Kermode Resources Ltd. — Interim / Quarterly Report 2023

Jun 27, 2023

KERMODE RESOURCES LTD. FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED APRIL 30, 2023 and 2022 (Unaudited) (Expressed in Canadian Dollars)

The accompanying unaudited interim financial statements have been prepared by Management of Kermode Resources Ltd. and have not been reviewed by the Company's auditors.

. KERMODE RESOURCES LTD Statements of Financial Position (Expressed in Canadian Dollars)

As at	April 30,2023	October 31,2022
ASSETS
Current assets
Cash	2,338	30,041
Miscellaneous receivables	18,085	3,573
Prepaid expenses	2,647	25,486
Total current assets	23,070	59,100
Exploration and evaluation assets (Note 5)	599,937	218,040
Total assets	623,007	277,140
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities (Note 6)	296,687	246,982
Advances payables (Note 4)	29,808	29,808
Total current liabilities	326,495	276,790
SHAREHOLDERS'DEFICIENCY
Share capital (Note 7)	10,518,189	10,100,588
Contributed surplus (Note 8)	157,238	138,776
Deficit	(10,378,915)	(10,239,014)
Total shareholders' deficiency	296,512	350
Total liabilities and shareholders' deficiency	623,007	277,140

Nature of business and going concern (Note 1) Subsequent events (Note 12)

Approved and authorized by the Board on June 27, 2023.

"Maxime Lepine" "Tek Manhas"

Director Director

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

. KERMODE RESOURCES LTD Statements of Loss and Comprehensive Loss For the three and six months ended April 30 (Expressed in Canadian Dollars)

		Six Month Ended April 30	Three Month Ended April 30
	2023	2022	2023	2022
Operating expenses
Management fees (Note 6)	$12,000	$4,000	$6,000	$4,000
Office and sundry	3,115	5,870	1,818	5,291
Professional fees	12,836	21,642	7,836	6,383
Property investigation(Note 7)	63,145	29,363	43,989	2,034
Share-based compensation (Note 8)	18,461	-	(53,409)	-
Transfer agent and filing fees	30,343	19,503	10,363	18,713
Write down of mineral property	-	78,196	-	78,196
Loss and comprehensive loss for the period	139,900	158,574	16,597	114,617
Loss and comprehensive loss for the period	(139,900)	(158,574)	(16,597)	(114,617)
Basic and diluted loss per share	(0.00)	(0.00)	(0.00)	(0.00)
Outstanding, basic and diluted Weighted averagenumber of common shares	145,155,795	102,338,246	136,761,004	108,221,480

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

KERMODE RESOURCES LTD. Statements of Changes in Shareholders' Equity (Deficiency) (Expressed in Canadian Dollars) For the six months ended April 30, 2023 and 2022

	Number of Shares	Share Capital	Contributed Surplus	Accumulated Deficit	Total
Balance, on October 31, 2021	90,497,373	$9,434,521	$102,255	$(9,728,506)	$(191,730)
Private Placement	9,652,600	241,315	-	-	241,315
Shares issued for debt	8,980,197	137,238	-	-	137,238
Share issued for Property	1,500,000	30,000	-	-	30,000
Share issue costs-cash	-	(6,054)	-	-	(6,054)
Loss for the period	-	-		(158,574)	(158,574)
Balance, April 30, 2022	110,630,170	9,837,020	102,255	(9,887,080)	52,195
Private Placement	-	-	-	-	-
Shares issued for debt	-	132,168	-	-	132,168
Share issued for Property	9,000,000	135,000	-	-	135,000
Share issue costs-cash	-	-	-	-	-
Share based compensation	-	-	72,634	-	72,634
Stock options cancelled	-	-	(39,712)	39,712	-
Broker warrants	-	(3,599)	3,599	-	-
Loss and comprehensive loss	-	-	-	(391,647)	(391,647)
Balance, October 31, 2022	119,630,170	10,100,589	138,776	(10,239,015)	350
Private Placement
Shares issued for services	5,840,055	87,600			58,543
Share issued for Property	22,000,000	330,000			359,057
Share based compensation			18,462		18,462
Loss for the period				(139,900)	(135,900)
Balance, April 30, 2023	147,470,225	10,518,189	157,238	(10,378,915)	296,512

The accompanying notes are an integral part of these financialstatements

KERMODE RESOURCES LTD. Statements of Cash Flows (Expressed in Canadian Dollars) For the six months ended April 30, 2023 and2022

	2023	2022
Operating Activities
Loss and comprehensive loss for the year	$(139,900)	$(158,574)
Items not affecting cash:
Shares issued for services(Note 7)	60,961	137,238
Shares issued for mineral property	-	30,000
Share-based compensation	18,462	-
Change innon-cash working capital items
Receivables	(14,511)	3,563
Prepaid expenses	22,839	39,143
Accounts payable and accrued liabilities	49,703	(168,892)
Net cash used in operating activities	(2,446)	(117,522)
Financing activities
Issuance of common shares, net of issue costs	-	235,261
Net cash provided by financing activities	-	235,261
Investing activities
Exploration and evaluation assets	(25,257)	6,195
Net cash used in investing activities	-	6,195
Cash, beginning of the year	30,041	93,664
Cash, end of the period	2,338	217,598
Change in cash for the period	(27,703)	123,934

Supplemental schedule of non-cash transactions:

Shares issued for mineral property acquisition (Note 7)	330,000	30,000
Shares issued for services(Note 7)	87,600	137,238
Exploration and evaluation expenditures included in
accounts payable and accrued liabilities	20,424	24,000
Due to related partiesaccrued in prepaid	-	42,671

The accompanying notes are an integral part of these financialstatements.

1. NATURE OF BUSINESS AND GOING CONCERN

Kermode Resources Ltd. ("Kermode" or the "Company") was incorporated under the laws of the Province of Alberta and was subsequently continued into BritishColumbia.

The Company is primarily engaged in the business of acquiring, exploring, and transacting in mineral exploration properties located in Canada and the USA. There has been no determination whether properties held contain economically recoverable mineralresources.

The Company's shares are listed on the TSX Venture Exchange ("TSX-V"). The Company's registered and records office is 1 – 505 Fisgard Street, Victoria, British Columbia, Canada.

These financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") with the assumption that the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company has incurred ongoing losses. A number of alternatives including, but not limited to completing a financing, are being evaluated with the objective of funding ongoing activities and obtaining additional working capital. The continuing operations of the Company are dependent upon its ability to continue to raise adequate financing and to commence profitable operations in the future and repay its liabilities arising from normal business operations as they become due. These material uncertainties may cast significant doubt about the Company's ability to continue as a going concern.

In March 2020 the World Health Organization declared corona virus 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 effects on the Company's business or ability to raise funds.

The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

2. SIGNIFICANT ACCOUNTING POLICIES Statement of Compliance

These financial statements of the Company have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") and interpretations of the IFRS Interpretations Committee ("IFRIC").The accounting policies set out below have been applied consistently to all periods presented in these financial statements.

Basis of presentation

KERMODE RESOURCES LTD. Notes to the Financial Statements (Expressed in Canadian Dollars) As at April 30, 2023 and 2022

These condensed interim financial statements have been prepared in accordance with International Accounting Standard 34, Interim Financial Reporting ("IAS 34") as issued by the International Accounting Standards Board ("IASB"). Accordingly, certain information and footnote disclosure normally included in annual financial statements prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the IASB, have been omitted or condensed.

The condensed interim financial statements of the Company have been prepared on a historical cost basis. In addition, these condensed interim financial statements have been prepared using the accrual basis of accounting. Historical cost is generally based on the fair value of the consideration given in exchange for assets. The condensed interim consolidated financial statements have been prepared on a going concern basis and are presented in Canadian dollars, which is the Company's functional currency.

The condensed interim financial statements should be read in conjunction with the most recently filed annual financial statements of Kermode, which includes information necessary or useful to understanding the Company's financial statement presentation. In particular, the Company's significant accounting policies were presented in Note 2 to the consolidated financial statements for the year ended October 31, 2022 and have been consistently applied in the preparation of these condensed interim consolidated financial statements except as described herein.

The operating results for the six months ended April 30, 2023, are not necessarily indicative of results that may be expected for the full year ended October 31, 2023, due to variation in property expenses and other factors.

2. ADVANCES PAYABLE

During the year ended October 31, 2021, the Company advanced funds to/from a management company, owned by a spouse of a former director. The management company incurred administration expenditures and settled certain exploration expenditures on behalf of the Company. The balance payable as at April 30, 2023 of $29,808 (October 31, 2022 - $29,808) is due to a company with common former directors and is non-interest bearing, unsecured with no specified terms ofrepayment.

3. LOSS (GAIN) ON SETTLEMENT OF DEBT

During the year ended October 31, 2022, the Company issued 8,980,197 common shares valued at $269,406 in settlement of $137,239 in debts resulting in a loss on settlement of $132,167. During the year ended October 31, 2021, the Company settled debt of $65,399 for $nil proceeds resulting in the gain on settlement of debt of $65,399.

Notes to the Financial Statements (Expressed in Canadian Dollars) As at April 30, 2023 and 2022

4. EXPLORATION AND EVALUATION ASSETS

	Caycuse		Eastgate		Copper /Jonathan'sPond	Grey	LittleCopper	Bay		LoupCreek	Lucky	Strike		StarofTheWest		VidetteLake	Total
Balance, October 31, 2021	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$68,195		$ 94,225
Acquisition Costs		-	6,030			-		-		-		-		-		9,000	15,030
Prospecting		-	20,000			-		-		-		-		-	59,195		79,195
Balance, January 31, 2022	$	-	$ 26,030		$	-	$	-	$	-	$	-	$	-		$	$
Acquisition Costs		-		-		-	42,000			-	135,000			-	10,000		187,000
Prospecting		-		-		-		-		-	19,517		12,117		10,000		41,634
Staking		-		-		-		-		-		3,576		5,830		-	9,406
Fees & licenses		-	2,801			-		-		-		-		-		-	2,801
Write down		-	(28,831)			-		-		-		-		-	(88,195)		(117,026)
Balance, October 31, 2022	$	-	$	-	$	-	$42,000		$	-	$158,093		$17,947		$	-	$ 218,040
Acquisition Costs	225,000			-	105,000			-		-		-		-		-	330,000
Prospecting		5,558		-		-		-		8,096		5,851	32,282			-	51,897
Balance, April 30, 2023	$230,668		$	-	$105,000		$42,000		$8,096		$163,944		$50,229		$	-	$599,937

Title to mineral properties

Title to mineral properties involves certain inherent risks due to the difficulties of determining the validity of certain claims as well as the potential for problems arising from the frequently ambiguous conveyancing history characteristic of many mineral properties. The Company has investigated title to all of its mineral properties and, to the best of its knowledge, title to all of its properties are in good standing.

The Company has not yet determined if the exploration and evaluation assets contain economic ore recoveries.

Vidette Lake Gold Project property, British Columbia

On May 23, 2020, the Company entered into an option agreement with Strata GeoData Services Ltd. to acquire a 100% interest in the Vidette Lake gold project in BritishColumbia.

During the year ending October 31, 2021, the Company paid $5,000 in cash; issued 100,000 common shares valued at $4,000, and incurred $59,195 of explorationexpenditures.

During the year ended October 31, 2022, the Company paid $10,000 incash.

To exercise the option, the Company was required to pay an additional $20,000 in cash, issue an additional 400,000 common shares of the Company, and expend an additional of $165,000 in exploration over the next 2 years.

5. EXPLORATION AND EVALUATION ASSETS – continued

During the year ended October 31, 2022, the Company decided not to proceed with the option agreement, consequently the costs of $88,195 were written off tooperations.

Eastgate Property, Nevada USA

The Company holds a 15% interest in the Eastgate Gold Property, which is comprised of mineral claims located northeast of the Rawhide Mine, and east of Fallon in Churchill, County,Nevada.

On April 3, 2012, the Company entered into a mineral property option and joint venture agreement with Blue Ridge Gold LLC. On January 3, 2017, the Company elected not to acquire any additional interest in the property and provided notice to Blue Ridge Gold LLC that the Company required a joint venture be formed between the parties.

Due to challenges and continued delays in coordinating exploration, the Company wrote off the costs of $28,831 in the year ended October 31, 2022.

Little Bay Copper, Newfoundland

On April 11, 2022, the Company entered into an option agreement with Grassroots Prospecting and Prospect Generation Inc. to acquire a 100% interest in the Little Bay Copper project in Newfoundland.

Pursuant to the option agreement, the Company issued 1,500,000 common shares valued at $30,000 and paid cash of $12,000 during the year ended October 31, 2022. To exercise the option, the Company must pay an additional $250,000 within 48 months of closing, and issue common shares and incur exploration expenditures as follows:

Date	Number of commonshares to be issued	Explorationexpenditures
12 months following closing	3,000,000	$ 100,000
24 months following closing	6,000,000	250,000
36 months following closing	7,500,000	400,000
48 months following closing	15,000,000	3,500,000
	31,500,000	$4,250,000

On exercise of the option, there will be a 2% net smelter returns royalty with a buy-back of 1% for $2,000,000.

Lucky Strike, British Columbia

On July 20, 2022, the Company entered into an option agreement to acquire a 100% interest in the Lucky Strike Copper project in British Columbia.

Pursuant to the option agreement, the Company issued 9,000,000 common shares valued at $135,000. To exercise the option, the Company must issue an additional 9,000,000 common shares within 12 months following closing and 9,000,000 common shares within 24 months following closing.

5. EXPLORATION AND EVALUATION ASSETS – continued

On exercise of the option, there will be a 2% net smelter return royalty payable to the vendor group, where each one percent can be bought down for $1,000,000.

Star of the West, British Columbia

On October 28, 2022, the Company entered into an option agreement to acquire a 100% interest in the Star of the West project in British Columbia. To exercise the option, the Company must register the following:

• i) a 2.5% net smelter return royalty with a total buy-down of $5,000,000 where each 0.5% can be purchased from the vendors for $1,000,000 and;
• ii) a 30% sales participation n right of the gross proceeds of any future transaction where the Company sells the property in the next ten years.

The option agreement does not require any payment of cash common shares or work commitments by the Company.

Caycuse Copper, British Columbia

On December 12, 2022 the Company entered into an option agreement to acquire a 100% interest in the Caycuse Copper project in BC with initial payments of 15,000,000 shares to the vendor group. The project has no work commitments and no cash payments. To exercise the option, the Company must register the following:

• i) a 1% net smelter return royalty with a total buy-down of $1,000,000 where 1% can be bought down for $1,000,000 entirely or in part and;
• ii) a 10% sales participation right of the gross proceeds of any future transaction where the Company sells the property in the next ten years.

Loup Creek, British Columbia

On December 12, 2022 the Company entered into an option agreement to acquire a 100% interest in the Loup Creek project in BC. The project has no work commitments and no cash payments. To exercise the option, the Company must register the following:

• i) a 2% net smelter return royalty with a total buy-down of $2,000,000 and;
• ii) a 20% sales participation right of the gross proceeds of any future transaction where the Company sells the property in the next ten years.

Grey Copper / Jonathan's Creek, Newfoundland

On December 13, 2022 the Company entered into an option agreement to acquire a 100% interest in the Loup Creek project in BC. The project has no work commitments and no cash payments. To exercise the option, the Company must register the following:

i) a 2% net smelter return royalty where 1% can be bought down for $1,000,000 entirely or in part

6. RELATED PARTY TRANSACTIONS AND BALANCES

The Company had the following transactions in the normal course of operations with related parties:

	April 30, 2023
Director fees	$	-	$	-
Management fee (i)		12,000		4,000

i) The Company paid or accrued $12,000 (2022 - $4,000) in management fees to the CFO of the Company. Management fees were paid to the holding company of the CFO, Nadon Professional Corporation.

Key management personnel of the Company are Directors, Chief Executive Officer and the Chief Financial Officer.

Accounts payable and accrued liabilities includes $136,737 (2022 - $103,627) due to current and former officers and directors and a company controlled by a current officer. These amounts are unsecured, noninterest bearing and have no fixed terms ofrepayment.

7. SHARE CAPITAL

Authorized share capital

As at April 30, 2023, the authorized share capital of the Company is an unlimited number of common shares without par value. All issued shares, consisting only of common shares, are fully paid.

Issued share capital

As at April 30, 2023, the Company had 147,470,225 common shares issued and outstanding. As at April 30, 2022, the Company had 110,630,170 common shares issued and outstanding.

Share issuances

For the six months ended April 30, 2023, the Company completed the following transactions:

• (i) On December 9, 2022, the Company issued 15,000,000 common shares valued at $225,000 pursuant to the option to acquire the Caycuse property (Note 4).
• (ii) On December 9, 2022, the Company issued 7,000,000 common shares valued at $105,000 pursuant to the option to acquire the Grey Copper / Jonathan's Pond properties (Note 4).
• (iii) On February, 2023, the Company issued 379,645 shares to 911 Exploration Corp. to pay for expenses incurred in January 2023 totaling $5,694.68; and the Company also issued 1,333,333 shares to Planet X Exploration Services Ltd to pay for expenses incurred in January 2023 totaling $20,000.00.
• (iv) On March 1, 2023, the Company issued 777,058 shares to 911 Exploration Corp. to pay for expenses incurred in February 2023 totaling $11,655.88.
• (v) On March 03, 2023, the Company issued 1,154,216 shares to Planet X Exploration Services Ltd

Notes to the Financial Statements (Expressed in Canadian Dollars) As at April 30, 2023 and 2022

to pay for expenses incurred in February totaling $17,313.25.

• (vi) On April 4, 2023, the Company issued 862,470 shares to 911 Exploration Corp. to pay for expenses incurred in February 2023 totaling $12,937.05.
• (vii) On April 11, 2023, the Company issued 1,333,333 shares to Planet X Exploration Services Ltd to pay for expenses incurred in February totaling $20,000.00.

In total for the six months ended April 30, 2023, the Company issued 22,000,000 shares with the value of $330,000 for the acquisition of mineral properties, and issued 5,840,055 shares for the services with the value of $87,600.

Regarding the shares for services in the six months ended April 30, 2023, 4,064,100 shares issued with the value of $60,961 was for the mineral property investigation and the sale tax, and 1,775,955 shares issued with the value of $26,639 was for the exploration and evaluation of the mineral properties, and capitalized in the Exploration and evaluation of assets.

8. SHARE-BASED PAYMENTS

The Company adopted an equity incentive plan to govern the grant, administration and exercise of Security Based Compensation which may be granted to eligible Participants. The maximum number of Shares issuable under this Plan shall not exceed the aggregate of (i) for Options, 10% of the number of Issued Shares of the Corporation outstanding as of the date of each grant hereunder, inclusive of all Shares then reserved for issuance pursuant to previously granted stock options, and (ii) for all other Awards, 10% of the number of Issued Shares of the Corporation outstanding as of the date where the plan was adopted. The plan was adopted September 19th, 2022 and allows for 11,963,017 Awards other than stock options to be issued. Under the plan, the exercise price of each option shall be equal or greater than the closing market price of the Company's stock on the day prior to the date of grant. These options are subject to approval from the TSX-V, can be granted for a maximum term of 10 years, and vest at the discretion of the Board of Directors.

Awards that may be granted under this Plan include Options; Performance Share Units; Stock Appreciation Rights and Stock Purchase Rights.

a) Options

The following table summarizes the continuity of the Company's stockoptions:

		Weighted Average
	Number of Options	Exercise Price
Balance October 31, 2021	5,000,000	$0.05
Exercised	-	-
Granted	-	-
Balance, January 31, 2022	5,000,000	$0.05
Exercised	-	-
Cancelled	(2,000,000)	0.05
Granted	3,000,000	0.05
Balance October 31, 2022	6,000,000	0.05
Exercised	-	-
Cancelled	(2,000,000)	0.05
Granted	1,196,301	0.05
Balance, April 30, 2023	5,196,301	0.05

Notes to the Financial Statements (Expressed in Canadian Dollars) As at April 30, 2023 and 2022

8. SHARE-BASED PAYMENTS – continued

At April 30, 2023, the Company had outstanding stock options, enabling holders to acquire common shares as follows:

Number ofoptions outstanding	Number ofoptions exercisable	Exerciseprice	Expirydate
1,000,000	1,000,000	$0.05	September 24, 2026
1,000,000	1,000,000	0.05	February 15, 2027
1,000,000	1,000,000	0.05	April 5, 2027
1,000,000	1,000,000	0.05	August 26, 2027
1,196,301	1,196,301	0.05	November 1, 2027

The weighted average contractual life of the options outstanding at April 20, 2023 is 3.79 years (October 31, 2022 – 4.65 years).

The total number of options exercisable as at April 30, 2023 is 5,196,301 (October 31, 2022 – 6,000,000).

The fair value of the options granted during the six months ended April 30, 2023 and 2022 was determined using the Black-Scholes option pricing model using the followinginputs:

Grant date	Risk-freeinterest rate	ExpectedLife	Volatilityfactor	Dividendyield
September 24, 2021	0.25%	5 years	250%	0%
February 15, 2022	0.25%	5 years	195%	0%
April 5, 2022	0.25%	5 years	198%	0%
August 26, 2022	0.25%	5 years	198%	0%
November 1, 2022	0.25%	5 years	198%	0%

b) Performance Share Units

The following table summarizes the continuity of the Company's performance share units (**"PSU"**s):

	Number of PSUs
Balance October 31, 2021	-
Exercised	-
Granted	-
Balance, April 30, 2022	-
Exercised	-
Granted	-
Balance, October 31, 2022	-
Exercised	-
Granted	7,000,000
Cancelled	(2,000,000)
Balance, April 30, 2023	5,000,000

9. WARRANTS

The following common share purchase warrants entitle the holders thereof the right to purchase one common share for each common share purchase warrant. Warrant transactions and the number of share purchase warrants outstanding as at January 31, 2023 are summarized asfollows:

	Exercise Price	Expiry	Number Outstandingas at April 30, 2023
Private Placement	$0.05	February 09, 2024	9,652,600
Finder's Warrants	$0.05	February 09, 2024	160,000

There were no warrants outstanding as at April 30, 2022.

10. FINANCIAL AND CAPITAL RISK MANAGEMENT

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 orliabilities;

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 marketdata.

The Company has made the following designations of its financialinstruments:

•	Cash	Amortized cost
•	Receivables	Amortized cost
•	Advances payable	Amortized cost
•	Accounts payable and accrued liabilities	Amortized cost

The fair value of the Company's advances payable and accounts payable and accrued liabilities approximate their carrying values due to the short-term nature of theseinstruments.

The Company is exposed to varying degrees to a variety of financial instrument related risks:

Credit risk

The Company's credit risk is primarily attributable to cash. The Company has no significant concentration of credit risk arising from operations. Management believes that the credit risk concentration with respect to cash, and financial instruments included in amounts receivable isremote.

10. FINANCIAL AND CAPITAL RISK MANAGEMENT – continued

Liquidity risk

The Company's approach to managing liquidity risk is addressed in Note 1. As at April 30, 2023, the Company had a cash balance of $2,338 available to settle current liabilities of $322,495. All of the Company's financial liabilities are subject to normal tradeterms.

Market risk

Market risk is the risk of loss that may arise from changes in market factors such as interest rates, foreign exchange rates, and commodity and equity prices. These fluctuations may be significant.

a) Interest rate risk

The Company has cash balances held with financial institutions. The Company's current policy is to invest excess cash in short-term treasury bills issued by the Government of Canada and its banking institutions. The Company periodically monitors the investments it makes and is satisfied with the credit ratings of its banks.

b) Foreign currency risk

The Company does not have any balances denominated in a foreign currency and believes it has no significant foreign currency risk.

c) Price risk

The Company is exposed to price risk with respect to commodity prices. Changes in commodity prices will impact the economics of development of the Company's mineral properties. The Company closely monitors commodity prices to determine the appropriate course of action to be taken.

Capital management

The Company manages its capital structure and makes adjustments to it, based on the funds available to the Company, in order to support the acquisition and exploration of mineral properties. The Board of Directors does not establish quantitative return on capital criteria for management, but rather relies on the expertise of the Company's management to sustain future development of the business. The Company defines capital that it manages as shareholders' equity (deficiency).

The properties in which the Company currently has an interest are in the exploration stage; as such the Company has historically relied on the equity markets to fund its activities. Current financial markets are very difficult and there is no certainty with respect to the Company's ability to raise capital. The Company will continue to assess new properties and seek to acquire an interest in additional properties if it feels there is sufficient geologic or economic potential and if it has adequate financial resources to do so. Management reviews its capital management approach on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable.

The Company currently is not subject to externally imposed capital requirements. There were no changes in the Company's approach to capital management.

11. SEGMENTED INFORMATION

The Company operates in one segment, being the acquisition, exploration and evaluation of mineral properties in Canada and the United States (Note 5).

April 30, 2023	Canada	United States	Total
Mineral properties	$599,937	$-	$599,937
April 30, 2022
Mineral properties	$42,000	$26,030	$68,030

12. SUBSEQUENT EVENTS

• a) On May 02, 2023, the Company issued 1,998,510 shares to pay the $19,985.10 incurred from the services provided by 911 Exploration Corp. in April 2023.
• b) On May 08, 2023, the Company closed the financing with gross proceeds of $25,730 under the nonbrokered private placement previously announced on March 10, 2023 ("Placement"). Kermode Resources Ltd. ("Kermode") issued 2,573,000 units of the Company ("Unit"), at a private of $0.01 per Unit. Each Unit consists of one common share of the Company and one common share warrant ("Warrant"); each Warrant is exercisable to acquire one common share of the Company at a price of $0.05 per Warrant Share for a period of 36 months to May 09, 2026. $800 was paid and 80,000 Warrants were issued as the Finder's fee for this Placement. Tek Manhas, an independent director of Kermode, is the sole subscribe and constitutes a related party transaction. All the securities issued in connection with this Placement are subject to a statutory hold period expiring four months and one day from issuance.
• c) On May 09, 2023, the Company announced a new Share for Services agreement ("Agreement"). The Company intends to issue commence share in the capital of Kermode to 911 Exploration Corp. ("Consultant") to pay for certain costs associated with minerals exploration activities ("Services"), including prospecting at the CAYCUSE, LUCKY STRIKE, STAR OF THE WEST, and other projects in British Columbia. The Consultant is arm's length to Kermode and its affiliates.

The deemed value of Shares issued under this agreement will be the closing price of the Shares on the TSX Venture Exchange on the first trading day after the month wherein the services were provided. The deemed value will not be less than the Discounted Market Price (subject to a minimum price of $0.01). Any shares issued at a deemed price less than $0.05 will be subject to the Exchange Hold Period. In any case, the deemed value shall not be determined and any such securities shall not be issued until after the services are provided to the Issuer.

d) On May 26, 2023, the Company announced to acquire the option on the KHRYSOS project and SILVER BELL project from Aurum VENA MINERAL RESOURCES CORP. in British Columbia. The KHRYSOS Project comprises BC mineral title number #1088992, 1095266, 1095267, and 1095268, which is approximately 750 hectares. The SILVER BELL project comprises BC mineral title numbers #1092822, 1089287, 1092823, and 1068145, which is approximately 500 hectares. Below is a summary of the terms of the acquisition.

All shares issued pursuant to the Option Agreement will be subject resale restrictions under applicable securities legislation and rules of the TSX Venture Exchange and the following schedule: of the 15,000,000 shares to be paid on signing, a total of 5,000,000 shares shall be free trading after four (4) months; a total of 5,000,000 shares shall be free trading after eight (8) months; and a total of 5,000,000 shares shall be free trading after twelve (12) months, such that one-third of each total share payment

Notes to the Financial Statements (Expressed in Canadian Dollars) As at April 30, 2023 and 2022

shall be free trading after each four-month increment. The price of shares issued shall be $0.01.

Timing	Cash	Securities	Exploration or OtherWork Commitments
Signing	$-	15,000,000	$-
Year 1	-	-	-
Year 2	-	-	-
Year 3	-	-	-
Year 4	-	-	-
Year 5	-	15,000,000	-

In addition, the deal shall have the following features:

• No royalty.
• 10% "Sales Participation Right" for any transaction in the next ten years.
• An area of interest including any contiguous claims within 2km distance.
• No spending obligations or work commitments.
• e) On May 31, 2023, the Company announced that Ms. Ashley Nanon resigned as CFO of Kermode Resources Ltd. and Mr. Andrew Low was appointed as the new CFO of the Company.
• f) On June 01, 2023, the Company announced a new Share for Services agreement, subject to Exchange approval. The Company intends to issue common shares in the capital of Kermode to Aurum Vena Mineral Resources Corp. ("Consultant") to pay for certain costs associated with minerals exploration activities ("Services") at the KHRYSOS and SILVER BELL projects in British Columbia. The Consultants are arm's length to Kermode and its affiliates. The Consultant shall be eligible to receive a maximum amount of compensation under this agreement of $100,000 per month or $1,200,000 for the full Term from June 1, 2023 to June 1, 2024. The actual amount of compensation in any month shall depend on the Services provided in that month as expressly agreed in advance with the Company.
• g) On June 01, 2023, the Company announced the share for services agreement with Mr. Peter Bell who is the Chief Executive Officer of the Company. The Company intends to issue common shares in the capital of Kermode to Peter Bell ("Officer") to pay for costs associated with providing services as a Chief Executive Officer. The Officer is non arm's length to Kermode and its affiliates. The Consultant shall be eligible to receive a maximum amount of compensation under this agreement of $5,000 per month or $60,000 for the full Term from June 1, 2023 to June 1, 2024. The actual amount of compensation in any month shall depend on the Services provided in that month as expressly agreed in advance with the Company.
• h) On June 01, 2023, the Company announced the share for services agreement with Andrew Low who is the Chief Financial Officer of the Company. The Company intends to issue common shares in the capital of Kermode to Andrew Low ("Officer") to pay for costs associated with providing services as a Chief Executive Officer. The Officer is non arm's length to Kermode and its affiliates. The Consultant shall be eligible to receive a maximum amount of compensation under this agreement of $5,000 per month or $60,000 for the full Term from June 1, 2023 to June 1, 2024. The actual amount of compensation in any month shall depend on the Services provided in that month as expressly agreed in advance with the Company.

Notes to the Financial Statements (Expressed in Canadian Dollars) As at April 30, 2023 and 2022

• i) On June 05, 2023, the Company issued 2,716,306 shares to pay the $27,163.06 incurred from the services provided by 911 Exploration Corp. in May 2023.
• j) On June 06, 2023, the Company grants 6,000,000 stock options to directors and an officer of the Company, exercisable at a price of $0.05 per share for a period of five years. The Company has also canceled 3,000,000 stock options to former directors and officers.
• k) June 8, 2023, the Company entered a shares-for-debt transaction. Pending exchange approval. Pursuant to the Debt Settlement, Kermode will issue up to 6,485,569 common shares of the Company at a price of $0.01 per share to certain creditors of the Company in full satisfaction of the debt owed. The creditors include one prospector who is arm's length from Kermode who was owed $18,126.91 for exploration services incurred prior to the tenure of current management. The creditors also include non-arm's length parties: the new CFO Andrew Low who will receive an inducement fee of $17,500 and the CEO Peter Bell who will receive repayment for trade payables, such as TSXV exchange fees, totaling $29,228.78. The Debt Settlement is subject to TSXV acceptance. All shares issued pursuant to the Debt Settlement will be subject to resale restrictions under applicable securities legislation and the rules of the TSXV.
• l) On June 09, 2023, the Company announced a non-brokered private placement ("Private Placement"). The Private Placement was closed on June 13, 2023. The gross proceeds are $50,000. All securities issued in connection with the Private Placement are subject to a statutory hold period expiring four months and one day from issuance. Under the financing, Kermode has issued 5,000,000 shares of the Company (the "Shares") at a price of $0.01 per Share. There are no warrants. The proceeds will be used for general working capital purposes. The proceeds of the financing will not primarily be used to pay management fees or for investor relations activities, and there will be no payments to related parties of the Company. Detailed use of proceeds includes $25,000 for corporate costs and $25,000 for exploration spending. No finder's fees were paid.
• m) On June 22, 2023, the Company announced to option the EASTGATE BC project as an exempt transaction within TSX Venture Exchange policy. The total area of the project is approximately 42 hectares of mineral claims in BC. The EASTGATE BC project is comprised of one claim number #1104223. To earn 100% ownership of the project, Kermode must assign the vendors a Net Smelter Return royalty and a Sales Participation Right as described below. The Net Smelter Return royalty is set at 5% five percent with a buy-down of $5M five million dollars to reduce the royalty to zero. The Sales Participation Right is set at 25% twenty five percent for a period of 10 ten years, where the right is calculated as a percentage of the gross proceeds from any transaction whereby Kermode sells any interest in the project. There is no exploration spending commitments, share payments, or cash payments.

Previously, on June 20, 2023, the Company signed a non-binding letter of intent to option the EASTGAGE BC Project.

• n) On June 22, 2023, the Company announced to option the 911 KNOCKOUT project on Vancouver Island as an exempt transaction within TSX Venture Exchange policy. The KNOCKOUT PROJECT is comprised of the following separate projects with total size of all three projects is approximately 935 hectares. The projects are as follows:
  • The Maidan Project covers 341 hectares with claim numbers 1101659, 1101723, 1101724.
  • The Robertson River Copper Project covers 340 hectares with claim number 1101059.
  • The Comego Project covers 254.69 hectares with claim number 1102760.

There are no cash payments, share payments, nor work commitments. To earn 100% ownership of the project, Kermode must make the following payments:

• Two percent 2% royalty with two million dollar $2M buy-down to eliminate the royalty. The buy-

Notes to the Financial Statements (Expressed in Canadian Dollars) As at April 30, 2023 and 2022

down shall apply once for all the projects in the 911 KNOCKOUT PROJECT collections.

• Twenty percent 20% "Sale Participation Right" for ten years.
• "Area of interest" clause whereby the terms of this deal shall apply to any contiguous property that shall be acquired by either party within a 5km radius at the discretion of Kermode.
• "Sole discretion" clause where Kermode can exercise the purchase option for any or all" of the claims included in the 911 KNOCKOUT project at any time at the sole discretion of Kermode.
• o) On June 22, 2023, the Company announced to option the SLESSE CREEK project as per the terms announced May 10, 2023. The Project land position covers 1,567 hectares. The claim numbers are 1103855, 1104184, 1102836, 1102889, 1103856, 1104185, 1102758, 1101588, 1101879, 1102837, and 1101878.

Below is a summary of the terms to purchase the option.

	Cash	Securities	ExplorationCommitments
Exchange Approval	$ -	4,000,000 shares	$ -
Year 1	$ -	4,000,000 shares	$ -
Year 2	$ -	9,000,000 shares	$ -

There are no cash payments and no work commitments. There is a 1% royalty with a $1M buy-down to eliminate the royalty and a 10% "Sale Participation Right" for ten years. There shall be an "area of interest" clause whereby the terms of this deal shall apply to any contiguous property that shall be acquired by either party or any property acquired within a 5km radius. All shares issued pursuant to the Option Agreement will be subject to resale restrictions under applicable securities legislation and the rules of the TSX Venture Exchange. The price of shares issued shall be $0.01.

Previously, on May 10, 2023, the Company announced that it revised the non-binding letter of intent ("LOI") to acquire the SLESSK CREEK project

p) On June 23, 2023, the Company announced to grant 2,000,000 performance share units ("Units") to a director and officer of the Company. The Units vest after one year and have a term of three years to expiry from the effective date which is June 23, 2023. The Units have been granted in accordance with the Company's security-based compensation plan. The Units entitle the consultant to receive payment in cash or shares of an amount equal to the closing market price on the day immediately prior to the last day of the applicable Performance Period multiplied by the applicable multiplier, to be determined on the last day of the Performance Period. The timing of the Performance Period for any Units that may be exercised is at the sole discretion of the Board of Directors. After the Units have vested, some may be exercised on some dates and others on different dates at the sole discretion of the Board to allow for multiple Performance Periods to exercise different tranches of Units. The Board is not obligated to exercise any number of the Units at any time unless it so decides. At the sole discretion of the Board of Directors, the form of payment for any Units shall be determined upon exercise. The amount of shares are subject to certain restrictions; for instance, the consultant shall not receive more than 2% of the shares of Kermode in any 12 month period as per the plan and TSXV policy. The multiplier shall be set at the sole discretion of the Board of Directors at the time of exercise with a maximum value of ten-toone (10:1).