Mako Mining — Interim / Quarterly Report 2020

Jun 2, 2020

==> picture [156 x 172] intentionally omitted <==

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended March 31, 2020 (Expressed in United States dollars)

==> picture [64 x 49] intentionally omitted <==

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION Expressed in thousands of United States dollars (Unaudited)

Expressed in thousands of United States dollars (Unaudited)
	Note		March 31, 2020		December 31, 2019
ASSETS
Current
Cash and cash equivalents		$	201	$	4,253
Receivables and refundable taxes	3		1,700		2,142
Inventories	4		653		1,136
Prepaid expenses, and other			161		279
Total current assets			2,715		7,810
Exploration and evaluation assets	5		765		765
Mineral property, plant and equipment	6		17,643		10,005
TOTAL ASSETS		$	21,123	$	18,580
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities	7	$	10,855	$	10,445
Provision for reclamation and rehabilitation	8		763		1,413
Total current liabilities			11,618		11,858
Accounts payable and accrued liabilities	7		887		870
Provision for reclamation and rehabilitation	8		634		722
Term loan	9		5,150		-
Total liabilities			18,289		13,450
Shareholders' equity (deficit)
Share capital	10		70,295		70,295
Contributed surplus			7,837		7,673
Accumulated other comprehensive income (loss)			(4,185)		1,577
Deficit			(71,113)		(74,415)
Total shareholders' equity (deficit)			2,834		5,130
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY		$	21,123	$	18,580

Approved by the Audit Committee of the Board of Directors on June 1, 2020

”John Hick”, Audit Committee Chair “Akiba Leisman”, Director

Nature of operations and going concern (Note 1) Events after the reporting period (Note 15)

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

2 | Page

==> picture [64 x 49] intentionally omitted <==

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE LOSS Expressed in thousands of United States dollars, except per share amounts (Unaudited)

(Unaudited)
		For the three	months ended
	Note	March 31, 2020		April 30, 2019
Revenue	$	500	$	3,994
Cost of sales
Production costs		(25)		(5,399)
Change in inventories		(476)		1,955
Depreciation,depletion and amortization		-		(21)
		(501)		(3,465)
Gross income(loss)		(1)		529
Exploration and evaluation expenses		(2,306)		(2,705)
General and administrative expenses		(1,280)		(875)
Other income (expense)
Accretion and interest expense		(27)		(12)
Gain on change in provision for reclamation and rehabilitation		191		-
Extinguishment of gold stream arrangement		-		(11,755)
Foreign exchange gain		6,513		3,668
Transaction cost		-		(23)
Interest income		211		662
Income (loss) before income taxes		3,301		(10,511)
Income tax expense		-		(75)
Income (loss) for the period	$	3,301	$	(10,586)
Other comprehensive income (loss)
Income (loss) for the period		3,301		(10,586)
Items subject to reclassification into statement of loss:
Foreign currencytranslation adjustment		(5,762)		(263)
Other comprehensive loss for theperiod		(5,762)		(263)
Comprehensive loss for the period	$	(2,461)	$	(10,849)
Basic and diluted income (loss) per common share	$	0.01	$	(0.04)
Weighted average common shares outstanding (thousands)		583,701		192,134

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

3 | Page

==> picture [66 x 49] intentionally omitted <==

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY Expressed in thousands of United States dollars (Unaudited)

(Unaudited)
							Accumulated
	Number of shares (000s)	Share capital		Contributed surplus		other comprehensive income (loss)			Deficit		Total
Balance at May 1, 2018	192,104	$	36,056	$	6,560	$	421	$	(38,988)	$	4,049
Shares issued on business combination	91,233		10,632		-		-		-		10,632
Shares issued on private placement	30,000		3,416		-		-		-		3,416
Share issue costs	-		(44)		-		-		-		(44)
Shares issued on exercise of warrants	67		11		-		-		-		11
Transfer of warrant value	-		7		(7)		-		-		-
Share-based compensation	-		-		395		-		-		395
Net loss	-		-		-		-		(26,890)		(26,890)
Other comprehensive loss	-		-		-		(1,054)		-		(1,054)
Balance at April 30, 2019	313,404	$	50,078	$	6,948	$	(633)	$	(65,878)	$	(9,485)
Shares issued on rights offering	270,017		20,385		-		-		-		20,385
Share issue costs	-		(200)		-		-		-		(200)
Shares issued on exercise of options	280		21		-		-		-		21
Transfer of option value	-		11		(11)		-		-		-
Share-based compensation	-		-		736		-		-		736
Net loss	-		-		-		-		(8,537)		(8,537)
Other comprehensive income	-		-		-		2,210		-		2,210
Balance at December 31, 2019	583,701	$	70,295	$	7,673	$	1,577	$	(74,415)	$	5,130
Share-based compensation	-		-		164		-		-		164
Net income	-		-		-		-		3,301		3,301
Other comprehensive loss	-		-		-		(5,762)		-		(5,762)
Balance at March 31, 2020	583,701	$	70,295	$	7,837	$	(4,185)	$	(71,114)	$	2,833

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

4 | Page

==> picture [65 x 49] intentionally omitted <==

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS Expressed in thousands of United States dollars (Unaudited)

Expressed in thousands of United States dollars (Unaudited)
		For the three months ended
	Note	March 31, 2020		April 30, 2019
Operating activities
Net income (loss) for the period	$	3,301	$	(10,586)
Non-cash items:
Accretion expense		9		11
Depreciation, depletion and amortization		-		(113)
Change in provision for reclamation and rehabilitation		(191)		(1,685)
Interest expense		18		(13)
Share-based payments		146		183
Extinguishment of gold stream arrangement		-		11,533
Unrealized foreign exchange loss		(5,642)		(246)
		(2,359)		(916)
Changes in non-cash workingcapital		565		(414)
Net cash used in operatingactivities		(1,794)		(1,330)
Investing activities
Expenditures on mineralproperty, plant and equipment		(7,201)		(97)
Net cash used in investingactivities		(7,201)		(97)
Financing activities
Drawdown on term loan		5,150		-
Proceeds on issue of shares, net of share issuance costs		-		3,372
Interestpaid		-		(45)
Net cashprovided byfinancingactivates		5,150		3,327
Effect of foreign exchange on cash and cash equivalents		(207)		(19)
Change in cash and cash equivalents		(4,052)		1,881
Cash and cash equivalents, beginning ofperiod		4,253		1,481
Cash and cash equivalents, end of period	$	201	$	3,362

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

5 | Page

==> picture [64 x 49] intentionally omitted <==

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS For the three months ended March 31, 2020

All tabular amounts are in thousands of United States dollars unless otherwise stated (Unaudited)

1. NATURE OF OPERATIONS AND GOING CONCERN

Mako Mining Corp. (“Mako” or the “Company”) was incorporated on April 1, 2004 under the laws of the Yukon Territory and continued into British Columbia under the British Columbia Corporations Act. The Company is listed on the TSX Venture Exchange (“TSX-V”) under the symbol MKO. The address of the Company’s corporate office and principal place of business is Suite 2833 – 595 Burrard Street, Vancouver, BC, Canada.

Due to the Company's change in year-end from April 30 to December 31 in the 2019 calendar year, the comparative figures in these condensed interim consolidated financial statements are for the three-months ended April 30, 2019.

The Company’s primary asset is the San Albino-Murra Property in Nicaragua (“San Albino Property”), which is in the development stage.

Going concern

These consolidated financial statements have been prepared on a going-concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of operations for the foreseeable future.

As at March 31, 2020, the Company had cash and cash equivalents of $201,137 (December 31, 2019 - $4,253,102), a working capital deficit of $8,903,029 (December 31, 2019 – $4,047,611), and an accumulated deficit of $71,113,255 (December 31, 2019 - $74,414,613). The Company recorded net income of $3,301,358 for the three months ended March 31, 2020 (net loss for the three months ended April 30, 2020 –$10,587,594) and had cash outflows from operating activities of $1,793,864 (for the three months ended April 30, 2019 - $1,331,117) and investing outflows of $7,200,707 (for the three months ended April 30, 2019 - $96,948). Subsequent to March 31, 2020, the Company drew down an additional $10,000,000 on the unsecured credit arrangement from its controlling shareholder (Note 15) that will be used to further the development of the Company’s San Albino Property and for general working capital purposes.

Based on the Company’s construction, development and exploration activities in Nicaragua and its current level of spending for general corporate purposes, the Company will require additional funding within the next twelve months. The Company has primarily raised funds through the sale of securities and more recently, through debt. The Company expects that it will continue to obtain funding through similar or other means depending on market conditions and other relevant factors at the time. However, there can be no assurance that the Company will be able to obtain such additional funding or obtain it on acceptable terms. This material uncertainty casts significant doubt about the Company’s ability to continue as a going concern. These consolidated financial statements do not reflect the adjustments to carrying values of assets and liabilities that would be necessary should the going concern assumption prove to be inappropriate, and these adjustments could be material.

2. BASIS OF PRESENTATION

(a) Statement of compliance

These condensed interim consolidated financial statements have been prepared in accordance with International Accounting Standard (“IAS”) 34, Interim Financial Reporting using accounting policies consistent with the International Financial Reporting Standards issued by the International Accounting Standards Board (“IFRS”).

6 | Page

==> picture [64 x 49] intentionally omitted <==

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS For the three months ended March 31, 2020

All tabular amounts are in thousands of United States dollars unless otherwise stated (Unaudited)

Accordingly, they do not include all the information and notes to the consolidated financial statements required by IFRS for complete financial statements and should be read in conjunction with the Company’s most recent audited consolidated financial statements for the eight months ended December 31, 2019.

These condensed interim consolidated financial statements were approved for issuance by the Board of Directors on June 1, 2020.

(b) Basis of presentation

The accounting policies and methods used in the preparation of these condensed interim consolidated financial statements are the same as those applied in the Company’s most recent audited consolidated financial statements for the eight months ended December 31, 2019 except for:

Borrowing costs

Borrowing costs are expensed as incurred except where they are directly attributable to the acquisition, construction or production of an asset that takes a substantial period of time to prepare for its intended use are capitalized as part of the cost of the asset. Capitalization of borrowing costs begin when there are borrowings and activities commence to prepare an asset for its intended use. Capitalization of borrowing costs ends when substantially all activity necessary to prepare a qualifying asset for its intended use are complete. Borrowing costs directly attributable to the construction of the San Albino Project have been capitalized within construction in progress costs.

These condensed interim consolidated financial statements have been prepared on a historical cost basis except for certain financial instruments that are measured at fair value.

(c) Use of judgements and estimates

The preparation of these condensed interim consolidated financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed at each period end. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

The significant judgments made by management in applying the Company’s accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements as at and for the eight months ended December 31, 2019.

COVID-19 Estimation Uncertainty

In March 2020, the World Health Organization declared a global pandemic related to COVID-19. The current and expected impacts on global commerce are anticipated to be far reaching. To date there have been significant stock

7 | Page

==> picture [64 x 49] intentionally omitted <==

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS For the three months ended March 31, 2020

All tabular amounts are in thousands of United States dollars unless otherwise stated (Unaudited)

market declines, significant volatility in commodity and foreign exchange markets and the global movement of people and some goods has become restricted. On March 23, 2020, in response to the COVID-19 global pandemic, the Company announced some proactive changes to the San Albino gold project development schedule. Mako has reduced the employee and contractor workforce from 400 to slightly less than 250 people. While the Company continues to operate its business and move the development of the San Albino Project forward, there is significant ongoing uncertainty surrounding COVID-19 and the extent and duration of the impacts that it may have on future production, future cash flows in 2020 and on global financial markets. The Company is continuously monitoring the situation in Nicaragua, which could impact the timing of completion of the San Albino Mine.

3. RECEIVABLES AND REFUNDABLE TAXES

	March	31, 2020		December 31, 2019
Value added taxes (IVA)	$	1,200	$	2,066
Other		500		76
	$	1,700	$	2,142

Value added taxes (IVA) are refundable from the Government of Mexico and represent 16% of qualifying expenditures.

4. INVENTORIES

INVENTORIES
	March 31, 2020	December 31, 2019
Finished metal	82	558
Supplies and spare parts	571	578
	653 $	1,136 $

As at March 31, 2020 and December 31, 2019, finished metal inventory was recorded at cost.

5. EXPLORATION AND EVALUATION ASSETS

The following exploration and evaluation assets are located in Nicaragua:

	Potrerillos San Albino		El Jicaro	Total
Balance, April 30, 2019	$ - $	10 $	120 $ 130
Transfer to mineral property, plant and equipment	-	(10)	-	(10)
Acquired during the period	645	-	-	645
Balance, December 31, 2019 and March 31, 2020	$ 645 $	- $	120 $	765

8 | Page

==> picture [64 x 49] intentionally omitted <==

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS For the three months ended March 31, 2020

All tabular amounts are in thousands of United States dollars unless otherwise stated (Unaudited)

6. MINERAL PROPERTY, PLANT AND EQUIPMENT

	Construction in progress			Building		Equipment		Total
Cost
As at April 30, 2019	$	-	$	124	$	1,060	$	1,184
Transfer from exploration and evaluation assets		10		-		-		10
Additions		8,253		-		1,310		9,563
Disposals		-		-		(63)		(63)
Foreign currency translation adjustment		-		-		1		1
As at December 31, 2019	$	8,263	$	124	$	2,308	$	10,695
Additions		7,639		-		-		7,639
As at March 31, 2020	$	15,902	$	124	$	2,308	$	18,334
Accumulated depreciation
As at April 30, 2019	$	-	$	94	$	526	$	620
Disposals		-		-		(58)		(58)
Depreciation		-		8		119		127
Foreign currency translation adjustment		-		-		1		1
As at December 31, 2019	$	-	$	102	$	588	$	690
Depreciation		-		-		1		1
As at March 31, 2020	$	-	$	102	$	589	$	691
Net book value as at December 31, 2019	$	8,263	$	22	$	1,720	$	10,005
Net book value as at March 31, 2020	$	15,902	$	22	$	1,719	$	17,643

San Albino Property, Nicaragua

During the eight months ended December 31, 2019, the Company’s Board approved the development of the San Albino Property. The Company made the decision to develop the mine based on a preliminary economic assessment, combined with other factors. Effective the date of this decision, all capitalized exploration and evaluation costs associated with San Albino were transferred to construction in progress, a non-depreciable category of mineral property until it is ready for its intended use.

9 | Page

==> picture [64 x 49] intentionally omitted <==

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS For the three months ended March 31, 2020

All tabular amounts are in thousands of United States dollars unless otherwise stated (Unaudited)

7. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

		**March 31, 2020 **	December	31, 2019
Trade payables	$	4,135	$	3,167
Trade payables - mining contractor		1,000		1,000
Due to related parties		109		198
Mexico mining concession taxes		5,611		6,080
	$	10,855	$	10,445
Non-current liability
Trade payables-mining contractor		887		870
	$	11,742	$	11,315

On October 7, 2019, the Company entered into a settlement agreement with the Company’s mining contractor in Mexico. The Company had an outstanding liability of $11,343,338 with the two parties agreeing to settle the balance of the liability for $6,000,000, payable as follows:

• $4,000,000 (paid) on the date of signing the settlement agreement

• $1,000,000 on the first anniversary of the settlement agreement

• $1,000,000 on the second anniversary of the settlement agreement

Management has discounted the value of the long-term portion of the liability using a rate of 8%, which is management’s estimate of the weighted average cost of capital for the Company.

8. RECLAMATION AND REHABILITATION OBLIGATIONS

		**March 31, 2020 **	December	31, 2019
Opening balance	$	2,135	$	5,229
Cash outflows for reclamation and rehabilitation activities		(964)		(842)
Changes in estimate		217		(2,275)
Accretion expense		9		23
Closing balance	$	1,397	$	2,135
Current portion	$	763	$	1,413
Long-term portion		634		722
	$	1,397	$	2,135

The Company has recognized liabilities relating to La Trinidad mine and the San Albino Project and has determined that no significant closure and reclamation liabilities exist in connection with the activities on its other properties. The Company has calculated the present value of the closure and reclamation provision at March 31, 2020 using the undiscounted estimate of cash outflows associated with reclamation activities is $1,491,881 (December 31, 2019 - $2,160,963). The provision was determined using a discount rate of 0.21% - 1.15% (December 31, 2019 – 1.59%) and an inflation rate of 1.93% (December 31, 2019 – 1.97%). The Company intends to complete the reclamation activities on La Trinidad by the middle of 2022.

10 | Page

==> picture [64 x 49] intentionally omitted <==

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS For the three months ended March 31, 2020

All tabular amounts are in thousands of United States dollars unless otherwise stated (Unaudited)

Reclamation activities at the La Trinidad mine commenced during the eight months ended December 31, 2019.

9. TERM LOAN

On February 20, 2020, the Company entered into a $15,150,000 unsecured term loan facility (the “Term Loan”) from Wexford Catalyst Trading Limited, Wexford Spectrum Trading Limited and Debello Trading Limited (collectively, the “Lenders”), each private investment funds managed by the Company’s controlling shareholder, Wexford Capital LP (“Term Loan Agreement”). The Term Loan matures in August 2022 and may be prepaid at any time, in whole or in part, at par plus accrued but unpaid interest, without penalty or premium. The Term Loan bears interest at the rate of 8.0% per annum until the first anniversary of the closing date, increasing to 10% per annum thereafter, which interest is payable semi-annually on June 30[th] and December 31[st] each year, with the first interest payment due on December 31, 2020. The Term Loan will be made available in up to three drawdowns on dates to be selected by the Company within twelve months of the closing date. Each drawdown will be for a maximum of $5,000,000 (except that the first drawdown may be for a maximum of up to $5,150,000).

To the extent a drawdown is less than $5,000,000, the balance of the commitment under that drawdown tranche will be permanently cancelled and any portion of the commitment that is not advanced within twelve months following the closing date will be permanently cancelled. The Company has agreed to pay a non-refundable upfront fee of $150,000 to the Lenders on the closing of the Term Loan.

In addition, if the Loan is not repaid in full on or prior to the first anniversary of the closing date, then the Company must pay to the Lenders cash bonus interest on the first anniversary of the closing date and on each successive anniversary in an amount equal to the cash equivalent of 500 ounces of gold calculated based on the average Gold Fixing Price in the London Bullion Market during the most recently completed calendar month at the time the payment is made, in accordance with the applicable formula set out in the Term Loan Agreement.

During the three months ended March 31, 2020, the Company recorded finance costs of $140,787 and accrued interest on the Term Loan of $44,856, which has been capitalized to construction in progress. Due to the uncertainty of COVID-19 management has assumed that the Term Loan will be outstanding on the first anniversary of the closing date. As such, the Company has accrued a cash bonus interest of $28,952 based on a gold futures price per ounce of $1,599. As at March 31, 2020, the Company had drawn down $5,150,000. Refer to Note 15.

10. SHARE CAPITAL

(a) Authorized - Unlimited number of common shares, without par value.

(b) Issued

• (i) On July 23, 2019, the Company completed a rights offering whereby the Company issued 270,017,178 common shares of the Company for gross proceeds of C$27,017,178 and incurred share issuance costs of C$265,488.

11 | Page

==> picture [64 x 49] intentionally omitted <==

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS For the three months ended March 31, 2020

All tabular amounts are in thousands of United States dollars unless otherwise stated (Unaudited)

(c) Share options

During the three months ended March 31, 2020, the Company recorded share-based payments relating to the vesting of previously granted options of $155,624, of which $146,147 is included in general and administrative expenses in net income (loss) and $9,477 is included in construction in progress.

11. RELATED PARTY TRANSACTIONS

(a) Key management compensation

Key management personnel include those persons having authority and responsibility for planning, directing and controlling the activities of the Company, and comprise the Company’s Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, VP Corporate Development, VP Exploration and Directors.

	For the three months ended
	March 31, 2020	April 30, 2019
Director fees	$ 30 $	59
Salaries, consulting and management fees	206	472
Share-based compensation	147	-
Total	$ 383 $	531
As at	March 31, 2020 December 31, 2019
Amount included in accounts payable	$ 53 $	5

(b) Tes-Oro Mining Group, LLC (“Tes-Oro”)

Tes-Oro is a private company controlled by the Company’s Chief Operating Officer. Tes-Oro is a full-service engineering, procurement and construction management firm working exclusively with the Company. During the three months ended March 31, 2020, the Company expensed fees relating to consulting services of $50,702 (April 30, 2019 $156,751) in exploration expenses. Amounts payable to Tes-Oro as at March 31, 2020 were $48,139 (December 31, 2019 were $134,077).

12. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

• (a) Carrying amount versus fair value

Financial Instruments measured at fair value are classified into one of three levels using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy has the following levels:

Level 1 – quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 – 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 – inputs for the asset or liability that are not based on observable market data (unobservable inputs).

12 | Page

==> picture [64 x 49] intentionally omitted <==

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS For the three months ended March 31, 2020

All tabular amounts are in thousands of United States dollars unless otherwise stated (Unaudited)

The Company’s financial instruments include cash and cash equivalents, receivables and accounts payable. The carrying values of cash, receivables and accounts payables approximate fair value because of the short-term nature of these instruments or capacity of prompt liquidation.

The Company does not have any financial instruments that are measured using level 3 inputs.

During the three months ended March 31, 2020 there were no transfers between level 1, level 2 and level 3 classified assets and liabilities.

13. SEGMENTED INFORMATION

As at March 31, 2020, the Company has one business segment, the production of gold and exploration of resources. The Company’s principal product is gold doré with the refined gold bullion sold in the London spot market by the subsidiary in Barbados. The gold doré is produced at the La Trinidad Mine in Mexico.

All of the Company’s significant non-current assets are distributed by geographic locations as follows:

		Canada	Mexico	Nicaragua		Total
As at March 31, 2020
Mineral property, plant and equipment	$	- $	230 $ 17,413		$	17,643
Exploration and evaluation assets		-	-	765		765
As at December 31, 2019
Mineral property, plant and equipment		-	230	9,775		10,005
Exploration and evaluation assets		-	-	765		765

14. SUPPLEMENTARY CASH FLOW INFORMATION

Changes in non-cash working capital comprise the following:

		For the three months ended	For the three months ended	For the three months ended
		March 31, 2020		April 30, 2019
Receivables and refundable taxes	$	434	$	(663)
Inventories		483		800
Prepaid expenses, and other		109		(105)
Accounts payable and accrued liabilities		378		(446)
Provision for reclamation and rehabilitation - current liability		(839)		-
	$	565	$	(414)

13 | Page

==> picture [64 x 49] intentionally omitted <==

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS For the three months ended March 31, 2020

All tabular amounts are in thousands of United States dollars unless otherwise stated (Unaudited)

15. EVENTS AFTER THE REPORTING PERIOD

• (a) On April 1, 2020 and May 15, 2020, the Company had drawn down $5,000,000 and $5,000,000, respectively, for a total of $10,000,000 on the Term Loan. As of May 15, 2020, the full amount of the Term Loan had been drawn down.

• (b) Subsequent to March 31, 2020, 825,000 stock options were exercised for gross proceeds to the Company of $160,062.

14 | Page