Ibero Mining Corp. — Annual Report 2020

Feb 12, 2021

Financial Statements For the years ended December 31, 2020 and 2019 (Expressed in Canadian dollars)

INDEPENDENT AUDITORS' REPORT

TO THE SHAREHOLDERS OF GOLDPLAY MINING INC. (FORMERLY INDUSTRIA METALS INC.)

Opinion

We have audited the accompanying financial statements of Goldplay Mining Inc. (formerly Industria Metals Inc.) (the "Company"), which comprise:

• the statements of financial position as at December 31, 2020 and 2019;
• the statements of loss and comprehensive loss for the years then ended;
• the statements of changes in shareholders' equity for the years then ended;
• the statements of cash flows for the years then ended; and
• the 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 the Company as at December 31, 2020 and 2019, and its financial performance and its cash flows for the years then ended in accordance with International Financial Reporting Standards ("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 Auditors' 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 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 financial statements, which indicates that the Company incurred a net loss of $311,026 during the year ended December 31, 2020. As stated in Note 1, these events or conditions, along with other matters as set forth in Note 1, 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 comprises of 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 identified above 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 auditors' 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.

Vancouver 1700 – 475 Howe St Vancouver, BC V6C 2B3

305 – 9440 202 St Langley, BC V1M 4A6 Nanaimo 201 – 1825 Bowen Rd Nanaimo, BC V9S 1H1 T: 250 755 2111

F: 250 984 0886

T: 604 687 1231

Langley

T: 604 282 3600 F: 604 357 1376

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.

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.

Auditors' 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 auditors' 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 auditors' 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 auditors' 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.

2

Vancouver 1700 – 475 Howe St Vancouver, BC V6C 2B3

T: 604 687 1231

Langley 305 – 9440 202 St Langley, BC V1M 4A6

T: 604 282 3600 F: 604 357 1376 Nanaimo 201 – 1825 Bowen Rd Nanaimo, BC V9S 1H1 T: 250 755 2111

F: 250 984 0886

Smythe LLP | smythecpa.com F: 604 688 4675

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 auditors' report is Sukhjit Gill.

Chartered Professional Accountants

Vancouver, British Columbia February 9, 2021

3

Vancouver 1700 – 475 Howe St Vancouver, BC V6C 2B3

T: 604 687 1231

Langley

T: 604 282 3600 305 – 9440 202 St Langley, BC V1M 4A6

F: 604 357 1376

Nanaimo

201 – 1825 Bowen Rd Nanaimo, BC V9S 1H1

T: 250 755 2111 F: 250 984 0886

Smythe LLP | smythecpa.com F: 604 688 4675

Statements of Financial Position as at

(Expressed in Canadian Dollars)

		December 31
	2020		December 312019
ASSETS
Current assets
Cash$	743,464	$	55
Accounts receivable	5,903		11,506
Prepaid expense	10,541		1,161
	759,908		12,722
Exploration and evaluation assets (Note 6)	50,000		166,954
$	809,908	$	179,676
LIABILITIES
Current liabilitiesAccounts payable and accrued liabilities (Note 7)	126,163		129,782
	126,163		129,782
SHAREHOLDERS' EQUITY
Share capital (Note 8)	1,174,195		310,967
Contributed surplus	81,649		-
Deficit	(572,099)		(261,073)
	683,745		49,894
$	809,908	$	179,676

Nature and continuance of operations and going concern (Note 1)

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

These financial statements were approved for issue by the Board of Directors on February 9, 2021 and are signed on its behalf by:

"Catalin Kilofliski"	, Director	"Andrew Marshall"	, Director
----------------------	------------	-------------------	------------

Statements of Loss and Comprehensive Loss for the

(Expressed in Canadian Dollars)

	Year ended	Year ended
	December 31	December 31
	2020	2019
OPERATING EXPENSES
Accounting and corporate secretarial fees (Note 7)	$43,956	$32,432
Audit and tax fees	7,883	11,579
Consulting (Note 7)	16,015	14,029
Impairment of mineral option	166,751	-
Legal fees	23,655	1,358
Shareholder communications	8,576	-
Office expenses	6,565	1,062
Exploration and evaluation (Note 6)	22,389	11,031
Regulatory and transfer agent fees	15,236	3,936
Net and comprehensive loss for the year	$311,026	$75,427
Basic and diluted loss per share	$0.07	$0.04
Weighted average number of shares outstanding	4,678,727	1,954,938

The accompanying notes are an integral part of these financial statements

Statements of Changes in Shareholders' Equity

(Expressed in Canadian Dollars)

	Number ofShares	Share Capital	ShareSubscription	ContributedSurplus	Deficit	Shareholders'Equity
Balance at December 31, 2018	1,921,073	$270,967	$	$	$(185,646)	$85,321
Issuance of common shares (Note 8)Net and comprehensive loss for the year	120,000-	60,000-	(20,000)	-	-(75,427)	40,000(75,427)
Balance at December 31, 2019	2,041,073	$330,967	$(20,000)	$-	$(261,073)	$49,894
Private placements shares component (Note 8)Private placements warrants componentShares issued for services	19,081,340184,400	898,9289,220		-81,649-	--	898,92881,6499,220
Share issuance costsShare issuance cost - broker warrants	--	(43,410)(26,510)		--	--	(43,410)(26,510)
Shares issued for mineral propertiesNet and comprehensive loss for the year	500,000-	25,000-		-	(311,026)	25,000(311,026)
Balance at December 31, 2020	21,806,813	$1,194,195	$(20,000)	$81,649	$(572,099)	$683,745

Statements of Cash Flows

(Expressed in Canadian Dollars)

	Year endedDecember 312020	Year endedDecember 312019
Cash provided by (used for):
Operating activities
Net and comprehensive loss for the year	$(311,026) $	(75,427)
Items not affecting cash
Impairment of mineral option	166,751	-
Change in non-cash working capital:
Accounts receivable	5,603	(2,795)
Prepaid expenses	(9,380)	(1,161)
Accounts payable and accrued liabilities	(3,619)	(6,299)
Due to related parties	-	18,164
	(151,671)	(67,518)
Investing activities
Mineral property option cash refund	203	-
Mineral property option payment	(25,000)	(483)
	(24,797)	(483)
Financing activities
Issuance of common shares, net	919,877	40,000
	919,877	40,000
Change in cash during the year	743,409	(28,001)
Cash, beginning of the year	55	28,056
Cash, end of the year	$743,464$	55

SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOW

Non-cash transactions and other supplemental disclosures
Issuance of shares under mineral options (Notes 6 & 8)	$	25,000	$	-
Private placements warrants (Note 8)	$	55,139	$	-
Issuance of common shares for services (Note 8)	$	9,220	$	-
Finder warrants (Note 8)	$	26,510	$	-

The accompanying notes are an integral part of these financial statements

Notes to the Financial Statements

Years Ended December 31, 2020 and 2019

(Expressed in Canadian dollars)

1. Nature and continuance of operations and going concern

Goldplay Mining Inc. (Formerly Industria Metals Inc.) (the "Company") was incorporated under the Business Corporations Act (British Columbia) on June 16, 2017, and its principal business activity is acquiring and exploring mineral properties. The Company's registered place of business is located at 650 - 1021 West Hastings Street, Vancouver, British Columbia, V6E 0C3, Canada. The Company changed its name to Goldplay Mining Inc. on November 30, 2020. The Company is in the startup stage of operations and does not yet have any revenue-generating activities.

The financial statements were prepared on a going concern basis with the assumption that the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business. The Company has a working capital of $633,745 (2019 deficit of $117,060), has incurred significant operating losses since inception, including $311,026 in the current year (2019 - $75,427), resulting in a deficit of $ 572,099 (2019 – $261,073). The Company will require additional financing to continue operations and pursue its projects. While the Company has been successful in obtaining funding in the past through the issuance of additional equity, there is no assurance that such funding will be available in the future. An inability to raise additional funds would adversely impact the future assessment of the Company as a going concern. These factors indicate the existence of a material uncertainty that may cast significant doubt about the Company's ability to continue as a going concern.

The Company is dependent upon its ability to finance its operations and exploration programs through financing activities that may include issuances of additional debt or equity securities. The recoverability of the carrying value of accounts receivable and exploration and evaluation assets and, ultimately, the Company's ability to continue as a going concern, is dependent upon the Company's ability to raise financing to complete exploration on a mineral property, the outcome of which is uncertain. The financial statements do not include adjustments to amounts and classifications of assets and liabilities that might be necessary should the Company be unable to continue operations. Such adjustments could be material.

In March 2020, the World Health Organization declared COVID-19 a global pandemic. This contagious disease outbreak and the related adverse public health developments have adversely affected workforces, economies, and financial markets, leading to a global economic downturn. 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. This may impact the Company's ability to obtain additional financing to support exploration activities.

2. Basis of presentation

Basis 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") and they are consistent with interpretations of the IFRS Interpretations Committee ("IFRIC") in effect at December 31, 2020.

The significant accounting policies set out in note 3 have been applied consistently to all periods presented.

Basis of measurement

The financial statements have been prepared on the historical cost basis. In addition, these financial statements have been prepared using the accrual basis of accounting, except for cash flow information.

Notes to the Financial Statements

Years Ended December 31, 2020 and 2019

(Expressed in Canadian dollars)

3. Significant accounting estimates and judgements

The preparation of these financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of expenses, assets and liabilities, the accompanying disclosures, and the disclosure of contingent liabilities at the date of the financial statements. Estimates and assumptions are continually evaluated and are based on management's experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

In particular, the Company has identified a number of areas where significant judgements, estimates and assumptions are required. These areas include, but are not limited to, the following:

Critical accounting estimates

Critical accounting estimates are estimates and assumptions made by management that may result in a material adjustment to the carrying amounts of assets and liabilities within the next financial year and include, but are not limited to, the following:

Recovery of receivables

The Company estimates the collectability and timing of collection of its receivables, classifying them as current assets or long-term assets, and applies provisions for collectability when necessary.

Recovery of deferred tax assets:

Judgement is required to determine whether deferred tax assets are recognized in the statement of financial position. Deferred tax assets, including those arising from unutilized tax losses, require the Company to assess the likelihood that it will generate sufficient taxable earnings in future periods, in order to utilize recognized deferred tax assets. Judgement is also required in respect of the application of existing tax laws in each jurisdiction.

Assumptions about the generation of future taxable profits depend on management's estimates of future cash flows. These estimates of future taxable income are based on forecast cash flows from operations (which are impacted by production and sales volumes, commodity prices, reserves, operating costs, closure and rehabilitation costs, capital expenditure, dividends and other capital management transactions). To the extent that future cash flows and taxable income differ significantly from estimates, the ability of the Company to realize the net deferred tax assets recorded at the reporting date could be impacted. In addition, future changes in tax laws in the jurisdictions in which the Company operates could limit the ability of the Company to obtain tax deductions in future periods.

Critical accounting judgments

Information about critical judgments in applying accounting policies that have the most significant effect on the amounts recognized in the financial statements include, but are not limited to, the following:

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, meet its liabilities for the ensuing year, and to fund planned project-acquisitions, involves significant judgment based on historical experience and other factors, including expectation of future events that are believed to be reasonable under the circumstances.

Notes to the Financial Statements

Years Ended December 31, 2020 and 2019

(Expressed in Canadian dollars)

3. Significant accounting estimates and judgements (continued)

Critical accounting judgments (continued)

Exploration and Evaluation expenditures

The application of the Company's accounting policy for Exploration and Evaluation ("E&E") expenditures requires judgement to determine whether future economic benefits are likely from either future exploitation or sale, or whether activities have not reached a stage that permits a reasonable assessment of the existence of reserves. Assets or cash-generating units are evaluated at each reporting date to determine whether there are any indications of impairment. The Company considers both internal and external sources of information when making the assessment of whether there are indications of impairment for the Company's exploration and evaluation assets.

In addition to applying judgement to determine whether future economic benefits are likely to arise from the Company's E&E assets or whether activities have not reached a stage that permits a reasonable assessment of the existence of reserves, the Company has to apply a number of estimates and assumptions. The determination of a resource is itself an estimation process that involves varying degrees of uncertainty depending on how the resources are classified (i.e., measured, indicated or inferred). The estimates directly impact when the Company defers E&E expenditure. The deferral policy requires management to make certain estimates and assumptions about future events and circumstances, particularly, whether an economically viable extraction operation can be established. Any such estimates and assumptions may change as new information becomes available. If, after expenditure is capitalized, information becomes available suggesting that the recovery of expenditure is unlikely, the relevant capitalized amount is written off to the statement of loss and comprehensive loss in the period when the new information becomes available.

4. Summary of significant accounting policies

Income taxes

Income tax on 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 or other comprehensive loss, in which case the income tax is recognized in equity or other comprehensive loss.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted, or substantively enacted, at the end of the reporting period, and any adjustment to tax payable in respect of previous years. Current tax assets and current tax liabilities are only offset if a legally enforceable right exists to set off the amounts, and the Company intends to settle on a net basis, or to realize the asset and settle the liability simultaneously.

Deferred tax is provided for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Temporary differences are not provided for the initial recognition of assets or liabilities in a transaction that is not a business combination and affects neither accounting nor taxable profit. The amount of deferred tax provided is based on the expected manner of realization or settlement of the carrying amounts of assets and liabilities, on a non-discounted basis using tax rates at the end of the reporting period applicable to the period of expected realization.

A deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be available against which the asset can be utilized.

Notes to the Financial Statements

Years Ended December 31, 2020 and 2019

(Expressed in Canadian dollars)

4. Summary of significant accounting policies (continued)

Cash and cash equivalents

Cash and cash equivalents consist of cash on deposit with banks or highly liquid short-term interest-bearing securities that are readily convertible to known amounts of cash and those that have maturities of three months or less or are fully redeemable without penalty when acquired. As at December 31, 2020 and 2019, the Company did not have any cash equivalents.

Financial instruments

(i) Classification

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

(ii) Measurement

Financial assets and liabilities at amortized cost

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

Financial assets and liabilities at FVTPL

Financial assets and liabilities carried at FVTPL are initially recorded at fair value. Realized and unrealized gains and losses arising from changes in the fair value of the financial assets and liabilities held at FVTPL are included in profit or loss in the period in which they arise.

Financial assets at FVTOCI

Financial assets carried at FVTOCI are initially recorded at fair value. Unrealized gains and losses arising from changes in the fair value of the financial assets held at FVTOCI are included in other comprehensive income or loss in the period in which they arise.

(iii) Impairment of Financial Assets at Amortized Cost

The Company recognizes a loss allowance for expected credit losses on financial assets that are measured at amortized cost. At each reporting date, the Company measures the loss allowance for the financial asset at an amount equal to the lifetime expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition. If at the reporting date, the credit risk on the financial asset has not increased significantly since initial recognition, the Company measures the loss allowance for the financial asset at an amount equal to the twelve month expected credit losses. Regardless of whether credit risk has increased significantly, the loss allowances for trade receivables without a significant financing component classified at amortized cost, are measured using the lifetime expected credit loss approach. The Company shall recognize in the statements of loss and comprehensive loss, as an impairment gain or loss, the amount of expected credit loss (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognized.

Notes to the Financial Statements

Years Ended December 31, 2020 and 2019

(Expressed in Canadian dollars)

4. Summary of significant accounting policies (continued)

(iv) Derecognition

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

Share capital

Common shares issued by the Company are classified as equity. Costs directly attributable to the issue of common shares, share purchase warrants and share options are recognized as a deduction from equity, net of any related income tax effects.

Unit offerings

Unit offerings require the Company to value each of the unit components separately. Units generally consist of a single common share and a full or a half-warrant.

• a) When unit warrants are non-transferrable, the Company uses the residual value method to value unit warrants. Proceeds received on the issuance of units are first allocated to common shares based on the fair market value of the common shares at the time the units are issued, with the residual being allocated to the warrant value.
• b) When unit warrants are transferrable, the Company uses the Black-Scholes model to value unit warrants. Proceeds received on the issuance of units are first allocated to warrants using the Black-Scholes valuation, with the remainder being allocated to the common shares.

Loss per share

Basic loss per share is computed by dividing the net loss available to common shareholders by the weighted average number of shares outstanding during the reporting year. Diluted loss per share is computed using the treasury stock method, under which the weighted average number of shares outstanding is increased to include additional shares for the assumed exercise of stock options and warrants, if dilutive. The number of additional shares is calculated by assuming that outstanding stock options and warrants are exercised. Shares held in escrow, other than where their release is subject to the passage of time, are not included in the calculation of the weighted average number of common shares outstanding. The Company does not have shares held in escrow as at the end of the reporting year.

Mineral property interests

Exploration and evaluation interests include the purchase price of mineral properties and any costs incurred for mineral properties not classified as exploration and evaluation expenses. When economically viable reserves have been determined, technical feasibility has been determined and the decision to proceed with development has been approved, the capitalized mineral property interests for that project are reclassified as mining properties, a component of property, plant and equipment.

Exploration and evaluation expenses are comprised of costs that are directly attributable to:

• Researching and analysing exploration data;
• Conducting geological studies, exploratory drilling and sampling;

Notes to the Financial Statements

Years Ended December 31, 2020 and 2019

(Expressed in Canadian dollars)

4. Summary of significant accounting policies (continued)

• Examining and testing extraction and treatment methods; and
• Activities in relation to evaluating the technical feasibility and commercial viability of extracting a mineral
• resource.

All exploration and evaluation expenditures are expensed until properties are determined to contain economically viable reserves. When economically viable reserves have been determined, technical feasibility has been determined and the decision to proceed with development has been approved, the subsequent costs incurred for the development of that project are capitalized as mining properties, a component of property, plant and equipment.

Development expenditures capitalized as mining properties are net of the proceeds of the sale of ore extracted during the development phase. Interest on borrowings related to the construction and development of assets is capitalized until substantially all the activities required to make the asset ready for its intended use are complete.

The costs of removing overburden to access ore are capitalized as pre-production stripping costs and classified as mineral interest.

Impairment of tangible and intangible assets

At the end of each reporting period, the Company's assets are reviewed to determine whether there is any indication that those assets may be impaired. If such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment, if any. The recoverable amount is the higher of fair value less costs to sell and value in use. Fair value less costs to sell is determined as the amount that would be obtained from the sale of the asset price received to sell an asset in an orderly transaction between market participants. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount and the impairment loss is recognized in profit or loss for the period. For an asset that does not generate largely independent cash flows, the recoverable amount is determined for the CGU to which the asset belongs.

Restoration and environmental obligations

The Company recognizes liabilities for legal or constructive obligations associated with the retirement of mineral properties. The net present value of future rehabilitation costs is capitalized to the related asset along with a corresponding increase in the rehabilitation provision in the period incurred. A pre-tax discount rate that reflects the time value of money is used to calculate the net present value The Company's estimates of reclamation costs could change as a result of changes in regulatory requirements, discount rates and assumptions regarding the amount and timing of the future expenditures. These changes are recorded directly to the related assets with a corresponding entry to the rehabilitation provision. The Company does not have any significant rehabilitation obligations as at and for the years presented.

Notes to the Financial Statements

Years Ended December 31, 2020 and 2019

(Expressed in Canadian dollars)

4. Summary of significant accounting policies (continued)

IFRS 16 Leases

At inception, the Company assesses whether a contract contains an embedded lease. A contract contains a lease when the contract conveys a right to control the use of an identified asset for a period of time in exchange for consideration. The Company, as lessee, is required to recognize a right-of-use asset ("ROU asset"), representing its right to use the underlying asset, and a lease liability, representing its obligation to make lease payments. The Company may elect to not apply IFRS 16 to leases with a term of less than 12 months or to low value assets, which is made on an asset by asset basis.

The Company recognizes a ROU asset and a lease liability at the commencement of the lease. The ROU asset is initially measured based on the present value of lease payments, plus initial direct cost, less any incentives received. It is subsequently measured at cost less accumulated amortization, impairment losses and adjusted for certain remeasurements of the lease liability. The ROU asset is amortized from the commencement date over the shorter of the lease term or the useful life of the underlying as set. The ROU asset is subject to testing for impairment if there is an indicator of impairment.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by the interest rate implicit in the lease, or if that rate cannot be readily determined, the incremental borrowing rate. The incremental borrowing rate is the rate which the operation would have to pay to borrow over a similar term and with similar security, the funds necessary to obtain an asset of similar value to the ROU asset in a similar economic environment.

Lease payments included in the measurement of the lease liability are comprised of:

• fixed payments, including in-substance fixed payments;
• variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;
• amounts expected to be payable under a residual value guarantee;
• the exercise price under a purchase option that the Company is reasonably certain to exercise;
• lease payments in an optional renewal period if the Company is reasonably certain to exercise an extension option; and
• penalties for early termination of a lease unless the Company is reasonably certain not to terminate early.

The lease liability is subsequently increased by the interest cost on the lease liability and decreased by lease payments made. It is remeasured when there is a change in future lease payments arising from a change in an index or a rate, a change in the estimate of the amount expected to be payable under a residual value guarantee, or as appropriate, changes in the assessment of whether a purchase or extension option is reasonably certain to be exercised or a termination option is reasonably certain not to be exercised.

Variable lease payments that do not depend on an index or a rate not included in the initial measurement of the ROU asset and lease liability are recognized as an expense in profit or loss the in the period in which they are incurred.

The Company has not entered into any leases as of December 31, 2020, and as such IFRS 16 does not currently apply to the Company.

Notes to the Financial Statements

Years Ended December 31, 2020 and 2019

(Expressed in Canadian dollars)

5. Risk management and financial Instruments

Financial instruments are agreements between two parties that give rise to a financial asset of one entity and a financial liability or equity instrument of another entity. The Company classifies its financial instruments as follows: cash is classified as FVTPL; accounts receivable (excluding taxes receivable) are classified as amortized cost; and accounts payable and accrued liabilities and due to related parties, as amortized cost. The carrying values of these instruments approximate their fair values due to their short term to maturity.

Capital management

The Company does not generate cash flows from operations. The Company's primary source of funds comes from the issuance of share capital and loans or advances from its related parties. The Company does not use other sources of financing that require fixed payments of interest and principal due to lack of cash flow from current operations and is not subject to any externally imposed capital requirements.

The Company's objective when managing capital is to safeguard the Company's ability to continue as a going concern.

The Company defines its capital as shareholders' equity (deficiency). Capital requirements are driven by the Company's general operations. To effectively manage the Company's capital requirements, the Company monitors expenses and overhead to ensure costs and commitments are being paid. There were no changes to the Company's capital management approach during the years ended December 31, 2020 and 2019.

Management of financial risk

Financial instruments measured at fair value are classified into one of three levels in the fair value hierarchy according to the relative reliability of the inputs used to estimate the fair values. The three levels of the fair value hierarchy are:

Level 1 - Unadjusted quoted prices in active markets for identical assets or liabilities;

Level 2 - Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly; and

Level 3 - Inputs that are not based on observable market data.

The Company's financial instruments classified as level 1 in the fair value hierarchy are cash, accounts receivables, accounts payable and accrued liabilities and due to related parties. The carrying values approximates fair value due to the short-term nature of these financial instruments. The types of risk exposure and the Company's methods of managing the risk remain consistent and are as follows:

The Company's risk exposure and the impact on the Company's financial instruments are summarized below:

Credit risk

Credit losses are measured using a present value and probability-weighted model that considers all reasonable and supportable information available without undue cost or effort along with the information available concerning past defaults, current conditions and forecasts at the reporting date. IFRS 9 requires the recognition of 12 month expected credit losses (the portion of lifetime expected credit losses from default events that are expected within 12 months of the reporting date) if credit risk has not significantly increased since initial recognition (stage 1), and lifetime expected credit losses for financial instruments for which the credit risk has increased significantly since initial recognition (stage 2) or which are credit impaired (stage 3). There are no expected credit losses with respect to the Company's financial instruments held at amortized cost.

Notes to the Financial Statements

Years Ended December 31, 2020 and 2019

(Expressed in Canadian dollars)

5. Risk management and financial Instruments (continued)

Market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market prices. Market risk consists of interest rate risk, foreign currency risk and other price risk. As at December 31, 2020, the Company is not exposed to significant market risk.

Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its obligations as they become due. The Company's approach to managing liquidity risk is to attempt to ensure that it will have sufficient cash or credit available to meet liabilities when due. The Company manages its liquidity risk by forecasting cash flows from operations and anticipating any investing and financing activities, and by maintaining its lending arrangement with a related party. Management and the Board of Directors are actively involved in the review, planning and approval of significant expenditures and commitments.

All of the liabilities presented as accounts payable and accrued liabilities are due within 90 days of December 31, 2020.

Categories of financial assets and financial liabilities

Financial	Category	December 31		December 31
instrument			2020	2019
Cash	FVPTL	$	743,464	$55
Accounts receivableAccounts payable and accrued	Amortized cost	$	-	$2,415
liabilities	Amortized cost	$	126,163	$129,782

The carrying values of the Company's financial instruments are classified into the following categories:

6. Exploration and Evaluation Asset

Scottie West Property Option

On November 22, 2020, the Company entered into a definitive agreement with Roughrider to acquire a 70% interest in the Scottie West Property, located in the "Golden Triangle" in Northwestern British Columbia.

Notes to the Financial Statements

Years Ended December 31, 2020 and 2019

(Expressed in Canadian dollars)

6. Exploration and Evaluation Asset (continued)

Pursuant to terms of the agreement with Roughrider, the Company has committed to the following to earn the 70% interest in the Scottie West property:

	Cash	Shares to be issued to	Work commitment
		Roughrider
Upon Signing	$25,000 (paid	Equivalent of $25,000 (issued in	none
	in November	November 2020)
	2020)
Year 1	$25,000	Equivalent of $50,000	$200,000
Year 2	$50,000	Equivalent of $75,000	$100,000
Year 3	$150,000	Equivalent of $150,000	$300,000
Year 4	$250,000	Equivalent of $200,000	$400,000
Total	$500,000	Equivalent of $500,000	$1,000,000

During the year ended December 31, 2020, the Company incurred $22,389 (2019 - $Nil) in property investigation expenses. These expenses were recorded on the statements of loss and comprehensive loss as they were incurred by the Company after it obtained the right to explore the area and before it has been determined that the Scottie West Property contains economically viable resources.

Colorado Property

On December 13, 2020, the Company terminated the agreement whereby the Company had the option to acquire 100% interest in certain leases of mineral rights ("Colorado Property") located in Montrose County and San Miguel Country in North-Eastern Colorado, which are thought to be prospective for uranium and vanadium. The carrying value of the Colorado property before termination was $166,751. During the year ended December 31, 2020, the Company incurred property investigation expenses of $Nil (2019 - $11,031) on the Colorado Property. As the Company no longer has the intention to pursue this project and terminated it during the year ended December 31, 2020, indicators of impairment existed leading to a test of recoverable amount of the Colorado Property, which resulted in an impairment loss of $166,751. A value in use calculation is not applicable as the Company does not have any expected cash flows from using the property at this stage of operations. In estimating the fair value less costs of disposal, management did not have observable or unobservable inputs to estimate the recoverable amount greater than $Nil. As this valuation technique requires management's judgment and estimates of the recoverable amount, it is classified within Level 3 of the fair value hierarchy. The Company has no remaining contractual obligations in relation to the Colorado property

7. Related party disclosures

Key management compensation

Key management personnel at the Company are the directors and officers of the Company. The remuneration of key management personnel during the years ending December 31, 2019 and 2020 is as follows:

Notes to the Financial Statements

Years Ended December 31, 2020 and 2019

(Expressed in Canadian dollars)

7. Related party disclosures (continued)

	Year ended	Year ended
	December 31	December 31
	2020	2019
Director remuneration1	$3,600	$10,429
Officer remuneration1	$27,000	$22,800

1 Remuneration consists exclusively of salaries, bonuses, health benefits if applicable and consulting fees for key management personnel.

1Remuneration consists exclusively of salaries, bonuses, health benefits if applicable and consulting fees for key management personnel.

Included in accounting and corporate secretarial fees is $29,100 (2019 - $32,432) incurred by and owed to Anacott Resources Corp. ("Anacott"), a corporation with common directors and officers during the years ended December 31, 2019 and December 31, 2020. Part of the accounting and corporate secretarial fees charged by Anacott, the portion pertaining to key management services totals $22,000 for 2020 (2019 - $22,800). Included in accounting and corporate secretarial fees is $10,000 (2019 – $Nil) incurred by and owed to Lazuli CPA Inc ("Lazuli"), a corporation with common officers during the year ended December 31, 2020. Part of the accounting and corporate secretarial fees charged by Lazuli, the portion pertaining to key management services totals $5,000 for 2020 (2019 – $Nil).

Included in consulting is $3,600 (2019 - $10,429) for consulting services provided by a director.

Included in accounts payable and accrued liabilities at December 31, 2020 is $ 75,055 (2019 - $92,105) due to Anacott. These amounts due to Anacott relate primarily to the costs of incorporation and the plan of arrangement, as well as the provision of key management services as described above, and are non-interest bearing and due on demand. As of December 1, 2020, Anacott is no longer a related party of the Company as there is no common key management. Included in accounts payable and accrued liabilities at December 31, 2020 is $7,064 (2019-6,000) due to a director who has resigned from his position with the Company on November 12, 2020. The former director provided consulting services to the Company.

8. Share capital

(a) Authorized

The Company's authorized share capital consists of an unlimited number of common shares without par value.

(b) Reconciliation of changes in share capital

Effective December 2, 2020, the Company completed a share consolidation on the basis of ten (10) preconsolidation shares for one (1) post-consolidation share. Unless otherwise noted herein, all share amounts presented have been retrospectively adjusted to reflect this consolidation.

During the year ended December 31, 2019 the Company issued 120,000 common shares for total proceeds of $60,000, of which $20,000 was received in 2018.

Notes to the Financial Statements

Years Ended December 31, 2020 and 2019

(Expressed in Canadian dollars)

8. Share capital (continued)

On November 6, 2020, the Company completed the first tranche of a non-brokered private placement consisting of the issuance of 13,281,340 units at a price of $0.05 per unit for aggregate gross proceeds of $664,067 (the "November 6, 2020 Private Placement"). Each unit was comprised of one common share and one-half of one common share purchase warrant ("November 2020 Warrant"). Each whole November 2020 Warrant entitles the holder, on exercise, to acquire one common share at a price of $0.10 per common until November 6, 2021, subject to acceleration of the expiry date on certain conditions. In the event that the Company receives conditional approval for a listing event on a public stock exchange (the "Listing Event"), the Company may elect to accelerate the November 2020 Warrant's expiration date to the date 30 days subsequent to the news release announcing the Listing Event, provided that the news release announcing the Listing Event is published before the date that is 30 days prior to the November 2020 Warrant's expiry date. In addition to the units issued to the private placement investors, 341,800 broker warrants, each exercisable for one common share at an exercise price of $0.05 per common share for a period of two years, and 184,400 common shares were issued as compensation for the services valued at $9,220 and provided by arm's length finders, resulting in the total number of 13,465,740 common shares issued as part of the November 6, 2020 Private Placement. The Company also paid a total of $24,773 in cash as finder fees.

On November 19, 2020, the Company completed the second tranche of the private placement consisting of the issuance of 4,100,000 units at a price of $0.05 per unit for aggregate gross proceeds of $205,000 (the "November 19, 2020 Private Placement"). The securities issued in the November 19, 2020 Private Placement contained substantially the same terms as the securities issued in the November 6, 2020 Private Placement. In consideration for the services performed by arm's length finders in the November 19, 2020 Private Placement, the Company also issued 188,400 broker warrants, each exercisable for one common share at an exercise price of $0.10 per common share for a period of one year. The Company also paid a total of $9,420 in cash as finder fees.

On November 23, 2020, the Company signed an option agreement with Roughrider Exploration Limited ("Roughrider") to acquire a 70% interest in the Scottie West Property. On November 26, 2020, the Company is sued 500,000 common shares valued at $0.05 to part of its first commitment to Roughrider.The details of this arrangement are included in Note 6.

On December 22, 2020, the Company completed a non-brokered private placement of 1,700,000 units at a price of $0.05 per unit for aggregate gross proceeds of $85,000 (the "December 2020 Private Placement"). Each unit was comprised of one common share and one-half of one common share purchase warrant ("December 2020 Warrant"). Each whole December 2020 Warrant entitles the holder, on exercise, to acquire one common at a price of $0.10 until December 22, 2021, subject to acceleration of the expiry date on certain conditions. In the event that the Company receives conditional approval for a Listing Event, the Company may elect to accelerate the December 2020 Warrant's expiration date to the date 30 days subsequent to the news release announcing the Listing Event, provided that the newsrelease announcing the Listing Event is published before the date that is 30 days prior to the December 2020 Warrant's expiry date.

The Company has valued the warrant component of the units issued to the investors in the year ended December 31, 2020 (total of 9,540,670 warrants) at $55,139 using the Black Scholes model with the following assumptions:

Stock Price	$0.05
Exercise Price	$0.10
Expected Life in Years	1.00
Annualized Volatility	80.00%
Annual Rate of Quarterly Dividends	0.00%
Discount Rate - Bond Equivalent Yield	0.24%

Notes to the Financial Statements

Years Ended December 31, 2020 and 2019

(Expressed in Canadian dollars)

8. Share capital (continued)

As the Company is not currently trading on any exchange, the expected volatility is based on volatility percentages used historically by comparable listed companies. The risk free of return is the yield on a zerocoupon Canadian treasury bill of a term consistent with the assumed warrant life.

The Company has calculated the fair market value of the 530,200 broker warrants to be equal to fair market value of the finder fee services $26,510 as per the finder fee agreements.

(c) Stock Option Plan

The Company adopted a stock option plan on December 5, 2019. under which the aggregate number of common shares to be reserved for exercise of all options granted under the plan and any other share compensation arrangement shall not exceed 10% of the issued shares of the Company at the time of granting of options. The stock option plan provides for the granting of stock options to regular employees and persons providing investor relations or consulting services up to a limit of 5% and 2%, respectively, of the Company's total number of issued and outstanding shares per year. Options granted to consultants providing investor relations services shall vest at a minimum over a period of twelve months with no more than one-quarter of such options vesting in any three-month period. Options, other than options granted to consultants providing investor relations services, shall vest immediately. As of December 31, 2020 and 2019, no stock options were issued.

(d) Share purchase warrants

As part of the November and December 2020 private placements, the Company issued a total of 10,070,870 warrants. As at December 31, 2020 and 2019, the following share purchase warrants were outstanding and exercisable:

		2020	2019
	Exercise	Number of	Number of
Expiry Date	Price	Warrants	Warrants
November 6, 2021	$0.10	6,640,670	-
November 19, 2021	$0.10	2,238,400	-
December 22, 2021	$0.10	850,000	-
Novmber 6, 2022	$0.05	341,800	-
		10,070,870	-

Continuity of the share purchase warrants is as follows:

	Number of	Weighted Average
	Warrants	Exercise Price
Balance at December 31, 2018	-	$-
Balance at December 31, 2019	-	$-
Private placement issued	10,070,870	$0.10
Balance at December 31, 2020	10,070,870	$0.10

No warrants were exercised or expired as of December 31, 2020

The weighted average remaining contractual life for warrants outstanding at December 31, 2020 is 0.9 years (2019 – Nil).

Notes to the Financial Statements

Years Ended December 31, 2020 and 2019

(Expressed in Canadian dollars)

9. Income Taxes

Income tax expense differs from the amount that would be computed by applying the Canadian statutory income tax rate of 27.00% (2019 – 27.00%) to income before income taxes. The reasons for the differences are as follows:

	2020	2019
Loss before taxStatutory income tax rate	$(311,026)$27.00%	(75,427)27.00%
Expected income tax recovery	(83,977)	(20,365)
Items not deductible for income tax purpose	37	-
Unused tax losses and tax offsets not recognized	101,664	20,365
Origination and reversal of temporary differences	(17,724)	-
Income tax expense	$-$	-

The Company recognizes a deferred tax asset on unused tax losses or other deductible amounts only when the Company expects to have future taxable profit against which the amounts could be utilized. The Company's deductible temporary differences and unused tax losses for which no deferred tax asset is recognized consist of the following unrecognized asset amounts:

	2020	2019
Non-capital losses carried forward	$352,417	$216,686
Mineral properties	184,865	-
Share issuance costs	55,936	-
Incorporation costs	44,387	44,387
Unrecognized deductible temporary differences	$637,605	$261,073

The Company has non-capital losses of approximately $352,417 (2018 - $216,686) that may be carried forward to apply against future years' income for Canadian income tax purposes in certain jurisdictions. These losses expire as follows:

	$352,417
2040	135,731
2039	75,428
2038	119,066
2037	$22,192

Notes to the Financial Statements

Years Ended December 31, 2020 and 2019

(Expressed in Canadian dollars)

10. Segmented information

The Company has one operating segment: the acquisition, exploration and development of mineral properties. The Company operates out of its head office in Canada and uses the Canadian Dollar as its functional currency. The Company's exploration and evaluation assets are in Canada.

11. Subsequent events

Issue of stock options on January 11, 2021

On January 11, 2021, the Company issued 2,100,000 stock options to its Officers and Directors. The options have an exercise price of $0.05 and will expire on January 11, 2026.

January and February 2021 Private Placements.

On January 12, 2021, the Company completed a private placement consisting of the issuance of 300,000 units at a price of $0.05 per unit for aggregate gross proceeds of $15,000. The securities issued contained substantially the same terms as the securities issued in the December 23, 2020 Private Placement. No finder fees were paid for this financing.

On February 4, 2021, the Company completed a private placement consisting of the issuance of 1,800,000 units at a price of $0.05 per unit for aggregate gross proceeds of $90,000. The securities issued contained substantially the same terms as the securities issued in the December 23, 2020 Private Placement. No finder fees were paid for this financing.

Application for Listing on the TSX Venture Exchange

The Company wishes to be listed on the TSX Venture Exchange in the near future and has commenced the listing process in December 2020. On January 22, 2021, the Company submitted the draft listing application for review by the TSX Venture Exchange.