IMPACT SILVER CORP — Interim / Quarterly Report 2020

Nov 23, 2020

IMPACT SILVER CORP.

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

September 30, 2020 and 2019

Unaudited

NOTICE OF NO REVIEW BY AUDITOR

In accordance with National Instrument 51 – 102 Continuous Disclosure Obligations of the Canadian Securities Administrators WE HEREBY GIVE NOTICE THAT the condensed consolidated interim financial statements which follow this notice have not been reviewed by an auditor.

IMPACT Silver Corp.

Condensed Consolidated Interim Statements of Financial Position

(Canadian dollars) Unaudited

ASSETS	September 30, 2020 December 31, 2019
Current Cash Trade and other receivables_(Note 3) Inventories(Note 4) Investments Value added and other taxes receivable Right-of-use assets(Note 5) Property, plant and equipment (Note 7) Exploration and evaluation assets(Note 8)_	$ 17,423,252 $ 3,773,062 1,207,633 1,783,571 600,762 539,041 - 2,500
	19,231,647 6,098,174 544,158 725,369 86,073 155,856 18,216,563 20,903,706 20,513,989 22,071,788
	$ 58,592,430 $ 49,954,893
LIABILITIES
Current Trade payables and accrued liabilities Lease liabilities_(Note 6) Lease liabilities(Note 6)_ Reclamation provision Deferred income tax liabilities SHAREHOLDERS' EQUITY	$ 2,368,049 $ 2,434,623 75,352 89,506
	2,443,401 2,524,129 17,327 67,098 430,643 467,839 4,013,472 4,417,422
	6,904,843 7,476,488
Share capital Warrants(Note 11(c)) Contributed surplus Accumulated other comprehensive loss Accumulated deficit	75,248,691 63,923,949 3,566,673 2,193,199 7,628,059 7,628,059 (9,030,829) (4,899,146) (25,725,007) (26,367,656)
	51,687,587 42,478,405
	$ 58,592,430 $ 49,954,893

Nature of operations and going concern (Note 1) Subsequent event (Note 13)

ON BEHALF OF THE BOARD:

“F.W. Davidson” , Director “P. Tredger” , Director

-The accompanying notes form an integral part of these consolidated financial statements-

IMPACT Silver Corp.

Condensed Consolidated Interim Statements of Income For the Three and Nine Months Ended September 30

Canadian dollars Unaudited

	Three months ended September 30 Nine months ended September 30 2020 2019 2020 2019
Revenues Cost of sales Operating expenses_(Note 10)_ Amortization and depletion Mine operating earnings (loss) General and administrative expenses Accounting, audit and legal Amortization Investor relations, promotion and travel Management fees and consulting Office, rent, insurance and sundry Office salaries and services Operating income (loss) Other (expenses) income Finance cost Finance income Foreign exchange (loss) gain Other (expense) income Write-down of property, plant and equipment Write-down of exploration and evaluation assets Income (loss) before taxes Current income tax (recovery) expense Deferred income tax expense Net income (loss)	$ 4,773,965 $ 3,536,801 $ 11,030,028 $ 9,285,159 2,713,478 2,794,578 7,694,538 8,786,278 363,208 384,001 1,106,472 1,186,596
	3,076,686 3,178,579 8,801,010 9,972,874
	1,697,279 358,222 2,229,018 (687,715)
	48,323 34,550 147,123 120,997 12,494 11,944 23,076 19,090 113,625 203,951 395,138 321,271 144,524 40,432 302,378 152,836 70,244 70,032 213,566 202,549 200,906 136,885 456,099 470,337
	590,116 497,794 1,537,380 1,287,080
	1,107,163 (139,572) 691,638 (1,974,795)
	(8,919) (8,402) (28,246) (25,175) 13,947 14,139 32,907 20,038 (119,403) 12,448 120,153 (93,750) (4,830) (3,927) 51,137 (25,517) - (4,518) - (4,518) - - - (1,709,443)
	(119,205) 9,740 175,951 (1,838,365)
	987,958 (129,832) 867,589 (3,813,160) (43,427) 27,670 107,415 27,670 103,543 45,031 117,525 93,465
	$ 927,842 $ (202,533) $ 642,649 $ (3,934,295)
Income (loss) per share –(Note 11(d)) Basic Diluted Weighted average number of shares outstanding Basic Diluted	$ 0.01 $ 0.00 $ 0.01 $ (0.04) $ 0.01 $ 0.00 $ 0.00 $ (0.04) 126,368,751 104,885,986 121,084,927 96,080,505 144,274,850 104,885,986 133,290,445 96,080,505

-The accompanying notes form an integral part of these consolidated financial statements-

IMPACT Silver Corp.

Condensed Consolidated Interim Statements of Comprehensive Income For the Three and Nine Months Ended September 30

(Canadian dollars) Unaudited

	Three months ended September 30 Nine months ended September30
	2020 2019 2020 2019
Net income (loss) Other comprehensive loss Items that may be subsequently reclassified to profit or loss Cumulative translation adjustment Items that will not be subsequently reclassified to profit or loss Loss on investments Comprehensive income (loss)	$ 927,842 $ (202,533) $ 642,649 $ (3,934,295) 561,022 (534,284) (4,129,183) (1,087,602) - (500) (2,500) (1,250)
	$ 1,488,864 $ (737,317) $ (3,489,034) $ (5,023,147)

-The accompanying notes form an integral part of these consolidated financial statements-

IMPACT Silver Corp.

Condensed Consolidated Interim Statements of Changes in Equity For the Nine Months Ended September 30

(Canadian dollars) Unaudited

For the Nine Months Ended September 30 (Canadian dollars) Unaudited
Shares Outstanding	Share Capital ($) Warrants ($) Contributed Surplus ($) Accumulated Other Comprehensive Income ($) Retained Deficit ($)	Total Shareholders’ Equity ($) 41,334,683 (3,934,295) (3,820) 6,143,873 (311,508) 139,099 - - (1,087,602) (1,250) 42,279,180 42,478,405 642,649 11,546,631 (788,025) - 1,779,160 160,450 (4,129,183) (2,500)
Balance at January 1, 2019 87,598,340 Net loss for the period - Impact of adopting IFRS 16 - Shares issued in relation to private placements 22,266,580 Share issue costs - Warrants exercised - Warrants issued in relation to private placements - Warrants expired 397,425 Cumulative translation adjustments - Loss on investments -	60,082,587 1,061,916 6,240,620 (4,626,026) (21,424,414) - - - - (3,934,295) - - - - (3,820) 6,143,873 - - - - (311,508) - - - - 164,978 (25,879) - - - (2,130,540) 2,130,540 - - - - (973,378) 973,378 - - - - - (1,087,602) - - - - (1,250) -
Balance at September 30, 2019 110,262,345	63,949,390 2,193,199 7,213,998 (5,714,878) (25,362,529)
Balance at January 1, 2020 110,262,345 Net income for the period - Shares issued in relation to private placements 16,715,730 Share issue costs - Warrants issued in relation to private placements - Warrants exercised 4,883,696 Options exercised 455,000 Cumulative translation adjustments - Loss on investments -	63,923,949 2,193,199 7,628,059 (4,899,146) (26,367,656) - - - - 642,649 11,546,631 - - - - (788,025) - - - - (1,819,469) 1,819,469 - - - 2,225,155 (445,995) - - - 160,450 - - - - - - - (4,129,183) - - - - (2,500) -
Balance at September30,2020 132,316,771	75,248,691 3,566,673 7,628,059 (9,030,829) (25,725,007)	51,687,587

• The accompanying notes form an integral part of these consolidated financial statements –

IMPACT Silver Corp.

Condensed Consolidated Interim Statements of Cash Flows

For the Three and Nine Months Ended September 30

(Canadian dollars) Unaudited

(Canadian dollars) Unaudited
Cash resources provided by (used in)	For the three months ended September 30 For the nine months ended September 30 2020 2019 2020 2019
Operating activities Net income (loss) Items not affecting cash Amortization and depletion Deferred income tax expense Accretion expense Write-down of inventory Write-down of exploration and evaluation assets Write-down of property, plant and equipment Unrealized loss (gain) on foreign exchange Changes in non-cash working capital Trade and other receivables Income taxes receivable Inventories Trade payables Income taxes payable Investing activities Acquisition of long-lived assets Financing activities Repayment of lease liability Proceeds from private placement, net Proceeds from the exercise of options Proceeds from exercise of warrants Net change in cash Cash - Beginning of period Cash - End of period	$ 927,842 $ (202,533) $ 642,649 $ (3,934,295) 375,702 395,945 1,129,548 1,205,686 103,543 45,031 117,525 93,465 7,128 7,261 22,117 22,131 - 9,866 - 14,874 - - - 1,709,443 - 4,518 - 4,518 19,071 (15,241) (84,289) (22,583) (188,811) (104,816) 488,861 (302,693) (5,730) (309) (8,887) (346) (85,832) (114,572) (120,938) 58,812 443,858 (357,998) 91,738 113,483 (42,185) 27,670 103,145 27,670
	1,554,586 (305,178) 2,381,469 (1,009,835)
	(591,583) (471,390) (1,351,502) (1,317,081)
	(27,250) (15,699) (77,993) (25,815) 8,765,879 4,204,448 10,758,606 5,340,515 160,450 - 160,450 - 1,259,493 139,098 1,779,160 139,098
	10,158,572 4,327,847 12,620,223 5,453,798
	11,121,575 3,551,279 13,650,190 3,126,882 6,301,677 810,030 3,773,062 1,234,427
	$ 17,423,252 $ 4,361,309 $ 17,423,252 $ 4,361,309

-The accompanying notes form an integral part of these consolidated financial statements-

IMPACT Silver Corp.

Notes to the Condensed Consolidated Interim Financial Statements September 30, 2020

(Canadian dollars) Unaudited

1. Nature of operations and going concern

IMPACT Silver Corp. and its subsidiaries (collectively, “IMPACT” or the “Company”) are engaged in silver mining and related activities including exploration, development and mineral processing in Mexico. The Company operates a series of mines near Zacualpan in the State of Mexico and in Guerrero State and produces silver, lead, zinc and gold sold in the form of lead and zinc concentrates. The registered address of the Company is 705 – 543 Granville Street, Vancouver, British Columbia.

The business of mining and exploring for minerals involves a high degree of risk and there can be no assurance that the current exploration and development programs will result in ongoing profitable mining operations. The investment in and expenditures on exploration and evaluation assets comprise a significant portion of the Company’s assets. The recovery of the Company’s investment in these exploration and evaluation assets and the attainment of profitable operations are dependent upon future commodity prices, the ongoing discovery and development of economic ore on these properties and the ability to arrange sufficient financing to bring the ore estimates into production. The ultimate outcome of these matters cannot presently be determined because they are contingent on future events.

The consolidated financial statements have been prepared on a going concern basis, which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business as they come due into the foreseeable future.

During the nine months ended September 30, 2020, the Company had net income of $0.6 million and generated cash flows from operating activities of $2.4 million. At September 30, 2020, the Company had unrestricted cash of $17.4 million, current assets of $19.2 million and working capital of $16.8 million. The Company believes this will provide sufficient working capital for the next year. However, as IMPACT is a producing silver mining company, its performance is heavily impacted by the price of silver; therefore, it is possible that internally generated cash flows may not be sufficient and may affect the Company’s ability to cover its working capital and capital investments.

The Company’s management will continue to consider various alternatives for future financing requirements, within the context of existing market conditions. These alternatives could include, but are not limited to equity financing, debt financing or other means depending on market conditions and other relevant factors at the time. Although the Company has been successful in closing recent private placements, there can be no assurance that management will continue to be successful in its efforts to finance all the activities of the Company, as there is still volatility in debt and equity capital markets and other factors, which may adversely affect the Company's ability to implement a financing plan. The Company’s consolidated financial statements do not include the adjustments that would result if the Company is unable to continue as a going concern. These adjustments could be material.

In March 2020, the World Health Organization declared coronavirus COVID-19 a global pandemic. In compliance with the measures implemented by the Government of Mexico, the Company temporarily suspended mining operations April 30, 2020. Since resumption of mining activities in June 2020, the Company has not experienced any significant disruption to operations or to shipments of concentrates.

This contagious disease outbreak has continued to spread, and along with any related adverse public health developments has had a negative impact on workforces, economies, and financial markets globally. It is not possible for the Company to predict the duration or magnitude of the adverse results of the outbreak and its effects on the Company’s business or results of operations at this time.

IMPACT Silver Corp. Notes to the Condensed Consolidated Interim Financial Statements September 30, 2020

(Canadian dollars) Unaudited

2. Basis of Preparation

Statement of compliance

The Company’s consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and Interpretations of the International Financial Reporting Interpretations Committee (“IFRIC”). These unaudited condensed interim financial statements have been prepared in accordance with IAS 34, Interim Financial Reporting. All material intercompany balances have been eliminated. The accounting policies applied in the preparation of these unaudited condensed financial statements are consistent with those applied and disclosed in the Company’s audited consolidated financial statements for the year ended December 31, 2019. As all the disclosures required by IFRS are not included, these interim statements should be read in conjunction with the audited financial statements of IMPACT Silver Corp. (“the Company”) for the year ended December 31, 2019.

Except when otherwise stated, all amounts are presented in Canadian (“CDN”) dollars, which is the presentation currency of the Company.

The condensed consolidated interim financial statements were authorised for issue by the Board of Directors on November 19, 2020

3. Trade and other receivables

The following table details the composition of trade and other receivables at:

Value added taxes receivable – current portion Trade and other receivables Prepaids	September 30, 2020 December 31, 2019
	$ 222,888 $ 316,753 738,353 1,131,119 246,392 335,699
	$ 1,207,633 $ 1,783,571

4. Inventories

The following table details the composition of inventories at:

Materials and supplies Stockpile inventory Concentrate inventory	September 30, 2020 December 31, 2019
	$ 258,955 $ 297,934 160,289 7,507 181,518 233,600
	$ 600,762 $ 539,041

The amount of inventories recognized as an expense during the period ended September 30, 2020 was $7.7 million (September 30, 2019 - $8.8 million).

The amount of write-down of inventories to net realizable value during the nine months ended September 30, 2020 was $nil (September 30, 2019 - $0.01 million) relating to concentrate inventory.

IMPACT Silver Corp.

Notes to the Condensed Consolidated Interim Financial Statements September 30, 2020

(Canadian dollars) Unaudited

5. Right-of-use assets

Details are as follows:

Balance at January 1, 2019 Initial adoption of IFRS 16 Additions Remeasurements Amortization Foreign exchange movement Balance at December 31, 2019 Additions Amortization Foreign exchange movement Balance at September 30, 2020	Land
	$ - 63,600 161,008 (10,428) (58,131) (193)
	155,856 20,963 (84,013) (6,733)
	$ 86,073

6. Lease Liabilities

Details are as follows:

Balance at January 1, 2019 Initial adoption of IFRS 16 Future aggregate minimum lease payments of operating leases Discounted using the incremental borrowing rate Lease liabilities on initial application of IFRS 16 Interest Repayments Additions Remeasurements Foreign exchange movement Balance at December 31, 2019 Interest Repayments Additions Foreign exchange movement Balance at September 30, 2020 Less: current portion Non-current lease liabilities	$ -
	70,012 (8,292)
	61,720 5,895 (61,256) 161,008 (10,428) (335)
	156,604
	6,128 (84,131) 20,963 (6,885)
	92,679 **75,352 **
	$ 17,327

The Company’s leased assets are for office leases and land. The lease liabilities were discounted at the Company’s incremental borrowing rate. The weighted average rate applied at January 1, 2019 was 8.0%. Operating lease expenses relating to short-term and low-value leases not included in the measurement of lease obligations for the nine months ended September 30, 2020 was $62,783.

IMPACT Silver Corp. Notes to the Condensed Consolidated Interim Financial Statements September 30, 2020

(Canadian dollars) Unaudited

6. Lease Liabilities - continued

The expected timing of undiscounted lease payments at September 30 is as follows:

Less than one year $ One to five years $	2020 2019
	79,458 $ 79,409 17,753 79,307
	97,211 $ 158,806

7. Property, plant and equipment

Details are as follows:

Cost Balance at January 1, 2019 Additions Transfers Disposals Change in reclamation estimate Foreign exchange movement	Plant and mine equipment ($) Vehicles ($) Office furniture and equipment ($) Surface rights ($) Mining Assets ($)	Total ($)
	9,884,164 492,481 228,999 1,140,522 30,016,247 - - 37,118 - 661,205 - - - - 315,996 - - (57,315) - (1,826,883) - - - - 101,675 (84,849) (4,256) (1,053) (9,858) (233,412)	41,762,413 698,323 315,996 (1,884,198) 101,675 (333,428)
Balance at December 31, 2019 Additions Foreignexchangemovement	9,799,315 488,225 207,749 1,130,664 29,034,828 44,035 55,684 31,427 - 650,642 (1,217,579) (61,082) (15,241) (141,457) (3,252,967)	40,660,781 781,788 (4,688,326)
Balance at September 30, 2020	8,625,771 482,827 223,935 989,207 26,432,503	36,754,243
Accumulated amortization Balance at January 1, 2019 Amortization for the period Disposals Foreignexchangemovement	6,461,924 409,465 193,948 - 12,709,820 566,258 17,718 14,225 - 895,953 - - (52,797) - (1,298,424) (56,599) (3,574) (873) - (99,969)	19,775,157 1,494,154 (1,351,221) (161,015)
Balance at December 31, 2019 Amortization for the period Foreign exchange movement	6,971,583 423,609 154,503 - 12,207,380 299,632 15,153 18,979 - 710,236 (878,917) (53,508) (13,263) - (1,317,707)	19,757,075 1,044,000 (2,263,395)
Balance at September 30, 2020	6,392,298 385,254 160,219 - 11,599,909	18,537,680
Netbook value
At December 31, 2019	2,827,732 64,616 53,246 1,130,664 16,827,448	20,903,706
At September 30, 2020	2,233,473 97,573 63,716 989,207 14,832,594	18,216,563

IMPACT Silver Corp.

Notes to the Condensed Consolidated Interim Financial Statements September 30, 2020

(Canadian dollars) Unaudited

8. Exploration and evaluation assets

Balance at January 1, 2019	$	23,605,588
Additions		1,237,512
Transfers to mining assets		(315,996)
Write-down		(2,321,340)
Foreignexchange		(133,976)
Balance at December 31, 2019		22,071,788
Additions		520,734
Foreign exchange		(2,078,533)
Balance atSeptember30, 2020	$	20,513,989

9. Key management personnel compensation

Key management includes the Chief Executive Officer, Chief Financial Officer, Vice-President Exploration and Board of Directors and Audit Committee members. The remuneration of directors and other members of key management personnel for the nine months ended September 30 is as follows:

Salaries and fees	2020 2019
	$ 504,099 $ 310,015

10. Expenses by nature

The following table details the nature of operating expenses as at:

Production costs Administration Transportation Wages and salaries	Three months ended September 30 Nine months ended September 30 2020 2019 2020 2019
	$ 1,422,954 $ 1,378,246 $ 3,998,660 $ 4,484,553 92,530 107,753 236,634 291,194 111,481 97,845 325,889 323,538 1,086,513 1,210,734 3,133,355 3,686,993
	$ 2,713,478 $ 2,794,578 $ 7,694,538 $ 8,726,278

IMPACT Silver Corp.

Notes to the Condensed Consolidated Interim Financial Statements September 30, 2020

(Canadian dollars) Unaudited

11. Equity

a) Share capital

Authorised share capital consists of an unlimited number of common shares without par value.

On August 20, 2020, the Company completed a brokered private placement for aggregate gross proceeds of $9.5 million from the issuance of 10,049,096 units of the Company at $0.95 per unit. Each unit consists of one common share and one-half share purchase warrant, each whole purchase warrant exercisable into one common share at a price of $1.30 for a period of 24 months from the date of issuance. The shares and warrants are subject to a hold period of four months expiring on December 21, 2020. The Company paid cash commissions of 6% of the gross proceeds from certain subscribers in the private placement and the agents were granted, and subscribed for, an aggregate of 598,089 broker warrants entitling the holder to acquire one unit at a price of $0.95 per unit.

On April 16, 2020, the Company closed a non-brokered private placement for 6,666,634 units of the Company at a price of $0.30 per unit for gross proceeds of $2.0 million. Each unit consists of one common share and one common share purchase warrant. Each warrant entitles the holder to purchase one common share at a price of $0.385 until April 16, 2023.

On August 12, 2019, the Company closed a non-brokered private placement which was completed in four tranches. The private placement raised aggregate gross proceeds of $4.9 million by issue of 7,500,000 series 1 units at a price of $0.26 per unit and 10,344,827 series 2 units at a price of $0.29 per unit. Each series 1 unit consists of one common share and one warrant. Each series 1 warrant entitles the holder to purchase one common share at a price of $0.30 per common share for a period of 36 months from the date of issuance. Each series 2 unit consists of one common share and one warrant. Each series 2 warrant entitles the holder to purchase one common share at a price of $0.385 per common share for a period of 36 months from the date of issuance.

• On July 5, 2019, a total of 4,752,770 series 1 units were issued for aggregate gross proceeds of $1.2 million.

• On July 24, 2019, a total of 2,747,230 series 1 units were issued for aggregate gross proceeds of $0.7 million.

• On August 2, 2019, a total of 8,433,759 series 2 units were issued for aggregate gross proceed of $2.4 million.

• On August 12, 2019, a total of 1,911,068 series 2 units were issues for aggregate gross proceeds of $0.6 million.

On January 18, 2019, the Company closed the second tranche of a non-brokered private placement which commenced in 2018. The private placement raised aggregate gross proceeds of $1.7 million by issue of 6,453,253 units at a price of $0.27 per unit. Each unit consists of one common share and one warrant. Each warrant entitles the holder to purchase one common share at a price of $0.35 per common share for a period of 24 months from the date of issuance.

• On November 30, 2018, a total of 2,031,500 units were issued for aggregate gross proceeds of $0.5 million.

• On January 18, 2019, a total of 4,421,753 units were issued for aggregate gross proceeds of $1.2 million

b) Stock options

The Company has established a stock option plan whereby the board of directors may, from time to time, grant options to directors, officers, employees or consultants. Under the terms of the Company’s stock option plan, the maximum number of shares reserved for issuance is 10% of the issued shares of the Company on a rolling basis. Options granted must be exercised no later than five years from date of grant or extension or such lesser period as determined by the Company’s board of directors. The exercise price of an option is not less than the closing price on the Exchange on the last trading day preceding the grant.

IMPACT Silver Corp.

Notes to the Condensed Consolidated Interim Financial Statements September 30, 2020

(Canadian dollars) Unaudited

11. Equity – continued

b) Stock Options - continued

A summary of the Company’s stock options as at September 30, 2020 and the changes for the periods ended on these dates is as follows:

			Weighted Average
		Number	ExercisePrice ($)
At	January 1, 2019	4,710,000	0.64
	Granted	2,000,000	0.36
	Expired	(1,210,000)	0.55
	Forfeited	(315,000)	0.66
At	December 31, 2019	5,185,000	0.55
	Exercised	(455,000)	0.35
	Forfeited	(30,000)	0.98
At	September 30, 2010	4,700,000	0.57

The following table summarizes information about the stock options outstanding at September 30, 2020:

Exercise		Weighted Average
Price	Number of Options	Remaining Life	Number of Options
PerShare	Outstanding	(Years)	Exercisable	ExpiryDate
$0.98	1,595,000	0.82	1,595,000	July 27, 2021
$0.35	1,225,000	1.97	1,225,000	September 20, 2022
$0.36	1,880,000	4.07	1,880,000	October 24,2024
	4,700,000	**2.42 **	4,700,000

c) Warrants

A summary of the Company’s warrants as at September 30, 2020 and the changes for the periods ended on these dates is as follows:

s follows:
		Weighted Average Exercise
	Number	Price ($)
At January 1, 2019	6,417,465	0.73
Issued	22,266,580	0.35
Exercised	(397,425)	0.35
Expired	(4,385,965)	0.90
At December 31, 2019	23,900,655	0.35
Issued	11,691,159	0.78
Exercised	(4,883,696)	0.36
At September30, 2020	30,708,118	**0.51 **

IMPACT Silver Corp. Notes to the Consolidated Financial Statements September 30, 2020 (Canadian dollars) Unaudited

11. Equity – continued

c) Warrants - continued

The fair value of each warrant granted is estimated at the time of grant using the Black-Scholes option pricing model with assumptions as follows:

	Nov 30	Jan 18	July 5	July 24	Aug 2	Aug 12
Date Granted	2018	2019	2019	2019	2019	2019
	Nov 30	Jan 18	July 5	July 24	Aug 2	Aug 12
ExpiryDate	2020	2021	2022	2022	2022	2022
Number of warrants
granted	2,031,500	4,421,753	4,752,770	2,747,230	8,433,759	1,911,068
Risk-free interest rate	2.14%	1.93%	1.69%	1.51%	1.41%	1.39%
Expected dividend yield	Nil	Nil	Nil	Nil	Nil	Nil
Expected share price
volatility	82.37%	82.07%	72.93%	74.32%	75.39%	75.81%
Expected warrant life in
years	1.5	1.5	1.5	1.5	1.5	1.5
	April 16	Aug 20
Date Granted	2020	2020
	April 16	Aug 20
ExpiryDate	2023	2022
Number of warrants
granted	6,666,634	5,024,525
Risk-free interest rate	0.34%	0.26%
Expected dividend yield	Nil	Nil
Expected share price
volatility	79.48%	89.00%
Expected warrant life in
years	1.5	1.5

Pricing models require the input of highly subjective assumptions including the expected share price volatility. Changes in the subjective input assumptions can materially affect the fair value estimate.

IMPACT Silver Corp. Notes to the Consolidated Financial Statements September 30, 2020 (Canadian dollars) Unaudited

11. Equity – continued

d) Earnings per share

Details of the calculation of loss per share are set out below for:

	Three months ended September 30 Nine months ended September 30 2020 2019 2020 2019
Net income (loss) attributable to shareholders	$ 927,842 $ (202,533) $ 642,649 $ (3,934,295)
Weighted average number of shares outstanding - Basic Warrants Stock options Weighted average number of shares outstanding - Diluted Income (loss) per share - basic Basic Diluted	126,368,751 104,885,986 121,084,927 96,080,505 15,975,402 - 10,889,957 - 1,930,696 - 1,315,560 -
	144,274,850 104,885,986 133,290,445 96,080,505 $ 0.01$ 0.00 $ 0.01 $ (0.04) $ 0.01 $ 0.00 $ 0.00 $ (0.04)

12. Segmented information

The Company has one operating segment and two reportable segments based on geographic area:

i) Mexico – This part of the business includes the Company’s mining operations and exploration properties ii) Canada – This part of the business includes head office and group services

The segments are determined based on the reports reviewed by the Chief Executive Officer (who is considered the Chief Operating Decision Maker) to make decisions about resources to be allocated to the segment and assess its performance and for which discrete financial information is available.

Details are as follows:	Three months ended September 30 Nine months ended September 30 2020 2019 2020 2019
Revenues by geographic area Mexico Net income (loss) by geographic area Mexico Canada	$ 4,773,965 $ 3,536,801 $ 11,030,028 $ 9,285,159
	$ 1,482,630 $ 243,988 $ 2,034,542 $ (2,801,668) (554,788) (446,521) (1,391,893) (1,132,627)
	$ 927,842 $ (202,533) $ 642,649 $ (3,934,295)

IMPACT Silver Corp.

Notes to the Condensed Consolidated Interim Financial Statements September 30, 2020

(Canadian dollars) Unaudited

12. Segmented information - continued

Assets by geographical area Mexico Canada Property, plant and equipment by geographical area Mexico Canada	September 30, 2020 December 31, 2019
	$ 43,482,656 $ 46,313,779 15,108,774 3,641,114
	$ 58,592,430 $ 49,954,893
	$ 18,168,733 $ 20,867,360 47,830 36,346
	$ 18,216,563 $ 20,903,706

13. Subsequent Event

Subsequent to the end of the quarter, the Company entered into an option agreement with Red Oak Mining Corp. (“Red Oak”) on the Nuevo Taxco Project. Red Oak can earn a 100% interest in the property by making certain staged payments to the Company over three years, (total payments of $300,000 and issuance of 3.5 million shares of Red Oak), and by incurring exploration expenditures of $1.4 million over the period . The Company will retain a 1% net smelter return on the project that Red Oak may buy back for $1.0 million. The transaction is subject to TSX Venture Exchange approval.