Marvel Discovery Corp. — Audit Report / Information 2022

Dec 24, 2022

Consolidated Financial Statements Years ended August 31, 2022 and 2021 Expressed in Canadian Dollars

Crowe MacKay LLP 1100 - 1177 West Hastings Street Vancouver, BC V6E 4T5 Main +1 (604) 687-4511 Fax +1 (604) 687-5805 www.crowemackay.ca

Independent Auditor's Report

To the Shareholders of Marvel Discovery Corp.

Opinion

We have audited the consolidated financial statements of Marvel Discovery Corp. (the "Group"), which comprise the consolidated statements of financial position as at August 31, 2022 and August 31, 2021 and the consolidated statements of operations and comprehensive loss, changes in shareholders' equity and 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 Group as at August 31, 2022 and August 31, 2021, 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 audit 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 Group in accordance with the ethical requirements that are relevant to our audit 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 is sufficient and appropriate to provide a basis for our opinion.

Material Uncertainty Related to Going Concern

We draw attention to Note 1 to the consolidated financial statements which describes the material uncertainty that may cast significant doubt on the Group'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:

• Management's Discussion and Analysis

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 identified above and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

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

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

Management is responsible for the preparation and fair presentation of the 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 Group'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 Group or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Group'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 Group'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 Group'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 Group 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 Group 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 Hilda Leung.

"Crowe MacKay LLP"

Chartered Professional Accountants Vancouver, Canada December 23, 2022

Consolidated Statements of Financial Position

As at August 31, 2022 and 2021

(Expressed in Canadian dollars)	August 31,	August 31,
	2022	2021
ASSETS
Current
Cash	$104,064	$100,618
Amount receivable (Note 5)	63,053	78,354
Due from related parties (Note 9)	105,369	490
Prepaid expenses and deposits (Note 9)	69,653	75,325
	342,139	254,787
Advances on exploration	35,612	-
Investment (Note 13)	500,000	581,578
Exploration and evaluation assets (Note 6)	2,775,639	1,193,649
	$3,653,390	$2,030,014
LIABILITIES
Current
Accounts payable and accrued liabilities (Notes 7 and 9)	$593,251	$649,102
Due to related parties (Note 9)	25,000	-
Flow-through premium (Note 14)	52,270	-
	670,521	649,102
SHAREHOLDERS' EQUITY
Share capital (Note 8)	16,701,543	14,423,772
Share subscription receivable (Notes 8 and 9)	(203,550)	(193,750)
Reserves (Note 8)	1,657,147	1,514,309
Deficit	(15,172,271)	(14,363,419)
	2,982,869	1,380,912
	$3,653,390	$2,030,014

Nature and continuance of operations (Note 1) Commitments (Note 6) Subsequent events (Notes 6, 8, 9 and 15)

Approved and authorized for issuance on behalf of the Board of Directors on December 23, 2022:

/s/ Karim Rayani /s/ Geoff Balderson

Karim Rayani Geoff Balderson

Consolidated Statements of Operations and Comprehensive Loss For the years ended August 31, 2022 and 2021

(Expressed in Canadian dollars)

	For the years ended August 31,2022	2021
Administrative expenses
Bank and interest charges	$3,267	$2,176
Consulting fees (Note 9)	109,818	170,125
Filing and transfer agent fees	57,755	83,102
Loan interest (Note 11)	-	18,881
Management fees (Note 9)	146,000	96,000
Office and miscellaneous	1,292	2,860
Professional fees (Note 9)	105,231	128,182
Property investigation cost	12,000	-
Rent (Note 9)	30,000	-
Salaries and benefits	-	3,642
Share-based payment (Notes 8 and 9)	18,540	332,440
Shareholder communications	201,720	109,393
Travel and promotion	9,420	-
Total expenses	695,043	946,801
Loss before other items:	(695,043)	(946,801)
Other items:
Loss on fair value of investment	(81,578)	-
Interest income	1,612	742
Other income (Note 14)	65,276	72,000
Impairment of exploration and evaluation asset (Note 6)	-	(105,166)
Bad debts	(101,734)	-
Gain on debt settlement (Notes 7 and 11)	2,615	143,744
Total other (expenses) income	(113,809)	111,320
Net loss and comprehensive loss for the year	$(808,852)	$(835,481)
Basic and diluted loss per share	$(0.01)	$(0.01)
Weighted average number of common shares outstanding	91,016,325	68,855,545

Consolidated Statements of Changes in Shareholders' Equity For the years ended August 31, 2022 and 2021

(Expressed in Canadian dollars)

	Number ofshares	ShareCapital	Sharesubscriptionadvance/receivable	Optionreserves	Warrantreserves	Deficit	TotalShareholders'Equity
Balance, August 31, 2020	63,337,105	$13,184,763	$(42,350)	$1,062,769	$88,918	$(11,835,952)	$2,458,148
Share subscriptions received	-	-	42,350	-	-	-	42,350
Shares issued pursuant to optionsexercise	375,000	72,362	-	(33,862)	-	-	38,500
Shares issued pursuant to warrantsexercise	7,945,667	460,197	(35,750)	-	-	-	424,447
Shares issued for property acquisitionWarrants issued to acquire exploration	500,000-	40,000-	--	--	-18,670	--	40,00018,670
and evaluation assetsUnits issued forproperty acquisition	1,250,000	109,000	-	-	45,374	-	154,374
Debt settlement	1,250,000	162,500	-	-	-	-	162,500
Private placement	4,400,000	500,000	(158,000)	-	-	-	342,000
Share issue costsFlow-through premium	--	(33,050)(72,000)	--	--	--	--	(33,050)(72,000)
Share-based payment	-	-	-	332,440	-	-	332,440
Distribution to Shareholders (Note 13)	-	-	-	-	-	(1,691,986)	(1,691,986)
Net loss for the year	-	-	-	-	-	(835,481)	(835,481)
Balance, August 31, 2021	79,057,772	$14,423,772	$(193,750)	$1,361,347	$152,962	$(14,363,419)	$1,380,912

Consolidated Statements of Changes in Shareholders' Equity For the years ended August 31, 2022 and 2021 (Expressed in Canadian dollars)

	Number ofshares	ShareCapital	Sharesubscriptionadvance/receivable	Optionreserves	Warrantreserves	Deficit	TotalShareholders'Equity
Balance, August 31, 2021	79,057,772	$14,423,772	$(193,750)	$1,361,347	$152,962	$(14,363,419)	$1,380,912
Share subscription receivedPrivate placementFlow-through premiumShare issue cost	-9,863,756--	-1,185,667(117,546)(64,610)	155,600(10,400)--	----	-120,708--	----	155,6001,295,975(117,546)(64,610)
Shares issued pursuant to warrantsexercised	6,827,000	472,850	(155,000)	-	-	-	317,850
Shares issued pursuant to optionsexercised	750,000	108,410	-	(31,410)	-	-	77,000
Shares issued to acquire explorationand evaluation assets	5,700,000	693,000	-	-	-	-	693,000
Warrants issued to acquire explorationand evaluation assets	-	-	-	-	35,000	-	35,000
Share-based payments	-	-	-	18,540	-	-	18,540
Net loss for the year	-	-	-	-	-	(808,852)	(808,852)
Balance, August 31, 2022	102,198,528	$16,701,543	$(203,550)	$1,348,477	$308,670	$(15,172,271)	$2,982,869

Consolidated Statements of Cash Flows

For the years ended August 31, 2022 and 2021

(Expressed in Canadian dollars)

	For the years ended August 31,20222021
Operating Activities
Net loss for the year	$	(808,852)	$	(835,481)
Adjustments to reconcile loss to net cash used in operating activities:
Other income		(65,276)		(72,000)
Bad debtsShare-based payment		101,73418,540		-332,440
Gain on debt settlement		(2,615)		(143,744)
Loss on fair value of investment		81,578		-
Interest income		(1,612)		-
Changes in non-cash working capital items related to operations:
Amount receivable		15,301		(67,753)
Prepaid expenses and deposits		5,672		14,418
Accounts payable and accrued liabilities		125,396		370,788
Cash provided by (used in) operating activities		(530,134)		(401,332)
Investing Activities
Exploration and evaluation assets		(1,169,968)		(255,524)
Due from related parties		(103,267)		823
Cash used in investing activities		(1,273,235)		(254,701)
Financing Activities
Issuance of common shares, net of share issue costs		1,781,815		772,247
Repayment of promissory note		-		(174,718)
Due to related parties		25,000		(315,566)
Cash provided by financing activities		1,806,815		281,963
Change in cash during the year		3,446		(374,070)
Cash, beginning of year		100,618		474,688
Cash, end of the year	$	104,064	$	100,618
Supplemental Disclosure of Cash Flow Information:
Cash paid during the year:
Interest	$	-	$	-
Income taxes	$	-	$	-

Supplemental disclosure – (Note 12)

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

1. Nature and continuance of operations

Marvel Discovery Corp. (formerly International Montoro Resources Inc.) (the "Company") was incorporated on January 30, 1987 under the laws of the Province of British Columbia, Canada, and its principal activity is the acquisition and exploration of mineral properties in Canada. The Company changed its name on February 24, 2021. The Company's shares are traded on the TSX Venture Exchange ("TSX-V") under the symbol "MARV".

The corporate office and principal place of business of the Company is Suite 615 – 800 West Pender Street, Vancouver, B.C., V6C 2V6.

The Company is in the business of exploring its mineral exploration assets and has not yet determined whether these properties contain ore reserves that are economically recoverable. At August 31, 2022 the Company was in the exploration stage and had interests in properties in Canada.

These consolidated financial statements have been prepared on a going concern basis, which presumes the realization of assets and discharge of liabilities in the normal course of business for the foreseeable future. The ability of the Company to continue as a going concern and the recoverability of the amounts shown for exploration and evaluation assets are dependent upon the existence of economically recoverable reserves, the ability of the Company to obtain necessary financing to complete the development, and upon future profitable production or proceeds from the disposition thereof. There is significant uncertainty regarding the outcome of these matters. The Company has sustained losses from operations and has an ongoing requirement for capital investment to explore its exploration and evaluation assets. As at August 31, 2022, the Company had a working capital deficiency of $328,382 (2021 – $394,315) and accumulated deficit of $15,172,271 (2021 - $14,363,419). Based on its current plans, budgeted expenditures, and cash requirements, the Company does not have sufficient cash to finance its current plans. The Company expects that it will need to raise substantial additional capital to accomplish its business plan over the next several years. The Company expects to seek additional financing through equity financing. There can be no assurance as to the availability or terms upon which such financing might be available (Note 15).

The Company's business may be affected by changes in political and market conditions, such as interest rates, availability of credit, inflation rates, changes in laws, and national and international circumstances. Recent geopolitical events, including, the outbreaks of the coronavirus (COVID-19) pandemic, relations between NATO and Russian Federation regarding the situation in Ukraine, and potential economic global challenges such as the risk of the higher inflation and energy crises, may create further uncertainty and risk with respect to the prospects of the Company's business.

These conditions indicate the existence of a material uncertainty that may cast significant doubt about the Company's ability to continue as a going concern. These consolidated financial statements do not include any adjustments to the amounts and classification of assets and liabilities that might be necessary should the Company be unable to continue in business.

2. Basis of preparation

Statement of compliance

The consolidated financial statements of the Company have been prepared in accordance with International Financial Reporting Standards ("IFRS") issued by the International Accounting Standards Board ("IASB") and interpretations of the International Financial Reporting Interpretations Committee ("IFRIC").

The consolidated financial statements were reviewed by the Audit Committee and approved on December 23, 2022.

2. Basis of preparation – (cont'd)

Basis of preparation

The consolidated financial statements of the Company have been prepared on an accrual basis and are based on historical costs, except for financial instruments classified as fair value through profit and loss, which are stated at their fair value. The consolidated financial statements are presented in Canadian dollars, which is the Company's functional currency, unless otherwise noted.

3. Significant accounting policies

The accounting policies set out below have been applied consistently in the consolidated financial statements, unless otherwise indicated.

Basis of consolidation

These consolidated financial statements include the accounts of the Company and its subsidiaries. The results of the subsidiaries will continue to be included in the consolidated financial statements of the Company until the date that the Company's control over the respective subsidiaries cease. Control exists when the Company has the power, directly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

Inter-company balances and transactions, including unrealized income and expenses arising from intercompany transactions, are eliminated on consolidation.

Entity	Incorporation	Status	FunctionalCurrency
New Marvel Gold Corp.	B.C., Canada	Inactive	CDN Dollar
New Marvel Energy Corp.	B.C., Canada	Inactive	CDN Dollar

New Marvel Gold Corp. was incorporated on July 19, 2021, and New Marvel Energy Corp. was incorporated on April 8, 2022.

Exploration and evaluation assets

The Company is in the exploration stage in respect to its exploration and evaluation assets.

Pre-exploration costs are expensed in the year in which they are incurred.

Once the legal right to explore a property has been acquired, costs directly related to exploration and evaluation expenditures are recognized and capitalized, in addition to the acquisition costs. These direct expenditures include such costs as materials used, geological and geophysical evaluation, surveying costs, drilling costs, payments made to contractors and depreciation on property and equipment during the exploration phase. Costs not directly attributable to exploration and evaluation activities, including general administrative overhead costs, are expensed in the year in which they occur.

Where the Company has entered into option agreements for the acquisition of an interest in exploration and evaluation assets which provided for periodic payments, such amounts unpaid are not recorded as a liability when they are payable entirely at the Company's discretion. Although the Company has taken steps to verify title to the exploration and evaluation assets in which it has an interest, these procedures do not guarantee the Company's title. The exploration and evaluation assets may be subject to prior undetected agreements or transfers and title may be affected by such defects.

Exploration and evaluation assets – (cont'd)

When a project is deemed to no longer have commercially viable prospects to the Company, exploration and evaluation expenditures in respect of that project are deemed to be impaired. As a result, those exploration and evaluation expenditure costs, in excess of estimated recoveries, are written-off to profit or loss.

The Company assesses exploration and evaluation assets for indications of impairment at each reporting date.

Once the technical feasibility and commercial viability of extracting the mineral resource has been determined, the property is considered to be a mine under development and is classified as "mine development cost". Exploration and evaluation assets are tested for impairment before the assets are transferred to development properties.

Any incidental revenue earned in connection with exploration activities is applied as a reduction to capitalized exploration costs. Any operational income earned in connection with exploration activities is recognized in profit or loss.

Impairment of assets

The carrying amount of the Company's assets (which include exploration and evaluation assets) is reviewed at each reporting date to determine whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. An impairment loss is recognized whenever the carrying amount of an asset or its cash generating unit exceeds its recoverable amount. Impairment losses are recognized in profit or loss.

The recoverable amount of assets is the greater of an asset's fair value less cost to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects the current market assessments of the time value of money and the risks specific to the asset. For an asset that does not generate cash inflows largely independent of those from other assets, the recoverable amount is determined for the cash-generating unit to which the asset belongs.

An impairment loss is only reversed if there is an indication that the impairment loss may no longer exist and there has been a change in the estimates used to determine the recoverable amount, however, not to an amount higher than the carrying amount that would have been determined had no impairment loss been recognized in previous years.

Financial instruments

Financial Assets

At initial recognition, the Company measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, the transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit and loss ("FVTPL") are expensed in profit or loss. Financial assets are considered in the entirety when determining whether their cash flows are solely payment of principal and interest.

Financial instruments – (cont'd)

Financial assets – (cont'd)

Subsequent measurement of financial assets depends on their classification. The classification depends on the Company's business model for managing the financial assets and contractual terms of the cash flows. These are the measurement categories under which the Company classifies its financial assets:

• · Amortized cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortized cost. A gain or loss on a debt investment that is subsequently measured at amortized cost is recognized in profit or loss when the asset is derecognized or impaired. Interest income from these financial assets is included in interest income using the effective interest rate method.
• · Fair value through other comprehensive income ("FVOCI"): Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets' cash flows represent solely payments of principal and interest, are measured at FVOCI. Movements in the carrying amount are taken through other comprehensive income ("OCI"), except for the recognition of impairment gains and losses, interest revenue, and foreign exchange gains and losses which are recognized in profit or loss. When the financial asset is derecognized, the cumulative gain or loss previously recognized in OCI is not reclassified from equity to profit or loss and remains in accumulated OCI.
• · Fair value through profit or loss: Assets that do not meet the criteria for amortized cost or FVOCI are measured at FVTPL. A gain or loss on an investment that is subsequently measured at FVTPL is recognized in profit or loss and presented net as other income/expense in the statement of operations in the period which it arises.

The Company's cash has been designated as FVTPL and accounts receivable and due from related parties are measured at amortized cost. Investment was measured using the equity method during the year ended August 31, 2021, and up to March 23, 2022. Thereafter, it was measured at FVTPL.

Impairment of Financial Assets at Amortized Cost

The Company recognizes a loss allowance for expected credit losses on financial assets that are measured at amortized cost. At each reporting date, the Company measures the loss allowance for the financial asset at an amount equal to the lifetime expected credit losses of the credit risk on the financial asset has increased significantly since initial recognition. If at the reporting date, the financial asset has not increased significantly since initial recognition, the Company measures the loss allowance for the financial asset at an amount equal to the twelve month expected credit losses. The Company shall recognize in profit or loss, as an impairment gain or loss, the amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognized.

Derecognition

The Company derecognizes financial assets only when the contractual rights to cash flows from the financial assets expire, or when it transfers the financial assets and substantially all of the associated risks and rewards of ownership to another entity. Gains and losses on derecognition are generally recognized in operations.

Financial instruments – (cont'd)

Financial Liabilities

The Company classifies its financial liabilities into the following categories: financial liabilities at FVTPL and amortized cost.

A financial liability is classified as FVTPL if it is classified as held-for-trading or is designated as such on initial recognition. Directly attributable transaction costs are recognized in profit or loss as incurred. The fair value changes to financial liabilities at FVTPL are presented as follows: the amount of change in fair value that is attributable to changes in the credit risk of the liability is presented in OCI; and the remaining amount of the change in the fair value is presented in profit or loss. The Company does not designate any financial liabilities at FVTPL.

Other non-derivative financial liabilities are initially measured at fair value less any directly attributable transaction costs. Subsequent to initial recognition, these liabilities are measured at amortized cost using the effective interest rate method. The Company classifies its accounts payable and accrued liabilities, due to related parties and promissory notes as financial liabilities held at amortized cost.

Provisions

Rehabilitation Provision

The Company is subject to various government laws and regulations relating to environmental disturbances caused by exploration and evaluation activities. The Company records the present value of the estimated costs of legal and constructive obligations required to restore the exploration sites in the year in which the obligation is incurred. The nature of the rehabilitation activities includes restoration, reclamation and revegetation of the affected exploration sites.

The rehabilitation provision generally arises when the environmental disturbance is subject to government laws and regulations. When the liability is recognized, the present value of the estimated costs is capitalized by increasing the carrying amount of the related exploration and evaluation assets. Over time, the discounted liability is increased for the changes in present value based on current market discount rates and liability specific risks.

Additional environment disturbances or changes in rehabilitation costs will be recognized as additions to the corresponding assets and rehabilitation liability in the year in which they occur.

Other Provisions

Provisions are recorded when a present legal or constructive obligation exists as a result of past events where it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate of the amount of the obligation can be made.

Basic and diluted loss per share

Basic loss per share is computed by dividing the net loss by the weighted average number of outstanding shares in issue during the reporting period. Diluted loss per share is computed similar to basic loss except that the weighted average number of outstanding shares include additional shares for the assumed exercise of stock options and warrants, if dilutive. The number of additional shares is calculated by assuming that outstanding stock options and warrants were exercised and the proceeds from such exercises were used to acquire common stock at the average market price during the reporting periods. In a loss reporting period, potentially dilutive common shares are excluded from the loss per share calculation as the effect would be anti-dilutive.

Income taxes

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

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted, or substantively enacted, at the end of the reporting period, and any adjustment to tax payable in respect of previous years.

Current tax assets and current tax liabilities are only offset if a legally enforceable right exists to set off the amounts, and the Company intends to settle on a net basis, or to realize the asset and settle the liability simultaneously.

Deferred tax is recognized in respect of all qualifying temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements except for other than business combination which does not have an impact. Deferred income tax is determined on a non-discounted basis using tax rates and laws that have been enacted or substantively enacted at the statement of financial position date and are expected to apply when the deferred tax asset or liability is settled. Deferred tax assets are recognized to the extent that it is probable that the assets can be recovered.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority.

Deferred income tax assets and liabilities are presented as non-current.

Share capital

The Company has adopted a residual value method with respect to the measurement of shares and warrants issued as private placement units. The residual value method first allocates value to the more easily measurable component based on fair value and then the residual value, if any, to the less easily measurable component. The fair value of the common shares issued in the private placements is determined to be the more easily measurable component and is valued at their fair value, as determined by the price of concurrent common share financing. The balance, if any, is allocated to the attached warrants. Any fair value attributed to the warrants is recorded to warrant reserves.

Flow-through shares

The Company may from time to time, issue flow-through common shares to finance its exploration program. Pursuant to the terms of the flow-through share agreements, these shares transfer the tax deductibility of qualifying resource expenditures to investors. On issuance, the Company bifurcates the flow-through share into i) a flow-through share premium, equal to the estimated premium, if any, investors pay for the flow-through feature, which is recognized as a liability, and ii) share capital. Upon expenses being incurred, the Company derecognizes the liability and recognizes a deferred tax liability and deferred tax expense for the amount of tax reduction renounced to the shareholders. The reduction of the flow-through share premium previously recorded is recognized as other income.

Proceeds received from the issuance of flow-through shares are restricted to be used only for Canadian exploration expenses (as defined in the Tax Act).

The Company may also be subject to a Part XII.6 tax on flow-through proceeds renounced under the Lookback Rule, in accordance with the Tax Act. When applicable, this tax is accrued as a financial expense until paid.

Share-based payment

The Company operates a stock option plan. Share-based payments to employees are measured at the fair value of the instruments issued and amortized over the vesting periods. Share-based payments to nonemployees are measured at the fair value of goods or services received or the fair value of the equity instruments issued, if it is determined the fair value of the goods or services cannot be reliably measured, and are recorded at the date the goods or services are received. The corresponding amount is recorded to option reserves. The fair value of options is determined using a Black–Scholes pricing model which incorporates all market vesting conditions. The number of shares and options expected to vest is reviewed and adjusted at the end of each reporting period such that the amount recognized for services received as consideration for the equity instruments granted shall be based on the number of equity instruments that eventually vest. All equitysettled share-based payment is reflected in option reserves, until exercised. Upon exercise, shares are issued from treasury and the amount reflected in reserve is credited to share capital, adjusted for any consideration paid.

Foreign currency translation

Transactions and balances:

Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of the transaction. Foreign currency monetary items are translated at the period-end exchange rate. Nonmonetary items measured at historical cost continue to be carried at the exchange rate at the date of the transaction. Non-monetary items measured at fair value are reported at the exchange rate at the date when fair values were determined.

Exchange differences arising on the translation of monetary items or on settlement of monetary items are recognized in profit or loss in the statement of operations and comprehensive loss in the period in which they arise, except where deferred in equity as a qualifying cash flow or net investment hedge.

Investment in associate

The Company's investment was accounted for using the equity method of accounting during the year end August 31, 2021 up to March 31, 2022. An associate is an entity in which the Company has significant influence and which is neither a subsidiary nor a joint venture.

Associates are those entities in which the Company has significant influence, but not control, over the financial and operating policies. Significant influence is presumed to exist when the Company holds between 20 and 50 percent of the voting power of another entity. Investments in associates are accounted for using the equity method (equity accounted investees) and are recognized initially at cost. The consolidated financial statements include the Company's share of the income and expenses and equity movements of equity accounted investees, after adjustments to align the accounting policies with those of the Company from the date that significant influence or joint control commences, until the date that significant influence or joint control ceases. Where there has been a change recognised directly in the equity of the associate, the Company recognises its share of any changes and discloses this, when applicable, in the statement of changes in equity. Profits and losses resulting from transactions between the Company and the associate are eliminated to the extent of the interest in the associate. When the Company's share of losses exceeds its interest in an equity accounted investee, the carrying amount of that interest, including any long-term investments, is reduced to nil, and the recognition of further losses is discontinued, except to the extent that the Company has obligation, or has made payments on behalf of the investee.

When the Company no longer exercises significant influence over an investee, it discontinues the equity method of accounting. The Company recognizes its proportionate share of income or loss in the investee until the date of loss of significant influence, and thereafter accounts for the investment at fair value through profit and loss. Any difference between the carrying value of the investment and its fair value on the date of loss of significant influence is recorded as a gain or loss in the statement of operations.

Related party transactions

Related party transactions 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 financing and operating decisions. Parties are also considered to be related if they are subject to common control. Related parties may be individuals or corporate entities and include key management of the Company and its parent. A transaction is considered to be a related party transaction when there is a transfer of resources, services or obligations between related parties.

Recent accounting pronouncements and changes in accounting policies

Certain new standards, interpretations, amendments and improvements to existing standards were issued by the IASB or IFRIC that are mandatory for future accounting periods are as follows:

Classification of Liabilities as Current or Non-current (Amendments to IAS 1)

The amendments to IAS1 provide a more general approach to the classification of liabilities based on the contractual arrangements in place at the reporting date. These amendments are effective for reporting periods beginning on or after January 1, 2023.

4. Critical accounting estimates, assumptions and judgments

The Company makes estimates and assumptions about the future that affect the reported amounts of assets and liabilities. Estimates and judgments are continually evaluated based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may differ from these estimates and assumptions.

The effect of a change in an accounting estimate is recognized prospectively by including it in net loss in the year of the change, if the change affects that year only, or in the year of the change and future years, if the change affects both.

Critical judgments, estimates and assumptions in applying accounting policies

Information about critical judgments in applying accounting policies that have the most significant risk of causing material adjustment to the carrying amounts of assets and liabilities recognized in the consolidated financial statements within the next financial year are discussed below:

Going Concern

The assessment of the Company's ability to continue as a going concern require significant judgement. See Note 1.

Title to mineral property interests

Although the Company has taken steps to verify title to mineral properties 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.

Impairment of Mineral Properties

In accordance with the Company's accounting policy for its mineral properties, exploration and evaluation expenditures on mineral properties are capitalized. There is no certainty that the expenditures made by the Company in the exploration of its property interests will result in discoveries of commercial quantities of minerals. The Company applies judgment to determine whether indicators of impairment exist for these capitalized costs.

Management uses several criteria in making this assessment, including the period for which the Company has the right to explore, expected renewals of exploration rights, whether substantive expenditures on further exploration and evaluation of mineral properties are budgeted, and evaluation of the results of exploration and evaluation activities up to the reporting date.

Investment in private company

When the fair values of financial assets recorded on the statement so financial position cannot be derived from active markets, they are determined using a variety of valuation techniques. The inputs to these models are derived from observable market data where possible, but where observable market data is not available, judgement is required to establish fair value.

5. Amounts receivable

	August 31,2022	August 31,2021
Goods and services tax recoverable	$38,053	$	78,354
Accounts receivable	25,000		-
Total	$63,053	$	78,354

6. Exploration and evaluation assets

							Canada
	Blackfly	Baie Verte	Duhamel	East Bull	Gander	Highway	Key Lake	Sandy Pond	Step	Slip Gold	Victoria Lake	Other	Total
Balance, August 31, 2021	$ 437,131	$28,275	$311,516	$55,000	$123,620	$-	$-	$36,115	$-	$91,170	$90,019	$20,803	$1,193,649
Acquisition costs:
Staking	-	-	7,000	-	-	-	-	-	2,250	-	-	-	9,250
Cash	15,000	30,000	-	10,000	-	50,000	50,000	25,000	18,500	-	15,000	23,450	236,950
Shares	24,000	27,000	-	-	-	552,000	-	54,000	-	-	36,000	-	693,000
Warrants	-		-	-	-		-	14,000	-	-	21,000	-	35,000
	39,000	57,000	7,000	10,000	-	602,000	50,000	93,000	20,750	-	72,000	23,450	974,200
Exploration and evaluation costs:
Assays	20,663	-	-	-	-		-	-	-	880	-	-	21,543
Claim fees	-	-	-	-	-	-	-	-	-	-	1,100	4,110	5,210
Drilling (recovery)	(19,303)	-	-	-	-	-	25,000	-	-	-	-	-	5,697
Geological consulting	5,034	6,354	45,889	45,560	9,337	-	-	2,291	-	-	8,946	906	124,317
Geophysics	-	-	-	-	87,500	5,499	-	7,500	59,188	15,000	-	5,000	179,687
Mag Surveys	-	-	-	-	-	-	132,500	-	-	-	-	-	132,500
Field cost	-	6,101	62,592	-	32,920	-	-	3,553	2,900	-	4,301	-	112,367
Prospecting	-	-	-	-	-	-	-	-	-	5,365	-	-	5,365
Reports and admin	-	-	-	-	-	8,316	-	-	-	-	-	-	8,316
Travel and accommodations	-	-	12,788	-	-		-	-	-	-	-	-	12,788
	6,394	12,455	121,269	45,560	129,757	13,815	157,500	13,344	62,088	21,245	14,347	10,016	607,790
Total expenditures for the year	45,394	69,455	128,269	55,560	129,757	615,815	207,500	106,344	82,838	21,245	86,347	33,466	1,581,990
Balance, August 31, 2022	$ 482,525	$97,730	$439,785	$110,560	$253,377	$615,815	$207,500	$142,459	$82,838	$112,415	$176,366	$54,269	$2,775,639

						Canada
	SerpentRiver	Duhamel	Wicheeda	Camping	Blackfly	Slip Gold	VictoriaLake	East Bull	Gander	Sandy Pond	Other*	Total
Balance, August 31, 2020	$2,148,113	$ 213,920	$ 227,989	$65,166	$10,000	$-	$-	$-	$-	$-	$3	$2,665,191
Acquisition costs:
Staking	-	-	-	-	-	-	13,715	-	120,120	11,115	49,075	194,025
Cash	-	-	-	-	-	30,000	10,000	10,000	-	25,000	-	75,000
Shares	-	-	-	40,000	8,500	42,500	28,000	30,000	-	-	-	149,000
Warrants	-	-	-	-	18,670	18,670	11,704	15,000	-	-	-	64,044
	-	-	-	40,000	27,170	91,170	63,419	55,000	120,120	36,115	49,075	482,069
Exploration and evaluation costs:
Assays	-	-	-	-	41,028	-	-	-	-	-	-	41,028
Claim fees	-	-	-	-	-	-	260	-	-	-	-	260
Drilling	-	-	-	-	178,595	-	-	-	-	-	-	178,595
Geological consulting	1,200	92,570	-	-	150,568	-	26,340	-	-	-	-	270,678
Geophysics	-	-	-	-	8,500	-	-	-	-	-	-	8,500
Mag Surveys	-	-	-	-	21,270	-	-	-	-	-	-	21,270
Other	-	-	22,500	-	-	-	-	-	3,500	-	-	26,000
Reports and admin	9,600	-	4,162	-	-	-	-	-	-	-	-	13,762
Travel and accommodations	-	5,026	-	-	-	-	-	-	-	-	-	5,026
	10,800	97,596	26,662	-	399,961	-	26,600	-	3,500	-	-	565,119
Total expenditures for the year	10,800	97,596	26,662	40,000	427,131	91,170	90,019	55,000	123,620	36,115	49,075	1,047,188
	2,158,913	311,516	254,651	105,166	437,131	91,170	90,019	55,000	123,620	36,115	49,078	3,712,379
Impairment	-	-	-	(105,166)	-	-	-	-	-	-	-	(105,166)
Distribution (Note 13)	(2,158,913)	-	(254,651)	-	-	-	-	-	-	-	-	(2,413,564)
Balance, August 31, 2021	$-	$ 311,516	$-	$-	$437,131	$91,170	$90,019	$55,000	$ 123,620	$36,115	$49,078	$1,193,649

* Included in other properties is Baie Verte staking cost of $28,275 which was broken out for the year ended August 31, 2022.

The following is a description of the Company's exploration and evaluation assets and the related spending commitments:

Blackfly Property (Ontario)

On August 21, 2020 the Company entered into an agreement to acquire a 100% interest in five claims consisting of 64 unpatented mining claims units near Atikokan, Ontario. The agreement is subject to a 2% Net Smelter Royalty ("NSR") to the optionors of which 1% may be purchased for $1,200,000. Terms include cash payments totaling $105,000, which includes $40,000 in advance royalty payments commencing on August 4, 2024 and ending on August 4, 2027, and issue 500,000 common shares and 500,000 share purchase warrants as follows:

• i) Cash of $10,000 on signing (paid), issuance of 100,000 common shares within 15 days of regulatory approval (issued) and issuance of 500,000 share purchase warrants at $0.12 per share for a period of two years from acceptance (issued);
• ii) Cash of $15,000 (paid) and issuance of 100,000 (issued) common shares due on or before August 21, 2021;
• iii) Cash payment of $20,000 (subsequently paid) and issuance of 100,000 (issued) common shares due on or before August 21, 2022; and
• iv) Cash payment of $20,000 and issuance of 200,000 common shares due on or before August 21, 2023; and

The Company must also incur $153,600 in exploration expenditures before August 21, 2024 (incurred).

Baie Verte Line Property (Newfoundland)

During the year ended August 31, 2021, the Company staked a total of 435 claim units for a total cost of $28,275.

On September 28, 2021, the Company acquired 100% interest in 244 mineral claims in Newfoundland, Canada known as the Baie Verte Line property. As consideration the Company paid $30,000 in cash and issued 200,000 common shares fair valued at $27,000.

Duhamel Property (Quebec)

On January 24, 2018 the Company entered into an agreement to acquire a 100% interest in nine GESM mineral cells in Quebec known as the Duhamel Property. The agreement is subject to a 2% NSR to the optionors of which 1% may be purchased for $1,200,000. Terms of the agreement are as follows:

• i. Payment of $10,000 upon signing of the agreement (paid);
• ii. Issuance of an aggregate of 1,000,000 common shares of the Company (issued at a value of $55,000);
• iii. Payment of an additional $50,000, or at the discretion of the Company, additional shares at 12 months from Exchange approval (issued 1,000,000 shares at a value of $60,000);
• iv. Payment of an additional $50,000, or at the discretion of the Company, additional shares at 24 months from Exchange approval (issued 1,000,000 shares at a value of $35,000);
• v. Incurring or funding $150,000 in exploration expenditures on the Duhamel Property:
  • (i) $25,000 on or before 12 months from Exchange approval (incurred);
  • (ii) An additional $50,000 on or before 24 months from Exchange approval (incurred); and
  • (iii) An additional $75,000 on or before 36 months from Exchange approval (incurred).

Duhamel Property (Quebec) – (cont'd)

Finders fees are payable as follows:

• i. Payment of $1,000 upon signing of the agreement (paid);
• ii. Payment of $5,000 within five days of TSX approval (paid);
• iii. Payment of $5,000 12 months from Exchange approval (paid);
• iv. Payment of $5,000 24 months from Exchange approval, provided the Company has not terminated the agreement (paid).

During 2018, the Company staked an additional 32 claims adjacent to the existing claim block.

During the year ended August 31, 2022, the Company staked additional claims totaling $7,000.

East Bull Property (Ontario)

On May 4, 2021, the Company entered into an agreement to acquire a 100% interest in 16 mineral claims in the Deagle, Gaiashk, and Gerow Mining District known as the East Bull Property. Terms include cash payments totaling $20,000 of which $10,000 is due within fifteen days of the effective date (paid) and the remaining $10,000 six months from the effective date (paid), issuance of 300,000 units of the Company (issued at a value of $45,000). Each unit consist of one common share and one warrant. Each warrant is exercisable for two years at a price of $0.15 until May 18, 2022 and at a price of $0.20 until May 18, 2023. The shares were valued at $30,000 and the warrants were valued at $15,000 using volatility of 127.72%, interest rate of 0.3% stock price at date of issuance of $0.10 and dividend yield of 0.00%. The agreement is subject to a 2% NSR to the vendors of which 1% may be purchased for $750,000 cash.

Gander Property (Newfoundland)

During the year ended August 31, 2021, the Company staked 1,848 claim units for a total cost of $120,120.

Highway Property (Saskatchewan)

On November 18, 2021, the Company entered into an assignment and assumption agreement with District 1 Exploration Corp. ("District 1") a company with common directors. District 1, pursuant to an option agreement dated October 30, 2018 and as amended on November 23, 2020, has an option agreement with Doctors Investment Group Ltd. whereby District 1 has an exclusive right and option to acquire a 100% interest in and to the Highway Zone Uranium Project located in the Province of Saskatchewan. The Company has agreed to assume the terms of the agreement, issuing 1,250,000 common shares to the Optionor (250,000 shares issued subsequently), paying a total of $115,000 and incurring a total of $650,000 of expenditures on the property over the 30 month period from the effective date of March 10, 2022. The agreement is subject to a 1% NSR to the Optionor. As consideration, the Company agreed to issue 4,600,000 common shares to District 1 as distribution to District 1's shareholders by way of a return of capital or dividend. On March 10, 2022, the Company issued the 4,600,000 common shares to District 1 fair valued at $552,000 and paid cash of $50,000.

Key Lake Properties (Saskatchewan)

On March 10, 2022, the Company entered into a mineral property sale agreement with Doctors Investment Group Ltd. (the "Optionor") whereby the Company has the right to acquire 100% interest in 18 claims located in the Province of Saskatchewan. As consideration, the Company agreed to pay cash of $550,000 and incur $1,500,000 in exploration expenditures as follows:

Cash payments of $550,000 as follows:

• i) $15,000 on signing (paid).
• ii) $35,000 within 90 days of the signing (paid).
• iii) $50,000 on the first anniversary on signing (March 10, 2023).
• iv) $100,000 on the second anniversary on signing (March 10, 2024).
• v) $100,000 on the third anniversary on signing (March 10, 2025).
• vi) $250,000 on the fourth anniversary on signing (March 10, 2026).

Incur $1,500,000 in Exploration Expenditures as follows:

• i) $250,000 on or before the first anniversary on signing (March 10, 2023).
• ii) $500,000 on or before the second anniversary on signing (March 10, 2024).
• iii) $750,000 on or before the third anniversary on signing (March 10, 2025).

The Company will pay a 1% NSR to the Optionor upon Commencement of Commercial Production. The Company will have the right to purchase from the Optionor the 1% NSR at any time at a cost of $1,000,000.

Sandy Pond Property (Newfoundland)

On August 10, 2021, the Company entered into an agreement to acquire a 100% interest in 335 mineral claims in the Province of Newfoundland and Labrador herein specified as the Sandy Pond Property. The Company will pay a 0.5% NSR to the Optionor, which may be purchased from the Optionor at a cost of $600,000. Terms include cash payments of $25,000 upon signing (paid), issuance of 400,000 common shares within 15 days of the effective date (issued) fair valued at $54,000, issuance of 200,000 share purchase warrants exercisable at a price of $0.25 per share for a period of two years within fifteen days of the effective date (issued) fair valued at $14,000 and a further cash payment of $25,000 within sixty days of the effective date (paid). The warrants were fair valued using volatility of 149%, interest rate of 0.53%, share price at date of issuance of $0.12, expected life of 2 years and dividend yield of 0.00%.

During the year ended August 31, 2021, the Company staked a total of 171 claim units for a total cost of $11,115.

Step Property (also know as Cape Ray) (Newfoundland)

On October 25, 2021, the Company acquired 100% interest in 178 mineral claims in Newfoundland, Canada known as the Step Property. As consideration the Company paid $17,000 in cash.

During the year ended August 31, 2022, the Company purchased 10 mineral claims for total consideration of $1,500 and staked additional claims for total consideration of $2,250.

Slip Gold Property (Newfoundland)

On September 23, 2020 the Company entered into an agreement to acquire a 100% interest in six claims consisting of 203 claim units. Terms include cash payments totaling $30,000 (paid), and the issuance of 500,000 units of the Company (issued at a value of $61,170). Each warrant is exercisable for two years at a price of $0.12 until October 2, 2022. The shares were valued at $42,500 and the warrants were valued at $18,670 using volatility of 100.18%, interest rate of 0.24% and dividend yield of 0.00%. The agreement is subject to a 2% NSR to the vendors of which 1% may be purchased for $1 million cash.

Victoria Lake Gold Property and Extension (Newfoundland)

On October 13, 2020 the Company entered into an agreement to acquire a 100% interest in five claims consisting of 53 claim units. Terms include cash payments totaling $10,000 (paid), and the issuance of 350,000 units of the Company (issued at a value of $39,704). Each warrant is exercisable for two years at a price of $0.12 until October 26, 2022. The shares were valued at $28,000 and the warrants were valued at $11,704 using volatility of 98.88%, interest rate of 0.24% and dividend yield of 0.00%. The agreement is subject to a 2% NSR to the vendors of which 1% may be purchased for $1 million cash.

During the year ended August 31, 2021, the Company staked six claims consisting of 302 claim units for total cost of $13,715.

On July 23, 2021, the Company entered into an agreement to acquire 100% interest in 55 mineral claims located in the Victoria Lake area of Newfoundland ("Victoria Lake Extension") which is contiguous to the Victoria Lake Gold Property. As consideration the Company agreed to pay cash payments totaling $55,000 of which $15,000 was due within fifteen days on the effective date (paid) and $40,000 within three years of the effective date, and issue 500,000 common shares of which 300,000 common shares within fifteen days on the effective date (issued and fair valued at $36,000) and 200,000 within three years from the effective date. The Company also issued 300,000 share purchase warrants exercisable at $0.25 per share for two years from the date TSX Venture exchange approval (October 20, 2021). The warrants were fair valued at $21,000 using volatility of 145%; interest rate of 1.07%; share price at the date of issuance of $0.125, expected life of 2 years and dividend yield of 0%. The agreement is subject to paying a pre-NSR flat fee of $10,000 within 5 years of the effective date. The Company is committed to a minimum $60,000 exploration program by the end of year 3 and the Company shall pay the vendor, upon commencement of commercial production, a NSR Royalty being equal to 2% with the option to acquire 50% (ie. 1% NSR) from the Vender for $1,500,000.

Other properties

BVBL Extension Property (Newfoundland)

On October 29, 2021, the Company acquired 100% interest in 120 mineral claims in Newfoundland Canada known as the BVBL Extension Property. As consideration the Company paid $13,000 in cash.

Elliot Lake Property (Ontario)

On May 31, 2022, the Company entered into a mineral property purchase agreement with Power One Resources Corp. (the "Power One"), a company related by common directors, whereby the Company acquired 100% interest in 209 mineral claims located in the Ontario. As consideration, the Company agreed to pay cash of $10,450. As at August 31, 2022, this amount is included in due from related parties.

Hope Brook Project (Newfoundland)

During the year ended August 31, 2021, the Company staked 320 claim units for a total cost of $20,800.

Other properties – (cont'd)

Serpent River Project (Ontario)

The Company entered into an agreement to acquire a 100% interest in ten mining claims in the Sault Ste. Marie Mining Division, Elliot Lake area, in Northern Ontario. Terms of the agreement include the issuance of 100,000 common shares at a value of $91,000 (issued) and $500,000 in cash (paid). In addition, there is a 2.0% net smelter return relating to the acquisition. The Company may at any time purchase 1.0% of the NSR for $1.5 million. A finders' fee of 5,000 common shares valued at $8,550 and $25,000 cash has been paid.

On May 13, 2021, the Serpent River Project was included in the spin-out assets to Power One.

Wicheeda North Property (British Columbia)

On January 31, 2019 the Company entered into an agreement to acquire a 100% interest in four mineral claims located in the Cariboo Mining Division northeast of Prince George, British Columbia. Terms of the agreement are as follows:

• i. Payment of a total of $50,000 as follows:
  • a. $25,000 upon Exchange approval of the agreement (paid);
  • b. $25,000 within one year of signing the agreement (paid).
• ii. Issuance of an aggregate of 1,000,000 units of the Company (issued at a value of $73,356). Each unit consists of one common share and one transferable share purchase warrant entitling the holder to acquire one common share at a price of $0.10 until May 29, 2021. The shares were valued at $50,000 and the warrants were valued at $23,356 using volatility of 119.90%, interest rate of 1.53% and dividend yield of 0.00%;
• iii. Payment of 2% NSR. The Company may acquire one-half of the NSR for $1 million within five years of the Agreement Date.

On May 13, 2021, the Wicheeda North Property was included in the spin-out assets to Power One. As at August 31, 2021, the Company still retained four claim blocks in the Wicheeda North at a nominal amount. During the year ended August 31, 2022, the Company paid $4,110 in claim maintenance payment.

Camping Lake Property (Ontario)

On December 9, 2019 the Company entered into an agreement to acquire up to 75% interest in five mineral claims in Red Lake Mining District, Ontario. To earn a 51% interest the Company will issue 1,000,000 common shares upon Exchange acceptance (issued at a value of $35,000) and issued a further 500,000 common shares on the first anniversary of Exchange acceptance (issued at a value of $40,000). The Company will make staged cash payments totaling $65,000 over four years, incur $100,000 in exploration expenditures before October 31, 2020 (deferred), and a further $200,000 in expenditures by October 31, 2021. Upon earning the initial 51% interest, the Company has the option to acquire a further 24% for a cash payment of $500,000. The agreement is subject to a 2% net smelter royalty to the vendors.

As at August 31, 2021, Management of the Company has decided not to proceed with Camping Lake Property and have recorded an impairment of $105,166.

7. Accounts payable and accrued liabilities

	August 31,2022	August 31,2021
Accounts payable	$494,485	$610,817
Accrued liabilities	95,512	35,031
Part XII.6 tax payable	3,254	3,254
	$593,251	$649,102

During the year ended August 31, 2021, the Company paid $30,000 and transferred its interest in the Crackingstone and Onnie Lake properties to settle debt of $137,494 for a gain of $107,494.

8. Share capital

Authorized share capital

Unlimited number of common shares without par value.

Issuances

During the year ended August 31, 2022:

On August 19, 2022, pursuant to the terms of an option agreement, the Company issued 100,000 common shares fair valued at $11,000.

On May 6, 2022, the Company issued 346,000 non-flow-through unit at a price of $0.145 per unit for total proceeds of $50,170. Each unit consists of one non-flow-through common share and one common share purchase warrant, with each warrant entitling the holder to subscribe for one non-flow through common share at a price of $0.25 per share for a period of two years from issuance. No value was assigned to the warrants.

On April 21, 2022, the Company issued 1,470,588 flow-through units at a price of $0.17 per unit for total proceeds of $250,000. Each unit consists of one flow-through common share and one-half of one common share purchase warrant, with each whole warrant entitling the holder to subscribe for one nonflow through common share at a price of $0.30 per share for a period of two years from issuance. The Company recognized a flow-through premium of $36,765 and no value was assigned to the warrants. The Company paid cash finders' fee of $15,000.

On March 10, 2022, pursuant to the terms of an assignment and assumption agreement, the Company issued 4,600,000 common shares fair valued at $552,000.

On December 16, 2021, the Company issued 853,261 non-flow-through unit at a price of $0.115 per unit for total proceeds of $98,125. Each unit consists of one non-flow-through common share and one common share purchase warrant, with each warrant entitling the holder to subscribe for one non-flow through common share at a price of $0.20 per share for a period of two years from issuance. A residual value of $12,799 was allocated to the warrants using the residual value method.

Issuances – (cont'd)

During the year ended August 31, 2022: - (cont'd)

On December 3, 2021, the Company issued 5,385,385 flow-through units at a price of $0.13 per unit for total proceeds of $700,100. Each unit consists of one flow-through common share and one-half of one common share purchase warrant, with each whole warrant entitling the holder to subscribe for one nonflow through common share at a price of $0.25 per share for a period of two years from issuance. The Company also issued 1,808,522 non-flow-through unit at a price of $0.115 per unit for total proceeds of $207,980 of which $10,400 is included in share subscription receivable. Each unit consists of one nonflow-through common share and one common share purchase warrant, with each warrant entitling the holder to subscribe for one non-flow through common share at a price of $0.20 per share for a period of two years from issuance. The Company recognized a flow-through premium of $80,781 and a residual value of $107,909 was allocated to the warrants using the residual value method. The Company paid cash finders' fee of $49,610.

On October 22, 2021, pursuant to the terms of a purchase agreement, the Company issued 300,000 common shares fair value at $36,000 and issued 300,000 share purchase warrants expiring two years from the date of issuance. The share purchase warrant will entitle the holder to purchase one additional common share of the Company at a price of $0.25 per share until October 20, 2023. The warrants were valued at $21,000 using volatility of 145%, interest rate of 1.07%, share price at the date of issuance of $0.12, expected life of 2 years and dividend yield of 0.00%.

On September 28, 2021, pursuant to the terms of a purchase agreement, the Company issued 200,000 common shares fair valued at $27,000.

On September 28, 2021, pursuant to the terms of a purchase agreement, the Company issued 400,000 common shares fair valued at $54,000 and issued 200,000 share purchase warrants expiring two years from the date of issuance. The share purchase warrant will entitle the holder to purchase one additional common share of the Company at a price of $0.25 per share until September 29, 2023. The warrants were valued at $14,000 using volatility of 149%, interest rate of 0.53%, share price at date of issuance of $0.12, expected life of 2 years and dividend yield of 0.00%.

On September 17, 2021, pursuant to the terms of an option agreement, the Company issued 100,000 common shares fair valued at $13,000.

During the year ended August 31, 2022, the Company issued 750,000 common shares pursuant to the exercise of stock options with an exercise price of $0.10 and $0.12 for total proceeds of $77,000. A fair value of $31,410 was transferred from option reserves to share capital. The trading share price on the date of exercise was between $0.105 to $0.155.

During the year ended August 31, 2022, the Company issued 6,827,000 common shares pursuant to the exercise of share purchase warrants for total proceeds of $472,850 of which $155,000 is included in share subscription receivable at August 31, 2022.

During the year ended August 31, 2021:

During the year ended August 31, 2021, the Company issued 375,000 common shares pursuant to the exercise of stock options with exercise prices between $0.06 and $0.12 for total proceeds of $38,500. A fair value of $33,862 has been transferred from option reserve to share capital. The trading share prices on the date of exercise of these options range between $0.08 and $0.175.

Issuances – (cont'd)

During the year ended August 31, 2021: - (cont'd)

During the year ended August 31, 2021, the Company issued 7,945,667 common shares pursuant to the exercise of share purchase warrants with weighted average price of $0.0579 for total proceeds of $460,197 of which $35,750 is included in share subscriptions receivable as at August 31, 2021.

On July 2, 2021, the Company completed a non-brokered private placement of 2,000,000 units at a price of $0.10 per unit for total proceeds of $200,000 which is mostly included in share subscription receivable as at August 31, 2021. Each unit consisted of one common share and one common share purchase warrant, each warrant entitling the holder to subscribe for one common share at a price of $0.15 per share expiring on July 28, 2024.

On May 31, 2021, the Company completed a non-brokered private placement of 2,400,000 units at a price of $0.125 per unit for total proceeds of $300,000. Each unit consisted of one flow-through common share and one-half of one common share purchase warrant, each whole warrant entitling the holder to subscribe for one non-flow-through common share at a price of $0.25 per share expiring on May 31, 2023. The Company recognized a flow-through premium of $72,000. In connection with the private placement the Company paid cash finders fee of $24,000.

On May 18, 2021, the Company issued 300,000 units valued at $30,000 pursuant to the property acquisition agreement. The unit consists of one common share and one share purchase warrant. Each share purchase warrant is exercisable for two years at a price of $0.15 until May 18, 2022 and at a price of $0.20 until May 18, 2023. The shares were valued at $30,000 and the share purchase warrants were valued at $15,000 using a volatility of 127.72%, interest rate of 0.3% and dividend yield of 0.00%.

On May 6, 2021, the Company issued 1,250,000 common shares valued at $162,500 to settled debts totaling $193,600 resulting in a gain on debt settlement of $31,100.

On March 17, 2021, the Company issued 500,000 common shares valued at $40,000 pursuant to the terms of the property agreement.

On October 26, 2020, the Company issued 350,000 units valued at $28,000 pursuant to a property acquisition. The unit consists of one common share and one two-year transferable common share purchase warrant. One warrant will entitle the holder to purchase one additional common share of the Company at a price of $0.12 per share until October 26, 2022. The warrants were valued at $11,704 using volatility of 98.88%, interest rate of 0.24% and dividend yield of 0.00%.

On October 5, 2020, the Company issued 100,000 common shares valued at $8,500 and 500,000 warrants pursuant to a property acquisition. One two-year transferable warrant will entitle the holder to purchase one additional common share of the Company at a price of $0.12 per share until October 5, 2022. The warrants were valued at $18,670 using volatility of 100.18%, interest rate of 0.24% and dividend yield of 0.00%.

On October 2, 2020, the Company issued 500,000 units valued at $42,500 pursuant to a property acquisition. The unit consists of one common share and one two-year transferable common share purchase warrant. One warrant will entitle the holder to purchase one additional common share of the Company at a price of $0.12 per share until October 2, 2022. The warrants were valued at $18,670 using volatility of 100.18%, interest rate of 0.24% and dividend yield of 0.00%.

Stock options

The Company has adopted an incentive stock option plan, which provides that the Board of Directors of the Company may from time to time, in its discretion, and in accordance with the TSX-V requirements, grant to directors, officers, employees and technical consultants to the Company, non-transferable stock options to purchase common shares, provided that the number of common shares reserved for issuance will not exceed 10% of the Company's issued and outstanding common shares. Such options will be exercisable for a period of up to 5 years from the date of grant. In connection with the foregoing, the number of common shares reserved for issuance to any one optionee will not exceed five percent (5%) of the issued and outstanding common shares and the number of common shares reserved for issuance to all technical consultants will not exceed two percent (2%) of the issued and outstanding common shares.

Options may be exercised no later than 90 days following cessation of the optionee's position with the Company or 30 days following cessation of an optionee conducting investor relations activities' position.

On February 28, 2022, the Company granted 300,000 stock options to consultants of the Company. The stock options entitle the holders thereof the right to purchase one common share for each option at $0.12 per share expiring on February 28, 2024. The stock option vest on the date of grant. The fair value of the stock options of $18,540 was determined using the Black Scholes option valuation model with the following assumptions – Share price on date of grant of $0.095; Risk-free interest rate of 1.57%; Dividend yield of 0%; Expected life of 2 years; forfeiture rate of 0% and Expected volatility of 141%.

On June 29, 2021, the Company granted 1,400,000 stock options to directors and officers of the Company and consultants. The stock options entitle the holders thereof the right to purchase one common share for each option at $0.12 per share expiring on June 29, 2024. The stock option vest on the date of grant. The fair value of the stock options of $177,100 was determined using the Black Scholes option valuation model with the following assumptions – Share price on date of grant of $0.155; Risk-free interest rate of 0.65%; Dividend yield of 0%; Expected life of 3 years; forfeiture rate of 0% and Expected volatility of 144%.

On January 29, 2021, the Company granted 1,300,000 stock options to directors and officers of the Company and consultants. The stock options entitle the holders thereof the right to purchase one common share for each option at $0.10 per share expiring on January 29, 2023. The stock option vest on the date of grant. The fair value of the stock options of $53,820 was determined using the Black Scholes option valuation model with the following assumptions – Share price on date of grant of $0.065; Risk-free interest rate of 0.16%; Dividend yield of 0%; Expected life of 2 years; forfeiture rate of 0% and Expected volatility of 148%.

On September 11, 2020, the Company granted 1,800,000 stock options to directors and officers of the Company and consultants. The stock options entitle the holders thereof the right to purchase one common share for each option at $0.10 per share expiring on September 11, 2023. The stock option vest on the date of grant. The fair value of the stock options of $101,520 was determined using the Black Scholes option valuation model with the following assumptions – Share price on date of grant of $0.08; Risk-free interest rate of 0.25%; Dividend yield of 0%; Expected life of 3 years; forfeiture rate of 0% and Expected volatility of 142%.

Volatility is calculated based on the historical trading price of the Company's shares.

Stock options – (cont'd)

The changes in options during the years ended August 31, 2022 and 2021 are as follows:

	August 31,	2022	August 31,	2021
	Number ofoptions	Weightedaverageexerciseprice	Number ofoptions	Weightedaverageexerciseprice
Options outstanding, beginning of year	5,900,000	$ 0.09	3,030,000	$ 0.05
Granted	300,000	0.12	4,500,000	0.11
Exercised	(750,000)	0.10	(375,000)	0.10
Expired	(600,000)	0.10	(1,255,000)	0.03
Options outstanding and exercisable,
end of year	4,850,000	$ 0.09	5,900,000	$ 0.09

Details of options outstanding and exercisable as at August 31, 2022 are as follows:

Number of	Weighted average	Exercise
Stock Options	Contractuallife	Price	Expiry Date
1,700,000		$0.05	July 9, 2023
1,500,000		$0.10	September 11, 2023
350,000		$0.10	January 29, 2023
200,000		$0.12	February 28, 2024
1,100,000		$0.12	June 29, 2024
4,850,000	1.12 years

Share Purchase Warrants

The changes in warrants during the years ended August 31, 2022 and 2021 are as follows:

		August 31,2022		August 31,2021
	Number ofwarrants	Weightedaverageexerciseprice	Number ofwarrants	Weightedaverageexerciseprice
Balance, beginning of year	17,420,333	$0.11	27,435,000	$0.08
Issued	6,935,770	0.24	4,850,000	0.17
Exercised	(6,827,000)	0.07	(7,945,667)	0.06
Expired	(5,743,333)	0.12	(6,919,000)	0.10
Balance, end of year	11,785,770	$0.21	17,420,333	$0.11

Share Purchase Warrants

Details of warrants outstanding as at August 31, 2022 are as follows:

Number ofwarrants	Exercise price$	Date of expiry
500,000	0.12	October 2, 2022
500,000	0.12	October 5, 2022
350,000	0.12	October 26, 2022
300,000	0.20	May 4, 2023
1,200,000	0.25	May 31, 2023
200,000	0.25	September 29, 2023
300,000	0.25	October 20, 2023
2,692,693	0.25	December 3, 2023
1,808,522	0.20	December 3, 2023
853,261	0.20	December 16, 2023
735,294	0.30	April 29, 2024
346,000	0.25	April 29, 2024
2,000,000	0.15	June 28, 2024
11,785,770

Subsequent to August 31, 2022, 1,350,000 share purchase warrants expired unexercised.

Reserves

The reserves recorded on the Company's statement of financial position are composed of the value of stock option grants and share purchase warrants prior to exercise at which time the corresponding amount will be transferred to share capital. The Company uses the Black Scholes model to determine the fair value of stock option grants and share purchase warrants.

9. Related party transactions

Key management personnel compensation

The Company's related parties include key management personnel, which includes Officers and Directors of the Company, and companies related by way of directors or shareholders in common. During the year ended August 31, 2022 and 2021 key management compensations are as follows:

	For theyearsendedAugust 31,20222021
Management consulting fees – CEO	$	146,000	$	96,000
Consulting fee – current and former Directors		34,375		27,500
Professional fees – to a company controlled by the CFO		24,000		8,000
Share based payment		-		121,768
	$	204,375	$	253,268

9. Related party transactions – (cont'd)

Related party balances

As at August 31, 2022, prepaid expenses includes $10,000 (2021 - $Nil) in prepaid rent to the CEO. During the year ended August 31, 2022, the Company paid $30,000 (2021 - $Nil) in rent to the CEO.

As at August 31, 2022, accounts payable and accrued liabilities include $12,600 (2021 - $Nil) due to a company controlled by the CFO for unpaid fees. This amount is unsecured, non-interest bearing and payable on demand.

On July 2, 2021, the Company completed a non-brokered private placement with the CEO of the Company for 2,000,000 units at a price of $0.10 per unit for total proceeds of $200,000 which is mostly included in share subscription receivable as at August 31, 2021. Each unit consisted of one common share and one common share purchase warrant, each warrant entitling the holder to subscribe for one common share at a price of $0.15 per share expiring on June 28, 2024. As at August 31, 2022 and 2021, the Company is holding the share certificate until payment is received of which $38,150 is remaining. The amount was collected subsequent to the year-end.

On June 3, 2021, the Company paid $30,000 and transferred its interest in the Crackingstone and Onnie Lake properties to debt settle a debt of $137,494 with a company controlled by a former director resulting in a gain of $107,494.

During the year ended August 31, 2021 the former CEO and President assigned a portion of the management fees payable to an arm's length third party. A total of $140,000 was included in the Spin-out to Power One on May 13, 2021 (Note 13).

Due to/from related parties

Included in due from related parties are as follows:

• a) On June 15, 2022, the Company entered into a loan agreement with Power One in the amount of $100,000, that is unsecured, bears interest at 7.5% per annum and is repayable the earlier of (i) five business days following a private placement by Power One of at least $1,000,000 or (ii) 13 months following the date of this agreement (July 15, 2023). As at August 31, 2022, the Company recorded interest of $1,603 on the loan.
• b) On May 31, 2022, the Company entered into a mineral property purchase agreement with Power One Resources Corp. (the "Power One") whereby the Company acquire 100% interest in 209 mineral claims located in the Ontario. As consideration, the Company agreed to pay cash of $10,450, which remains outstanding at year-end (Note 15).
• c) During the year ended August 31, 2022, the Company paid $13,726 (2021 $nil) in expenses on behalf of District 1, which remains receivable at year-end. The balance is unsecured, non-interest bearing and payable on demand.
• d) During the year ended August 31, 2022, the Company received $25,000 (2021 $nil) from Falcon Gold Corp, a company related by common directors. The balance owing is unsecured, non-interest bearing and payable on demand.

10. Financial risk management

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

Credit Risk

The Company is exposed to credit risk by holding cash. Holding the cash in large Canadian financial institutions minimizes this risk. The Company has minimal amount receivable exposure, and its various refundable credits are due from the Canadian government. The Company is exposed to credit risk with respect to amount due from related party, and the maximum exposure is its carrying amount on the statement of financial position.

Currency Risk

The Company's functional currency is the Canadian dollar. There is minimal foreign exchange risk to the Company as its mineral property interests are located in Canada. Management monitors its foreign currency balances and make adjustments based on anticipated need for currencies. The Company does not engage in any hedging activities to reduce its foreign currency risk.

Interest Rate Risk

The Company's exposure to interest rate risk relates to its ability to earn interest income on cash balances at variable rates. The fair value of the Company's cash accounts is relatively unaffected by changes in short term interest rates. The income earned on certain bank accounts is subject to the movements in interest rates. The Company pays interest on loans at a fixed interest rate which does not pose an interest rate risk. Currently, this risk will have an immaterial effect on operations.

Price Risk

Price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices (other than those arising from currency risk or interest rate risk). The Company is at risk to changes in commodity prices which may affect financing options available to the Company.

Liquidity Risk

Liquidity risk arises through the excess of financial obligations over available financial assets due at any point in time. The Company manages this risk by careful management of its working capital and deferring related party payables.

The Company's expected source of cash flow in the upcoming year will be through equity financing. Cash on hand at August 31, 2022 and expected cash flows for the next 12 months are not sufficient to fund the Company's ongoing operational needs. The Company will need funding through equity or debt financing, entering into joint venture agreements, or a combination thereof.

Capital Management

The Company is engaged in the mineral exploration field and manages related industry risk issues directly. The Company is potentially at risk for environmental issues and fluctuations in commodity based market prices associated with resource property interests. Management is of the opinion that the Company addresses environmental risk and compliance in accordance with industry standards and specific project environmental requirements.

The Company includes cash and equity in the definition of capital. Equity is comprised of issued common shares, reserves, and deficit.

10. Financial risk management – (cont'd)

The Company manages its capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of underlying assets. In order to maintain or adjust its capital structure, the Company may issue new shares, purchase shares for cancellation pursuant to normal course issuer bids or make special distributions to shareholders. The Company is not subject to any externally imposed capital requirements and does not presently utilize any quantitative measures to monitor its capital.

There were no changes in the Company's approach to capital management during the year.

Fair Value

The fair value of the Company's financial assets and liabilities approximates the carrying amount. Financial instruments measured at fair value are classified into one of three levels in the fair value hierarchy according to the relative reliability of the inputs used to estimate the fair values. The three levels of the fair value hierarchy are:

• Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities;
• Level 2 Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly; and
• Level 3 Inputs that are not based on observable market data.

The Company's financial assets measured at fair values through profit or loss are as follows:

August 31, 2022	Level 1	Level 2	Level 3
	$	$	$
Cash	104,064	-	-
Investment	-	500,000	-
August 31, 2021	Level 1	Level 2	Level 3
	$	$	$
Cash	100,618	-	-
Investment	-	-	581,578

Management believes that the recorded values of all cash, accounts receivable, accounts payable and accrued liabilities, promissory notes, and amounts due to and from related parties approximate their current fair values because of their nature and anticipated settlement dates.

11. Promissory notes

On November 10, 2015, the Company entered into an unsecured promissory note agreement with an arm's length party to borrow $75,000. Terms of the agreement are interest of 18% per annum, compounded quarterly, and the issuance of 20% in bonus shares (issued 60,000 shares valued at $9,000). The loan is for a term of one year, after which it will be repayable on demand. As at August 31, 2020, the Company had interest payable of $99,718. During the year ended August 31, 2021, the Company accrued $18,881 in interest payable. On May 6, 2021, the Company issued 1,250,000 common shares valued at $162,500 to debt settle the $193,600 resulting in a gain on debt settlement of $31,100.

12. Supplemental disclosure with respect to cash flows

During the years ended August 31, 2022 and 2021, the Company incurred the following non-cash financing and investing transactions that are not reflected in the statements of cash flows:

	August 31,2022$	August 31,2021$
Non-cash financingand investingactivities:
Issuance of share capital for:
Distribution of properties to Power One	-	2,413,564
Distribution of accounts payable to Power One	-	(140,000)
Distribution of Power One shares to shareholders	-	(1,691,986)
Shares and units issued for property acquisition	693,000	149,000
Debt settlement	-	162,500
Fair value assigned to share purchase warrants	120,708	-
Fair value of warrants issued for property acquisition	35,000	18,670
Fair value of stock options transferred	(31,410)	(33,862)
Settlement of accounts payable against subscription
receivable	-	42,000
Accounts payable related toexploration and evaluation
assets	193,088	473,454

13. Investment

On May 13, 2021, the Company completed the plan of arrangement (the "Arrangement") whereby the Company spun out its Serpent River and Wicheeda North property assets and liabilities (the "Spin-Out") in order to create a new exploration company, Power One, by way of plan of arrangement under the Business Corporations Act (British Columbia). In consideration for the transferred assets and liabilities, the Company received 5,000,000 common shares of Power One and in addition, each holder of common shares of the Company received one Power One common share for each five common shares of the Company held which was recorded as distribution to the shareholders by the Company.

As the Arrangement occurred between companies under common control, the transfer was reflected at carrying values and was recorded as a capital transaction through equity. The carrying values of the net assets and liabilities transferred and acquired pursuant to the Arrangement consisted of the following:

Exploration and evaluation properties (Note 6)	$2,413,564
Accounts payable related to exploration and evaluation propertiesShares of Power One received	(140,000)(581,578)
Total distribution to the shareholders	$1,691,986

With its 5,000,000 common shares of Power One, the Company held 25.99% of the issued and outstanding shares of Power One and as at August 31, 2021 the Company's interest was diluted to 23.54%. The Company concluded that it has significant influence, but not control, over the financial and operating policies of Power One, accordingly the Company will account for its investment under the equity method. As at August 31, 2021, the Company did not record its share of the net loss from Power One as it was considered nominal. As at August 31, 2022, the Company's interest was diluted to 15.42% and will accounted for the investment at fair value. Fair value was determined by reference to the offering price of Power One's most recent private placement.

13. Investment – (cont'd)

The following table is a reconciliation of the investment in Power One.

	August 31,2022	August 31,2021
Balance, beginning of year	$581,578	$	-
Investment	-		581,578
Share of loss of equity investment	-		-
Write-down of investment	(81,578)		-
Balance, end of year	$500,000	$	581,578

The following table summarized Power One statements of financial position.

	August 31,2022	August 31,2021
Current assetsNon-current assetsCurrent liabilities	$1,142,6332,413,564(340,588)	$105,2612,413,564(158,444)
Net assets	$3,215,609	$2,360,381

The net loss from Power One from May 13, 2021, to August 31, 2021 was $42,183 and Marvel's share was $9,930.

14. Income taxes

Income tax expense varies from the amount that would be computed from applying the combined federal and provincial income tax rate to loss before taxes as follows:

	August 31,2022		August 31,2021
Net loss before income taxes for the yearStatutory Canadian corporate tax rate	$	(808,852)$27.00%		(835,481)27.00%
Expected (recovery) at statutory rateUnrecognized items for tax purposesChange in unrecognized deferred tax assets		(218,400)-218,400		(225,600)70,300155,300
Income tax recovery	$	-	$	-

14. Income taxes – (cont'd)

The significant components of the Company's unrecognized deferred income tax assets are as follows:

	August 31,2022	August 31,2021
Acquisition and exploration deductions	$902,000	$1,141,900
Share issue costs	21,000	11,900
Non-capital loss carry forwards	1,438,000	1,334,400
Investment	11,000	-
Net capital loss carry forwards	12,000	12,000
	2,384,000	2,500,200
Deferred tax assets not recognized	(2,384,000)	(2,500,200)
Net deferred tax assets	$-	$-

The significant components of the Company's temporary differences, unused tax credits and unused tax losses that have not been included on the statement of financial position are as follows:

	Expiry	2022		2021
Exploration and evaluation asset	No expiry date	$ 3,341,000	$	4,229,000
Share issuance costs	2026	$79,000	$	44,000
Non-capital losses	2026 - 2042	$5,326,000	$	4,942,000
Capital loss	No expiry date	$89,000	$	89,000

Flow-through

Flow-through common shares require the Company to spend an amount equivalent to the proceeds of the issued flow-through common shares on Canadian qualifying exploration expenditures within 24 month period. The Company may be required to indemnify the holders of such shares for any tax and other costs payable by them in the event the Company has not made the required exploration expenditures.

During the year ended August 31, 2022, the Company received $950,100 from the issuance of flowthrough shares. These amounts will not be available to the Company for future deduction from taxable income. A flow-through premium of $117,546 was recognized initially and $65,276 was recognized as other income during the year ended August 31, 2022. As at August 31, 2022, the Company has remaining $384,373 in exploration expenditures to incur.

During the year ended August 31, 2021, the Company received $300,000 from the issuance of flowthrough shares. These amounts will not be available to the Company for future deduction from taxable income. A flow through premium of $72,000 was recognized initially. As at August 31, 2021, the Company incurred the $300,000 and recognized the $72,000 as other income.

15. Subsequent Events

Subsequent to August 31, 2022:

The Company issued 15,283,369 flow-through units at a price of $0.12 per unit for total proceeds of $1,834,008. Each unit consisted of one flow-through common share and one-half of one common share purchase warrant, with each whole warrant entitling the holder to subscribe for one non-flow-through common share at a price of $0.25 per share for a period of two years from issuance. The Company also issued 1,190,000 non-flow-through unit at a price of $0.11 per unit for total proceeds of $130,900. Each unit consists of one non-flow-through common share and one common share purchase warrant, with each warrant entitling the holder to subscribe for one non-flow through common share at a price of $0.18 per share for a period of two years from issuance. In connection with the private placements, the Company paid cash finders' fees of $150,680 and issued 1,258,670 finders' warrants. Each finders' warrants entitles the holder thereof to purchase one non-flow-through common share at a price of $0.18 for a period of two years from issuance.

On October 4, 2022, Carmanah Minerals Corp. ("Carmanah") entered into an option agreement with the Company to earn-in a 50% interest to the Walker Creek claims which is the southern part of the Key Lake Property. Upon completion of the earn-in, the Company and Carmanah will each own 50% interest in the project. As consideration, Carmanah will issue to the Company 3,500,000 common shares and 3,500,000 share purchase warrants, and make cash payments of $400,000 over a four year period. Carmanah will also incur $1,500,000 in exploration expenditures over a three year period. Carmanah will pay a 2% NSR to the Company upon commencement of commercial production.

On November 29, 2022, the Company entered into a debt settlement subscription agreement with Power One whereby Power One agreed to accept 95,000 units of Marvel in full satisfaction of the $10,450 balance owing from Marvel at year-end. The units were issued as part of the non-flow-through unit private placement described above.

On December 2, 2022, the Company purchased two mineral claims from Eagle Bay Resources Corp. for total cost of $26,649.