.

3. Significant accounting policies (continued)

(b) Basis of presentation (continued)

In the preparation of these audited annual consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the period. Actual results could differ from these estimates. Of particular significance are the estimates and assumptions used in the recognition and measurement of items included in note 3(o).

(c) Basis of consolidation

The audited annual consolidated financial statements incorporate the financial statements of the Company and its subsidiaries.

The results of subsidiaries acquired or disposed of during the periods presented are included in the consolidated statement of loss and comprehensive loss from the effective date of acquisition and up to the effective date of disposal, as appropriate. All intercompany transactions, balances, income and expenses are eliminated upon consolidation.

(i) Subsidiaries - The following companies have been consolidated within the audited annual consolidated financial statements:

Company	Registered	Principal activity
U3O8 Corp.	Ontario, Canada	Parent company
Prometheus Resources (Barbados) Limited(1)	Barbados	Holding company
Prometheus Resources (Guyana) Inc.(1)	Guyana, South America	Exploration company
Gaia Energy Inc.(1)	Ontario, Canada	Holding company
Maple Minerals Exploration and Development Inc.(1)	Ontario, Canada	Exploration company
Maple Minerals Exploration and Development Inc.(1)	Argentina	Exploration company
Maple Minerals Exploration and Development Inc.(1)	Colombia	Exploration company
Gaia Energy Argentina S.A.(1)	Argentina	Exploration company
Gaia Energy Investments Ltd. (BVI)(1)	British Virgin Islands	Exploration company
Gaia Energy Colombia Ltd.(1)	Colombia	Exploration company
0964104 B.C. Ltd.(1)	British Columbia, Canada	Holding company
Calypso Holdings Inc.(1)	Cayman Islands	Holding company
Energia Mineral Inc.(1)	Cayman Islands	Exploration company
Pampa Amarilla Inc.(1)	Cayman Islands	Exploration company

(1) 100% owned by ultimate shareholder - U3O8 Corp.

(ii) Equity investment in South American Silica Corp. - Since April 2011, the Company has significant influence in South American Silica Corp., ("SAS") (formerly South American Rare Earth Corp.), but does not have control; this investment is accounted for using the equity method. Under the equity method, the investment is initially recorded at cost and the carrying value is adjusted thereafter, to reflect the Company's pro-rata share of post acquisition income or loss. The amount of adjustment is included in the determination of net income or loss of the Company, and the investment account of the Company is also increased or decreased to reflect the Company's share of capital transactions and changes in accounting policies. The carrying values of equity investments are regularly reviewed to ensure there is no impairment. When there is objective evidence of impairment, the investment is written down to recognize the loss (note 14).

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Notes to Consolidated Financial Statements December 31, 2019 and 2018 (Expressed in Canadian Dollars)

U3O8 Corp.

3. Significant accounting policies (continued)

(d) Foreign currencies

The functional currency, as determined by management, of U3O8 Corp. and each of its subsidiaries is the Canadian Dollar. For the purpose of the audited annual consolidated financial statements, the results and financial position are expressed in Canadian Dollars.

Transactions in currencies other than the functional currency are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at the period end exchange rates are recognized in the audited annual consolidated statement of loss and comprehensive loss. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

(e) Financial instruments

IFRS 9 – Financial Instruments, ("IFRS 9") establishes three primary measurement categories for financial assets: fair value through profit and loss (“FVTPL”), fair value through other comprehensive income (“FVOCI”) and amortized cost. The basis for classification depends on the entity’s business model and the contractual cash flow characteristics of the instrument. For financial liabilities, the new standard retains most of the requirements of IAS 39, except that fair value changes due to changes in an entity’s own credit risk are recorded in other comprehensive income rather than in net earnings.

Classification

The Company determines the classification of its financial instruments at initial recognition. Upon initial recognition, a financial asset is classified as measured at: amortized cost, FVTPL, or FVOCI. The classification of financial assets is generally based on the business model in which a financial asset is managed and its contractual cash flow characteristics. A financial liability is classified as measured at amortized cost or FVTPL.

A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as FVTPL:

• it is held within a business model whose objective is to hold assets to collect contractual cash flows; and

• its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as FVTPL:

• it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and

• its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

An equity investment that is held for trading is measured at FVTPL. For other equity investments that are not held for trading, the Company may irrevocably elect to designate them as FVOCI. This election is made on an investment-byinvestment basis.

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Notes to Consolidated Financial Statements December 31, 2019 and 2018 (Expressed in Canadian Dollars)

U3O8 Corp.

3. Significant accounting policies (continued)

(e) Financial instruments (continued)

Classification (continued)

All financial assets not classified as measured at amortized cost or FVOCI as described above are measured at FVTPL. This includes all derivative financial assets. On initial recognition, the Company may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortized cost or at FVOCI as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

Financial liabilities are measured at amortized cost, unless they are required to be measured at FVTPL (such as instruments held for trading or derivatives) or the Company has elected to measure them at FVTPL.

Measurement

Initial measurement

On initial recognition, all financial assets and financial liabilities are measured at fair value adjusted for directly attributable transaction costs except for financial assets and liabilities classified as FVTPL, in which case the transaction costs are expensed as incurred.

Subsequent measurement

The following accounting policies apply to the subsequent measurement of financial instruments:

Financial assets at FVTPL

These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognized in profit or loss.

Financial assets at amortized cost

These assets are subsequently measured at amortized cost using the effective interest method. The amortized cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss.

Equity investments at FVOCI

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

Debt investments at FVOCI

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

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Notes to Consolidated Financial Statements December 31, 2019 and 2018 (Expressed in Canadian Dollars)

U3O8 Corp.

3. Significant accounting policies (continued)

(e) Financial instruments (continued)

Impairment of financial instruments

IFRS 9 introduced a single expected credit loss impairment model, which is based on changes in credit quality since initial application. The adoption of the expected credit loss impairment model had no impact on the Company’s consolidated financial statements.

The Company assesses all information available, including on a forward-looking basis, the expected credit losses associated with its 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 the reporting date, with the risk of default as at the date of initial recognition, based on all information available, and reasonable and supportive forward-looking information.

Financial instruments recorded at fair value on the consolidated statement of financial position are classified using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy has the following levels:

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

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

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

Categories of financial instruments:

		As at		As at
	December 31,		December 31,
		2019		2018
Financial assets:
FVTPL
Cash	$	77,098	$	94,578
Amortized cost
Amounts receivable		19,735		50,232
Financial liabilities:
Amortized cost
Amounts payable and other liabilities	$	1,573,545	$	1,395,843
Loan payable		758,666		394,933
Other payable		176,000		176,000

As of December 31, 2019 and 2018, the fair value of all the Company's financial instruments approximates the carrying value, due to their short-term nature.

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U3O8 Corp. Notes to Consolidated Financial Statements December 31, 2019 and 2018 (Expressed in Canadian Dollars)

3. Significant accounting policies (continued)

(f) Impairment of non-financial assets

At the end of each reporting period, the Company reviews the carrying amounts of its non-financial assets with finite lives to determine whether there is any indication that those assets are impaired. Where such an indication exists, the recoverable amount of the asset is estimated. For the purpose of measuring recoverable amounts, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units or "CGUs"). The recoverable amount is the higher of an asset’s fair value less costs of disposal and value in use (being the present value of the expected future cash flows of the relevant asset or CGU). An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount.

The Company has determined that a full allowance for impairment of the Argentina assets was appropriate for 2019.

(g) Exploration and evaluation expenditures

Exploration and evaluation expenditures include the costs of acquiring licenses and costs associated with exploration and evaluation activity. Exploration and evaluation expenditures are expensed as incurred except for expenditures associated with the acquisition of exploration and evaluation assets, which are recognized at the fair value at the acquisition date.

Once a project has been established as commercially viable and technically feasible, related development expenditure is capitalized. This includes costs incurred in preparing the site for mining operations. Capitalization ceases when the mine is capable of commercial production, with the exception of development costs which give rise to a future benefit.

(h) Equipment

Equipment is carried at cost, less accumulated depreciation and accumulated impairment losses.

The cost of an item of equipment consists of the purchase price, any costs directly attributable to bringing the asset to the location and condition necessary for its intended use and an initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located.

Depreciation is recognized based on the cost of an item of equipment, less its estimated residual value, over its estimated useful life at the following rates:

Detail	Percentage	Method
Furniture and fixtures	20% to 30%	Declining balance
Field equipment	20%	Declining balance

An asset's residual value, useful life and depreciation method are reviewed, and adjusted if appropriate, on an annual basis. An item of equipment is de-recognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on disposal of the asset, determined as the difference between the net disposal proceeds and the carrying amount of the asset, is recognized in profit or loss in the consolidated statements of loss and comprehensive loss.

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• 13 -

Notes to Consolidated Financial Statements December 31, 2019 and 2018 (Expressed in Canadian Dollars)

U3O8 Corp.

3. Significant accounting policies (continued)

(h) Equipment (continued)

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

(i) Cash and cash equivalents

Cash and cash equivalents in the consolidated statement of financial position comprise cash at banks and on hand, and short-term deposits with an original maturity of three months or less, which are readily convertible into a known amount of cash. The Company’s cash and cash equivalents are invested with major financial institutions in business accounts and guaranteed investment certificates which are available on demand by the Company for its programs. The Company had cash of $77,098 (December 31, 2018 - $94,578) and $nil cash equivalents as at December 31, 2019 and 2018.

(j) Provisions

A provision is recognized when the Company has a present legal or constructive obligation as a result of a past event, it is probable that an outflow of economic benefits will be required to settle the obligation, and the amount of the obligation can be reliably estimated. If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.

A provision for onerous contracts is recognized when the expected benefits to be derived by the Company from a contract are lower than the unavoidable cost of meeting its obligations under the contract.

The Company has provided for all material provisions at December 31, 2019 and December 31, 2018.

(k) Share-based payment transactions

The fair value is measured at grant date and recognized over the period during which the options vest. The fair value of the options granted is measured using the Black-Scholes option pricing model, taking into account the terms and conditions upon which the options were granted. At each financial position reporting date, the amount recognized as an expense is adjusted to reflect the actual number of share options that are expected to vest.

An individual is classified as an employee when the individual is an employee for legal or tax purposes (direct employee) or provides services similar to those performed by a direct employee, including directors of the Company.

In situations where equity instruments are issued to non-employees and some or all of the goods or services received by the entity as consideration cannot be specifically identified, they are measured at fair value of the share-based payment. Otherwise, share-based payments are measured at the fair value of the goods and services received.

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• 14 -

Notes to Consolidated Financial Statements December 31, 2019 and 2018 (Expressed in Canadian Dollars)

U3O8 Corp.

3. Significant accounting policies (continued)

(l) Income taxes

Income tax on the profit or loss for the periods presented comprises current and deferred tax. Income tax is recognized in profit or loss except to the extent that it relates to items recognized directly in equity, in which case it is recognized in equity.

Current tax expense is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at period end, adjusted for amendments to tax payable with regards to previous years.

Deferred tax is provided using the liability method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The following temporary differences are not provided for: goodwill not deductible for tax purposes; the initial recognition of assets or liabilities that affect neither accounting or taxable profit; and differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future. The amount of deferred tax provided is based on the expected manner of realization or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the financial position reporting date.

A deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. To the extent that the Company does not consider it probable that a deferred tax asset will be recovered, a deferred tax asset is not recognized.

(m) Restoration, rehabilitation and environmental obligations

A legal or constructive obligation to incur restoration, rehabilitation and environmental costs may arise when environmental disturbance is caused by the exploration, development or ongoing production of a mineral property. Such costs arising from the decommissioning of plant and other site preparation work, discounted to their net present value, are provided for and capitalized at the start of each project to the carrying amount of the asset, as soon as the obligation to incur such costs arises. Discount rates using a pretax rate that reflect the time value of money are used to calculate the net present value. The related liability is adjusted for each period for the unwinding of the discount rate and for changes to the current market-based discount rate, amount or timing of the underlying cash flows needed to settle the obligation. Costs for restoration of subsequent site damage which is created on an ongoing basis during production are provided for at their net present values and charged against profits as extraction progresses.

The Company has no material restoration, rehabilitation and environmental obligations as the disturbance to date is minimal.

(n) Loss per share

The Company presents basic and diluted loss per share data for its common shares, calculated by dividing the loss attributable to common shareholders of the Company by the weighted average number of common shares outstanding during the period. Diluted loss per share is determined by adjusting the loss attributable to common shareholders and the weighted average number of common shares outstanding for the effects of all dilutive potential common shares.

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• 15 -

Notes to Consolidated Financial Statements December 31, 2019 and 2018 (Expressed in Canadian Dollars)

U3O8 Corp.

3. Significant accounting policies (continued)

• (o) Significant accounting judgments and estimates

The preparation of these audited annual consolidated financial statements requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of expenses during the reporting period. Actual outcomes could differ from these estimates. These audited annual consolidated financial statements include estimates which, by their nature, are uncertain. The impacts of such estimates are pervasive throughout the audited annual consolidated financial statements, and may require accounting adjustments based on future occurrences. Revisions to accounting estimates are recognized in the period in which the estimate is revised and future periods if the revision affects both current and future periods. These estimates are based on historical experience, current and future economic conditions and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Critical accounting estimates:

Significant assumptions about the future and other sources of estimation uncertainty that management has made at the financial position reporting date, that could result in a material adjustment to the carrying amounts of assets and liabilities, relate to, but are not limited to, the following:

• the Company reviews its South American property interests for impairment based on results to date and when events and changes in circumstances indicate that the carrying value of the assets may not be recoverable. IFRS 6 - Exploration for and evaluation of mineral resources and IAS 36 – Impairment of assets requires the Company to make certain judgments in respect of such events and changes in circumstances, and in assessing their impact on the valuations of the affected assets;

• the estimated useful lives of equipment. Each significant component of an item of equipment is depreciated over its estimated useful life. Estimated useful lives are determined based on current facts and past experience, and take into consideration the anticipated physical life of the asset, existing long-term sales agreements and contracts, current and forecasted demand, and the potential for technological obsolescence; and

• Share-based payments expense. We measure our share-based payments expense by reference to the fair value of the stock options at the date at which they are granted. Estimating fair value for granted stock options requires determining the most appropriate valuation model which is dependent on the terms and conditions of the grant. This estimate also requires determining the most appropriate inputs to the valuation model including the expected life of the option, volatility, dividend yield, and rate of forfeitures.

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• 16 -

Notes to Consolidated Financial Statements December 31, 2019 and 2018 (Expressed in Canadian Dollars)

U3O8 Corp.

3. Significant accounting policies (continued)

(o) Significant accounting judgments and estimates (continued)

Critical accounting judgments

• management assessment of going concern and uncertainties of the Company’s ability to raise additional capital and/or obtain financing to advance the mineral properties (Note 2);

• management applied judgment in determining the functional currency of the Company as Canadian Dollars and the functional currency of its subsidiaries, based on the facts and circumstances that existed during the period;

• management determination of no material restoration, rehabilitation and environmental exposure, based on the facts and circumstances that existed during the period; and

• the measurement of income taxes payable and deferred income tax assets and liabilities requires management to make judgments in the interpretation and application of the relevant tax laws. The actual amount of income taxes only become final upon filing and acceptance of the tax return by the relevant authorities, which occurs subsequent to the issuance of the consolidated financial statements.

(p) New standards adopted

On January 13, 2016, the IASB published a new standard, IFRS 16, Leases. The new standard brings most leases onbalance sheet for lessees under a single model, eliminating the distinction between operating and finance leases. Lessor accounting however remains largely unchanged and the distinction between operating and finance leases is retained. IFRS 16 is effective for annual reporting periods beginning on or after January 1, 2019. The adoption of this standard had no impact on the consolidated financial statements during the year ended December 31, 2019.

IFRIC 23, Uncertainty over Income Tax Treatments – New standard to clarify the accounting for uncertainties in income taxes. The interpretation provides guidance and clarifies the application of the recognition and measurement criteria in IAS 12 “Income Taxes” when there is uncertainty over income tax treatments. The interpretation is effective for annual periods beginning on January 1, 2019. The adoption of this standard had no impact on the consolidated financial statements during the year ended December 31, 2019.

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• 17 -

Notes to Consolidated Financial Statements December 31, 2019 and 2018 (Expressed in Canadian Dollars)

U3O8 Corp.

4. Capital risk management

The Company manages its capital with the following objectives:

• to ensure sufficient financial flexibility to achieve the ongoing business objectives including funding of future growth opportunities, and pursuit of accretive acquisitions; and

• to maximize shareholder return through enhancing the share value.

The Company monitors its capital structure and makes adjustments according to market conditions in an effort to meet its objectives given the current outlook of the business and industry in general. The Company may manage its capital structure by issuing new shares, repurchasing outstanding shares, adjusting capital spending, or disposing of assets. The capital structure is reviewed by management and the Board of Directors on an ongoing basis.

The Company considers its capital to be equity, comprising share capital, reserves and deficit, which at December 31, 2019, totalled $(2,408,758) (December 31, 2018 – $1,023,101).

5. Financial risk management

The Company’s activities expose it to a variety of financial risks: credit risk, liquidity risk and market risk (including interest rate, foreign exchange rate, and uranium price risk).

Risk management is carried out by the Company's management team with guidance from the Audit Committee under policies approved by the Board of Directors. The Board of Directors also provides regular guidance for overall risk management.

Credit risk

Credit risk is the risk of loss associated with a counterparty’s inability to fulfill its payment obligations. The Company's credit risk is primarily attributable to cash and amounts receivable. The majority of the Company's cash is held with major Canadian chartered banks and financial institutions in South America, from which management believes the risk of loss to be minimal.

Financial instruments included in amounts receivable consist of sales tax receivable from government authorities in Canada. Management believes that the credit risk with respect to financial instruments included in amounts receivable is minimal.

Liquidity risk

Liquidity risk is the risk that the Company will not have sufficient cash resources to meet its financial obligations as they come due. The Company’s liquidity and operating results may be adversely affected if the Company’s access to the capital market is hindered, whether as a result of a downturn in stock market conditions generally or related to matters specific to the Company. The Company generates cash flow primarily from its financing activities. As at December 31, 2019, the Company had a cash balance of $77,098 (December 31, 2018 - $94,578) to settle current liabilities of $2,332,211 (December 31, 2018 - $1,790,776). All of the Company's current financial liabilities have contractual maturities of less than 30 days and are subject to normal trade terms, except loan payable (note 17). The Company regularly evaluates its cash position to ensure preservation and security of capital as well as maintenance of liquidity. The Company will need to secure additional financing to meet its ongoing obligations. However, there is no assurance that it will be able to do so (note 2).

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• 18 -

U3O8 Corp. Notes to Consolidated Financial Statements December 31, 2019 and 2018 (Expressed in Canadian Dollars)

5. Financial risk management (continued)

Market risk

(a) Interest rate risk

The Company has cash balances and fixed interest-bearing debt. The Company's current policy is to invest excess cash in guaranteed investment certificates or interest-bearing accounts of major Canadian chartered banks. The Company regularly monitors compliance to its cash management policy.

(b) Price risk

The Company is exposed to price risk with respect to equity prices. Equity price risk is defined as the potential adverse effect on the Company's earnings due to movements in individual equity prices or general movements in the level of the stock market.

(c) Foreign currency risk

The Company's functional and reporting currency is the Canadian Dollar and major purchases are transacted in Canadian Dollars. As of December 31, 2019, the Company funds certain operations, exploration and administrative expenses in Colombia and Argentina on a cash call basis using US Dollar currency converted from its Canadian Dollar bank accounts held in Canada. The Company maintains US Dollar bank accounts in Canada, Barbados, and Colombian Peso accounts in Colombia and Argentina Peso accounts in Argentina. The Company is subject to gains and losses from fluctuations in the US Dollar and Colombian and Argentina Peso against the Canadian Dollar.

Sensitivity analysis

The sensitivity analysis shown in the notes below may differ materially from actual results. Based on management's knowledge and experience of the financial markets, the Company believes the following movements are "reasonably possible" over a twelve month period:

(i) Cash is subject to floating interest rates. Sensitivity to a plus or minus 1% change in interest rates would have affected the reported loss and comprehensive loss by an immaterial amount.

(ii) The Company holds balances in foreign currencies which creates foreign exchange risk. Sensitivity to a plus or minus 10% change in the foreign exchange rates against the Canadian Dollar would have affected the reported loss and comprehensive loss by approximately $70,000.

6. Share capital

a) Authorized share capital

At December 31, 2019 and 2018, the authorized share capital consisted of an unlimited number of common shares.

The common shares do not have a par value. All issued shares are fully paid.

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U3O8 Corp. Notes to Consolidated Financial Statements December 31, 2019 and 2018 (Expressed in Canadian Dollars)

6. Share capital (continued)

b) Common shares issued

	Fiscal 2018
Value Costs Net Value Number of Number of Common share Warrant Date Note ($) ($) ($) shares warrants amount($) amount($)
July 11, 2018 (1) 103,449 12,792 90,657 356,720 356,720 51,847 38,810 October 19, 2018 (2) 573,500 17,906 555,594 2,294,000 2,294,000 298,916 256,678 October 19, 2018 (3) 51,500 - 51,500 206,000 206,000 28,428 23,072 October 19,2018 (4) 88,268 - 88,268 304,371 - 88,268 -
816,717 30,698 786,019 3,161,091 2,856,720 467,459 318,560

Of the total 2018 share issue costs of $30,698, $22,445 was allocated to common shares and $8,253 was allocated to warrants. There were no 2019 share issue costs.

	Fiscal 2018 Warrant Value
Total BS value BS value Dividend Number of Strike Term BS to common to warrants yield Volatility Risk free Note warrants price($) (years) value($) shares($) ($) (%) (%) rate(%)	Average Expected Life (years)
(1) 356,720 0.41 2 41,380 - 41,380 - 148 1.94 21,350 0.41 2 4,245 2,547 1,698 - 148 1.94 (2) 2,294,000 0.40 3 256,928 - 256,928 - 161 2.30 28,000 0.40 2 5,229 2,886 2,343 - 143 2.29 (3) 206,000 0.40 3 23,072 - 23,072 - 161 2.30	2 2 3 2 3
2,906,070 330,854 5,433 325,421

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• 20 -

Notes to Consolidated Financial Statements December 31, 2019 and 2018 (Expressed in Canadian Dollars)

U3O8 Corp.

7. Equipment

COST

COST
							Field
							equipment
Balance, December	31,	2017	and December	31,	2018	$	1,657,716
Write-off							(1,657,716)
Balance,December	31,	2019				$	-

ACCUMULATED DEPRECIATION

ACCUMULATED DEPRECIATION
		Field
		equipment
Balance, December 31, 2017		1,610,957
Depreciation for theyear		9,352
Balance, December 31, 2018	$	1,620,309
Write-off		(1,620,309)
Balance,December 31,2019	$	-

CARRYING AMOUNTS

				Field
				equipment
At December	31,	2018	$	37,407
At December	31,	2019	$	-

8. Amounts receivable and other assets

8. Amounts receivable and other assets
		As at		As at
	December 31,		December 31,
		2019		2018
Sales tax receivable - (Canada)	$	2,620	$	22,200
Deposits with serviceproviders		19,735		28,032
	$	22,355	$	50,232

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• 21 -

Notes to Consolidated Financial Statements December 31, 2019 and 2018 (Expressed in Canadian Dollars)

U3O8 Corp.

9. Income taxes

Income tax expense

A reconciliation between income tax expense and the product of accounting profit (loss) multiplied by the Company's domestic tax rate is provided below:

Years ended December 31,		2019		2018
Loss before Income Tax	$	(3,581,365)	$	(1,403,857)
Income tax at statutory rate of 26.50%
(2018 - 26.50%)		(949,000)		(372,000)
Change in statutory, foreign tax, foreign
exchange rates and other		1,643,000		(29,000)
Permanent differences		46,000		33,000
Share issue costs		(6,000)		(6,000)
Adjustment to prior year's provision versus
statutory tax returns and expiration of
non-capital losses		(108,000)		(204,000)
Expiry of non-capital losses		3,000		1,486,000
Change in unrecognized temporarydifferences		(629,000)		(908,000)
	$	-	$	-

Deferred Tax Assets and Liabilities

(a) Unrecognized deferred tax assets

Deferred tax assets are recognized for the carry-forward or unused tax losses and unused tax credits to the extent that it is probable that taxable profits will be available against which the unused tax losses/credits can be utilized. The following represent the deductible temporary differences which have not been recognized in the financial statements.

		2019		2018	Expiry
Equipment	$	3,638,000	$	3,601,000	N/A
Loss carry-forward		25,207,000		24,955,000	See below
Equity accounted investment		3,807,000		3,807,000	N/A
Share issue costs		69,000		118,000	2040 - 2042
Deferred miningexpenditures		51,388,000		48,421,000	N/A
	**$ **	84,109,000	**$ **	80,902,000

(b) Non-capital losses

The following table summarizes the Company’s non-capital losses that can be applied against future taxable profit:

Country		Amount	Expiry date
Canada	$	24,138,116	2026 to 2039
Barbados		230,170	2020 to 2026
Colombia		718,157	indefinite
Guyana		75,194	indefinite

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• 22 -

Notes to Consolidated Financial Statements December 31, 2019 and 2018 (Expressed in Canadian Dollars)

U3O8 Corp.

10. Stock options

U3O8 Corp's stock option plan (the "Plan") was approved by the shareholders of the Company on June 30, 2009 and subsequent amendments approved on June 27, 2012 and July 29, 2015, for the purpose of attracting, retaining and motivating directors, officers, employees and other service providers by providing them with an opportunity, through share options, to acquire a proprietary interest in the Company and benefit from its growth. The number of stock options which may be granted under the plan is limited to not more than 10% of the issued common shares of U3O8 Corp. at the time of the stock option grant. The exercise price of options granted under the Plan may not be lower than the market price of the common shares at the time the option is granted, as calculated based upon the prior trading day closing price of the common shares on any stock exchange on which the common shares are listed or dealing network where the common shares trade, where applicable. In the event that there is no such closing price or trade on the prior trading day, the market price shall be based upon the average of the daily high and low board lot trading prices of the common shares on any stock exchange on which the shares are listed or dealing network on which the common shares trade for the five immediately preceding trading days. Vesting terms are 25% immediately and 25% every 6 months thereafter, fully vested by 18 months or other period as the Board deems appropriate. The maximum term of the stock options is 10 years.

The Company records a charge to the statement of loss and comprehensive loss account using the Black-Scholes fair valuation option pricing model. The valuation is dependent on a number of estimates, including the risk free interest rate, the level of stock volatility, together with an estimate of the level of forfeiture. The level of stock volatility is calculated with reference to the historic traded daily closing share price at the date of issue. Option pricing models require the input of highly subjective assumptions including the expected price volatility. Changes in the subjective input assumptions can materially affect the fair value estimate, and therefore the existing models do not necessarily provide a reliable measure of the fair value of the Company's share purchase options. The following table reflects the continuity of stock options for the years ended December 31, 2019 and 2018:

	Number of	Weighted average
	stock options	exerciseprice($)
Balance, December 31, 2017	829,750	0.96
Granted (a)	1,065,500	0.28
Expired	(98,500)	2.70
Cancelled	(71,250)	0.61
Balance, December 31, 2018	1,725,500	0.45
Expired	(25,000)	3.20
Balance,December 31,2019	1,700,500	0.41

(a) On November 13, 2018, the Company granted 1,065,500 stock options to directors, officers and consultants of the Company pursuant to the Company’s stock option plan. Of the options granted, 1,065,500 remained outstanding at December 31, 2018. The stock options were issued at an exercise price of $0.28, vest in tranches of 25%, with 25% vesting immediately and the remaining tranches at six-month intervals with the final vesting date being May 13, 2020 and will expire on November 14, 2023. For the purposes of the 1,065,500 options, the fair value of each option was estimated on the date of grant using the Black Scholes option pricing model with the following assumptions: expected dividend yield of 0%; expected volatility of 151% using the historical price history of the Company; risk free interest rate of 2.39%; and an expected average life of five years. The estimated value of $272,425 will be recorded as a cost to salaries and benefits with a corresponding increase to share-based payments reserve as the options vest. For the year ended December 31, 2019, the impact on expenses was $147,565 (2017 - $109,727) (cumulative to December 31, 2019 - $257,292).

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U3O8 Corp. Notes to Consolidated Financial Statements December 31, 2019 and 2018 (Expressed in Canadian Dollars)

10. Stock options (continued)

(b) During the year ended December 31, 2019, $149,506 in share-based payments (2018 - $25,808) related to stock options granted in prior years and vesting during the year ended December 31, 2019. The portion of the estimated fair value of options granted in the current and prior periods and vesting during the year ended December 31, 2019 and 2018, which have been reflected in the consolidated statements of loss and comprehensive loss are as follows:

Years ended December 31,		2019		2018
Canada
Salaries and benefits	$	149,506	$	115,510
Colombia, South America
Salaries and benefits		-		448
Argentina, South America
Salaries and benefits		-		19,577
Total	$	149,506	$	135,535

Stock option price volatility was based on historical price volatility of the common shares, which is assumed to be an appropriate and approximate proxy for future volatility of a stock option instrument granted for the underlying common shares.

The following table reflects the actual stock options issued and outstanding as of December 31, 2019:

		Weighted average		Number of
		remaining	Number of	options	Number of
	Exercise	contractual	options	vested	options
Expiry date	price($)	life(years)	outstanding	(exercisable)	unvested
March 30, 2020	0.70	0.25	272,500	272,500	-
November 9, 2021	0.60	1.86	305,000	305,000	-
December 11, 2022	0.51	2.95	57,500	57,500	-
November 14,2023	0.28	3.87	1,065,500	799,125	266,375
		2.90	1,700,500	1,434,125	266,375

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• 24 -

Notes to Consolidated Financial Statements December 31, 2019 and 2018 (Expressed in Canadian Dollars)

U3O8 Corp.

11. Loss per common share

The calculation of basic and diluted loss per common share for the year ended December 31, 2019 was based on the loss after tax attributable to common shareholders of $3,581,365 (December 31, 2018 – $1,403,857) and the weighted average number of common shares outstanding of 23,043,436 (December 31, 2018 – 20,644,546). Diluted loss per share did not include the effect of 1,700,500 (2018 - 1,725,500) share purchase options and 4,789,423 (2018 - 8,722,357) warrants as they are anti-dilutive.

12. Exploration and evaluation expenditures

The Company enters into exploration agreements or permits with other companies or foreign governments pursuant to which it may explore, or earn interests in mineral properties by issuing common shares and/or making option or rental payments and/or incurring expenditures in varying amounts by varying dates. Failure by the Company to meet such requirements can result in a reduction or loss of the Company’s ownership interests or entitlements under the agreements or permits.

The following is a detailed list of expenditures incurred on the Company’s mineral properties:

Years ended December 31,		2019		2018
Guyana, South America (a)
Exploration activities	$	-	$	18,000
	$	-	$	18,000
Colombia, South America (b)
Exploration activities	$	64,715	$	68,759
Salaries and benefits		32,718		33,411
	$	97,433	$	102,170
Argentina, South America (c)
Exploration activities	$	58,356	$	424,203
Salaries and benefits		3,743		135,465
Loss on disposal of equipment		37,407		9,352
	$	99,506	$	569,020
	$	196,939	$	689,190

(a) Total cumulative exploration activities incurred in Guyana, South America to December 31, 2018 amounted to $35,544,787 (December 31, 2018 - $35,544,787). As of December 31, 2018, the Company decided to discontinue it operations in Guyana and all claims were dropped.

(b) Total cumulative exploration activities incurred in Colombia, South America to December 31, 2018 amounted to $23,866,771 (December 31, 2018 - $23,769,338).

(c) Total cumulative exploration activities incurred in Argentina, South America to December 31, 2018 amounted to $15,489,706 (December 31, 2018 - $15,390,200).

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U3O8 Corp.

Notes to Consolidated Financial Statements December 31, 2019 and 2018 (Expressed in Canadian Dollars)

13. General and administrative

Years ended December 31,		2019		2018
Salaries and benefits	$	233,910	$	291,836
Administrative and general		11,088		104,108
Professional fees		152,742		131,650
Business development		8,550		50,642
Reportingissuer costs		82,027		110,371
	$	488,317	$	688,607

14. Equity accounted investment

As at December 31, 2019, the Company had a 38.9% equity interest in SAS (as defined in note 3(c)(ii)), which is a private company (December 31, 2018 – 38.9%). Since inception, SAS has incurred losses and the Company is not required to fund any losses incurred by SAS beyond its initial equity investment and the investment in SAS has a carrying value of $nil (December 31, 2018 - $nil).

15. Warrants

15. Warrants
	Number of	Grant date	Weighted average
	warrants	fair value($)	exerciseprice($)
Balance, December 31, 2017	6,644,387	1,611,940	0.90
Issued (note 6(b)(1)(2)(3))	2,906,070	318,560	0.40
Expired	(828,100)	(166,062)	1.14
Warrant modification(a)(b)	-	105,328	-
Balance, December 31, 2018	8,722,357	1,869,766	0.71
Expired	(3,932,934)	(1,079,775)	0.95
Balance, December 31, 2019	4,789,423	789,991	0.51

Expiry date Exercise price ($) Warrants outstanding

February 2, 2020	1.00	119,353
March 6, 2020	1.00	125,000
March 27, 2020	1.00	150,000
May 1, 2020	0.35	1,034,000
May 8, 2020	1.30	180,000
July 11, 2020	0.41	356,720
July 11, 2020	0.41	21,350
July 13, 2020	1.00	125,000
September 23, 2020	1.00	150,000
October 19, 2021	0.40	2,294,000
October 19, 2020	0.40	28,000
October 19,2021	0.40	206,000
		4,789,423

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• 26 -

Notes to Consolidated Financial Statements December 31, 2019 and 2018 (Expressed in Canadian Dollars)

U3O8 Corp.

15. Warrants (continued)

• (a) On September 11, 2018, the following terms were changed for the following warrants:

• 1,066,667 warrants with an exercise price of $0.90 per share were issued on September 13, 2016 as part of a private placement, having an original expiry date of September 13, 2018. Each warrant entitles the holder to purchase one common share of the Company. The expiry date of the warrants was extended to September 13, 2019 and the exercise price was repriced to $0.50 per common share. The Company recorded the incremental difference of $66,540 as a capital transaction based on the fair value of these warrants immediately prior to and after the modification. These warrants were valued immediately prior to the subsequent extension using the following Black-Scholes option pricing model parameters; a risk-free interest rate of 2.12%, a dividend yield of 0%, a volatility of 0%, and an expected life of 0.00 year. These warrants were valued subsequent to the subsequent extension using the following Black-Scholes option pricing model parameters; a risk-free interest rate of 2.12%, a dividend yield of 0%, a volatility of 97.76%, and an expected life of 1.0 year.

• 65,833 warrants with an exercise price of $0.90 per share were issued on October 12, 2016 as part of a private placement, having an original expiry date of October 12, 2018. Each warrant entitles the holder to purchase one common share of the Company. The expiry date of the warrants was extended to October 12, 2019 and the exercise price was repriced to $0.50 per common share. The Company recorded the incremental difference of $5,434 as a capital transaction based on the fair value of these warrants immediately prior to and after the modification. These warrants were valued immediately prior to the subsequent extension using the following Black-Scholes option pricing model parameters; a risk-free interest rate of 2.12%, a dividend yield of 0%, a volatility of 81.27%, and an expected life of 0.08 year. These warrants were valued subsequent to the subsequent extension using the following Black-Scholes option pricing model parameters; a risk-free interest rate of 2.12%, a dividend yield of 0%, a volatility of 111.08%, and an expected life of 1.0 year.

• (b) On November 3, 2018, the following terms were changed for the following warrants:

• 759,250 warrants with an exercise price of $0.70 per share were issued on November 3, 2015 as part of a private placement, having an original expiry date of November 3, 2018. Each warrant entitles the holder to purchase one common share of the Company. The expiry date of the warrants was extended to November 3, 2019 and the exercise price was repriced to $0.50 per common share. The Company recorded the incremental difference of $33,354 as a capital transaction based on the fair value of these warrants immediately prior to and after the modification. These warrants were valued immediately prior to the subsequent extension using the following Black-Scholes option pricing model parameters; a risk-free interest rate of 2.28%, a dividend yield of 0%, a volatility of 0%, and an expected life of 0.00 year. These warrants were valued subsequent to the subsequent extension using the following Black-Scholes option pricing model parameters; a risk-free interest rate of 2.28%, a dividend yield of 0%, a volatility of 94.83%, and an expected life of 1.0 year.

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Notes to Consolidated Financial Statements December 31, 2019 and 2018 (Expressed in Canadian Dollars)

U3O8 Corp.

16. Related party balances and transactions

Transactions between the Company and its subsidiaries, which are related parties of the Company, have been eliminated on consolidation and are not disclosed in this note.

Related parties include the Board of Directors, close family members and enterprises which are controlled by these individuals as well as certain persons performing similar functions.

(a) The Company entered into the following transactions with related parties:

Years ended December 31,		2019		2018
John C. Ross ConsultingInc.(i)	$	30,000	$	30,000

(i) Chief Financial Officer ("CFO") fees expensed to a company controlled by the current CFO of the Company. At December 31, 2019, $46,700 is included in amounts payable and other liabilities (December 31, 2018 - $12,800).

(b) The Company defines its key management personnel as its Board of Directors, Chief Executive Officer ("CEO"), and CFO. Remuneration of Directors and key management personnel of the Company was as follows:

Years ended December 31,		2019	2018
Salaries and benefits (*)	$	68,500 $	137,000
Share basedpayments		98,346	93,626
	$	166,846 $	230,626

(*) The Board of Directors do not have employment or service contracts with the Company. There were no director fees accrued or paid during the year ended December 31, 2019 or December 31, 2018. The CEO of the Company was owed $418,061 as at December 31, 2019 (December 31, 2018 - $332,084). Salaries and benefits of $68,500 for the year ended December 31, 2019 (December 31, 2018 - $137,000) excludes $30,000 expensed to CFO above for both years presented. In addition, a director of the Company was owed $20,400 as at December 31, 2019 (December 31, 2018 - $20,400).

During the year ended December 31, 2019, a company with a common director charged the Company $nil for general and administrative services (December 31, 2018 - $36,283) at market rates. These general and administrative services were incurred in the normal course of operations.

The above noted transactions are in the normal course of business and are measured at the exchange amount, as agreed to by the parties, and approved by the Board of Directors in strict adherence to conflict of interest laws and regulations.

(c) See note 17 for details of the loans advanced from a director of the Company during the years ended December 31, 2019 and 2018. In addition, another company controlled by the same director was owed $41,000 as at December 31, 2019 (December 31, 2018 - $41,000). The payable is non-interest bearing and due on demand.

(d) During the year ended December 31, 2019, Dr. Spencer acquired nil units (December 31, 2018 - 140,000 units for proceeds of $35,000) and Mr. Ross acquired nil units (December 31, 2018 - 140,000 units for proceeds of $35,000).

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Notes to Consolidated Financial Statements December 31, 2019 and 2018 (Expressed in Canadian Dollars)

U3O8 Corp.

17. Loan payable

During the years ended December 31, 2019 and 2018, the Company entered into a series of advances from Bambazonke Holdings Ltd. (“Bambazonke”), pursuant to which Bambazonke agreed to lend the Company cash to fund working capital. Amounts outstanding under loan payable incur interest at a rate of 8% per annum and the principal and interest payable thereon will be repaid on a best efforts basis. Bambazonke is a company controlled by a director of the Company. Aggregate advances at December 31, 2019 amounted to $690,000 (December 31, 2018 - $370,000). Interest expense of $68,666 was included in loan payable as at December 31, 2019 (December 31, 2018 - $24,933). No interest or principal was repaid during all years presented.

18. Segmented information

The Company primarily operates in one reportable operating segment, being the exploration and evaluation of uranium properties in South America. The Company has administrative offices in Toronto, Canada. Geographical information is as follows:

December 31, 2019

December 31, 2019
		Canada		Colombia		Argentina		Total
Current assets	$	69,286	$	15,694	$	14,473	$	99,453
	$	69,286	$	15,694	$	14,473	$	99,453
December 31, 2018
		Canada		Colombia		Argentina		Total
Current assets	$	94,136	$	47,715	$	2,959	$	144,810
Non-current assets		-		-		2,845,067		2,845,067
	$	94,136	$	47,715	$	2,848,026	$	2,989,877

19. South American property interests

		Acquisition
		Costs
Balance, December 31, 2017 and 2018	$	2,807,660
Impairment of South Americanpropertyinterests		(2,807,660)
Balance,December 31,2019	$	-

The Company controls various exploration and mining concessions in Argentina. The various concessions have a carrying value of $nil (2018 - $2,807,660). The Company will consider resuming exploration in Argentina when it considers that associated value creation is likely to outweigh the dilution to existing shareholders brought about by issuing stock to fund exploration. As a result, the Company recorded an impairment charge of $2,807,660 in fiscal 2019. As at December 31, 2019 and 2018, the carrying value of the Berlin Project was $nil.

In Colombia, the Company holds five exploration concessions that constitute its Berlin Project. These concessions were valued at $7,666,992. The Company has undertaken a less than optimal level of exploration in the previous five years and has no immediate plans to resume exploration in Colombia until the share price recovers. As a result, the Company recorded an impairment charge of $7,666,992 in fiscal 2016. As at December 31, 2019 and 2018, the carrying value of the Berlin Project was $nil.

All exploration expenses in Guyana have been expensed to date. In fiscal 2018, the Company decided to discontinue its operations in Guyana and all claims were dropped.

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Notes to Consolidated Financial Statements December 31, 2019 and 2018 (Expressed in Canadian Dollars)

U3O8 Corp.

20. Other payable

In fiscal 2011, the Company vended an exploration concession for a share interest in a new entity. The other payable of $176,000 represents an allowance for a potential tax exposure from this transaction.

21. Subsequent events

(a) Since December 31, 2019, the outbreak of the novel strain of coronavirus, specifically identified as “COVID 19”, has resulted in governments worldwide enacting emergency measures to combat the spread of the virus. These measures, which include the implementation of travel bans, self imposed quarantine periods and social distancing, have caused material disruption to businesses globally resulting in an economic slowdown. Global equity markets have experienced significant volatility and weakness. Governments and central banks have reacted with significant monetary and fiscal interventions designed to stabilize economic conditions. The duration and impact of the COVID 19 outbreak is unknown at this time, as is the efficacy of the government and central bank interventions. It is not possible to reliably estimate the length and severity of these developments and the impact on the financial results and condition of the Company and its operating subsidiaries in future periods.

(b) The following warrants expired unexercised subsequent to December 31, 2019:

February 2, 2020	1.00	119,353
March 6, 2020	1.00	125,000
March 27, 2020	1.00	150,000
May 1, 2020	0.35	1,034,000
May8,2020	1.30	180,000

(c) On March 30, 2020, 272,500 options with an exercise price of $0.70 expired unexercised.

(d) Subsequent to the year end, Bambazonke advanced the Company a further $150,000 in accordance with the same terms disclosed in note 17.

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