Lipari Mining Ltd. — Annual Report 2021

Apr 1, 2021

GOLDEN SHARE RESOURCES COPRORATION

Audited Financial Report

Year ended December 31, 2020 and 2019 (Expressed in Canadian dollars)

GOLDEN SHARE RESOURCES COPRORATION

FINANCIAL REPORT

INDEPENDENT AUDITOR’S REPORT	3-4
FINANCIAL STATEMENTS
Audited consolidated statement of financial position	5
Audited consolidated statement of Income and comprehensive Income	6
Audited consolidated statement of changes in equity (deficit)	7
Audited consolidated statement of cash flows	8
Notes to Audited consolidated financial statements	9-30

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INDEPENDENT AUDITOR’S REPORT

To the Shareholders of

Golden Shares Resources Corporation

Opinion

We have audited the accompanying consolidated financial statements of Golden Share Resources Corporation (the "Company"), which comprise the consolidated statements of financial position as at December 31, 2020, and the consolidated statements of comprehensive income, consolidated statements of changes in equity (deficit) and cash flows for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as at December 31, 2020, and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards.

Material Uncertainty Related to Going Concern

We draw attention to Note 2 in the consolidated financial statements, which describe the events and conditions that indicate the existence of material uncertainties that may cast significant doubt about the Company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.

Basis for Opinion

We conducted our audits in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our auditor’s report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audits of the financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Other Matter

The consolidated financial statements of the company as at and for the year ended December 31, 2019 were audited by another auditor who expressed an unmodified opinion with material uncertainty regarding going concern on those financial statements on April 28, 2020.

Other Information

Management is responsible for the other information. The other information comprises Management’s Discussion and Analysis.

Our opinion on the financial statements does not cover the other information and we do not and will not express any form of assurance conclusion thereon. In connection with our audits of the financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audits, or otherwise appears to be materially misstated.

We obtained Management’s Discussion and Analysis prior to the date of this auditor’s report. If, based on the work we have performed on this other information, we conclude that there is a material misstatement of this other information, we are required to report that fact in this auditor’s report. We have nothing to report in this regard.

Responsibilities of Management and Those Charged with Governance for the Financial Statements

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

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

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

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Auditor's Responsibilities for the Audit of the Financial Statements

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

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

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

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

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

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

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

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

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

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

The engagement partner on the audit resulting in this independent auditor’s report is Julia Zhou.

Kreston GTA LLP

Licensed Public Accountants April 1, 2021 Markham, Canada

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GOLDEN SHARE RESOURCES CORPORATION

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION	CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As of December 31, 2020 and 2019 (in Canadian dollars)
Notes 2020 2019
ASSETS Current assets Cash HST receivable Other financial assets 9 Total current assets Total assets LIABILITIES Current liabilities Accounts payable and accrued liabilities 5 Loans payable 6 Total current liabilities Non-current liabilities Long term debt 7 Total non-current liabilities Total liabilities DEFICIT Share capital 8 Contributed surplus Deficit Total deficit Total liabilities and deficit	$ $ 11,844 433 6,107 5,121 400,000 -
	417,951 5,554
	417,951 5,554
	226,540 543,065 219,733 326,001
	446,273 869,066 33,027 -
	33,027 -
	479,300 869,066 18,096,471 17,927,006 3,335,527 3,246,554 (21,493,347) (22,037,072)
	(61,349) (863,512)
	417,951 5,554

The accompanying notes are an integral part of the consolidated financial statements. Approved on behalf the Board

“Wes Robert” Director “Nick Zeng ” Director

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GOLDEN SHARE RESOURCES CORPORATION

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE Years ended on December 31, 2020 and 2019	INCOME (in Canadian dollars)
Notes	2020 2019
Gain on disposal of exploration assets 9 Gain on spin out the energy storage business Gain on government grant 7 Exploration and evaluation expenditures 9 Administrative expenses 10 Financial expenses 6 Income (loss) before income taxes Income taxes Income tax recovered 13 Net income (loss) Net income (loss) and other comprehensive income (loss) Basic and diluted net earnings (loss) per share Weighted average number of common shares outstanding	$ $ 900,000 - - 1,876,309 28,658 - (35,014) (54,381) (306,454) (419,623) (43,465) (23,817) 543,725 1,378,488 - - - - 543,725 1,378,488 543,725 1,378,488 0.014 0.036 38,917,940 38,621,345

The accompanying notes are an integral part of the consolidated financial statements.

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GOLDEN SHARE RESOURCES CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (DEFICIT)	CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (DEFICIT)	CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (DEFICIT)
Years ended on December 31, 2020 and 2019				(in Canadian dollars)
Notes	Share Capital		Contributed surplus	Deficit Total
Balance on January 1st, 2019 Share-based payments 11 Transactions with owners Net income Balance on December 31, 2019 Balance on January 1st, 2020 Shares issued for settlement of debts 13 Shares issued for options exercised 11 Share-based payments 11 Transactions with owners Net income Balance on December 31, 2020	Number 38,621,345 - - - 38,621,345 38,621,345 715,000 180,000 - 895,000 - 39,516,345	$ 17,927,006 - - - 17,927,006 17,927,006 143,000 26,465 - 169,465 - 18,096,471	$ 3,176,633 69,921 69,921 - 3,246,554 3,246,554 - (8,465) 97,438 88,973 - 3,335,527	$ $ (23,415,560) (2,311,921) - 69,921 - 69,921 1,378,488 1,378,488 (22,037,072) (863,512) (22,037,072) (863,512) - 143,000 - 18,000 - 97,438 - 258,438 543,725 543,725 (21,493,347) (61,349)

The accompanying notes are an integral part of the consolidated financial statements.

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GOLDEN SHARE RESOURCES CORPORATION

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2020 and 2019 (in Canadian dollars)

GOLDEN SHARE RESOURCES CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

Years ended on December 31, 2020 and 2019 Notes	2020 2019 (in Canadian dollars)	2020 2019 (in Canadian dollars)
OPERATING ACTIVITIES Net income (loss) Items not affecting cash Gain on disposal of exploration assets 9 Gain on spin out the energy storage business 12 Gain on government grant 7 Accrued Interst 6 Accretion expense 7 Share-based payments 11 Accounts and other receivable Prepaid expenses Trade and accrued liabilities Cash used in operating activities INVESTING ACTIVITIES Proceed from disposal of mining rights 9 Cash flows from investing activities FINANCING ACTIVITIES Proceeds from Loans payable 6 Repayment of loans 6 Proceeds from long term debt 7 Proceeds from exercise of options 11 Cash flows from financing activities Net change in cash Effects of exchange rate changes on cash Cash, beginning of year Cash, end of year	$ 543,725 (900,000) - (28,658) 41,644 1,685 97,438 (244,166) (986) - (173,525) (418,677) 500,000 500,000 80,000 (230,142) 60,000 18,000 (72,142) 9,181 2,230 433 11,844	$ 1,378,488 - (1,876,309) - - 22,218 69,921 (405,682) 25,730 3,796 134,413
		(241,743)
		-
		-
		283,784 (42,499) - -
		241,285
		(458) - 891
		433

The accompanying notes are an integral part of the consolidated financial statements.

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GOLDEN SHARE RESOURCES CORPORATION

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2020 and 2019 (in Canadian dollars)

NOTE 1. STATUTES OF INCORPORATION AND NATURE OF ACTIVITIES

Golden Share Resources Corporation (hereinafter "Golden Share" or the "Company") is a mineral exploration company focusing on the province of Ontario, Canada, a mineral rich and politically stable jurisdiction. Golden Share is incorporated under the Canada Business Corporations Act. The Company's corporate office and principal place of business is located at 7-145 Riviera Drive, Markham, Ontario, L3R 5J6.The Company is listed on the TSX Venture Exchange (“TSXV”) under the trading symbol “GSH”.

As approved by annual general and special shareholders meeting on December 12, 2018, Golden Share span out its energy storage business into a US-based wholly-owned subsidiary created on June 19, 2018, named as Harmony Energy Technologies Corporation ("Harmony") in January 2019, with the Company retaining its mineral exploration business.

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 effects on the Company’s business or ability to raise funds.

The consolidated financial statements comprise the consolidated financial statements of the Company and have been prepared by management in accordance with International Financial Reporting Standards (“IFRS”).

The consolidated financial statements of the Company and have been prepared by management in accordance with International Financial Reporting Standards ("IFRS"). The consolidated financial statements have been presented in Canadian dollars.

The consolidated financial statements were approved and authorized for issue by the Board of Directors on April 1, 2021 in preparation of their filing.

NOTE 2. GOING CONCERN ASSUMPTION

These consolidated financial statements have been prepared on the basis of the going concern assumption, meaning the Company will be able to realize its assets and discharge its liabilities in the normal course of operations. The carrying amounts of assets, liabilities, revenues and expenses presented in the consolidated financial statements and the classification used in the consolidated statement of financial position have not been adjusted as would be required if the going concern assumption was not appropriate. Those adjustments could be material.

Given that the Company has not yet determined whether its mineral properties contain mineral deposits that are economically recoverable, the Company has not yet generated income nor cash flows from its operations. As at December 31, 2020, the Company has a accumulated deficit of $21,493,347 (accumulated deficit of $22,037,072 as at December 31, 2019) and working capital deficit of $61,349 (working capital deficit of $863,512 as at December 31, 2019) which will not be sufficient to support the Company's needs for cash during the coming year. The Company will require additional funding to be able to advance and retain mining rights interest and to meet ongoing requirements for general operations. These material uncertainties cast significant doubt regarding the Company’s ability to continue as a going concern.

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GOLDEN SHARE RESOURCES CORPORATION

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2020 and 2019 (in Canadian dollars)

NOTE 2. GOING CONCERN ASSUMPTION (CONTINUED)

The Company’s ability to continue support as a going concern is dependent upon its ability to raise additional financing to further explore its mineral properties and continued support of suppliers and creditors. Even if the Company has been successful in the past in doing so, there is no assurance that it will manage to obtain additional financing in the future.

NOTE 3. SUMMARY OF ACCOUNTING POLICIES

New Standards adopted as at January 1, 2019

International Financial Reporting Standards 16, Leases (“IFRS 16”)

The Company adopted IFRS 16, Leases, on January 1, 2019. In accordance with the transition guidance of IFRS 16, the new requirements have been applied retroactively with the cumulative effect of initial application recognised as at January 1, 2019. The Company has applied IFRS 16 using the modified retrospective approach, under which the Company will not restate its comparative figures but will recognize the cumulative effect of adopting IFRS 16 as an adjustment to opening retained earnings.

On adoption of IFRS 16, the Company applied the standard to leases that had previously been classified as "operating leases" in accordance with the principles of IAS 17, leases. The consolidated financial statements were not impacted because the Company's lease is less than 12 months. For the initial application of IFRS 16, the Company used the following practical expedients permitted by the standard:

– Recognition of operating leases with a remaining lease term of less than 12 months as at January 1, 2019 as short-term leases;

– Exclusion of initial direct costs to measure right-of-use assets;

– Use of hindsight to determine the lease term of a lease with renewal options.

Basis of preparation and evaluation of consolidated financial statements

The consolidated financial statements are prepared using the significant accounting policies described in the present note. These methods have been applied consistently to all periods presented in these consolidated financial statements. These consolidated financial statements have been prepared on a historical cost basis. In addition, these consolidated financial statements have been prepared using the accrual basis of accounting, except for cash flow information.

Functional and presentation currency

The consolidated financial statements are presented in Canadian dollars, which is also the functional currency of the Company.

Foreign currency transactions and balances

Foreign currency transactions are translated into the functional currency of the Company using the exchange rates prevailing at the dates of the transactions (spot exchange rate).

Foreign exchange gains and losses resulting from the settlement of such transactions and from the remeasurement of monetary items denominated in foreign currency at year-end exchange rates are recognised in profit or loss.

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GOLDEN SHARE RESOURCES CORPORATION

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2020 and 2019 (in Canadian dollars)

NOTE 3. SUMMARY OF ACCOUNTING POLICIES (CONTINUED)

Financial instruments

The Company recognizes a financial asset or a financial liability when it becomes a party to the contractual provisions of the instrument. Under IFRS 9, such financial assets or financial liabilities are initially recognized at fair value and the subsequent measurement depends on their classification.

Financial assets

The Company classifies its financial assets into three categories, depending on the cash flow characteristics of the assets and the business objective for managing the assets. Financial assets are derecognized when the contractual rights to receive cash flows from the assets have expired or have been transferred and the Company has transferred substantially all the risks and rewards of ownership. The Company's accounting policy for each category is as follows:

Amortized cost - Assets are held within a business model with the objective of collecting their contractual cash flow; and the contractual cash flows consist solely of payments of principal and interest. They are recognized initially at fair value plus directly attributable transaction costs, and subsequently measured at amortized cost less cumulative impairment losses. A gain or loss on a debt investment is recognized in profit and loss when the asset is derecognized or impaired.

Fair value through other comprehensive income (“FVTOCI”) – Assets are held within a business model that includes both hold to collect their contractual cash flow and sell the assets; and the contractual cash flows consist solely of payments of principal and interest. For debt instruments measured at FVTOCI, interest income (calculated using the effective interest rate method), foreign currency gains or losses and impairment gains or losses are recognized directly in profit or loss. The cumulative fair value gains or losses recognized in other comprehensive income (“OCI”) are reclassified to profit or loss when the asset is derecognized. An election may be made to classify an equity investment, that is neither held for trading nor represents contingent consideration recognized by an acquirer in a business combination, as held at FVTOCI. The option to designate an equity instrument at FVTOCI is available at initial recognition and is irrevocable. This designation results in all gains and losses being presented in OCI except dividend income which is recognized in profit or loss.

Fair value through profit and loss (FVTPL) - Assets that do not meet the criteria for amortized cost or FVTOCI are measured at FVTPL. A gain or loss on a financial asset measured at FVTPL that is not part of a hedging relationship is recognized in profit and loss and presented on a net basis in the period in which it arises. IFRS 9 contains an option to designate a financial asset as measured at FVTPL if doing so eliminates or significantly reduces an ‘accounting mismatch’ that would otherwise arise from measuring assets or liabilities or recognizing the gains and losses on them on different bases. The option to designate a financial asset at FVTPL is available at initial recognition and is irrevocable.

Financial assets should be reclassified when and only when an entity changes its business model for managing financial assets. Any such reclassifications are applied prospectively from the date of the reclassification.

Financial liabilities

Under IFRS 9, financial liabilities are primarily classified at amortized cost with limited exceptions. Financial liabilities are derecognized when the obligation specified in the contract is discharged, cancelled or expires. The Company's accounting policy for each category is as follows:

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GOLDEN SHARE RESOURCES CORPORATION

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2020 and 2019 (in Canadian dollars)

NOTE 3. SUMMARY OF ACCOUNTING POLICIES (CONTINUED)

Financial instruments (Continued)

FVTPL - This category comprises derivatives, liabilities acquired or incurred principally for the purpose of selling or repurchasing it in the near term, and certain financial liabilities that were designated at FVTPL from inception. IFRS 9 contains an option to designate a financial liability as measured at FVTPL if doing so eliminates or significantly reduces an ‘accounting mismatch’ that would otherwise arise from measuring assets or liabilities or recognizing the gains and losses on them on different bases. The option to designate a financial liability at FVTPL is available at initial recognition and is irrevocable.

Amortized cost - Financial liabilities are recognized initially at fair value net of directly attributable transaction costs. They are subsequently recognized at amortized cost using effective interest method with interest expense recognized on an effective yield basis.

Financial assets and liabilities are offset and the net amount is presented in the statement of financial position when the Company has a legal right to offset the amounts and it intends to either settle on a net basis or realize the asset and settle the liability simultaneously.

The Company’s classification and measurements of financial assets and liabilities are summarized below:

Financial Instruments	Classification
Cash	Amortized cost
Other financial assets	FVTPL
Accounts and other receivables	Amortized cost
Trade and accrued liabilities	Amortized cost
Loans payable	Amortized cost
Long term debt	Amortized cost

Fair value hierarchy - IFRS 7, Financial instruments: Disclosures, establishes a fair value hierarchy that prioritizes the input to valuation techniques used to measure fair value as follows:

Level 1: Valuation based on quoted prices (unadjusted) in active markets for identical assets or liabilities; and Level 2: Valuation techniques based on inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and Level 3: Valuation techniques using inputs for the asset or liability that are not based on observable market data (unobservable inputs).

Assets are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. During the years ended December 31, 2020 and 2019, there were no transfers of amounts between fair value levels.

Other financial assets are classified as level 2 financial instruments. The Company’s other financial instruments, including cash, accounts and other receivables, trade and accrued liabilities, and loans payable are classified at level 3 financial instruments with fair value approximating their carrying values due to the relatively short-term nature of the instruments. The fair value of long-term debt was measured at the present value of the debt on initial recognition by using the discount rate of 12%.

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GOLDEN SHARE RESOURCES CORPORATION

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2020 and 2019 (in Canadian dollars)

NOTE 3. SUMMARY OF ACCOUNTING POLICIES (CONTINUED)

Financial instruments (Continued)

Allowance for expected credit losses

IFRS 9 provides a simplified approach to measuring expected credit losses using a lifetime expected loss allowance for all trade receivables and contract assets. The credit loss model groups receivables based on similar credit risk characteristics and the number of days past due in order to estimate bad debt expenses. The Company assesses the lifetime expected credit loss related to its sales receivables and re-assesses the provision each reporting period. When measuring the expected credit loss, the Company considers a variety of factors including: evidence of the debtor's financial condition, the term of the receivable and any changes in economic conditions.

Basic and diluted earnings per share

Basic earnings per share is calculated by dividing the earnings of each period presented attributable to common shareholders of the Company by the weighted average number of common shares outstanding during the period. Diluted earnings per share are calculated by adjusting the earnings attributable to ordinary equity holders of the Company, and the weighted average number of common shares outstanding, for the effects of all dilutive potential common shares which include options and warrants. The Company's diluted loss per share does not include the effect of stock options, warrants, and convertible debt as they are anti-dilutive.

Exploration and evaluation expenditures

All of the Company's projects are currently in the exploration and evaluation phase.

Exploration and evaluation expenditures are costs incurred in the course of initial search of mineral deposits before the technical feasibility and commercial viability of the extraction have been demonstrated.

The costs directly related to the acquisition of the mineral property rights and the exploration expenditures incurred during the exploration and evaluation phase are expensed. The Company will capitalize its exploration expenditures under property and equipment once technical feasibility and commercial viability of extracting a mineral resource are demonstrated.

To date, neither the technical feasibility nor the commercial viability of a mineral resource has been demonstrated.

Although the Company has taken steps to verify title to the mining properties in which it holds an interest, in accordance with industry practices for the current stage of exploration and development of such properties, these procedures do not guarantee the validity of the Company’s titles. Property titles may be subject to unregistered prior agreements and non-compliance with regulatory requirements.

Disposal of exploration assets

Requirements in IFRS 15 Revenue from contracts with customers are relevant for the recognition and measurement of a gain or loss on the disposal of a non-financial asset. IFRS 15 provides a single model that applies to contracts with customers and two approaches to recognizing revenue. The model features a contract-based five-step analysis of transactions to determine whether, how much and when revenue is recognized.

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GOLDEN SHARE RESOURCES CORPORATION

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2020 and 2019 (in Canadian dollars)

NOTE 3. SUMMARY OF ACCOUNTING POLICIES (CONTINUED)

Exploration and evaluation expenditures (Continued)

The Company determines the amount of revenue or a gain or loss on disposal to be recognized through application of the following five-step process:

• (i) Identification of the contract, or contracts with a customer;

• (ii) Identification of the performance obligations in the contract;

• (iii) Determination of the transaction price;

• (iv) Allocation of the transaction price to the performance obligations in the contract; and

• (v) Recognition of revenue when or as the Company satisfies the performance obligations.

Provisions, contingent liabilities, and contingent assets

Provisions are recognized when the Company has a present obligation (legal or constructive), as a result of past events, and it is probable that an outflow of resources that can be reliably estimated will be required to settle the obligation.

In those cases where the possible outflow of economic resources as a result of present obligations is considered improbable or remote, no liability is recognized, unless it was assumed in the course of a business combination.

Provisions are measured at the estimated expenditure required to settle the present obligation, based on the most reliable evidence available at the reporting date, including the risks and uncertainties associated with the present obligation. Provision are discounted to the net present value using an appropriate current market based pre-tax discount rate, when the time value of money is significant.

The Company’s operations are governed by government environment protection legislation. Environmental consequences are difficult to identify in terms of amounts, timetable and impact. As of the reporting date, management believes that the Company’s operations are in compliance with current laws and regulations. Site restoration costs currently incurred are negligible. When the technical feasibility and commercial viability of extracting a mineral resource have been demonstrated, a restoration provision will be recognized in the cost of the mining property when there is constructive commitment that has resulted from past events, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and the amount of the obligation can be measured with sufficient reliability.

Income taxes

Income tax expense is comprised of current and deferred tax. Income tax expense is recognized in profit or loss except to the extent that it relates to items recognized in equity, in which case it is recognized in equity. Current income tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustments to tax payable in respect of previous years.

Deferred tax liabilities or assets are recognized using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and amounts used for taxation purposes. Deferred tax is not recognized on the initial recognition of assets or liabilities in a transaction that is not a business combination.

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GOLDEN SHARE RESOURCES CORPORATION

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2020 and 2019 (in Canadian dollars)

NOTE 3. SUMMARY OF ACCOUNTING POLICIES (CONTINUED)

Income taxes (Continued)

Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realized simultaneously.

A deferred tax asset is recognized to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

Equity

Share capital represents the amount received upon the issuance of shares less the transaction costs directly attributable to the issue of shares. If shares are issued when options and warrants are exercised, the share capital account also comprises the compensation cost previously recognized in contributed surplus. In addition, if the shares are issued as part of an option agreement, the shares represent the number of shares issued for the acquisition of mining rights multiplied by the shares' fair value according to the quoted price on the day of the signature of the agreement.

Unit placements

Proceeds from unit placements are allocated proportionately between common shares and warrants according to their respective fair values.

Flow-through placements

Issuance of flow-through units represents in substance an issuance of common shares, warrants and the sale of the rights to tax deductions to the investors. When the flow-through units are issued, the sale of the rights to tax deductions is deferred and recognized as other liabilities in the consolidated statement of financial position. The proceeds received from the issuance of flow-through units are allocated between share capital, warrants and other liabilities using the residual method. Proceeds are first allocated to shares according to the quoted price of existing shares at the time of issuance, secondly to the warrants according to the fair value estimated using the Black-Scholes model and finally, the residual value is allocated to the other liabilities. The liability component recognized initially on the issuance of shares is reversed on renouncement of the rights to tax deductions to the investors and when eligible expenses are incurred and recognized in net earnings in reduction to deferred income tax expenses.

Other elements of the share capital

Contributed surplus includes compensation expenses related to share options and warrants until such equity instruments are exercised.

Deficit includes all current and prior period losses and earnings.

Share-based payments

The Company operates share-based remuneration plans (share options plans) for its eligible directors, officers, employees and consultants. None of the Company's plans feature any options for a cash settlement.

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GOLDEN SHARE RESOURCES CORPORATION

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2020 and 2019 (in Canadian dollars)

NOTE 3. SUMMARY OF ACCOUNTING POLICIES (CONTINUED)

Equity (Continued)

Occasionally, the Company issues warrants to brokers.

The fair value of share based payment is estimated through the use of Black Scholes valuation models – which require inputs such as the risk-free interest rate, expected dividends, expected volatility and the expected option life – and is expensed over the vesting period. The board of directors will determine the vesting period of the share-based payment.

Share-based payments under share-based payments plans (except warrants to brokers) are ultimately recognized as an expense in the net earnings and the consideration is recognized as a credit to contributed surplus under Equity.

Warrants

All warrants issued under a unit financing arrangement are valued on the date of grant using the Black Scholes option pricing model, net of related issue costs and are recorded in contributed surplus. Warrants issued to brokers are recognized as equity instrument issue costs and the consideration is recognized as a credit to contributed surplus under Equity.

If vesting periods or other vesting conditions apply, the expense is allocated over the vesting period, based on the best available estimate of the number of share options anticipated to vest. Non-market vesting conditions are included in assumptions about the number of options that are expected to become exercisable. Estimates are subsequently revised if there is any indication that the number of share options expected to vest differs from previous estimates. Any cumulative adjustment prior to vesting is recognized in the current period. No adjustment is made to any expense recognized in prior period if the number of share options ultimately exercised are different to that estimated on vesting.

Segmental reporting

The Company presents and discloses segmental information based on information that is regularly reviewed by the chief operating decision-maker, i.e. the Chief executive officer and the Board of Directors. Management currently identifies only one operating segment, that is the exploration and evaluation of mineral resources in Canada.

Related party transactions

Related party disclosures have not been made for transactions with related parties that are within a normal supplier or client relationship on terms and conditions no more or less favourable than those that it is reasonable to expect that the Office would have adopted in dealing with the party at arm's length in the same circumstances.

New standards not yet adopted and interpretations issued but not yet effective

IFRS 10 Consolidated Financial Statements ("IFRS 10"). IFRS 10 and IAS 28 – Investments in Associates and Joint Ventures (“IAS 28”) were amended in September 2014 to address a conflict between the requirements of IAS 28 and IFRS 10 and clarify that in a transaction involving an associate or joint venture, the extent of gain or loss recognition depends on whether the assets sold or contributed constitute a business. The effective date of these amendments is yet to be determined; however early adoption is permitted.

Page 16 of 30

GOLDEN SHARE RESOURCES CORPORATION

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2020 and 2019 (in Canadian dollars)

Note 4. SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES

When preparing the consolidated financial statements, management undertakes a number of judgments, estimates and assumptions about recognition and measurement of assets, liabilities, income and expenses. These judgments and estimates are continuously evaluated and are based on management’s experience and knowledge of the relevant facts and circumstances. Actual results may differ from the amounts included in the consolidated financial statements.

Judgments

The following are significant management judgments in applying the accounting policies of the Company that have the most significant effect on the consolidated financial statements.

Income taxes

The estimation of income taxes includes evaluating the recoverability of deferred tax assets based on an assessment of the Company’s ability to utilize the underlying future tax deductions against future taxable income prior to expiry of those deductions. Management assesses whether it is probable that some or all of the deferred income tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income. If changes were made to management’s assessment regarding the Company’s ability to use future tax deductions, the Company could be required to recognize more or fewer deferred tax assets, and future income tax provisions or recoveries could be affected.

Going concern

The evaluation of the Company's ability to continue as a going concern, to raise additional financing in order to cover its operating expenses and its obligations for the incoming year requires significant judgment based on past experience and other assumptions including the probability that future events are considered reasonable according to circumstances. Please refer to Note 2 for further information.

Estimates

Information about estimates and assumptions that have the most significant effect on recognition and measurement of assets, liabilities, income and expenses is provided below.

Share-based payments

The estimation of share-based payment costs requires the selection of an appropriate valuation model and consideration as to the inputs necessary for the valuation model chosen. The Company estimates the volatility of its own shares, the probable life of share options and warrants granted and the time of exercise of those share options and warrants. The model used by the Company is the Black-Scholes valuation model.

Valuation of other financial assets

The determination of fair value of other financial assets is subject to certain limitations. Financial information for private companies in which the Company has investments may not be available and, even if available, that information may be limited and/or unreliable.

Page 17 of 30

GOLDEN SHARE RESOURCES CORPORATION

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2020 and 2019 (in Canadian dollars)

NOTE 5. TRADE AND ACCRUED LIABILITIES

	2020	2020	2019	2019
		$		$
Accounts payables and accrued liabilities	14,626		267,129
Accountspayables to keymanagementpersonnel	211,914		275,937
Total	226,540		543,065

During the year ended December 31, 2020, the Company settled accounts payable with a company owned by a key management personnel for an aggregate amount of $143,000 by issuing 715,000 common shares of the Company (Note 8).

NOTE 6. LOANS PAYABLE

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During the year ended December 31, 2018, the Company obtained a CAD loan of $62,499 with interest free. During the year ended December 31, 2019, the Company paid off $43,499 of CAD loan and obtained additional CAD loan of $51,000. On January 1, 2020, the CAD loan of $70,000 was renewed with interest at a rate of 12% per annum and matured on December 31, 2021.

During the year ended December 31, 2020, the Company entered into various agreements for 18 months unsecured loans totaling $80,000 bearing interest at a rate of 12% per annum and matured on November 30, 2021. The Company accrued interest of $14,855 (2019 – Nil) for the CAD loans and recorded as financial expenses for the year ended December 31, 2020.

During the year ended December 31, 2019, the Company obtained a loan of $233,784 (USD$180,000) from Harmony Energy Storage Corporation, a company with common officers, bearing interest at a rate of 12% per annum and due on demand. During the year ended December 31, 2020, the Company repaid $230,142 (USD$154,079) and accrued interest of $26,789 (USD $19,666) (2019 - $22,217 (USD $17,106)) which were recorded as financial expenses.

Page 18 of 30

GOLDEN SHARE RESOURCES CORPORATION

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2020 and 2019 (in Canadian dollars)

NOTE 7. LONG TERM DEBT

In April 2020, the Company was approved and received a $40,000 term loan with RBC Bank under the Canada Emergency Business Account (‘’CEBA Loan’’) program funded by the Government of Canada. The CEBA Loan is a program is legislated by Government of Canada, administered by Export Development Canada (EDC) and delivered through Financial institutions with the intent of helping businesses pay their non-deferrable expenses during this challenging period due to Covid-19.

In December 2020, the Canadian Federal Government amended the CEBA Loan program to increase the loan amount by $20,000 to $60,000 and the Company increased its borrowings accordingly. The Company has recorded the fair value of $31,342 at inception by using an effective interest rate of 12.68%. The difference of $28,658 between the fair value and the total amount of CEBA Loan received has been recorded as a gain on government grant and $1,685 of accretion expense related to the CEBA Loan was recorded in financial expenses in the consolidated statements of comprehensive income for the year ended December 31, 2020.

Additionally, effective January 1, 2021, the outstanding balance of the CEBA Term Loan was automatically converted to a 2-year interest free term loan. The CEBA Term Loan may be repaid at any time without notice or the payment of any penalty. If 75% of the CEBA Term Loan is repaid on or before December 31, 2022, the repayment of the remaining 25% shall be forgiven. If on December 31, 2022, the Company exercises the option for an additional 3-year term extension, a 5% annual interest will be applied on the any balance remaining during the extension period.

NOTE 8. SHARE CAPITAL

Share capital

The Company is authorized to issue an unlimited number of common shares.

Transactions on share capital

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(i) On August 6, 2020, the Company settled accounts payable with a company owned by a key management personnel for an aggregate amount of $143,000 by issuing 715,000 common shares (Note 6).

(ii) In October 2020, 180,000 share options were exercised for proceeds of $18,000.

Page 19 of 30

GOLDEN SHARE RESOURCES CORPORATION

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2020 and 2019 (in Canadian dollars)

NOTE 8. SHARE CAPITAL (CONTINUED)

Warrants

The following table shows the changes in warrants:

			Number of	Weighted average
			warrants	exerciseprice
Balance, December	31,	2018	401,000	0.25
Expired			401,000	0.25
Balance,December	31,	2019	-
Balance,December	31,	2020	-

There were no warrants issued and outstanding as at December 31, 2020.

The number of outstanding warrants that could be exercised for an equal number of common shares is as follows:

			2020		2019
				Weighted
	Weighted average		Number of warrants	average	Number of warrants
Expiration date	exerciseprice		outstanding	exerciseprice	outstanding
		$		$
June 20,2019		-	-	0.25	401,000
			-		401,000

Page 20 of 30

GOLDEN SHARE RESOURCES CORPORATION

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2020 and 2019 (in Canadian dollars)

NOTE 9. EXPLORATION AND EVALUATION EXPENDITURES

Below is a summary of the Company's exploration and evaluation expenditures incurred by property.

2020 2019

Acquisition costs Ogoki and Kagiami Petawanga Ratte Lake Berens River Basking Total of acquisition costs Exploration expenditures Ogoki and Kagiami Sanbridge Band-Ore (the central and eastern parts of formerly Shebandowan) Petawanga Ratte Lake Basking Berens River Pistol Lake (the western part of formerly Shebandowan) Total of exploration expenditures Total of exploration and evaluation expenditures

$ $ - 4,288 13,500 - 750 - - 11,400 - 1,700 14,250 17,388 3,653 9,739 625 953 11,711 6,271 975 - 550 - 500 9,762 2,750 9,153 - 1,117 20,764 36,994 35,014 **54,381 **

Ogoki Project and Kagiami Project

The Ogoki Project and Kagiami Project, are both 100% owned by Golden Share, located in the James Bay Lowlands of Ontario. The Ogoki Project comprises ten non-contiguous claim blocks with 30 MLAS mining claims (195 MLAS cells) and the Kagiami Project comprises five small non-contiguous blocks comprising 87 MLAS mining claims.

Golden Share has granted Keystone a 1-per-cent (1%) net sales return royalty and net smelter return royalty (together, the “Royalty”) for all diamonds and other precious stones, as well as for precious and base metals, for both the Ogoki and Kagiami projects except the 2 claims of Ogoki project (claim# 516349 and #516392) .

In 2019, the Company signed an agreement with Marten Falls First Nation ("MFFN") with a mutually agreed compensation as a 2% of exploration expenses occurred in the traditional territory of MFFN.

Sandridge Project

The Sandridge Project is 100% owned by the Company through staking, located approximately 150 km east of Thunder Bay, Ontario. The project consists of 18 contiguous MLAS cell claims.

Band-Ore Project (The Central and Eastern Parts of Formerly Shebandowan)

The Band-Ore Project is 100% owned by the Company, located approximately 65 km west of Thunder Bay, Ontario. The project consists of 109 MLAS cell claims, 16 patented claims and 1 Mining lease claim.

Page 21 of 30

GOLDEN SHARE RESOURCES CORPORATION

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2020 and 2019 (in Canadian dollars)

NOTE 9. EXPLORATION AND EVALUATION EXPENDITURES (CONTINUED)

Band-Ore

‐ The Band Ore property consists of 24 MLAS cell claims, 16 patent claims and 1 Mining lease claim. To acquire ‐ 100% interest of Band Ore property, the Company issued 1,446,000 common shares and 723,000 common share purchase warrants (36 months at $3.00 per share expired on June 29, 2014), and granted 1% NSR royalty.

Band-Ore Extension

‐ The Band Ore Extension property consists of 85 MLAS cell claims. To acquire the 100% interest of Band-Ore Extenstion, the Company paid $36,000 in cash and issued 46,666 common shares. The property is subject to a 1% NSR royalty with the exception of 7 MLAS cell claims (#180514, 252727, 252728, 271780, 329655, 341514, 341515) subject to 1.5% NSR royalty.

Petawanga Project

During the year ended December 31, 2020, the Company acquired 100% of Petawanga Project through staking and paid registration cost of $13,500. Petawanga project is located approximately 30 kilometres southwest of the community of Embametoong First Nation in northern Ontario. The project is made up of one contiguous claim block totalling 270 MLAS cell claims.

Ratte Lake Project

During the year ended December 31, 2020, the Company acquired 100% of Ratte Lake Project through staking and paid registration cost of $750. The Ratte Lake Project is located northwest of Lake Nipigon, approximately 35 km northeast of the community Armstrong. Armstrong is 250 km north of Thunder Bay at the end of Highway 527. The project is comprising 15 MLAS cell mining claims.

Basking Project

The Basking Project is 100% owned by the Company through staking, located approximately 100 kilometres north-northwest of the "Ring of Fire area" in northern Ontario. The project is made up of four small noncontiguous claim blocks totalling 34 MLAS cell claims.

Berens River Project

The Berens River Project is located 200 km north of the town of Red Lake, Ontario, totaling 109 MLAS cell claims, results in the consolidation of three distinct claim blocks of Berens River, Berens Extensions and Berens Staking.

To acquire the 100% interests Berens River, the Company has paid $481,250 ($456,250 in cash and value at $25,000 of 42,327 common shares) and issued 400,000 commons shares.

In December 2011, the Company entered an option agreement to acquire a 100% interest in 20 legacy mining claims ("Berens Extension") around the Berens River. All conditions of the option agreement have been fulfilled. Therefore, the Company owns a 100% interest of Berens Extension with the payment of $37,500 in cash and issued 616,666 common shares. Currently, the Company remains 73 MLAS cell claims.

During the year ended December 31, 2020, the Company has entered into a Definitive Asset Purchase Agreement with Midex Resources Ltd. (“Midex”) to sell Berens River Project for $500,000 cash payment and 4 million Midex's common shares. The Company estimated the fair value of 4 million Midex’s common shares as $400,000 according to Midex recent private placement issuance of common shares. The Company has received the cash payment and expect to receive 2 million shares on August 25, 2021 and 2 million shares on August 25, 2022. This transaction resulted $900,000 of gain on disposal of exploration assets for the year ended December 31, 2020.

Page 22 of 30

GOLDEN SHARE RESOURCES CORPORATION

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2020 and 2019 (in Canadian dollars)

NOTE 9. EXPLORATION AND EVALUATION EXPENDITURES (CONTINUED)

For the 73 of 109 MLAS cell claims, an additional 33,333 or 66,666 common shares of Golden Share shall be issued to the optionor upon the notice from Midex if measured and indicated resources representing a metal content of 250,000 or 500,000 of gold or more are defined and validated by a 43-101 compliant report prepared by an independent geological consulting firm, or a total of 250,000 or 500,000 ounces of gold are produced on the 73 MLAS cell claims, respectively.

Pistol Lake (The Western Part of Formerly Shebandowan)

Pursuant a settlement, Golden Share has transferred the property back to the vendors in 2019.

NOTE 10. ADMINISTRATIVE EXPENSES BY NATURE

	2020	2019
	$	$
Salaries and related expenses	59,150	59,349
Management fees	72,000	72,000
Professional services	21,414	95,965
Investor-related fees	2,004	16,960
Transfer agent fees	9,271	16,071
Regulatory fees	15,353	16,456
Office and general	26,381	41,098
Travel, accommodation and meals	868	28,444
Share-based compensation	97,438	69,921
Losses from exchange differences	2,574	3,359
Total	306,454	419,623

During the year ended December 31, 2019, the Company spent $41,830 of legal fee relate to the energy business span out, which the legal fee and auditing fee are included in the professional fee.

NOTE 11. EMPLOYEE REMUNERATION

Share option plan

The Company has adopted a share-based compensation plan under which members of the Board of Directors may award options for common shares to directors, officers, employees and consultants to provide incentives. The maximum number of common shares issuable pursuant to the share option plan must not exceed 10% of the total number of common shares issued and outstanding.

The exercise price of each option is determined by the Board of Directors and cannot be less than the discounted market price of the common shares on the eve of the award and the term of the options cannot be more than ten years.

All share-based payments will be settled in equity. The Company has no legal or constructive obligation to repurchase or settle the options. Option pricing models require the input of highly subjective assumptions noted in Note 2. Changes in subjective input assumptions can materially affect the fair value estimate.

Page 23 of 30

GOLDEN SHARE RESOURCES CORPORATION

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2020 and 2019 (in Canadian dollars)

NOTE 11. EMPLOYEE REMUNERATION (CONTINUED)

The Company's share options are as follows for the year ended December 31, 2020 and December 31, 2019:

	Number of share	Weighted average
	options	exerciseprice
Balance, December 31, 2018	2,090,000	0.28
Granted	1,780,000	0.20
Expired	(150,000)	0.25
Balance,December 31,2019	3,720,000	0.24
Granted	920,000	0.20
Expired	(555,000)	0.27
Forfeited	(260,000)	0.23
Exercised	(180,000)	0.10
Balance,December 31,2020	3,645,000	0.23

On August 10, 2020, the Company granted 175,000 share options to directors, officers and employees, to acquire up to 175,000 common shares of the Company at a price of $0.20 per share. These share options vested immediately and are valid for 5 years. The fair value of the options was estimated as $0.14 per share by using the Black-Scholes model and assumptions at grant date.

On August 10, 2020, the Company granted 325,000 share options to consultants, to acquire up to 325,000 common shares of the Company at a price of $0.20 per share. These share options vested immediately and are valid for 3 years. The fair value of the options was estimated as $0.12 per share by using the Black-Scholes model and assumptions at grant date.

On October 26, 2020, the Company granted 120,000 share options to a director to acquire up to 120,000 common shares of the Company at a price of $0.20 per share. These share options vested immediately and are valid for 5 years. The fair value of the options was estimated as $0.09 per share by using the Black-Scholes model and assumptions at grant date.

On October 26, 2020, the Company granted 300,000 share options to consultants to acquire up to 300,000 common shares of the Company at a price of $0.20 per share. These share options vested immediately and are valid for 3 years. The fair value of the options was estimated as $0.08 per share by using the Black-Scholes model and assumptions at grant date.

On July 19, 2019, the Company granted 700,000 share options to directors, officers and employees, to acquire up to 700,000 common shares of the Company at a price of $0.20 per share. These share options vested immediately and are valid for 5 years. The fair value of the options was estimated as $0.055 per share by using the Black-Scholes model and assumptions at grant date.

On July 19, 2019, the Company granted 1,080,000 share options to consultants, to acquire up to 1,080,000 common shares of the Company at a price of $0.20 per share. These share options vested immediately and are valid for 3 years. The fair value of the options was estimated as $0.029 per share by using the Black-Scholes model and assumptions at grant date.

During the year ended December 31, 2020, 180,000 (2019 – Nil) share options were exercised at $0.10 per share, the weight average stock price was $0.15 when the option were exercised in 2020.

Page 24 of 30

GOLDEN SHARE RESOURCES CORPORATION

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2020 and 2019 (in Canadian dollars)

NOTE 11. EMPLOYEE REMUNERATION (CONTINUED)

The fair value per share option granted in 2020 and 2019 were determined using the Black-Scholes option pricing model and based on the following weighted average assumptions:

		2020		2019
Weighted average price at the grant date	$	0.160	$	0.080
Rate of return of dividends		-		-
Expected average volatility		105%		98%
Risk-free average interest rate		1.43%		1.41%
Expected average life		3.64 years		3.79 years
Weighted average exercise price	$	0.20	$	0.20

The expected volatility was determined using the historical volatility of the Company’s share price according to each expected life of the stock options.

An amount of $97,438 for the year ended December 31, 2020 (2019 - $69,921) in share-based payments was included in the consolidated statements of comprehensive income and credited to contributed surplus.

The following table summarizes the actual stock options issued and outstanding as of December 31, 2020:

		Weighted average remaining	Number of options
Expirydate	Exerciseprice($)	contratual life(years)	outstanding
6/19/2021	0.25	0.47	470,000
6/21/2022	0.35	1.47	675,000
7/18/2022	0.20	1.55	930,000
8/9/2023	0.20	2.61	275,000
10/25/2023	0.20	2.82	300,000
7/18/2024	0.20	3.55	700,000
8/9/2025	0.20	4.61	175,000
10/25/2025	0.20	4.82	120,000
	0.23	2.22	3,645,000

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GOLDEN SHARE RESOURCES CORPORATION

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2020 and 2019 (in Canadian dollars)

NOTE 12. ENERGY BUSINESS

On January 14, 2019, the Company announced completed spin-out of its energy business. The spin-out was completed by way of a statutory plan of arrangement under the Canada Business Corporations Act (the "Arrangement") under which Golden Share transferred its energy business to Harmony Energy Technologies Corporation, which was registered under the corporation law of Delaware, USA on June 19, 2018.

In exchange, Harmony issued 3,862,079 common shares (“Harmony Shares”) to Golden Share, which have been distributed to Golden Share shareholders on the basis of one Harmony Share for each 10 Golden Share common shares held as of the close of business on January 3, 2019. In connection with the Arrangement, each Golden Share common share has also been exchanged for a new Golden Share common share. This transaction resulted in 2019 in a reduction of the capital payable of $2,000,000, a reduction of prepaid expenses of $123,690 and the recognition of a gain on disposal of $1,876,309.

NOTE 13. INCOME TAX

Provision for income taxes

The major factors that cause variations from the Company’s combined federal and provincial statutory Canadian income tax rates were the following:

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Deferred income taxes

Deferred income taxes assets have not been recognized in respect to the following deductible temporary differences:

==> picture [484 x 87] intentionally omitted <==

Page 26 of 30

GOLDEN SHARE RESOURCES CORPORATION

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2020 and 2019 (in Canadian dollars)

NOTE 13. INCOME TAX (CONTINUED)

Non-capital losses expire in the following years:

==> picture [198 x 165] intentionally omitted <==

NOTE 14. RELATED PARTIES

All transactions with related parties have occurred in the normal course of operations and are recorded at the exchange amount, which is the amount of consideration established and agreed to by the related parties. Key management personnel are defined as those individuals having authority and responsibility for planning, directing and controlling the activities of the Company.

Key Management Compensation

The Company's related party transactions for the year ended December 31, 2020 and 2019, were all to key management personnel and were as follows:

==> picture [496 x 105] intentionally omitted <==

• (i) During the year ended Dec 31, 2020, the Company paid rent of $24,000 (2019 - $36,000) to Keystone Associates Inc. ("Keystone"), a company owned by the CEO, for shared office space from January to August. The shared office space agreement ended and was not renewed.

• (ii) During the year ended Dec 31, 2020, the Company paid salaries and related fee of $59,150 (2019 - $59,349) to an officer for CFO services.

• (iii) During the year ended Dec 31, 2020, the Company recorded management fee of $72,000 (2019 - $72,000) to Keystone Associates Inc. for management service provided by the CEO. As of December 31, 2020, the Company owed to Keystone of $138,400 (2019 -$183,060).

Page 27 of 30

GOLDEN SHARE RESOURCES CORPORATION

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2020 and 2019 (in Canadian dollars)

NOTE 14. RELATED PARTIES (CONTINUED)

• (iv) During the year ended Dec 31, 2020, the Company paid $12,000 (2019 – Nil) consulting fee to one of directors for the consulting and corporate service.

(v) During the year ended December 31, 2020, the company granted stock options to directors and officer and report the options value of $35,141 (2019 -$38,468).

The balance due to the related parties as at December 31, 2020 and 2019 are as follows.

		2020	2019
Accounts payable from related parties
Keystone	(i)	$138,400	$183,060
Officers	(ii)	$73,514	$92,877
Total		$211,914	$275,937

• (i) During the year ended December 31, 2020, the Company owe to Keystone of $138,400 (2019 - $183,060) for the management fee and share office expense. The outstanding balance is part of Trade or other payable (Note 5).

During the year ended December 31, 2020, the Company settled part of the accounts payable to Keystone with equity. (Note 8).

• (i) During the year ended December 31, 2020, the Company owed to the CEO $73,514 (2019 -$92,877) for the expense reimbursements or accounts payable paid on behalf of the Company. The outstanding balance is part of Trade or other payable (Note 5).

NOTE 15. CAPITAL MANAGEMENT POLICIES AND PROCEDURES

The Company’s capital management objectives are:

• to ensure the Company’s ability to continue as a going concern; and

• to increase the value of the Company's assets; and

• to provide an adequate return to shareholders of the Company.

These objectives will be achieved by identifying the right exploration projects, adding value to these projects and ultimately taking them through to production and cash flow, either with partners or by the Company's own means. The Company monitors capital on the basis of the carrying amount of equity. Capital for the reporting periods under review is summarized in the consolidated statement of changes in equity (deficit). The Company is not exposed to any externally imposed capital requirements except when the Company issues flowthrough shares for which an amount should be used for exploration work.

The Company sets the amount of capital in proportion to its overall financing structure, i.e. equity and financial liabilities. The Company manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may return capital to shareholders, issue new shares, or sell assets. When financing conditions are not optimal, the Company may enter into option agreements or other solutions to continue its activities or may slow its activities until conditions improve.

No changes were made in the objectives, policies and processes for managing capital during the reporting periods.

Page 28 of 30

GOLDEN SHARE RESOURCES CORPORATION

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2020 and 2019 (in Canadian dollars)

NOTE 16. FINANCIAL INSTRUMENTS

The Company is exposed to various risks in relation to financial instruments. The main types of risks the Company is exposed are credit risk and liquidity risk.

Credit risk

Credit risk is the risk that another party to a financial instrument will cause a financial loss for the Company by failing to discharge an obligation.

The Company's maximum exposure to credit risk is limited to the carrying amount of cash, which is considered to be negligible because the counterparty is a reputable bank with an investment grade external credit rating.

Liquidity risk

Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset.

Liquidity risk management serves to maintain a sufficient amount of cash and to ensure that the Company has financing sources such as private and public investments for a sufficient amount.

Over the past period, the Company has financed its exploration expense commitments, its working capital requirements and acquisitions through disposal available for sales assets, private and flow-through financings. As at December 31, 2020 the Company did not have sufficient cash to pay its trade accounts payable and loan payable.

The Company's trade and accrued liabilities and loans payable have contractual maturities within twelve months.

Market risk

Most of the Company’s transactions are carried out in Canadian dollars (CAD). Exposures to currency exchange rates arise from the Company’s loans payable denominated in US dollars (USD) for a total of US$43,528.

Foreign currency risk

Foreign currency risk is the risk that the fair value of, or future cash flows from, the Company’s financial instruments will fluctuate because of changes in foreign exchange rates. The Company functional currency is the Canadian dollars and major purchases are transacted in Canadian dollars. The Company’s foreign currency risk arises primarily with respect to the its loan is denominated in U.S. Dollars.

A variation of +/- 10% in the CAD/USD exchange rate would have an impact of +/-$4,353 on the Company's earnings (loss).

Page 29 of 30

GOLDEN SHARE RESOURCES CORPORATION

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2020 and 2019 (in Canadian dollars)

NOTE 17. COMMITMENTS

The Company is required to pay the land tax/license fee for the patent/mining lease owned by the Company. The following is a cash payment schedule of future obligations required annually:

	2021	2022 2023
'Band-Ore patent/mining Lease property tax	5,750	5,750 5,750

The Land tax/license fee may vary in future year, which is evaluated by the government annually. The above estimate land tax/license fee is based on the payment in 2020. The payment will be as long as the Company holds the patent and mining lease.

NOTE 18. SUBSEQUENT EVENTS

During the year ended of December 31, 2020, an outbreak of a new strain of coronavirus (COVID-19) resulted in a major global health crisis which continues to have impacts on the global economy and the financial markets at the date of completion of the financial statements.

These events are likely to cause significant changes to the assets or liabilities in the coming year or to have a significant impact on future operations. Following these events, the Company has taken and will continue to take action to minimize the impact. However, it is impossible to determine the financial implications of these events for the moment.

The USD loan of $54,878 (US$43,027) and accrued interest have been fully paid off on February 4, 2021.

On January 18, 2021, the Company granted 150,000 share options to consultants to acquire up to 150,000 common shares of the Company at a price of $0.20 per share. These share options vested immediately and are valid for 3 years. The fair value of $0.064 per share option was estimated by the Company to record this transaction.

In January and February 2021, the Company expanded 61 MLAS cell claims of Sandridge project through map staking, and the Company started drilling at Sandridge.

In February 2021, the Company entered into a binding Agreement with an arm-length third party to sell its whole interests at the Basking Project for cash consideration of $300,000.

In February 2021, the Company paid $21,853 back the partial of unsecured loan, as $20,000 capital and $1,853 interest.

On March 1, 2021, the Company granted 250,000 share options to one director and consultants to acquire up to 250,000 common shares of the Company at a price of $0.20 per share.150,000 and 100,000 share options vested immediately and are valid for 3 years and 5 years, respectively. The fair value of $0.10 and $0.117 per share option was used by the Company to record this transaction.

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