Magna Mining Inc. — Audit Report / Information 2021

May 26, 2021

Magna Mining (Canada) Corp. (formerly Magna Mining Corp.) Consolidated Financial Statements (expressed in Canadian dollars) December 31, 2020

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Baker Tilly WM LLP 1500 – 401 Bay Street Toronto, Ontario Canada M5H 2Y4 T: +1 416.368.7990 F: +1 416.368.0886

toronto@bakertilly.ca www.bakertilly.ca

INDEPENDENT AUDITOR’S REPORT

To the shareholders of Magna Mining (Canada) Corp. (formerly Magna Mining Corp.):

Opinion

We have audited the consolidated financial statements of Magna Mining (Canada) Corp. (formerly Magna Mining Corp.), and its subsidiary (together the "entity"), which comprise the consolidated statements of financial position as at December 31, 2020 and December 31, 2019, and the consolidated statements of operations and comprehensive loss, consolidated statements of changes in equity (deficiency) and consolidated statements of cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the entity as at December 31, 2020 and 2019, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with International Financial Reporting Standards.

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 Consolidated Financial Statements section of our report. We are independent of the entity in accordance with the ethical requirements that are relevant to our audits of the consolidated financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained in our audits is sufficient and appropriate to provide a basis for our opinion.

Material Uncertainty Related to Going Concern

We draw attention to Note 1 in the consolidated financial statements, which describes the events and conditions indicating that a material uncertainty exists that may cast significant doubt on the entity’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.

Other Information

Management is responsible for the other information. The other information comprises the information included in the Management’s Discussion and Analysis filed with the relevant Canadian securities commissions.

Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit and remain alert for indications that the other information appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact in this auditor’s report. We have nothing to report in this regard.

ASSURANCE • TAX • ADVISORY

Baker Tilly WM LLP is a member of Baker Tilly Canada Cooperative, which is a member of the global network of Baker Tilly International Limited. All members of Baker Tilly Canada Cooperative and Baker Tilly International Limited are separate and independent legal entities

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

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

In preparing the consolidated financial statements, management is responsible for assessing the entity’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 entity or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the entity’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated 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 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 consolidated financial statements.

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

• Identify and assess the risks of material misstatement of the consolidated 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 entity’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 entity’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 consolidated 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 entity to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated 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 entity to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group 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 audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

The engagement partner on the audit resulting in this independent auditor's report is John C. Sinclair.

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Chartered Professional Accountants, Licensed Public Accountants Toronto, Ontario May 25, 2021

Magna Mining (Canada) Corp. (formerly Magna Mining Corp.) Consolidated Statements of Financial Position (expressed in Canadian dollars) December 31, 2020

Assets Current Cash Accounts receivable Other assets (notes 13 and 17) Prepaid expenses Non-current Restricted cash (note 6) Equipment (note 7) Liabilities Current Accounts payable and accrued liabilities (note 9) Due to related party (note 19) Flow-through premium (note 13) Non-current Asset retirement obligation (note 10) Term loan (note 11) Shareholders' Equity (Deficiency) Share capital (note 13) Contributed surplus Warrants reserve Deficit Reporting entity and going concern (note 1) Subsequent events (note 22)	2020 $ 1,520,933 64,856 391,192 68,718 2,045,699 657,262 40,776 698,038 $ 2,743,737 $ 858,392 - 10,853 869,245 680,985 27,471 708,456 1,577,701 4,614,474 559,269 263,018 (4,270,725) 1,166,036 $ 2,743,737	2019
		$ 163,671 49,326 - 1,649 214,646 653,417 42,015 695,432 $ 910,078 $ 531,472 194,439 - 725,911 664,223 - 664,223 1,390,134 2,586,845 112,750 - (3,179,651) (480,056) $ 910,078

______ Director __________ Director

See accompanying notes to the consolidated financial statements

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Magna Mining (Canada) Corp. (formerly Magna Mining Corp.) Consolidated Statements of Operations and Comprehensive Loss (expressed in Canadian dollars) Year Ended December 31, 2020

Operating expenses General and administrative (note 16) Exploration Shakespeare maintenance Environmental Accretion of asset retirement obligation Depreciation of equipment Other income Foreign exchange gain Flow-through premium (note 13) Consultancy Term loan forgiveness (note 11) Miscellaneous Interest Net loss and comprehensive loss for the year Basic and diluted loss per share (note 14)	2020 $ 605,865 402,914 101,663 82,045 16,762 2,618 1,211,867 8,850 17,147 68,550 10,000 12,186 4,060 120,793 $ 1,091,074 $ 0.05	2019
		$ 142,717 524,706 98,433 104,983 16,349 5,566 892,754 24,463 39,800 - - - 14,486 78,749 $ 814,005 $ 0.04

See accompanying notes to the consolidated financial statements

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Magna Mining (Canada) Corp. (formerly Magna Mining Corp.) Consolidated Statements of Changes in Equity (Deficiency) (expressed in Canadian dollars) Year Ended December 31, 2020

	Number of
	common		Contributed			Warrants		Total equity
	shares	Share capital		surplus		reserve	Deficit	(deficiency)
Balance at December 31,
2018	21,876,901	$ 2,273,987	$	54,461	$	-	$(2,365,646)	$	(37,198)
Net and comprehensive loss
for the year	-	-		-		-	(814,005)		(814,005)
Shares issued for cash	642,857	225,000		-		-	-		225,000
Shares issued to settle debt	251,025	87,858		-		-	-		87,858
Stock-based compensation	-	-		58,289		-	-		58,289
Balance at December 31,
2019	22,770,783	2,586,845		112,750		-	(3,179,651)		(480,056)
Net and comprehensive loss
for the year	-	-		-		-	(1,091,074)	(1,091,074)
Shares issued for cash	3,650,999	1,838,801		-		-	-		1,838,801
Flow-through shares issued	200,000	110,000		-		-	-		110,000
Shares issued to settle debt	363,636	200,000		-		-	-		200,000
Finders' fee	12,000	6,600		-		-	-		6,600
Stock-based compensation	-	-		446,519		-	-		446,519
Warrants issued	-	-		-		263,018	-		263,018
Share issuance costs	-	(141,619)		-		-	-		(141,619)
Exercised stock options	97,000	97		-		-	-		97
Shares issued to obtain
claims	25,000	13,750		-		-	-		13,750
Balance at December 31,
2020	27,119,418	$ 4,614,474	$	559,269	$	263,018	$(4,270,725)	$	1,166,036

See accompanying notes to the consolidated financial statements

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Magna Mining (Canada) Corp. (formerly Magna Mining Corp.) Consolidated Statements of Cash Flows (expressed in Canadian dollars) Year Ended December 31, 2020

Operating activities Net loss and comprehensive loss for the year Items not requiring an outlay of cash: Depreciation of equipment Flow through premium Foreign exchange gain Stock-based compensation Shares issued to acquire claims Accretion of asset retirement obligation Interest income Forgiveness of term loan and other Net change in non-cash working capital balances Accounts receivable Prepaid expenses Accounts payable and accrued liabilities Cash used in operating activities Financing activities Deferred financing costs Loan from related party Issuance of common shares, net of costs Proceeds from term loan Proceeds from exercise of options Payment of deferred consideration for acquisition of Ursa Major Minerals Inc. Cash provided by financing activities Investing activities Purchase of equipment Cash used in investing activities Increase (decrease) in cash during the year Cash, beginning of year Cash, end of year Supplemental cash flow information Shares issued to settle debt (operating) Warrants issued for financing costs (note 17)(financing)	2020 $ (1,091,074) 2,618 (17,147) (8,850) 446,519 13,750 16,762 (4,060) (12,529) (654,011) (9,754) (67,069) 335,770 258,947 (395,064) (128,174) - 1,841,782 40,000 97 - 1,753,705 (1,379) (1,379) 1,357,262 163,671 $ 1,520,933 $ 200,000 $ 263,018	2019
		$ (814,005) 5,566 (39,800) (24,463) 58,289 - 16,349 (14,468) - (812,532) 45,429 (75) (117,369) (72,015) (884,547) - 194,439 225,000 - - (50,000) 369,439 - - (515,108) 678,779 $ 163,671 $ 87,858 $ -

See accompanying notes to the consolidated financial statements

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Magna Mining (Canada) Corp. (formerly Magna Mining Corp.) Notes to the Consolidated Financial Statements (expressed in Canadian dollars) Year Ended December 31, 2020

1. Reporting entity

Magna Mining (Canada) Corp. (formerly Magna Mining Corp.) ("Magna" or the "Company") was incorporated on December 2, 2016 under the Ontario Business Corporations Act. Its principal business activity is the acquisition, exploration and development of mineral properties, with a primary focus on base-metal properties in Canada.

On May 4, 2021, the Company completed a reverse takeover of CT Developers Ltd. and thereafter began trading on the TSX Venture Exchange (note 22).

The Company's registered office is located at 45 Oak Street, Dowling, ON P0M 1R0. The principal place of business is 1300 Kelly Lake Road, Sudbury, ON P3E 5P4.

Going concern

The nature of the Company’s operations results in significant expenditures for the acquisition and exploration of mineral properties. The eventual generation of revenue is dependent upon a number of factors including the existence of recoverable reserves, the ability of the Company to obtain financing to maintain the properties in good standing and to continue exploration and development and the discovery of economically recoverable reserves. To date, the Company has not generated any revenue from mining or other operations, and it is considered to be in the exploration stage.

These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) applicable to a going concern, which assumes the Company will be able to realize its assets and settle its liabilities in the normal course of business. For the year ended December 31, 2020, the Company reported a net loss of $1,091,074 (2019 - $814,005), and as at that date had working capital of $1,176,454 (2019 working capital deficit of - $511,265) and an accumulated deficit of $4,270,725 (2019 - $3,179,651)

The Company’s ability to continue as a going concern is dependent upon its ability to obtain additional funding from loans or equity financings provided by the Company’s existing shareholders and/or new shareholders or through other arrangements. There is no assurance that the Company will be successful in this regard. These events and conditions indicate a material uncertainty that may cast a significant doubt on the Company's ability to continue as a going concern.

These financial statements do not reflect the adjustments to the carrying values of assets and liabilities and the reported expenses and statement of financial position classifications that would be necessary were the going concern assumption deemed to be inappropriate. These adjustments could be material.

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Magna Mining (Canada) Corp. (formerly Magna Mining Corp.) Notes to the Consolidated Financial Statements (expressed in Canadian dollars) Year Ended December 31, 2020

1. Reporting entity (continued)

COVID - 19

On March 11, 2020, the World Health Organization categorized COVID-19 as a pandemic. The potential economic effects within the Company's environment and markets, possible disruption in supply chains, and measures being introduced at various levels of government to curtail the spread of the virus (such as travel restrictions, closures of non-essential municipal and private operations, imposition of quarantines and social distancing) could have a material impact on the Company's operations and the ability to finance its operations. The extent of the impact of this outbreak and related containment measures on the Company's operations cannot be reliably estimated at this time. Additionally, it is possible that estimates in the Company’s consolidated financial statements will change in the near term as a result of COVID-19. The Company is closely monitoring the impact of the pandemic on all aspects of its business.

2. Basis of preparation

(a) Statement of compliance

These consolidated financial statements were prepared in accordance with International Financial Reporting Standards (''IFRS'') and its interpretations adopted by the International Accounting Standards Board (''IASB'').

The Board of Directors authorized these consolidated financial statements for issuance on May 25, 2021.

(b) Basis of consolidation

These financial statements include the accounts of Magna Mining Corp. and its 100% owned subsidiary Ursa Major Minerals Inc.

All intercompany transactions and balances have been eliminated upon consolidation.

A subsidiary is an entity which Magna controls. The Company has control over an entity when it is exposed to or has rights to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.

A subsidiary is consolidated from the date on which control is obtained by the Company and is deconsolidated from the date that control ceases.

(c) Basis of presentation

These consolidated financial statements have been prepared on an accrual basis, except for cash flow information.

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Magna Mining (Canada) Corp. (formerly Magna Mining Corp.) Notes to the Consolidated Financial Statements (expressed in Canadian dollars) Year Ended December 31, 2020

2. Basis of preparation (continued)

(d) Functional and presentation currency

In concluding the functional currencies of the parent and subsidiary, management considered the currency that mainly influences the cost of providing goods and services in each jurisdiction in which the Company operates. The Company also considered secondary indicators including the currency in which funds from financing activities are denominated and the currency in which funds are retained.

These consolidated financial statements are presented in Canadian dollars, which is the functional currency of Magna Mining (Canada) Corp. (formerly Magna Mining Corp.), and its subsidiary .

(e) Significant estimates and critical judgments

The preparation of the consolidated financial statements in conformity with IFRS requires the use of judgment and estimates that affect the amounts reported and disclosed in the consolidated financial statements and related notes. These judgments and estimates are based on management’s knowledge of the relevant facts and circumstances, having regard to previous experience, but actual results may differ materially from the amounts included in the consolidated financial statements. Information about such judgments and estimation is contained in the accounting policies and notes to the consolidated financial statements, and the key areas are summarized below.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the review affects both current and future periods. The most significant estimates as at December 31, 2020 relate to the asset retirement obligation and fair valuation of options and warrants granted.

Critical accounting judgments

In the preparation of these consolidated financial statements, management has made judgments, aside from those that involve estimates, in the process of applying accounting policies. The judgments which may have an effect on the amounts recognized in the consolidated financial statements include the following:

• The assessment of the going concern assumption;

• The recognition of deferred tax assets

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Magna Mining (Canada) Corp. (formerly Magna Mining Corp.) Notes to the Consolidated Financial Statements (expressed in Canadian dollars) Year Ended December 31, 2020

3. Significant accounting policies

Foreign currency translation

Assets and liabilities are translated at the exchange rate in effect at the year-end date. Foreign currency transactions are translated into the functional currency using the exchange rate prevailing at the date of the transaction. Foreign currency gains and losses resulting from the settlement of such transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in profit or loss.

Cash

Cash consists of cash on deposit with banks and is subject to insignificant risk of changes in fair value.

Equipment

Recognition and measurement

Items of equipment are initially measured at cost. Items of equipment are carried at cost less accumulated depreciation and accumulated impairment losses. Equipment is classified by significant components, which are individually amortized over the useful life of the component.

Cost includes expenditures that are directly attributable to the acquisition of the asset. When parts of an item of equipment have different useful lives, they are accounted for as separate items (major components) of equipment.

Depreciation

Depreciation is provided at the following rates:

Computer equipment	30% declining balance
Motor vehicles	3 years straight-line
Equipment	3 years straight-line
Fencing	20 years straight-line

Depreciation is calculated on the depreciable amount, which is the cost of an asset or other amount substituted for cost, less its residual value.

Depreciation is recognized in profit or loss over the estimated useful lives of each part of an item of equipment, since this most closely reflects the expected pattern of consumption of the future economic benefits embodied in the asset.

Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

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Magna Mining (Canada) Corp. (formerly Magna Mining Corp.) Notes to the Consolidated Financial Statements (expressed in Canadian dollars) Year Ended December 31, 2020

3. Significant accounting policies (continued)

Equipment (continued)

Equipment is tested for impairment when events or changes in circumstances indicate that the carrying amount may not be recoverable. If an indicator is identified, the asset’s recoverable amount is calculated and compared to the carrying amount. For the purpose of measuring recoverable amounts, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units or “CGUs”). The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use (being the present value of the expected future cash flows of the relevant asset or CGU). An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount.

The Company evaluates impairment losses for potential reversals when events or circumstances warrant such consideration. An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.

Mineral properties and exploration and development expenditures

Acquisition costs for exploration and evaluation assets and exploration expenditures, net of recoveries, are charged to profit or loss as incurred. Acquisition costs may include cash consideration, the fair value of common shares issued, and the fair value of share purchase warrants and options issued based on amounts determined using the Black-Scholes option pricing model, for mineral property interests pursuant to the terms of the agreement.

After a property is determined by management to be technically feasible and commercially viable (Bankable Feasibility Study), development expenditures on the property are capitalized.

The costs related to a property from which there is production, together with the costs of production equipment, will be depleted and amortized using the unit-of-production method.

Exploration and evaluation assets acquired under an option agreement where payments are made at the sole discretion of the Company are charged to profit or loss at the time of payment. Property interests granted under an option agreement where payments to be made to the Company are at the sole discretion of the optionee, are recorded as recoveries at the time of receipt. Where recoveries exceed costs, such amounts are recognized in profit or loss.

Environmental expenditures that relate to current operations are expensed or capitalized depending on whether the technical feasibility and commercial viability of extracting a mineral resource are demonstrable. Liabilities are recorded when environmental assessments and/or remedial efforts are probable, and the costs can be reasonably estimated. Generally, the timing of these accruals coincides with the earlier of completion of a Feasibility Study or the Company’s commitment to a plan of action based on the then known facts.

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Magna Mining (Canada) Corp. (formerly Magna Mining Corp.) Notes to the Consolidated Financial Statements (expressed in Canadian dollars) Year Ended December 31, 2020

3. Significant accounting policies (continued)

Asset retirement obligation

An obligation to incur restoration, rehabilitation and environmental costs arises when environmental disturbance is caused by the exploration, development or ongoing production of a mineral interest by or on behalf of the Company. Costs for restoration of site damage incurred on an ongoing basis during exploration and evaluation are provided for at their net present values and charged to profit or loss in the period such exploration and evaluation occurs. Net present value is calculated using the pre-tax rate that reflects the current market assessments of the time value of money and the risks specific to the liability. The liability is adjusted each period for the unwinding of the discount and for changes to the current market-based discount rate, amount or timing of the underlying cash flows needed to settle the obligation.

Impairment of mineral properties

When mineral properties have been capitalized, they are assessed for impairment when events or changes in circumstances indicate that the carrying amount may not be recoverable. Assessment of impairment indicators involves the application of a number of significant judgments over internal and external factors including reserve and resource estimation, future precious metal prices, estimated costs of future production, changes in government legislation and regulations, estimated deferred taxes and the availability of financing and various other operational factors. If any such indication exists, an estimate of the recoverable amount is undertaken. If the asset’s carrying amount exceeds its recoverable amount, an impairment loss is recognized in profit or loss.

Title to mineral properties

Although the Company takes steps to verify title to exploration and evaluation assets in which it has an interest, these procedures do not guarantee the Company's title. Such properties may be subject to prior agreements or transfers and title may be affected by undetected defects.

Income taxes

Income tax expense comprises current and deferred tax. Income tax is recognized in profit or loss, except to the extent that it relates to items recognized in other comprehensive income or directly in equity in which case, the income tax is also recognized in other comprehensive income or directly in equity, respectively.

Current tax

The current income tax expense or recovery is calculated on the basis of the tax laws enacted or substantively enacted at the statement of financial position date. Management establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

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Magna Mining (Canada) Corp. (formerly Magna Mining Corp.) Notes to the Consolidated Financial Statements (expressed in Canadian dollars) Year Ended December 31, 2020

3. Significant accounting policies (continued)

Income taxes (continued)

Deferred tax

Deferred tax is recognized, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the statement of financial position date and are expected to apply when the related deferred tax asset is realized or the deferred tax liability is settled.

Deferred tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized.

Deferred tax is provided on temporary differences arising on investments in subsidiaries and associates, except where the timing of the reversal of the temporary difference is controlled by the Company and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.

Share capital

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

Resource expenditure deductions for income tax purposes may be renounced to investors in accordance with income tax legislation for flow-through share arrangements. On issuance of flowthrough common shares, the Company bifurcates the flow-through share proceeds into: (i) share capital, for the fair value of common shares without a flow-through feature (based on the most recent selling price), and (ii) a flow-through share premium liability, for the amount investors pay for the flow-through feature (in excess of the most recent selling price of the common shares). As resource expenditures are incurred, the Company derecognizes the liability and recognizes other income.

Proceeds from the issuance of flow-through shares are restricted, to be used only for Canadian resource expenditures, and must be incurred within a two-year period before a 10% penalty tax applies on any unspent amount that has been renounced.

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Magna Mining (Canada) Corp. (formerly Magna Mining Corp.) Notes to the Consolidated Financial Statements (expressed in Canadian dollars) Year Ended December 31, 2020

3. Significant accounting policies (continued)

Options, warrants, contributed surplus and stock-based compensation

The estimation of the fair value of options and warrants at the date of grant requires the selection of an appropriate valuation model and consideration as to the inputs necessary for the valuation model chosen. The fair value of each option or warrant is calculated using the Black-Scholes pricing model. The Company has made estimates as to the volatility, the expected life of options or warrants, the expected dividend rate, the risk-free interest rate for the life of the option or warrant, and where applicable, expected forfeiture rates. The expected life of the option or warrant is based on the contractual life and historical data. The expected volatility is based on the historical volatility of comparable companies, over the period of the expected life of the stock option or warrant. These estimates may not necessarily be indicative of future actual patterns.

Employees (including directors and senior executives) of the Company may receive a portion of their remuneration in the form of share-based payments, whereby employees render services as consideration for equity instruments (“equity-settled transactions”). The value of equity-settled transactions with employees is measured by reference to the fair value of the equity instruments at the date on which they are granted. The Company is also required to estimate the expected future forfeiture rate of options in its calculation of share-based payments.

In situations where equity instruments are issued to non-employees for goods or services, the transaction is measured at the fair value of the goods or services received by the Company. When the value of the goods or services cannot be reliably estimated, they are measured at the fair value of the share-based payment.

The costs of equity-settled transactions are recognized, together with a corresponding increase in equity, over the period in which the performance and/or service conditions are fulfilled, ending on the date on which the relevant option holder become fully entitled to the award (“vesting date”). The cumulative expense recognized for equity-settled transactions at each reporting date until the vesting date reflects the Company’s best estimate of the number of equity instruments that will ultimately vest. The profit or loss charge or credit for a period represents the movement in cumulative expense recognized as at the beginning and end of that period and the corresponding amount is recorded in contributed surplus.

No expense is recognized for awards that do not ultimately vest, except for awards where vesting is conditional upon a market condition, which are treated as vesting irrespective of whether or not the market condition is satisfied provided that all other performance and/or service conditions are satisfied.

Where the terms of an equity-settled transaction are modified, the minimum expense recognized is the expense as if the terms had not been modified. An additional amount is recognized on the same basis as the amount of the original award for any modification which increases the total fair value of the equity-settled transactions or is otherwise beneficial to the option holder as measured at the date of modification.

Contributed surplus consists of stock-based compensation expense relating to options vesting, net of exercises and forfeitures. In addition, all cancellations and forfeitures related to warrants are transferred from warrants reserve to contributed surplus.

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Magna Mining (Canada) Corp. (formerly Magna Mining Corp.) Notes to the Consolidated Financial Statements (expressed in Canadian dollars) Year Ended December 31, 2020

3. Significant accounting policies (continued)

Loss per share

Basic loss per share is computed by dividing loss attributable to common shareholders by the weighted average number of common shares outstanding during the year. The computation of diluted loss per share assumes the conversion, exercise or contingent issuance of securities only when such conversion, exercise or issuance would have a dilutive effect on loss per share. The dilutive effect of outstanding options and warrants and their equivalents is reflected in diluted loss per share by the treasury stock method. In a loss period, potentially dilutive stock options and warrants are excluded from the loss per share calculation as the effect is anti-dilutive.

Financial instruments

The following table summarizes the classification and measurement of the Company's financial

instruments:
Classification	Financial instrument	Description
Amortized cost	Cash	Cash balances with banks
Amortized cost	Accounts receivable	Receivables from related party and
		customers
Amortized cost	Restricted cash	Cash on deposit with Ministry of Energy,
		Northern Developments and Mines
Amortized cost	Accounts payable and	Amounts payable to third parties
	accrued liabilities
Amortized cost	Due to related party	Amount payable to a related party
Amortized cost	Term loan	Term loan

Criteria for classification

The Company classifies financial instruments at amortized cost, FVOCI or FVTPL . The classification is driven by the following criteria:

Classification	Criteria	Criteria
Receivables
Amortized cost		Held within a business model whose objective is to hold assets in
		order to collect contractual cash flows; and
		Contractual terms of the financial asset give rise on specified dates
		to cash flows that are solely payments of principal and interest on
		the principal amount outstanding.

13

Magna Mining (Canada) Corp. (formerly Magna Mining Corp.) Notes to the Consolidated Financial Statements (expressed in Canadian dollars) Year Ended December 31, 2020

3. Significant accounting policies (continued)

Financial instruments (continued)

Measurement

After classification as amortized cost, FVTPL or FVOCI, the Company uses the following policy for initial measurement and subsequent measurement at each reporting period.

Classification	Initial	Subsequent	Changes in value
	measurement	measurement
Financial assets	Fair value less	Amortized cost using the	Reported in profit or loss
measured at	expected credit	effective interest method	when realized or impaired.
amortized cost	loss
Financial liabilities	Fair value	Amortized cost using the	Reported in profit or loss when
measured at		effective interest method.	liability is extinguished.
amortized cost

Impairment of financial asset s

The Company assesses all information available, including on a forward-looking basis the expected credit loss associated with its financial assets carried at amortized cost. The impairment methodology applied depends on whether there has been a significant increase in credit risk. To assess whether there is a significant increase in credit risk, the Company compares the risk of a default occurring on the asset at the reporting date with the risk of default at the date of initial recognition based on all information available, and reasonable and supportive forward-looking information. Evidence of increased credit risk may include indications that the counterparty debtor or a group of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganization and where observable data indicates that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults. Receivables are reviewed qualitatively on a case-by-case basis to determine whether they need to be written off.

Expected credit losses are measured as the difference in the present value of the contractual cash flows that are due to the Company under the contract, and the cash flows that the Company expects to receive. The Company assesses all information available, including past due status, credit ratings, the existence of third-party insurance, and forward-looking macroeconomic factors in the measurement of the expected credit losses associated with its financial assets carried at amortized cost. The Company measures expected credit loss by considering the risk of default over the contract period and incorporates forward-looking information into its measurement.

14

Magna Mining (Canada) Corp. (formerly Magna Mining Corp.) Notes to the Consolidated Financial Statements (expressed in Canadian dollars) Year Ended December 31, 2020

3. Significant accounting policies (continued)

Revenue recognition

Revenue represents the amount the Company expects to receive for goods and services in its contracts with customers, net of discounts and sales taxes.

The Company recognizes consultancy revenue under IFRS 15 which provides a single, principles based five - step model for revenue recognition to be applied to all customer contracts and requires enhanced disclosures.

Consultancy revenue is recognized when there is a contract with the customer, a performance obligation exists, the transaction price has been determined and the price is allocated to the performance obligations in the contract. Revenue is recognized over time as the performance obligations are satisfied.

4. Recent accounting pronouncements

New standards and interpretations

IAS 1: Presentation of Financial Statements & IAS 8 – Accounting Policies, Changes in Accounting Estimates and Errors

In October 2018, the IASB issued “Definition of Material”, an amendment to IAS 1 – Presentation of Financial Statements and IAS 8 – Accounting Policies, Changes in Accounting Estimates and Errors, to clarify the definition of material and to align the definition used in the Conceptual Framework and the standards themselves. Materiality is defined as “information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements, which provide financial information about a specific reporting entity.” This amendment is effective for the annual period beginning January 1, 2020. The Company has adopted IAS 1 and IAS 8 as of January 1, 2020, with no impact on its consolidated financial statements.

New standards not yet adopted

Amendments to IAS 1: Classification of Liabilities as Current or Non-Current

In January 2020, the IASB issued Classification of Liabilities as Current or Non-current (“Amendments to IAS 1”). The amendments aim to promote consistency in applying the requirements by helping companies determine whether, in the statement of financial position, debt and other liabilities with an uncertain settlement date should be classified as current (due or potentially due to be settled within one year) or non-current. The amendments include clarifying the classification requirements for debt a company might settle by converting it into equity. The amendments are effective for annual reporting periods beginning on or after January 1, 2022, with earlier application permitted.

15

Magna Mining (Canada) Corp. (formerly Magna Mining Corp.) Notes to the Consolidated Financial Statements (expressed in Canadian dollars) Year Ended December 31, 2020

4. Recent accounting pronouncements (continued)

Financial instruments (continued)

Amendments to IAS 37: Onerous Contracts – Cost of Fulfilling a Contract

In May 2020, the IASB issued Onerous Contracts – Cost of Fulfilling a Contract (“Amendments to IAS 37”) amending the standard regarding costs a company should include as the cost of fulfilling a contract when assessing whether a contract is onerous. The amendment is effective for annual reporting periods beginning on or after January 1, 2022.

The Company does not expect these new standards not yet adopted to have a material impact on the consolidated financial statements in the period of initial application.

5. Acquisition of Ursa Major Minerals Inc.

On February 7, 2017, the Company completed the acquisition of Ursa Major Minerals Inc. (“Ursa”), the owner of the Shakespeare Mine, Stumpy Bay, Porter, Porter Baldwin, Shining Tree and Fox Mountain Projects, each of which is located in proximity to Sudbury, Ontario, Canada. All of these are considered as exploration and evaluation assets.

The transaction was accounted for as an asset acquisition and the allocation of the purchase price to the assets acquired and liabilities assumed was based on fair values at the time of acquisition.

The purchase price included a deferred consideration of $150,000 which required a payment of $50,000 on each of December 31, 2017, December 31, 2018 and December 31, 2019, and was non-interest bearing. These amounts were paid in their respective years.

6. Restricted cash

Restricted cash represents a cash security deposit with the Ontario Ministry of Energy, Northern Development and Mines ("MNDM") in connection with the Stage One Mining Closure Plan on the Shakespeare Mine.

16

Magna Mining (Canada) Corp. (formerly Magna Mining Corp.) Notes to the Consolidated Financial Statements (expressed in Canadian dollars) Year Ended December 31, 2020

7. Equipment

The carrying amount of equipment and the changes in the carrying amounts are as follows:

a) Cost At December 31, 2019 and 2018 Additions At December 31, 2020 b) Accumulated depreciation At December 31, 2018 Depreciation At December 31, 2019 Depreciation At December 31, 2020 c) Carrying amounts (a-b) At December 31, 2019 At December 31, 2020	Computer equipment	Fencing	Equipment	Motor vehicles Total	Motor vehicles Total
	$ - 1,379 $ 1,379 $ - - $ - 41 $ 41 $ - $ 1,338	$ 44,689 - $ 44,689 782 2,234 $ 3,016 2,235 $ 5,251 $ 41,673 $ 39,438	$ 5,400 - $ 5,400 3,416 1,799 $ 5,215 185 $ 5,400 $ 185 $ -	$ 4,600 $ 54,689 - 1,379 $ 4,600 $ 56,068 2,910 7,108 1,533 5,566 $ 4,443 $ 12,674 157 2,618 $ 4,600 $ 15,292 $ 157 $ 42,015 $ - $ 40,776
					15,292
					42,015
					40,776

17

Magna Mining (Canada) Corp. (formerly Magna Mining Corp.) Notes to the Consolidated Financial Statements (expressed in Canadian dollars) Year Ended December 31, 2020

8. Mineral properties

The Company’s primary mineral property is the Shakespeare Mine.

All of the Company’s properties are located near Sudbury, Ontario, Canada.

The Company is required to make a $24,000 per year advance royalty payment in order to maintain certain property agreements in good standing, as outlined below. The Company is also required to make statutory licence and property tax expenditures each year to maintain its properties in good standing.

a) Shakespeare Mine

The Company has a 100% interest in the Shakespeare Mine consisting of six claims and three leases. The Shakespeare Mine contains a nickel, copper, platinum group metal resource.

In 2011, Ursa declared commercial production at the Shakespeare Mine. Subsequently, Ursa suspended production and the mine remains on care and maintenance.

b) Stumpy Bay Property

The Company owns an 84% interest in three claims known as the Stumpy Bay Property, located in Shakespeare and Baldwin Townships, Ontario. Nickel Creek Platinum Corp. has a 0.5% Net Smelter Return Royalty of which 100% can be repurchased by the Company for $250,000.

Prior vendors have retained a 2% Net Smelter Returns Royalty. Aggregate advance royalty payments of $200,000 were paid by the former operator and no further advance royalty obligation exists. The Company has the right to purchase one half of the royalty for $750,000.

Glencore International PLC has elected to include this property as part of the Shakespeare agreement and accordingly it holds a 16% interest in the Stumpy Bay Property.

c) Porter Baldwin Property

The Company has staked 62 mining claims in the Agnew Lake area that are contiguous with the Shakespeare Mine.

The Company has granted a 0.5% Net Smelter Returns Royalty, 100% of which can be repurchased for $250,000.

d) Porter Option

The Company has a 100% interest in certain mineral claims known as the Porter Option, located in Shakespeare, Dunlop and Porter Townships, Ontario. The optionor has retained a 2% Net Smelter Returns Royalty. Advance royalty payments of $24,000 per year commenced January 15, 2007.

Aggregate advance royalty payments of $224,000 have been paid.

The Company has the right to purchase one-half of the royalty for $1,000,000.

18

Magna Mining (Canada) Corp. (formerly Magna Mining Corp.) Notes to the Consolidated Financial Statements (expressed in Canadian dollars) Year Ended December 31, 2020

8. Mineral properties (continued)

e) Shining Tree Property

The Company has a 100% interest in 39 mineral claims known as the Shining Tree Property, located in Fawcett Township, Ontario. The optionor has retained a 1% Net Smelter Returns Royalty. The Company has the right to purchase one-half of the royalty for $500,000. Nickel Creek Platinum Corp. has a 0.5% Net Smelter Return Royalty of which 100% can be repurchased by the Company for $250,000.

f) Fox Mountain

The Company has staked 14 mining claims in the Thunder Bay Mining Division of Ontario. The Company has granted a 0.5% Net Smelter Returns Royalty, 100% of which can be repurchased for $250,000.

The Fox Mountain property was disposed of in 2020 for gross proceeds of $5,000.

g) Spanish River Option

The Company has a 100% interest in 7 claim units located in Baldwin Township, Ontario collectively known as the Spanish River Option. Magna will be required to complete cumulative exploration expenditures totaling $100,000 prior to the third anniversary date of signing which is November 2, 2023. The Optionor will retain a 1.5% NSR royalty which Magna can repurchase 50% (0.75%) for $1,000,000 at any time.

On November 2, 2020, Magna entered into an option to purchase agreement with 2060014 Ontario Inc. to acquire 100% of 7 claim units located in Baldwin Township, Ontario (The “Spanish River Option”). The terms of the agreement were as follows:

• Within 10 days from the date of signing: $6,000 cash and 25,000 shares of Magna (issued)

• Before the 1st anniversary date of signing: $14,000 cash and 25,000 shares of Magna

• Before the 2nd anniversary date of signing: $25,000 cash and 25,000 shares of Magna

• Before the 3rd anniversary date of signing: $30,000 cash and 25,000 shares of Magna

9. Accounts payable and accrued liabilities

Accounts payable and accrued liabilities consist of:

Trade accounts payable Accrued liabilities and other payables	2020 $ 190,807 667,585 $ 858,392	2019
		$ 66,271 465,201 $ 531,472

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Magna Mining (Canada) Corp. (formerly Magna Mining Corp.) Notes to the Consolidated Financial Statements (expressed in Canadian dollars) Year Ended December 31, 2020

10. Asset retirement obligation

The Company's provision for closure and reclamation costs are based on management's estimates of the discounted costs to abandon and reclaim mineral properties and facilities as well as an estimate of the future timing of the costs to be incurred.

The Company has estimated its total provision for asset retirement to be $680,985 at December 31, 2020 (2019 - $664,223), using an inflation rate of 2.50% (2019 - 2.50%) and a discount rate of 2.70% (2019 - 2.70%) over the period of 7 years.

The following is the continuity of the asset retirement obligation:

Balance, December 31, 2018 Accretion Balance, December 31, 2019 Accretion Balance, December 31, 2020	$ 647,874 16,349	$ 647,874 16,349
	$	664,223 16,762 680,985

11. Term loan

On April 17, 2020, the Company received a $40,000 loan under the Canada Emergency Business Account ("CEBA") program. The loan is guaranteed by the Canadian government, unsecured, and interest-free through December 31, 2022. $10,000 is eligible for forgiveness, contingent on the Company repaying $30,000 on or before December 31, 2022. During the year ended December 31, 2020, the Company recognized $10,000 (2019 - $Nil) as other income for the forgivable portion of the loan. If $30,000 is not repaid on or before December 31, 2022, $40,000 (including the forgivable amount) will be converted to a three-year term loan maturing on December 31, 2025 and bearing interest at 5% per annum with monthly interest-only payments. As at December 31, 2020, the principal balance owing on the loan was $40,000 (2019 - $Nil).

The funds from the CEBA program must only be used to pay non-deferrable operating expenses such as payroll, rent, utilities, insurance, property tax and regularly scheduled debt service and may not be used to fund any costs such as prepayment or refinancing of existing indebtedness, payments of dividends and distributions, and/or increases in management compensation.

The loan was fair valued and the difference of $3,712 between the proceeds and fair value was recognized in the profit or loss.

20

Magna Mining (Canada) Corp. (formerly Magna Mining Corp.) Notes to the Consolidated Financial Statements (expressed in Canadian dollars) Year Ended December 31, 2020

12. Income taxes

A reconciliation of income taxes at the statutory rate is as follows:

Net loss before income taxes $ Expected income tax recovery at the statutory tax rate of 26.5% (2019 - 27%) Timing differences: Mineral exploration expenses Non-deductible expenses: Stock-based compensation Other Expected income tax recovery Unrecognized benefit of deferred tax assets Deferred income tax expense $	2020 1,091,074 $ 289,135 (106,772) (118,328) 20,299 84,334 (84,334) - $	2019 814,005 219,781 (70,835) (7,869) 6,468 147,545 (147,545) -

The Company’s deductible temporary differences and unused tax losses consist of the following amounts:

Non-capital losses Mineral properties and equipment Asset retirement obligation Deferred income taxes not recognized Deferred income tax assets	2020 $ 766,000 4,437,000 180,000 5,383,000 (5,383,000) $ -	2019 $ 347,000 4,434,000 179,000 4,960,000 (4,960,000) $ -

13. Share capital

The authorized share capital of the Company is comprised of unlimited number of common shares without par value

In February 2019, the Company closed a private placement financing pursuant to which a total of 642,857 shares were issued at a price of $0.35 per share, for gross aggregate proceeds of $225,000.

In November 2019, the Company entered into an agreement to issue 251,025 shares to settle accounts payable to a related party of $87,858, at an issue price of $0.35 per share.

On March 19, 2020 the Company closed a private placement financing pursuant to which a total of 265,999 shares were issued at a price of $0.55 per share, for gross proceeds of $146,301.

21

Magna Mining (Canada) Corp. (formerly Magna Mining Corp.) Notes to the Consolidated Financial Statements (expressed in Canadian dollars) Year Ended December 31, 2020

13 Share capital (continued)

On March 19, 2020 the Company closed a private placement financing pursuant to which a total of 200,000 flow-through common shares were issued at a price of $0.69 per share, for gross proceeds of $138,000, of which $110,000 was allocated to share capital and $28,000 was allocated to flow-through premium. $17,147 of the flow-through premium was recognized in other income during the year. At year end, the Company's outstanding commitment to recognise the remaining flow-through premium is $53,489. Finder’s fees of 12,000 common shares were paid in connection with this financing at their fair value of $6,600. Legal fees of $10,008 were incurred with respect to the flow-through financing.

On November 2, 2020, the Company issued 25,000 shares of Magna at their fair value of $13,750 in connection with the purchase of the Spanish River Option. See note 8(g).

On March 19, 2020 the Company settled a related party loan of $194,439 through the issuance of common shares. The Company issued a total of 363,636 common shares at an issue price of $0.55 per share.

On November 13, 2020, Magna completed a private placement at a price of $0.50 per common share for gross proceeds of $1,692,500 and issued 3,385,000 common shares. Finder's fees in respect of the issuance amounted to $125,011.

During the year, the Company incurred transaction costs of $128,174 in connection with the GoPublic transaction completed in May 2021. These costs are included in other assets as of December 31, 2020.

14. Basic and diluted loss per share

The calculation of basic and diluted loss per share for the year ended December 31, 2020 was based on the loss attributable to common shareholders of $1,091,074 (2019: $814,005) and the weighted average number of common shares outstanding of 23,900,091 (2019 - 22,454,211).

15. Stock options

The directors of the Company have approved a Stock Option Plan, which contemplates the granting of options to directors, senior officers, employees and consultants of the Company and its subsidiary, Ursa. The Stock Option Plan is intended to provide an incentive to eligible persons to acquire a proprietary interest in the Company, to continue their participation in its affairs and to increase their efforts on its behalf. The Stock Option Plan is administered by the Magna Board.

The aggregate number of shares reserved for issuance under the Stock Option Plan may not exceed 10% of the issued and outstanding common shares on the date of grant.

22

Magna Mining (Canada) Corp. (formerly Magna Mining Corp.) Notes to the Consolidated Financial Statements (expressed in Canadian dollars) Year Ended December 31, 2020

15. Stock options (continued)

Details of the stock options issued during the year are as follows:

Outstanding at the beginning of the year Issued during the year Exercised during the year Outstanding at end of year Vested and exercisable	2020	2020	2019
	Number of stock options Weighted average exercise price		Number of stock options Weighted average exercise price
		1,272,000 $ 0.33 1,500,000 0.39 (97,000) 0.001 2,675,000 $ 0.38 2,266,667 $ 0.38	722,000 $ 0.16 550,000 0.55 - - 1,272,000 $ 0.33 1,272,000 $ 0.33

In November 2019, the Company granted 550,000 stock options to employees and directors. These options are exercisable at $0.55 per share, vest 50% on issuance and 50% one year after issuance and expire in November 2022.

On November 6, 2020, the Company granted 1,500,000 stock options to employees and directors. 1,000,000 of these stock options have a term of 3-years, vest immediately and have an exercise price of $0.35 per common share, 200,000 stock options have a term of 3-years, vest immediately and have an exercise price of $0.45 per common share and 300,000 stock options have a term of 3-years, vest one-third immediately and one-third annually thereafter and have an exercise price of $0.50 per common share.

The options outstanding at December 31, 2020 were 2,675,000 (2019 - 1,272,000) and had a weighted average exercise price of $0.38 (2019 - $0.33), and a weighted average remaining contractual life of 2.24 years (2019 - 2.59 years). 925,000 of these options vest one-third annually from the grant date, 550,000 options vest one year from grant date and 1,200,000 options vested immediately on grant date. The outstanding options vest from February 2020 to December 2022. The aggregate of the estimated fair values of the options granted in 2020 is $448,824 (2019 - $93,513). The weighted average inputs to the Black-Scholes Option Pricing model are as follows:

23

Magna Mining (Canada) Corp. (formerly Magna Mining Corp.) Notes to the Consolidated Financial Statements (expressed in Canadian dollars) Year Ended December 31, 2020

15. Stock options (continued)

Dividends Expected volatility Risk-free interest rate Expected life (months) Exercise price Spot price	2020 2019
	NIL NIL % 85 % 92 % 0.27 % 1.56 36 36 $0.39 0.55 $0.50 $0.35

Expected volatility was determined with reference to the historical volatility of similar public companies over the same period as the expected life of the options.

The Company recognized total stock-based compensation expense of $446,519 in 2020 (2019 - $58,289) within general and administrative expenses.

During the year ended December 2020, 97,000 options were exercised at an exercise price of $0.001 per share. The share price at the date of exercise was $0.55. There were no exercises in 2019.

16. Expenses by nature

Certain expenses are presented on the face of the consolidated statements of operations and comprehensive loss using a classification based on the functions exploration, environmental, Shakespeare maintenance and general and administrative.

Salaries and wages

Total salaries, wages and related costs incurred during the year ended December 31, 2020 amounted to $169,550 (2019 - $162,725). No salaries were paid to key management personnel during the year. The Company's key management personnel are the executives and directors.

During the year staff costs were allocated to exploration expense $91,133 (2019 - $75,191), environmental expense $45,323 (2019 - $46,066), and Shakespeare maintenance $33,094 (2019 - $41,468).

General and administrative expenses

For the years ended December 31, 2020 and 2019, general and administrative expenses consisted of the following:

Stock-based compensation Legal and professional General office Consultancy	$	2020 2019 446,519 $ 58,288 82,946 45,263 43,451 36,591 32,949 2,575 605,865 $ 142,717
	$

24

Magna Mining (Canada) Corp. (formerly Magna Mining Corp.) Notes to the Consolidated Financial Statements (expressed in Canadian dollars) Year Ended December 31, 2020

17. Warrants

On October 26, 2020, the Company issued 3,000,000 common share purchase Warrants (the "Magna Warrants"), to consultants as consideration for services, on terms which include: (i) a vesting provision such that the Magna Warrants shall not vest unless a GoPublic Transaction and prior to or concurrent with the closing of the GoPublic Transaction, an offering of Units of Magna, with each Unit comprised of one common share and onehalf of one common share purchase warrant, for minimum aggregate gross proceeds of $5,000,000 are closed at least two business days before the expiry of the Magna Warrants and (ii) exercise of the Magna Warrants will be conditional upon, among other things, the Warrant holders entering into lockup agreements.

Each Magna Warrant is exercisable to acquire, subject to adjustment as provided for in the warrant certificate evidencing such Magna Warrants, one Magna Share at a price of $0.10 per share at any time prior to October 26, 2022. On completion of the Qualifying Transaction (see note 22), each Magna Warrant issued to the consultants was to be exchanged for CT Exchange Warrants on the basis of the Exchange Ratio (such warrants to be referred to as Resulting Issuer Warrants). Based on the existing terms of the Magna Warrants, after giving effect to the Exchange Ratio, the consultants were to receive an aggregate of 4,875,000 Resulting Issuer Warrants in connection with the transaction, each Resulting Issuer Warrant entitling the holder thereof to acquire one Resulting Issuer Share at an effective exercise price of $0.06 per share. Subsequent to year end, the terms of the warrants were modified (note 22).

The outstanding warrants as at December 31, 2020 and December 31, 2019 and the respective changes during the year are summarized as follows:

Outstanding at the beginning of the year Broker compensation warrants Issued during the year Outstanding at end of year	2020	2019
	Number of warrants Exercise price	Number of warrants Exercise price
	- $ - 3,000,000 $ 0.10 3,000,000 $ 0.10	- $ - - $ - - $ -

The warrants outstanding at December 31, 2020 had an exercise price of $0.10 (2019 - $N/A ), and a remaining contractual life of 1.82 years (2019 - N/A). On issuance, the estimated vesting date of the warrants was August 2021. The aggregate of the estimated fair values of the warrants granted in 2020 is $1,231,401 (2019 - $N/A) which the Company is recognizing over the vesting period. During the year, $263,018 was recognized as deferred financing costs within other assets with the corresponding credit to warrant reserve. The inputs to the Black-Scholes Option Pricing model are as follows:

25

Magna Mining (Canada) Corp. (formerly Magna Mining Corp.) Notes to the Consolidated Financial Statements (expressed in Canadian dollars) Year Ended December 31, 2020

17. Warrants (continued)

Warrants (continued)
Expected volatility Risk-free interest rate Expected life (months) Exercise price Spot price	2020 2019
	% 85 % - % 0.25 % - 24 - $ 0.10 - $ 0.50 -

Expected volatility was determined with reference to the historical volatility of similar public companies over the same period as the expected life of the warrants.

18. Segmented information

The Company operates in one reportable operating segment, being the acquisition, exploration and development of mineral properties. The Company’s assets are located in Canada. The Company earned all its other income in Canada.

19. Related party transactions

Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control or common significant influence, and related parties may be individuals or corporate entities. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties. The Company's related parties are its directors and executives.

In 2019, a director advanced a loan of $194,439 to the Company to fund operations. The loan was unsecured, interest free with no set terms of repayment. The loan was settled by issuance of shares of the Company during the year.

In 2020, the Company earned consultancy income of $68,550 from Mine Management Partners Ltd., a Company controlled by the Chief Executive Officer. Accounts receivable in relation to the above revenue was $12,204 as of December 31, 2020.

Stock-based compensation to related parties during the year was $28,567 (2019 - $23,111).

26

Magna Mining (Canada) Corp. (formerly Magna Mining Corp.) Notes to the Consolidated Financial Statements (expressed in Canadian dollars) Year Ended December 31, 2020

20. Capital management

The Company's capital under management includes equity of $1,166,036 at December 31, 2020 (December 31, 2019 - ($480,056)). The Company’s objectives in managing its capital are as follows:

• To safeguard its ability to continue as a going concern; and

• To have sufficient capital to be able to meet its strategic objectives including the continued exploration and development of its existing mineral projects and the identification of additional projects.

Given the current exploration stage of its projects, the Company’s primary source of capital is derived from equity issuances. Capital consists of equity attributable to common shareholders.

The Company has no externally imposed capital requirements and manages its capital structure in accordance with its strategic objectives and changes in economic conditions. In order to maintain or adjust its capital structure, the Company may issue new shares in the form of private placements and/or secondary public offerings.

There has been no change in the Company's approach to capital management in the year ended December 31, 2020.

21. Financial instruments

Fair value

The Company’s financial instruments comprise cash, restricted cash, accounts receivable, due to related parties, accounts payable and accrued liabilities and term loan.

Financial instruments recognized at fair value on the consolidated statement of financial position are classified in fair value hierarchy levels as follows:

• Level 1: Valuation based on unadjusted quoted prices in active markets for identical assets or liabilities

• Level 2: Valuation techniques based on inputs other than Level 1 quoted prices that are observable for the asset or liability, either directly (prices) or indirectly (derived from prices)

• Level 3: Valuation techniques with unobservable market inputs (involves assumptions and estimates by management).

Fair value

The carrying values of cash, accounts payable and accrued liabilities do not materially differ from their fair values given their short-term period to maturity.

Non-current financial instruments include restricted cash and term loan. The carrying amounts of these financial instruments approximate fair value based on the related interest rate and term of the instruments.

27

Magna Mining (Canada) Corp. (formerly Magna Mining Corp.) Notes to the Consolidated Financial Statements (expressed in Canadian dollars) Year Ended December 31, 2020

21. Financial instruments (continued)

Financial risk factors

The Company’s activities expose it to a variety of financial risks, including foreign exchange risk, credit risk and interest rate risk.

Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations associated with financial liabilities. The Company manages liquidity risk through the management of its capital structure. The Company’s approach to managing liquidity is to ensure that it will have sufficient liquidity to settle obligations and liabilities when due.

The following are the remaining contractual maturities of financial liabilities for the years ended December 31, 2020 and 2019:

December 31, 2020 Accounts payable and accrued liabilities Term loan Total December 31, 2019 Accounts payable and accrued liabilities Related party Total	Carrying amount $ 858,392 27,471 $ 830,921 Carrying amount $ 531,472 194,439 $ 725,911	Total < 6 months $ 858,392 $ 858,392 30,000 - $ 888,392 $ 858,392 Total <6 months $ 531,472 $ 531,472 194,439 - $ 725,911 $ 531,472	6-12 months 1-5 years $ - $ - - 30,000 $ - $ 30,000 6-12 months 1-5 years $ - $ - 194,439 - $ 194,439 $ -

Credit risk

Credit risk is the risk of economic loss arising from a counterparty’s failure to repay or service debt according to the contractual terms. Financial instruments that potentially subject the Company to credit risk consist of cash, accounts receivable and restricted cash. The carrying value of the Company’s financial assets recorded in the consolidated financial statements represents the Company's maximum exposure to credit risk. The Company manages credit risk by placing cash with major Canadian financial institutions. Accounts receivable includes receivables from customers and related parties who have no history of default and management believes the credit risk is low.

28

Magna Mining (Canada) Corp. (formerly Magna Mining Corp.) Notes to the Consolidated Financial Statements (expressed in Canadian dollars) Year Ended December 31, 2020

21. Financial instruments (continued)

Foreign exchange risk

The Company operates in Canada and therefore, currently, has limited exposure to foreign exchange risk arising from transactions denominated in foreign currencies. Other than Canadian dollar balances, the Company holds balances in cash and has royalties payable that are denominated in US$ as outlined below. Accordingly, the Company is subject to foreign exchange risk relating to such balances in connection with fluctuations against the Canadian dollar. The Company has no program in place for hedging foreign currency risk.

The Company held the following foreign currency denominated balances as at December 31, 2020 and December 31, 2019:

Cash (US $) Due to related parties (US$) Accrued liabilities (US $) Total (US $) Foreign exchange rate Equivalent in Canadian dollars			December 31, 2020	December 31, 2019
			128 - (346,628) (346,500) 1.27 (440,055)	172 (150,000) (346,628) (496,456) 1.30 (645,393)

Based on the balances held as at December 31, 2020, a 10% decrease in the US dollar exchange rate would have resulted in a increase in the net loss for the year then ended of approximately $44,000 (2019 - $64,500) .

Interest rate risk

Interest rate risk is the risk that cash flows will fluctuate due to changes in market interest rates. The Company’s financial assets are generally not exposed to significant interest rate risk because of their short-term nature. The Company's restricted cash is interest bearing, however, the Company has assessed that changes in interest rates will not have a material impact on interest income realized on such assets.

The Company did not have any interest-bearing liabilities outstanding as at December 31, 2020.

29

Magna Mining (Canada) Corp. (formerly Magna Mining Corp.) Notes to the Consolidated Financial Statements (expressed in Canadian dollars) Year Ended December 31, 2020

22. Subsequent events

On May 4, 2021 the Company and CT Developers Ltd ("CT") completed the Qualifying Transaction. Trading on the TSX Venture Exchange commenced May 11, 2021 under the symbol NICU and the name Magna Mining Inc.

On February 10, 2021, Magna and CT finalized a definitive agreement for the transaction. CT acquired all of the issued and outstanding shares of Magna in consideration for CT issuing to each shareholder of Magna (a "Magna Shareholder") 1.625 shares of CT ("CT Shares") post consolidation for each common share of Magna (such exchange ratio, the "Exchange Ratio") held by such Magna Shareholder and each convertible, exchangeable or exercisable security of Magna was exchanged for a convertible, exchangeable or exercisable security of CT at the Exchange Ratio on substantially the same economic terms and conditions as the original convertible, exchangeable or exercisable security of Magna. This transaction resulted in the shareholders of Magna controlling the entity.

Immediately prior to the Magna Acquisition:

• CT completed a private placement of 2,000,000 CT Shares to eligible investors at a price of $0.10 per CT Share, for aggregate gross proceeds of $200,000

• CT completed a share consolidation on the basis of 4 pre-consolidation CT Shares for 1 postconsolidation CT Share.

On February 12, 2021, Magna completed a private placement of 10,770,000 subscription receipts (“Subscription Receipts”) at a price of $0.65 per Subscription Receipt for gross proceeds of $7,000,500. Each Subscription Receipt was exchanged, without payment of any consideration in addition to the purchase price, for one common share and one-half of one warrant of Magna (“Magna Unit”).

Subscription Receipt issue costs include Agent’s Fee of 6% of specific gross proceeds, payable in either cash or Subscription Receipts at the option of the Agent, of $408,488, legal fees of $125,000, a Corporate Finance fee of 1.5% payable in Subscription Receipts and Agents Warrants of 6% to acquire Subscription Receipts, having a term of 24-months.

Upon completion of the private placement, 50% of the cash commission and 100% of estimated expenses were released to the Agents. The remaining portion of the aggregate gross proceeds were held in escrow and were released to the Magna upon completion of the proposed transaction.

As a result of the transaction, the Resulting Issuer has amended the warrant certificates issued to the Consultants such that an aggregate of no more than 4,209,405 Resulting Issuer Warrants will be issued to the Consultants upon the Closing, with an effective exercise price of $0.40 per Resulting Issuer Share.

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