International Bethlehem Mining Corp — Interim / Quarterly Report 2021

Aug 27, 2021

INTERNATIONAL BETHLEHEM MINING CORP.

Condensed Consolidated Interim Financial Statements (Unaudited – Prepared by Management)

For the six months ended June 30, 2021 and 2020 (Expressed in Canadian Dollars)

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NOTICE OF NO AUDITOR REVIEW OF INTERIM FINANCIAL STATEMENTS

Under National Instrument 51-102, Part 4, subsection 4.3(3)(a), if an auditor has not performed a review of the interim financial statements, they must be accompanied by a notice indicating that the financial statements have not been reviewed by an auditor. The accompanying unaudited condensed consolidated interim financial statements of the Company have been prepared by and are the responsibility of the Company’s management. The Company’s independent auditor has not performed a review of these financial statements in accordance with standards established by the Chartered Professional Accountants of Canada for a review of interim financial statements by an entity’s auditor.

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INTERNATIONAL BETHLEHEM MINING CORP. Condensed Consolidated Interim Statements of Financial Position

(Unaudited - Expressed in Canadian Dollars)

		June 30,		December 31,
		2021		2020
ASSETS
Current
Cash and cash equivalents	$	536	$	287
Receivables		8,310		5,166
Prepaid expenses		417		416
		9,263		5,869
Reclamation deposits(Note 4)		45,000		45,000
Receivables(Note 9(c))		1		1
	$	54,264	$	50,870
LIABILITIES AND SHAREHOLDERS' DEFICIENCY
Current
Accounts payable and accrued liabilities (Note 5)	$	314,623	$	486,053
Loans payable (Note 5 and 8)		277,000		16,000
		591,623		502,053
Shareholders' deficiency
Capital stock (Note 6)		13,184,063		13,184,063
Reserves		1,437,227		1,437,227
Deficit		(15,158,649)		(15,072,473)
		(537,359)		(451,183)
	$	54,264	$	50,870

Nature of operations and going concern (Note 1) Commitments and contingencies (Note 9) Subsequent event (Note 13)

On behalf of the Board:

“Peter Berdusco” Director “Charles Hugh Maddin” Director

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

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INTERNATIONAL BETHLEHEM MINING CORP.

Condensed Consolidated Interim Statements of Loss and Comprehensive Loss

(Unaudited – Expressed in Canadian Dollars) Six months ended June 30, 2021 and 2020

	Three-month period ended June 30, 2021 Three-month period ended June 30, 2020 Six-month period ended June 30, 2021 Six-month period ended June 30, 2020
EXPENSES Bank charges and interest (Note 5) Consulting fees (Note 5) Insurance Legal, audit and accounting (Note 5) Management fees (Note 5) Office and miscellaneous (Note 5) Rent (Note 5) Transfer agent and regulatory fees Wages and benefits (Note 5) OTHER ITEMS Interest income Loss and comprehensive loss for the period	$ 55 $ 414 $ 665 $ 515 38,000 - 38,000 7,500 - 272 - 272 12,004 (3,070) 19,780 1,801 14,000 - 17,000 - 3,000 1,704 5,000 4,198 - 5,955 - 11,909 3,707 6,686 5,783 9,129 - 3,148 - 5,755
	(70,766) (15,109) (86,228) (41,079)
	47 73 52 140
	$ (70,719) $ (15,036) $ (86,176) $ (40,939)
Basic and diluted loss per share	$ (0.00) $ (0.00) $ (0.00) $ (0.00)
Weighted average number of common shares outstanding	20,409,033 20,409,033 20,409,033 20,409,033

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

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INTERNATIONAL BETHLEHEM MINING CORP.

Condensed Consolidated Interim Statements of Changes in Shareholders’ Deficiency (Expressed in Canadian Dollars)

			Share-based			Total
		Capital	Payment	Warrant		Shareholders’
	Number of	Stock	Reserve	Reserve	Deficit	Deficiency
	Shares	($)	($)	($)	($)	($)
Authorized Share Capital:
Unlimited number of common
shares without par value
Issued:
Balance, December 31, 2019	20,930,951	13,184,063	1,394,427	42,800	(15,003,650)	(382,360)
Loss for the period	-	-	-	-	(40,940)	(40,940)
Balance, June 30, 2020	20,930,951	13,184,063	1,394,427	42,800	(15,044,590)	(423,300)
Loss for the period	-	-	-	-	(27,883)	(27,883)
Balance, December 31, 2020	20,930,951	13,184,063	1,394,427	42,800	(15,072,473)	(451,183)
Loss for the period	-	-	-	-	(86,176)	(86,176)
Balance, June 30, 2021	20,930,951	13,184,063	1,394,427	42,800	(15,158,649)	(537,359)

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

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INTERNATIONAL BETHLEHEM MINING CORP. Condensed Consolidated Interim Statements of Cash Flows

(Unaudited - Expressed in Canadian Dollars) For the six months ended June 30, 2021 and 2020

		Six-month period ended June 30,2021 Six-month period ended June 30,2020
CASH FLOWS FROM OPERATING ACTIVITIES Loss for the period Changes in non-cash working capital items Receivables Prepaid expenses Accounts payable and accrued liabilities Net cash flows used in operating activities CASH FLOWS FROM FINANCING ACTIVITIES Loan proceeds Net cash flows provided by financing activities Change in cash and equivalents during the period Cash and equivalents, beginning of the period		$ (86,176) $ (40,939) (3,144) 601 (1) 17 (187,430) 37,756
		(276,751) (2,565)
		277,000 -
		277,000 -
		249 (2,565) 287 3,396
Cash and equivalents, end of the period		$ 536 $ 831
Cash paid for interest Cash paid for income taxes		$ - $ - $ - $ -

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

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INTERNATIONAL BETHLEHEM MINING CORP . Notes to the Condensed Consolidated Interim Financial Statements

(Expressed in Canadian Dollars) For the six months ended June 30, 2021 and 2020

1. NATURE OF OPERATIONS AND GOING CONCERN

Nature of operations

International Bethlehem Mining Corp. (the “Company”) was incorporated April 5, 1995 under the laws of the Province of British Columbia. The Company is engaged in the exploration of mineral resource properties, primarily in Canada.

Going concern

These condensed consolidated interim financial statements have been prepared on the basis of accounting principles applicable to a going concern, which assume that the Company will be able to 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.

There are several conditions that may cast significant doubt on the Company’s ability to continue as a going concern, including that the Company has incurred significant operating losses and accumulated deficits over the past several fiscal years. The Company is unable to self-finance operations in the long term, has a working capital deficit of $582,360 (December 31, 2020 - $496,184), a deficit of $15,158,649 (December 31, 2020 - $15,072,473), limited resources, no source of operating cash flow and no assurances that sufficient funding will be available to conduct further exploration of its mineral property projects.

The application of the going concern concept is dependent upon the Company’s ability to generate future profitable operations and receive continued financial support from its creditors and shareholders. These condensed consolidated interim financial statements do not include any adjustments to the amounts and classifications of assets and liabilities that might be necessary should the Company be unable to continue as a going concern. Management is actively engaged in the review and due diligence on new projects, is seeking to raise the necessary capital to meet its funding requirements and has undertaken available cost-cutting measures. There can be no assurance that management’s plan will be successful. If the going concern assumption were not appropriate for these condensed consolidated interim financial statements, then adjustments would be necessary in the carrying value of assets and liabilities, the reported expenses and the balance sheet classifications used. Such adjustments could be material.

The business of exploration and evaluation involves a high degree of risk and there can be no assurance that current exploration programs will result in profitable mining operations. The Company has no source of revenue and has significant cash requirements to meet its administrative overhead and maintain its mineral interests. The recoverability of any amounts shown for mineral properties is dependent on several factors. These include the discovery of economically recoverable reserves, the ability of the Company to obtain the necessary financing to complete the development of these properties, and future profitable production or proceeds from disposition of mineral properties.

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INTERNATIONAL BETHLEHEM MINING CORP . Notes to the Condensed Consolidated Interim Financial Statements

(Expressed in Canadian Dollars) For the six months ended June 30, 2021 and 2020

2. BASIS OF PREPARATION

Statement of compliance

These condensed consolidated interim financial statements have been prepared in accordance with International Accounting Standards (“IAS”) 34, Interim Financial Reporting.

These condensed consolidated interim financial statements include the accounts of the Company and its whollyowned inactive subsidiary, Bethlehem Resources (Nevada) Corp. All significant intercompany transactions and balances have been eliminated.

The Board of Directors approved the financial statements for issue on August 26, 2021.

Basis of measurement

The condensed consolidated interim financial statements have been prepared on the historical cost basis except for certain financial instruments, which are measured at fair value.

Functional and presentation currency

These condensed consolidated interim financial statements are presented in Canadian dollars, which is the Company’s and its subsidiary’s functional currency. All financial information is expressed in Canadian dollars unless otherwise stated and have been rounded to the nearest dollar.

Use of estimates and judgements

The preparation of the condensed consolidated interim financial statements in conformity with IFRS requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on management’s best knowledge of the amount, event or actions, actual results ultimately may differ from those estimates.

In March 2020, the World Health Organization declared coronavirus COVID-19 a global pandemic. This contagious disease outbreak, which has continued to spread, and any related adverse public health developments, has adversely affected workforces, economies, and financial markets globally, potentially leading to an economic downturn. It is not possible for the Company to predict the duration or magnitude of the adverse results of the outbreak and its future potential effect on the Company’s business or ability to raise funds.

The most significant accounts that require estimates as the basis for determining the stated amounts include the valuation of share-based payments and recognition of deferred tax amounts.

Critical accounting estimates:

a) Share-based payments

The fair value of share options granted is measured using the Black-Scholes option pricing model. Measurement inputs include share price on measurement date, exercise price of the option, expected volatility, expected life of the options, expected dividends and the risk-free rate. These estimates will impact the amount of share-based payments recognized.

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INTERNATIONAL BETHLEHEM MINING CORP . Notes to the Condensed Consolidated Interim Financial Statements

(Expressed in Canadian Dollars) For the six months ended June 30, 2021 and 2020

2. BASIS OF PREPARATION (Continued)

b) Income taxes

Related assets and liabilities are recognized for the estimated tax consequences between amounts included in the financial statements and their tax base using substantively enacted future income tax rates. Timing of future revenue streams and future capital spending changes can affect the timing of any temporary differences and, accordingly, affect the amount of the deferred tax asset or liability calculated at a point in time.

3. SIGNIFICANT ACCOUNTING POLICIES

In preparation of these condensed consolidated interim financial statements, the Company has consistently applied the same accounting policies as disclosed in the audited consolidated annual financial statements for the year ended December 31, 2020.

4. EXPLORATION AND EVALUATION ASSETS

Reclamation deposits

As at June 30, 2021, the Company has refundable deposits of $45,000 (December 31, 2020 - $45,000) with the British Columbia Ministry of Mines relating to the Company’s former Ground Hog Basin, Cottonbelt and LH properties.

5. RELATED PARTY TRANSACTIONS

• (a) As at June 30, 2021, accounts payable and accrued liabilities include $230,633 (December 31, 2020 - $318,979) owing to companies with certain directors in common and companies controlled by certain directors and former directors.

• (b) The Company paid or accrued the following amounts during the periods ended June 30, 2021 and 2020 to key management and companies controlled by directors and former directors or companies having certain directors and former directors in common:

		June 30,		June 30,
		2021		2020
Accounting fees	$	12,000	$	-
Consulting fees		35,000		7,500
Management fees		12,000		-
Rent	$	59,000	$	5,954

(c) The Company reimbursed Waterfront Communications Inc. (a company with certain directors in common) on a cost basis, to cover shared administrative and payroll costs in the amount of $nil (2020 - $5,755) and shared expenses in the amount of $nil (2020 - $5,658).

6. CAPITAL STOCK

Issuance of shares

No shares were issued during the period ended June 30, 2021 or the year ended December 31, 2020.

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INTERNATIONAL BETHLEHEM MINING CORP . Notes to the Condensed Consolidated Interim Financial Statements

(Expressed in Canadian Dollars) For the six months ended June 30, 2021 and 2020

7. STOCK OPTIONS AND WARRANTS

Stock options

Options to purchase common shares have been granted to directors, officers, employees and consultants at exercise prices determined by reference to the market value on the date of the grant. Under the terms of the Company’s rolling stock option plan, dated May 28, 2005, the maximum number of common shares issuable shall not exceed 10% of the issued and outstanding shares of the Company at the time the stock options are granted. Vesting of stock options is at the discretion of the Board of Directors at the time the options are granted.

Stock option transactions are summarized as follows:

				Weighted
			Number	Average
			of Options	Exercise Price
Outstanding and exercisable, December	31,	2019	1,100,000	$ 0.05
Expired			(137,000)	0.05
Outstanding and exercisable, December	31,	2020	and June 30, 2021 963,000	$ 0.05

The following incentive stock options were outstanding at June 30, 2021:

		Number of
Expiry Date	Exercise Price	Options
September 22,2021	$ 0.05	963,000
		963,000

Warrants

Warrant transactions are summarized as follows:

Weighted
Number Average
of Warrants Exercise Price
Balance, December 31, 2019, December 31, 2020 and June 30, 2021 9,500,000 $ 0.06

The following warrants are exercisable and outstanding at June 30, 2021:

			Number of
Expiry Date	Exercise	Price	Warrants
December 21, 2022	$	0.06	8,000,000
May 7, 2024		0.06	1,500,000
			9,500,000

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INTERNATIONAL BETHLEHEM MINING CORP . Notes to the Condensed Consolidated Interim Financial Statements

(Expressed in Canadian Dollars) For the six months ended June 30, 2021 and 2020

8. LOANS PAYABLE

The Company received an unsecured non-interest-bearing loans with no terms of repayment from a arm’s length individuals. The loans were received in six tranches, in the amount of $25,000, $27,000, $150,000, $25,000, $25,000, $25,000 for a total loans amount of $277,000.

9. COMMITMENTS AND CONTINGENCIES

• (a) In prior years, the Company entered into three 5-year term renewable agreements, as amended, with companies controlled by two directors and one former director of the Company for the provision of consulting services at a cost of $2,500 per month ($30,000 per annum) for each of the three agreements. If any of such agreements were terminated without cause, or if there was a change in control of the Company, the Company was required to pay $150,000 to such contracted party so affected. On August 12, 2021, the agreements were voluntarily terminated without penalties or payments on termination.

• (b) The Company has also entered into two agreements with certain directors/officers for services rendered in such capacities. If such agreements are terminated without consent of the director/officer or the director/officer resigns within 120 days following a change in control, the Company must pay $50,000 to such director/officer and allow any unvested stock options to vest. On August 12, 2021, the agreements were voluntarily terminated without penalties or payments on termination.

• (c) The Company was reassessed for certain prior years’ taxation filings (principally from 2003 and 2004) by the Canada Revenue Agency (“CRA”) pertaining to the renunciation of its flow-through expenditures. Also, individual investors in certain flow-through shares may be impacted by the reassessments. The Company has been assessed taxes of $339,195 and interest and penalties of approximately $323,000 as of June 30, 2021, and CRA is currently withholding approximately $280,000 of the Company’s GST and METC refunds. On April 15, 2015, the Company received a Notice of Confirmation from CRA which indicated that CRA had disallowed the Notices of Objection previously filed by the Company. The Company does not believe that the issues raised by the Company in its Notices of Objection were properly addressed by CRA and the Company filed an Appeal to the Tax Court of Canada, consequently no accrual has been made.

Due to delays in attempting to resolve the claim with CRA and the uncertainty with the final outcome, on December 31, 2018 the Company has taken a provision of $260,838 against the receivable leaving a balance of $1. The Company will continue to attempt to collect the receivables with CRA in the future.

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INTERNATIONAL BETHLEHEM MINING CORP . Notes to the Condensed Consolidated Interim Financial Statements

(Expressed in Canadian Dollars) For the six months ended June 30, 2021 and 2020

10. CAPITAL MANAGEMENT

The Company’s shareholders’ deficiency comprises its capital under management. The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern in order to pursue the development of its mineral properties and to maintain a flexible capital structure, which optimizes the costs of capital at an acceptable risk.

The Company manages the capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. To maintain or adjust the capital structure, the Company may attempt to issue new shares, issue new debt, acquire or dispose of assets.

In order to facilitate the management of its capital requirements, the Company prepares expenditure budgets that are updated as necessary depending on various factors, including successful capital deployment and general industry conditions. The Board of Directors does not establish quantitative return on capital criteria for management, but rather relies on the expertise of the Company’s management to sustain future development of the business.

In order to maximize ongoing development efforts, the Company does not pay out dividends. The Company’s investment policy is to invest its short-term excess cash in highly liquid short-term interest-bearing investments with maturities of 365 days or less from the original date of acquisition, selected with regard to the expected timing of expenditures from continuing operations.

To fund future operations and exploration activities the Company will need to raise funds through future share issuances, issue new debt or dispose of assets.

There have been no changes to the Company’s approach to capital management during the period ended June 30, 2021. The Company is not subject to externally imposed capital requirements.

11. SEGMENTED INFORMATION

The Company has one operating segment, mineral exploration, and all assets of the Company are located in Canada.

12. FINANCIAL INSTRUMENTS

Fair value

The Company classifies its cash and cash equivalents as fair value through profit or loss; receivables at amortized cost; and accounts payable and accrued liabilities and loans payable at amortized cost.

The carrying values of receivables, accounts payable and accrued liabilities and loans payable approximate their fair values due to the short-term maturity of these financial instruments.

The Company’s risk exposure and the impact on the Company’s financial instruments are summarized below.

Credit risk

Credit risk is the risk of financial loss to the Company if a counter party to a financial instrument fails to meet its payment obligations. The Company is exposed to credit risk with respect to its cash and cash equivalents and receivables.

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INTERNATIONAL BETHLEHEM MINING CORP . Notes to the Condensed Consolidated Interim Financial Statements

(Expressed in Canadian Dollars) For the six months ended June 30, 2021 and 2020

12. FINANCIAL INSTRUMENTS ( Continued)

Management believes that the credit risk concentration with respect to cash and cash equivalents is remote as it maintains accounts with highly-rated financial institutions.

Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in satisfying financial obligations as they become due. The Company manages its liquidity risk by forecasting cash flows from operations and anticipated investing and financing activities. At June 30, 2021, the Company had accounts payable and accrued liabilities of $314,623 (December 31, 2020 - $486,053). Based on the current funds held as at June 30, 2021, the Company does not have sufficient working capital for the short term and will need to rely upon financing from shareholders and/or debt holders to obtain sufficient working capital in the long term. There is no assurance that such financing will be available on terms and conditions acceptable to the Company.

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 comprises three types of risk: interest rate risk, foreign currency risk and other price risk.

• (i) Interest rate risk

Interest rate risk consists of two components:

• (a) To the extent that payments made or received on the Company’s monetary assets and liabilities are affected by changes in the prevailing market interest rates, the Company is exposed to interest rate cash flow risk.

• (b) To the extent that changes in prevailing market rates differ from the interest rate in the Company’s monetary assets and liabilities, the Company is exposed to interest rate price risk.

The Company is not exposed to significant interest rate risk.

• (ii) Foreign currency risk

The Company is not exposed to significant foreign currency risk.

• (iii) Other price risk

Other price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market prices, other than those arising from interest rate risk or foreign currency risk. The Company is not exposed to other price risk since it has sold its investments.

13. SUBSEQUENT EVENT

Subsequent to the period ended June 30, 2021, the Company received unsecured non-interest-bearing loans for a total of $31,500 with no terms of repayment from arm’s length individuals.

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