Minnova Corp — Annual Report 2021

Jul 30, 2021

MINNOVA CORP.

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED

MARCH 31, 2021 AND 2020

(Expressed in Canadian Dollars)

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Independent Auditor’s Report

To the Shareholders of Minnova Corp.

Opinion

We have audited the consolidated financial statements of Minnova Corp. and its subsidiaries (the “Company”), which comprise the consolidated statements of financial position as at March 31, 2021 and 2020, and the consolidated statements of operations and comprehensive loss, consolidated statements of cash flows and consolidated statements of changes in equity 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 Company as at March 31, 2021 and 2020, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with International Financial Reporting Standards (“IFRS”).

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 Company in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in Canada. 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 in the consolidated financial statements, which indicates that the Company has a working capital deficiency and a deficit as of March 31, 2021. As stated in Note 1, these events or conditions, along with other matters as set forth in Note 1, indicate that material uncertainties exist that cast significant doubt on the Company’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 and, in doing so, consider whether the other information is materially

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inconsistent with the consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

We obtained Management’s Discussion and Analysis prior to the date of this auditor’s report. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. 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 IFRS, 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 Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or cease operations, or has no realistic alternative but to do so.

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

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 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 judgement 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 risks 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.

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

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

• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the 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 Company 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.

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 of the audit resulting in this independent auditor’s report is Glen McFarland.

McGovern Hurley LLP

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Chartered Professional Accountants Licensed Public Accountants

Toronto, Ontario July 29, 2021

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MINNOVA CORP. CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

Page 1

(Expressed in Canadian Dollars)

				March 31,		March 31,
				2021		2020
		ASSETS
CURRENT ASSETS
Cash			$	131,450	$	21,039
Amounts receivable				142,694		110,339
Prepaid expenses				178,931		11,004
TOTAL CURRENT ASSETS				453,075		142,382
NON-CURRENT ASSETS
Restricted cash equivalents (Note 6)				75,000		75,000
Equipment (Note 7)				242,407		263,442
Exploration properties and deferred exploration expenditures (Note 8)				20,168,358		18,908,153
TOTAL NON-CURRENT ASSETS				20,485,765		19,246,595
TOTAL ASSETS			$	20,938,840	$	19,388,977
	LIABILITIES AND EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities (Notes 9		and 15)	$	1,298,611	$	1,572,162
Hydro contract accrual				277,533		277,533
Flow-through premium liability (Note 18)				44,794		-
TOTAL CURRENT LIABILITIES				1,620,938		1,849,695
NON-CURRENT LIABILITIES
Provision for closure and reclamation (Note 10)				3,089,986		3,374,457
TOTAL LIABILITIES				4,710,924		5,224,152
EQUITY
Share capital (Note 12(b))				23,901,545		21,508,745
Share-based payment reserves (Note 13)				2,470,002		1,713,124
Deficit			(10,143,631)			(9,057,044)
TOTAL EQUITY				16,227,916		14,164,825
TOTAL LIABILITIES AND EQUITY			$	20,938,840	$	19,388,977
NATURE OF OPERATIONS AND GOING CONCERN(Note 1)
COMMITMENTS AND CONTINGENCIES(Notes 6, 8, 10,17 and 18)
SUBSEQUENT EVENT(Note 19)

APPROVED ON BEHALF OF THE BOARD:

Signed	"James White"	,	Director
Signed	"Gorden Glenn"	,	Director

See accompanying notes to the consolidated financial statements

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MINNOVA CORP.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Expressed in Canadian Dollars)

For the Years Ended March 31,		2021		2020
EXPENSES
Stock-based payments (Note 13(a))	$	203,659	$	-
General and administrative (Note 14)		158,874		105,996
Management and directors' compensation (Note 15(b))		90,269		124,000
Professional and consulting fees (Note 15(a))		118,933		52,942
Amortization (Note 7)		21,035		24,211
LOSS BEFORE BELOW ITEMS		(592,770)		(307,149)
Foreign exchange (loss) income		(38,419)		3,251
Loss on debt settlement (Note 12(vi))		(750,000)		-
Change in estimated provision		-		200,000
Interest income		-		6,660
Write-off of exploration properties and
deferred exploration expenditures (Note 8)		-		(275,444)
Reversal of flow-through premium liability		242,279		-
Finance cost (Note 10)		(28,082)		(40,860)
NET LOSS AND COMPREHENSIVE LOSS
FOR THE YEAR	**$ **	(1,166,992)	$	(413,542)
Net loss per common share - basic and diluted	$	(0.03)	$	(0.01)
Weighted average number of shares outstanding
- basic and diluted		38,342,566		32,492,280

See accompanying notes to the consolidated financial statements

MINNOVA CORP.

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CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in Canadian Dollars)

For theyears ended March 31,		2021		2020
CASH FLOWS USED IN OPERATING ACTIVITIES
Net loss for the year	$	(1,166,992)	$	(413,542)
Items not involving cash:
Amortization		21,035		24,211
Foreign exchange loss		38,419		-
Accretion of provision for closure and reclamation		28,082		40,860
Reversal of flow-through premium liability		(242,279)		-
Write-off of exploration properties and
deferred exploration expenditures		-		275,444
Change in estimated provision		-		(200,000)
Stock-based payments		203,659		-
Loss on settlement of debt		750,000		-
		(368,076)		(273,027)
Changes in non-cash working capital balances:
Amounts receivable		(32,355)		17,638
Prepaid expenses		(167,927)		(11,004)
Accounts payable and accrued liabilities		648,591		551,927
		448,309		558,561
Cash flows provided by operating activities		80,233		285,534
CASH FLOWS USED IN INVESTING ACTIVITIES
Increase in exploration properties and deferred exploration expenditures		(1,764,769)		(298,468)
Cash flows used in investing activities		(1,764,769)		(298,468)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from private placements		1,855,000		-
Share issue costs		(87,553)		-
Proceeds from exercise of stock options		12,500		-
Proceeds from exercise of warrants		15,000		-
Cash flows provided by financing activities		1,794,947		-
Increase/ (decrease) in cash		110,411		(12,934)
Cash, beginning of year		21,039		33,973
Cash, end of year	$	131,450	$	21,039
Supplemental Information:
Shares issued for settlement of debt (Note 12(c))	$	619,953	$	241,561
Broker warrants issued		74,074		-
Change in accrued property expenditures		(340,608)		(57,758)

See accompanying notes to the consolidated financial statements

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MINNOVA CORP.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Expressed in Canadian Dollars)

Share-based Payment Reserves Share Capital Shares Stock Share purchase DSU and Number Amount to be issued options warrant reserve RSU Deficit Total

Balance, March 31, 2019 Shares issued for settlement of accounts payable and accrued liabilities (note 12 (c)) Warrants expired Stock option expired Loss and comprehensive loss for the year Balance, March 31, 2020 Flow-through common shares and warrants issued, after costs Common shares and warrants issued, after costs Fair value of broker warrants Premium liability for flow-through shares Shares issued for settlement of debts Shares issued from exercise of stock options Reclassification of fair value of stock options exercised Shares issued from exercise of warrants Reclassification of fair value of warrants exercised Expiry of stock options Stock-based compensation Loss and comprehensive loss for the year Balance, March 31, 2021

31,696,873 $ 21,008,745 $ 258,499 $ 1,208,261 $ 1,020,449 $ 828,690 $ (9,987,778) $ 14,336,866 1,111,111 500,000 (258,499) - - - - 241,501 - - - - (1,020,449) - 1,020,449 - - - - (323,827) - - 323,827 - - - - - - - (413,542) (413,542) 32,807,984 $ 21,508,745 $ - $ 884,434 $ - $ 828,690 $ (9,057,044) $ 14,164,825 6,462,500 1,187,404 - - 304,179 - - 1,491,583 1,200,000 157,892 - - 117,972 - - 275,864 - (74,074) - - 74,074 - - - - (287,073) - - - - - (287,073) 3,000,000 1,369,953 - - - - - 1,369,953 50,000 12,500 - - - - - 12,500 - 7,376 - (7,376) - - - - 60,000 15,000 - - - - - 15,000 - 3,822 - - (3,822) - - - - - - (80,405) - - 80,405 - - - - 352,256 - - - 352,256 - - - - - - (1,166,992) (1,166,992) 43,580,484 $ 23,901,545 $ - $ 1,148,909 $ 492,403 $ 828,690 $(10,143,631) $ 16,227,916

See accompanying notes to the consolidated financial statements

MINNOVA CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2021 AND 2020 (Expressed in Canadian Dollars)

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1. NATURE OF OPERATIONS AND GOING CONCERN

Minnova Corp. (the "Company") is a public company incorporated on July 19, 1994, pursuant to the laws of the Companies Act of Barbados. Since the Company's management and the principal office of the Company are located in Toronto, Ontario, a continuance (the "Continuance") of the Company from the laws of Barbados to the laws of the Province of Ontario was filed on April 21, 2010. As a result of the Continuance, the corporate legislation that governs the Company ceased to be the Barbados Act and the Company is now governed by the Business Corporations Act (Ontario). The registered office of the Company is located at 217 Queen Street West, Suite 401, Toronto, Ontario, M5V 0R2. On June 26, 2014, the Company changed its name to "Minnova Corp." and commenced trading on the Toronto Stock Venture Exchange ("TSX-V") on June 27, 2014, under the new symbol "MCI".

The Company's exploration operations are subject to government legislation, policies and controls relating to prospecting, development, production, environmental protection, mining taxes and labour standards. In order for the Company to carry out its exploration activities, the Company is required to hold certain permits. There is no assurance that the Company's existing permits will be renewed or that new permits that have been or will be applied for will be granted.

Major expenditures are required to locate and establish ore reserves, to develop metallurgical processes and to construct mining and processing facilities at a particular site. The recoverability of valuations assigned to exploration properties and deferred exploration expenditures is dependent upon discovery of economically recoverable reserves, the ability to obtain necessary financing to complete development and future profitable production or proceeds from disposition.

Although the Company has taken steps to verify title to exploration properties in which it has an interest in accordance with industry standards for the current stage of exploration of such properties, these procedures do not guarantee the Company's title. Property title may be subject to other licensing requirements or regulations, social licensing requirements unregistered prior agreements, unregistered claims, aboriginal land claims and non-compliance with regulatory requirements.

In order to meet future expenditures and cover administrative costs, the Company will need to raise additional financing. The Company has a working capital deficiency of $1,167,863 (March 31, 2020 - $1,707,313) and a deficit of $10,143,631 (March 31, 2020 - $9,057,044) as at March 31, 2021 and will require additional financing to fund its continuing exploration efforts. These conditions indicate the existence of material uncertainties that cast significant doubt about the Company's ability to continue as a going concern. Although the Company has been successful in raising funds to date, there can be no assurance that adequate funding will be available in the future, or available under terms acceptable to the Company. These consolidated financial statements have been prepared on a going concern basis that assumes the Company will be able to continue to realize its assets and discharge its liabilities in the normal course of business. In the event the Company is not able to obtain adequate funding, there is uncertainty as to whether the Company will be able to maintain its property interests. These consolidated financial statements do not reflect the adjustments to the carrying values of assets and liabilities that would be necessary if the Company were unable to obtain adequate financing. Such adjustments could be material. Changes in future conditions could require material write downs of the carrying values of certain assets.

The consolidated financial statements were approved by the Board of Directors on July 29, 2021.

Since March 2020, the spread of COVID-19 has severely impacted many local economies around the globe. In many countries, including Canada, organizations and businesses are being forced to cease or limit operations for long or indefinite periods of time. Measures taken to contain the spread of the virus, including travel bans, quarantines, social distancing, and closures of non-essential services have triggered significant disruptions to organizations worldwide, resulting in an economic slowdown. Global stock markets have also experienced great volatility and a significant weakening. Governments and central banks have responded with monetary and fiscal interventions to stabilize economic conditions. Management believes COVID-19 has had no material impact on the Company.

Continued...

MINNOVA CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2021 AND 2020 (Expressed in Canadian Dollars)

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2. BASIS OF PREPARATION

These consolidated financial statements are prepared in accordance with International Financial Reporting Standards ('IFRS"), as issued by the International Accounting Standards Board ("IASB") and International Financial Reporting Interpretations Committee ("IFRIC").

The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial statements.

Basis of Presentation:

These consolidated financial statements have been prepared on a historical cost basis. In addition, these financial statements have been prepared using the accrual basis of accounting except for cash flow information.

Significant Accounting Judgments and Estimates:

The preparation of these financial statements requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of expenses during the reporting period. Actual outcomes could differ from these estimates. These financial statements include estimates that, by their nature, are uncertain. The impacts of such estimates are pervasive throughout the financial statements, and may require accounting adjustments based on future occurrences. Revisions to accounting estimates are recognized in the period in which the estimate is revised and future periods if the revision affects both current and future periods. These estimates are based on historical experience, current and future economic conditions and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The areas which require management to make significant judgments, estimates and assumptions in determining carrying values include, but are not limited to:

Assets' Carrying Values and Impairment Charges

In the determination of carrying values and impairment charges, management looks at the higher of the recoverable amount or fair value less costs to sell in the case of assets and at objective evidence, significant or prolonged decline of fair value on financial assets indicating impairment. These determinations and their individual assumptions require that management make a decision based on the best available information at each reporting period.

Capitalization of Exploration Properties and Deferred Exploration Expenditures

Management has determined that exploration properties and deferred exploration expenditures incurred during the year have future economic benefits and are economically recoverable. In making this judgment, management has assessed various sources of information including but not limited to the geologic and metallurgic information, history of conversion of mineral deposits to proven and probable mineral reserves, scoping and feasibility studies, proximity of operating facilities, operating management expertise and existing permits. See Note 8 for details of capitalized exploration properties and deferred exploration expenditures.

Continued...

MINNOVA CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2021 AND 2020 (Expressed in Canadian Dollars)

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2. BASIS OF PREPARATION (Continued)

Significant Accounting Judgments and Estimates (Continued):

Mineral Reserve Estimates

The figures for mineral reserves and mineral resources are determined in accordance with National Instrument 43-101, "Standards of Disclosure for Mineral Projects", issued by the Canadian Securities Administrators. There are numerous uncertainties inherent in estimating mineral reserves and mineral resources including many factors beyond the Company's control. Such estimation is a subjective process, and the accuracy of any mineral resource estimate is a function of the quantity and quality of available data and of the assumptions made and judgments used in engineering and geological interpretation. Differences between management's assumptions including economic assumptions such as metal prices and market conditions could have a material effect in the future on the Company's financial position and results of operations.

Impairment of Exploration Properties and Deferred Exploration Expenditures

While assessing whether any indications of impairment exist for exploration properties and deferred exploration expenditures, consideration is given to both external and internal sources of information. Information the Company considers includes changes in the market, economic and legal environment in which the Company operates that are not within its control that could affect the recoverable amount of exploration properties and deferred exploration expenditures. Internal sources of information include the manner in which exploration properties and deferred exploration expenditures are being used or are expected to be used and indications of expected economic performance of the assets. Estimates may include but are not limited to estimates of the discounted future pre tax cash flows expected to be derived from the Company's exploration properties, costs to sell the properties and the appropriate discount rate. Reductions in metal price forecasts, increases in estimated future costs of production, increases in estimated future capital costs, reductions in the amount of recoverable mineral reserves and mineral resources and/or adverse current economics can result in a write down of the carrying amounts of the Company's exploration properties and deferred exploration expenditures.

Estimation of Decommissioning and Restoration Costs and the Timing of Expenditures

The cost estimates are updated annually to reflect known developments, (e.g. revisions to cost estimates and to the estimated lives of operations), and are subject to review at regular intervals. Decommissioning, restoration and similar liabilities are estimated based on the Company's interpretation of current regulatory requirements, constructive obligations and are measured at fair value. Fair value is determined based on the net present value of estimated future cash expenditures for the settlement of decommissioning, restoration or similar liabilities that may occur upon decommissioning of the mine. Such estimates are subject to change based on changes in laws and regulations and negotiations with regulatory authorities.

Income, Value Added, Withholding and Other Taxes

The Company is subject to income, value added, withholding and other taxes. Significant judgment is required in determining the Company’s provisions for taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The Company recognizes liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. The determination of the Company’s income, value added, withholding and other tax liabilities requires interpretation of complex laws and regulations. The Company’s interpretation of taxation law as applied to transactions and activities may not coincide with the interpretation of the tax authorities. All tax related filings are subject to government audit and potential reassessment subsequent to the financial statement reporting period. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the tax related accruals and deferred income tax provisions in the period in which such determination is made.

Continued...

MINNOVA CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2021 AND 2020 (Expressed in Canadian Dollars)

Page 8

2. BASIS OF PREPARATION (Continued)

Significant Accounting Judgments and Estimates (Continued):

Share-based Payments

Management determines costs for share based payments using market based valuation techniques. The fair value of the market based and performance based share awards are determined at the date of grant using generally accepted valuation techniques. Assumptions are made and judgment used in applying valuation techniques. These assumptions and judgments include estimating the future volatility of the stock price, expected dividend yield, future employee turnover rates and future employee stock option exercise behaviours and corporate performance. Such judgments and assumptions are inherently uncertain. Changes in these assumptions affect the fair value estimates.

Contingencies

Refer to Notes 6, 8, 10,17 and 18

3. ACCOUNTING POLICIES

Basis of Consolidation

These consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries Minnova Peru S.A.C. and Minnova Renewable Energy. These are fully consolidated from the date of acquisition, being the date on which the Company obtains control, and continue to be consolidated until the date that such control ceases.

The Company controls an investee if the Company has:

(i) power over the investee;

(ii) exposure, or rights, to variable returns from its involvement with the investee; and (iii) the ability to use its power over the investee to affect its returns.

When the Company has less than a majority of the voting or similar rights of an investee, the Company considers all relevant facts and circumstances in assessing whether it has power over an investee, including but not limited to:

(i) the contractual arrangement with the other vote holders of the investee;

(ii) rights arising from other contractual arrangements; and (iii) the Company’s potential voting rights.

The Company re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the period are included in loss and comprehensive loss from the date that the Company gains control until the date that the Company ceases to control the subsidiary. All inter-company account balances and transactions have been eliminated upon consolidation.

Continued...

MINNOVA CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2021 AND 2020 (Expressed in Canadian Dollars)

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3. ACCOUNTING POLICIES (Continued)

Financial Instruments:

(i) Classification

The Company classifies its financial instruments in the following categories: at fair value through profit and loss (“FVTPL”), at fair value through other comprehensive income (loss) (“FVTOCI”) or at amortized cost. The Company determines the classification of financial assets at initial recognition. The classification of debt instruments is driven by the Company’s business model for managing the financial assets and their contractual cash flow characteristics. Equity instruments that are held for trading are classified as FVTPL. For other equity instruments, on the day of acquisition the Company can make an irrevocable election (on an instrument-by-instrument basis) to designate them as at FVTOCI. Financial liabilities are measured at amortized cost, unless they are required to be measured at FVTPL (such as instruments held for trading or derivatives) or if the Company has opted to measure them at FVTPL. The Company classified cash as amortized cost, and amounts receivable, accounts payable and accrued liabilities and hydro contract accrual as amortized cost.

(ii) Measurement

Financial assets and liabilities at amortized cost

Financial assets and liabilities at amortized cost are initially recognized at fair value plus or minus transaction costs, respectively, and subsequently carried at amortized cost less any impairment.

Financial assets and liabilities at FVTPL

Financial assets and liabilities carried at FVTPL are initially recorded at fair value and transaction costs are expensed in the statements of loss and comprehensive loss. Realized and unrealized gains and losses arising from changes in the fair value of the financial assets and liabilities held at FVTPL are included in the consolidated statements of loss and comprehensive loss in the period in which they arise.

Debt investments at FVTOCI

These assets are subsequently measured at fair value. Interest income calculated using the effective interest method, foreign exchange gains and losses and impairment are recognised in profit or loss. Other net gains and losses are recognised in other comprehensive loss (“OCI”). On derecognition, gains and losses accumulated in OCI are reclassified to profit or loss.

Equity investments at FVTOCI

These assets are subsequently measured at fair value. Dividends are recognised as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognised in OCI and are never reclassified to profit or loss.

(iii) 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 if 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 the consolidated statements of loss and comprehensive 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.

Continued...

MINNOVA CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2021 AND 2020 (Expressed in Canadian Dollars)

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3. ACCOUNTING POLICIES (Continued)

Financial Instruments (Continued):

(iv) Derecognition

Financial assets

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.

Financial liabilities

The Company derecognizes a financial liability when its contractual obligations are discharged or cancelled, or expire. The Company also derecognizes a financial liability when the terms of the liability are modified such that the terms and /or cash flows of the modified instrument are substantially different, in which case a new financial liability based on the modified terms is recognized at fair value.

(v) Financial Instruments Recorded at Fair Value:

Financial instruments recorded at fair value on the statement of financial position are classified using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy has the following levels:

• Level 1 - valuation based on quoted prices (unadjusted) in active markets for identical assets or liabilities;

• Level 2 - valuation techniques based on inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and

• Level 3 - valuation techniques using inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The fair value of all the Company's financial instruments approximates the carrying value, due to their short-term nature other than restricted cash equivalents which represent a guaranteed investment certificate. The Company had no financial instruments to classify in the fair value hierarchy at March 31, 2021 and 2020.

Equipment:

Equipment is carried at cost, less accumulated amortization and accumulated impairment losses.

The cost of an item of equipment consists of the purchase price, any costs directly attributable to bringing the asset to the location and condition necessary for its intended use and an initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located.

Amortization is recognized based on the cost of an item of equipment, less its estimated residual value, over its estimated useful life at the following rates:

Detail	**Percentage **	Method
Mine equipment	20%	Declining balance
Mine buildings	5%	Decliningbalance

An asset's residual value, useful life and amortization method are reviewed, and adjusted if appropriate, on an annual basis.

Continued...

MINNOVA CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2021 AND 2020 (Expressed in Canadian Dollars)

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3. ACCOUNTING POLICIES (Continued)

Exploration Properties and Deferred Exploration Expenditures:

Exploration and Evaluation Properties:

Once a license to explore an area has been secured, expenditures on exploration and evaluation activities, net of government assistance received, are capitalized to exploration properties and deferred exploration expenditures. Amortization of equipment is not capitalized. Exploration and evaluation expenditures relate to the initial search for deposits with economic potential and to detailed assessments of deposits or other projects that have been identified as having economic potential.

Once an economically viable reserve has been determined for an area and the decision to proceed with development has been approved, exploration and evaluation assets attributable to that area are first tested for impairment and then reclassified to construction in progress within mineral properties and deferred exploration expenditures.

Subsequent recovery of the resulting carrying value depends on successful development or sale of the undeveloped project. If a project does not prove viable, all irrecoverable costs associated with the project net of any impairment provisions are written off.

Development Properties:

When economically viable reserves have been determined and the decision to proceed with development has been approved, the expenditures related to construction are capitalized as construction-in-progress and classified as a component of mineral properties and deferred exploration expenditures. Costs associated with the commissioning of new assets, in the period before they are operating in the way intended by management, are capitalized, net of any preproduction revenues.

Interest on borrowings related to the construction and development of assets are capitalized until substantially all the activities required to make the asset ready for its intended use are complete.

Production Properties:

When a mine construction project moves into the production stage, the capitalization of certain mine construction costs ceases and costs are either regarded as inventory or expensed, except for costs which qualify for capitalization relating to mining asset additions or improvements, underground mine development or mineable reserve development.

Depletion:

Accumulated mine development costs are depleted on a unit-of-production basis over the estimated economically recoverable reserves of the mine concerned.

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MINNOVA CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2021 AND 2020 (Expressed in Canadian Dollars)

Page 12

3. ACCOUNTING POLICIES (Continued)

Impairment of Non-Financial Assets:

The carrying values of exploration properties and deferred exploration expenditures, and equipment are assessed for impairment when indicators of such impairment exist. If any indication of impairment exists, an estimate of the asset's recoverable amount is calculated. The recoverable amount is determined as the higher of the fair value less costs to sell for the asset and the asset's value in use.

Impairment is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. If this is the case, the individual assets of the Company are grouped together into cash generating units ("CGUs") for impairment purposes. Such CGUs represent the lowest level for which there are separately identifiable cash inflows that are largely independent of the cash flows from other assets or other groups of assets. This generally results in the Company evaluating its non-financial assets on a geographical basis. If the carrying amount of the asset exceeds its recoverable amount, the asset is impaired and an impairment loss is charged to the statement of operations so as to reduce the carrying amount to its recoverable amount.

A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset's recoverable amount since the last impairment loss was recognised. If this is the case, the carrying amount of the asset is increased to its recoverable amount. The increased amount cannot exceed the carrying amount that would have been determined, net of depreciation/amortization, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in the consolidated statement of operations.

Provisions:

General:

A provision is recognized when the Company has a present legal or constructive obligation as a result of a past event, it is probable that an outflow of economic benefits will be required to settle the obligation, and the amount of the obligation can be reliably estimated. If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.

A provision for onerous contracts is recognized when the expected benefits to be derived by the Company from a contract are lower than the unavoidable cost of meeting its obligations under the contract.

Rehabilitation Provision:

The Company records the present value of estimated costs of legal and constructive obligations required to restore operating locations in the period in which the obligation is incurred. The nature of these restoration activities includes dismantling and removing structures, dismantling operating facilities, and restoration, reclamation and re-vegetation of affected areas.

The obligation generally arises when the asset is installed or the ground / environment is disturbed at the production location. When the liability is initially recognised, the present value of the estimated cost is capitalised by increasing the carrying amount of the related mining assets to the extent that it was incurred prior to the production of related ore. Over time, the discounted liability is increased for the change in present value based on the discount rates that reflect current market assessments and the risks specific to the liability. The periodic unwinding of the discount is recognised in the consolidated statement of operations as a finance cost. Additional disturbances or changes in rehabilitation costs will be recognised as additions or charges to the corresponding assets and rehabilitation liability when they occur. When applicable for closed sites, changes to estimated costs are recognised immediately in the consolidated statement of operations.

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MINNOVA CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2021 AND 2020 (Expressed in Canadian Dollars)

Page 13

3. ACCOUNTING POLICIES (Continued)

Flow-Through Shares:

Flow-through shares are a unique Canadian tax incentive. The Company has adopted a policy whereby flow-through proceeds are allocated between the offering of the common shares and the sale of tax benefits when the common shares are offered. The allocation is made based on the difference between the quoted price of the common shares and the amount the investor pays for the flow-through shares. A liability is recognized for the premium paid by the investors and is then derecognized in the period of the incurrence of expenditures. The recognition of a deferred income tax liability upon renunciation of the flow through expenditure is recorded as income tax expense in the period of renunciation. Any difference between the amount of the liability component derecognized and deferred income tax liability recognized is recorded in the consolidated statement of operations.

Foreign Currency Translation:

The Canadian dollar is the functional currency of the Company's operations and those of its subsidiaries. The financial statements, the results of operations and financial position are expressed in Canadian dollars. In preparing the financial statements, transactions in currencies other than the entity's functional currency (foreign currencies) are recognised at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Gains/losses on translation are recorded in the consolidated statement of operations.

Stock-Based Payments:

Stock options

The fair value of stock options granted is recognized as an expense over the vesting period with a corresponding increase in equity. An individual is classified as an employee when the individual is an employee for legal or tax purposes (direct employee) or provides services similar to those performed by a direct employee, including directors of the Company.

The fair value is measured at the grant date and recognized over the period during which the options vest. The fair value of the options granted is measured using the Black-Scholes option-pricing model, taking into account the terms and conditions upon which the options were granted. At each financial position reporting date, the amount recognized as an expense is adjusted to reflect the actual number of share options that are expected to vest. Stock option expense incorporates an expected forfeiture rate for those options that do not vest immediately. Amounts recorded for expired unexercised stock options and warrants are transferred to deficit on expiry.

Share-based payments to non-employees are measured at the fair value of the goods or services received or the fair valueof the equity instruments issued if it is determined the fair value of the goods or services received cannot be reliablymeasured, and are measured and recorded at the date the goods or services are received.

Restricted stock unit and deferred stock unit

The Company operates a restricted stock unit (“RSU”) plan and deferred stock unit (“DSU”) plan for directors, executive officers, employees and consultants of the Company. The vesting conditions of the RSUs and DSUs may be based on a required service period or the achievement of performance targets. RSUs that have been vested will be payable, at the holder’s option, in common shares. Vested DSUs are payable in common shares. The share-based remuneration expense of the RSUs and DSUs is based on the estimated fair value at grant date and the awards expected to vest over the vesting period. A corresponding compensation liability is recorded in the equity.

Continued...

MINNOVA CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2021 AND 2020 (Expressed in Canadian Dollars)

Page 14

3. ACCOUNTING POLICIES (Continued)

Loss per Share:

The Company presents basic and diluted loss per share data for its common shares, calculated by dividing the loss attributable to common shareholders of the Company by the weighted average number of common shares outstanding during the year. Diluted loss per share is determined by adjusting the loss attributable to common shareholders and the weighted average number of common shares outstanding for the effects of all warrants, options RSUs and DSUs outstanding that may add to the total number of common shares. The Company's diluted loss per share for all years presented does not include the effect of stock options, warrants, RSUs and DSUs as they are anti-dilutive.

Income Taxes:

Income tax on the profit or loss for the years presented comprises current and deferred tax. Income tax is recognized in profit or loss except to the extent that it relates to items recognized directly in equity, in which case it is recognized in equity.

Current tax expense is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at year end, adjusted for amendments to tax payable with regards to previous years.

In general, deferred tax is recognized in respect of temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred income tax is determined on a non-discounted basis using tax rates and laws that have been enacted or substantively enacted at the year-end 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.

Recent Accounting Pronouncements

During the year ended March 31, 2021, the Company adopted a number of new IFRS standards, interpretations, amendments and improvements of existing standards. These included IAS 1 and IFRS 3. These amendments did not have any material impact on the Company’s financial statements.

Certain pronouncements were issued by the IASB or the IFRIC that are mandatory for accounting periods on or after April 1, 2021 or later periods. Many are not applicable or do not have a significant impact to the Company and have been excluded. The following has not yet been adopted and is being evaluated to determine their impact on the Company.

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

IAS 1 – Presentation of Financial Statements (“IAS 1”) was amended in January 2020 to provide a more general approach to the classification of liabilities under IAS 1 based on the contractual arrangements in place at the reporting date. The amendments clarify that the classification of liabilities as current or noncurrent is based solely on a company’s right to defer settlement at the reporting date. The right needs to be unconditional and must have substance. The amendments also clarify that the transfer of a company’s own equity instruments is regarded as settlement of a liability, unless it results from the exercise of a conversion option meeting the definition of an equity instrument. The amendments are effective for annual periods beginning on January 1, 2023.

IAS 16 – Property, Plant and Equipment (“IAS 16”) was amended. The amendments introduce new guidance, such that the proceeds from selling items before the related property, plant and equipment is available for its intended use can no longer be deducted from the cost. Instead, such proceeds are to be recognized in profit or loss, together with the costs of producing those items. The amendments are effective for annual periods beginning on January 1, 2022.

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MINNOVA CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2021 AND 2020 (Expressed in Canadian Dollars)

Page 15

4. MANAGING CAPITAL

The Company manages its capital with the following objectives:

• to ensure sufficient flexibility to achieve the ongoing business objectives including funding of future resource based exploration and investment initiatives; and

• to maximize shareholder return through enhancing the share value.

The Company monitors its capital structure and makes adjustments according to market conditions in an effort to meet its objectives given the current outlook of the business and the industry in general. The Company may manage its capital structure by issuing new shares, repurchasing outstanding shares, adjusting capital spending, or disposing of assets. Management adjusts the capital structure as necessary in order to support the acquisition, exploration and development of its mineral properties for the mining of gold, nickel and copper. The capital structure is reviewed by management and the Board of Directors on an ongoing basis.

The Company considers its capital to be total shareholders' equity (managed capital), which at March 31, 2021, totaled $16,227,916 (2020 - $14,164,825).

The Company manages capital through its financial and operational forecasting processes. The Company reviews its working capital and forecasts its future cash flows based on operating expenditures, as well as other investing and financing activities. The forecast is regularly updated based on activities related to the acquisition, exploration and development of its mineral properties. The Board of Directors regularly reviews the Company's capital management approach. The Company's capital management objectives, policies and processes have remained unchanged during the years ended March 31, 2021 and 2020.

The Company is not subject to any capital requirements imposed by a lending institution or regulatory body, other than of the TSX Venture Exchange (“TSXV”) which requires adequate working capital or financial resources of the greater of (i) $50,000 and (ii) an amount required in order to maintain operations and cover general and administrative expenses for a period of 6 months.

As of March 31, 2021, the Company is not compliant with the policies of the TSXV. The impact of this violation is not known and is ultimately dependent on the discretion of the TSXV.

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MINNOVA CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2021 AND 2020

Page 16

(Expressed in Canadian Dollars)

5. FINANCIAL INSTRUMENTS

Details of the significant accounting policies and methods adopted (including the criteria for recognition, the basis of measurement, and the bases for recognition of income and expenses) for each class of financial asset and financial liability are disclosed in Note 3.

Categories of Financial Instruments

		As at		As at
		March 31,		March 31,
		2021		2020
Financial Assets
Amortized cost
Cash	$	131,450	$	21,039
Restricted cash equivalents		75,000		75,000
Amounts receivable		142,694		110,339
Financial Liabilities
Amortized cost
Accounts payable and accrued liabilities	$	1,298,611	$	1,572,162
Hydro contract accrual		277,533		277,533

The Company's risk exposures and the impact on the Company's financial instruments are summarized below. There have been no significant changes in the risks, objectives, policies and procedures for managing risk during the years ended March 31, 2021 and 2020.

Credit Risk

The Company's credit risk is primarily attributable to cash, amounts receivable and restricted cash equivalents. Restricted cash equivalents consists of a GIC which has been invested with a reputable Canadian financial institution. The Company does not hold any non-bank asset backed commercial paper. Management believes that the credit risk concentration with respect to its financial instruments is remote.

Liquidity Risk

The Company's approach to managing liquidity risk is to ensure that it will have sufficient liquidity to meet liabilities when due. As at March 31, 2021, the Company did not have sufficient cash to settle current liabilities of $1,620,938 (2020 - $1,849,695). Management believes that additional financing will be available to discharge current liabilities.

Most of the Company's accounts payable and accrued liabilities have contractual maturities of less than 30 days and are subject to normal trade terms.

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MINNOVA CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2021 AND 2020 (Expressed in Canadian Dollars)

Page 17

5. FINANCIAL INSTRUMENTS (Continued)

Interest Rate Risk

The Company has cash balances subject to fluctuations in the prime rate. The Company's current policy is to invest excess cash in investment-grade short-term deposit certificates issued by its banking institutions. The Company periodically monitors the investments it makes and is satisfied with the credit ratings of its banks. The debentures bear fixed interest rates and therefore are not subject to interest rate risk. Currently, the Company does not hedge against interest rate risk. As of March 31, 2021, the Company had no investment in short-term deposit certificates (March 31, 2020 – Nil).

Foreign Currency Risk

The Company's functional currency is the Canadian dollar and major purchases are transacted in Canadian dollars. Management believes the foreign exchange risk derived from currency conversions at this time are small and therefore, does not hedge its foreign exchange risk.

Commodity Price Risk

The Company is exposed to price risk with respect to commodity prices. Commodity price risk is defined as the potential adverse impact on earnings and economic value due to commodity price movements and volatilities. The Company closely monitors commodity prices as it relates to precious and base metals to determine the appropriate course of action to be taken by the Company. Management believes commodity price risk to be remote as the Company is not a producing entity.

Fair Value

The Company has, for accounting purposes, designated its cash and amounts receivable as amortized cost. Accounts payable, accrued liabilities and hydro contract accrual are classified for accounting purposes as amortized cost.

As of March 31, 2021 and 2020, both the carrying and fair value amounts of the Company's financial instruments are approximately equivalent because of the limited term of these instruments.

6. RESTRICTED CASH EQUIVALENTS

The Company has guaranteed by pledge of a guaranteed investment certificate an irrevocable standby letter of credit for $75,000 to the Government of Manitoba as a financial assurance guarantee in connection with the Puffy Lake ("PL") Property closure plan (see Note 10).

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MINNOVA CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2021 AND 2020

Page 18

(Expressed in Canadian Dollars)

7. EQUIPMENT

Cost
							Equipment		Buildings		Total
Balance, March	**31, **	2019,	2020	and	2021	$	105,000	$	305,096	$	410,096

Accumulated Amortization
		Equipment		Buildings		Total
Balance, March 31, 2019	$	39,480	$	82,963	$	122,443
Amortization for theyear		13,104		11,107		24,211
Balance, March 31, 2020	$	52,584	$	94,070	$	146,654
Amortization for theperiod		10,483		10,552		21,035
Balance, March 31, 2021	$	63,067	$	104,622	$	167,689
Carrying Amount
		Equipment		Buildings		Total
Balance, March 31, 2020	$	52,416	$	211,026	$	263,442
Balance, March 31, 2021	$	41,933	$	200,474	$	242,407

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Page 19

8. EXPLORATION PROPERTIES AND DEFERRED EXPLORATION EXPENDITURES

As at March 31, 2021

As at March 31, 2021
					Changes for
		March 31,			closure and			March 31,
		2020		Additions	reclamation	Write-off		2021
Exploration and Evaluation Properties
Nokomis Property	$	2,874,772	$	54,700	$ -	-	$	2,929,472
PL Property		16,033,381		1,518,058	(312,553)	-		17,238,886
	**$ **	18,908,153	$	1,572,758	$ (312,553)	-	**$ **	20,168,358
As at March 31, 2020
					Changes for
		March 31,			closure and			March 31,
		2019		Additions	reclamation	Write-off		2020
Exploration and Evaluation Properties
Nokomis Property	$	2,804,272	$	70,500	$ -	-	$	2,874,772
PL Property		15,663,531		115,087	254,763	-		16,033,381
La Esperanza Gold Property		220,321		55,123	-	(275,444)		-
	**$ **	18,688,124	$	240,710	$ 254,763	**(275,444) **	**$ **	18,908,153

PL Project (PL Property and Nokomis Property)

The Company owns a 100% interest in the PL Mine and contiguous Nokomis property, located in Manitoba, subject to a 3% net smelter royalty (NSR) that reduces to 2.5% and 2% if gold is below US$1,000/oz and US$750/oz, respectively.

La Esperanza Gold Property

On October 11, 2018, the Company entered into an option agreement to acquire a 100% interest in the Media Quebrada mining concession and adjacent claim, collectively called the La Esperanza Gold Property.

Details with respect to the consideration payable for this acquisition are as follows: on signing (November 7, 2018): cash payments of US$50,000 (paid) and common shares payment of 250,000 (issued); first anniversary (November 7, 2019): cash payment of US$100,000 (agreement in principal to defer for 12 months to November 7, 2020) and common shares payment of 250,000 (to be issued on execution of final agreement) and second anniversary (November 7, 2020): cash payment of US$500,000 (agreement in principal to defer for 12 months to November 7, 2021).

During the year ended March 31, 2020, the Company determined not to proceed with the La Esperanza Gold Property and has written off exploration properties and deferred exploration expenditures in the amount of $275,444.

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MINNOVA CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2021 AND 2020

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(Expressed in Canadian Dollars)

9. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

		March 31,		March 31,
		2021		2020
Trade payables	$	851,215	$	1,246,536
Accrued andpayroll liabilities		447,396		325,626
Total	$	1,298,611	$	1,572,162

The following is an aged analysis of the accounts payable and accrued liabilities:

		March 31,		March 31,
		2021		2020
Less than 1 month	$	307,221	$	69,689
1 to 3 months		4,639		208,295
Over 3 months		986,751		1,294,178
Total	$	1,298,611	$	1,572,162

10. PROVISION FOR CLOSURE AND RECLAMATION

The Company has provided a letter of credit in the amount of $75,000 to the Government of Manitoba under the terms of the closure plan on the PL Property (see Note 6). The Company further provided all assets, goods and personal property involved in the operation of the PL Property, as a security of up to $5,000,000 for the performance of the closure plan and the rehabilitation program.

The Company's provision for closure and reclamation costs is based on management's estimates of costs to abandon and reclaim mineral properties and facilities as well as an estimate of the future timing of the costs to be incurred. The Company has estimated its total provision for closure and reclamation to be $3,089,986 at March 31, 2021 ($3,374,457 - March 31, 2020), based on a total future liability of approximately $3,073,000 (March 31, 2020 - $3,073,000), an inflation rate of 1.17% (March 31, 2020 - 1.18%) and a discount rate of 1.55% (March 31, 2020 - 0.71%). Reclamation is expected to occur in approximately 10 years.

The following is an analysis of the provision for closure and reclamation:

Balance, March 31, 2019	$	3,078,834
Effect of changes in the inflation and discount rate		254,763
Accretion incurred in theyear		40,860
Balance, March 31, 2020	$	3,374,457
Effect of changes in the inflation and discount rate		(312,553)
Accretion incurred in theperiod		28,082
Balance, March 31, 2021	$	3,089,986

During the year ended March 31, 2021, the Company expensed $28,082 as accretion, which was recorded in finance cost on the consolidated statements of operations (2020 -$40,860).

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(Expressed in Canadian Dollars)

11. DEFERRED STOCK UNITS AND RESTRICTED STOCK UNITS

On January 12, 2017, the Company announced that it issued a total of 300,000 Deferred Stock Units ("DSUs") to nonexecutive directors as an annual award as outlined in the DSU Plan adopted in August 2016.

The Company also granted 1,500,000 Restricted Share Units ("RSUs") to executives and consultants. The RSUs were granted in accordance with the Company's Restricted Share Unit Plan and are subject to vesting provisions. More specifically, the grant consists of a base amount of 500,000 units with vesting subject to retention while the remaining bonus units are subject to performance conditions.

The DSUs vested immediately on the date of grant and the RSUs vest as to one-third on the date of grant, one-third in six months and one-third in twelve months.

During the year ended March 31, 2019, 825,000 RSU have been forfeited or expired. As at March 31, 2020, the DSUs and the RSUs had fully vested. For the year ended March 31, 2021, stock-based compensation of $nil (2020 - $nil) was recorded in the consolidated statements of operations in relation to the RSUs.

Under the DSU and RSU plan, the maximum number of common shares subject to issuance is 2,160,307.

						DSU	RSU
Balance, March	**31, **	2019,	2020	and	2021	300,000	675,000

12. SHARE CAPITAL

(a) Authorized:

Unlimited number of common shares with no par value.

(b) Common Shares Issued:

	Number of
	Shares	Amount
Balance, March 31, 2019	31,696,873	$ 21,008,745
Shares issued for settlement of accountspayable and accrued liabilities(i)	1,111,111	500,000
Balance, March 31, 2020	32,807,984	$ 21,508,745
Flow-through common shares issued, after costs (ii)(v)	6,462,500	1,187,404
Common shares issued, after costs (iv)	1,200,000	157,892
Fair value of broker warrants (ii)(iv)(v)	-	(74,074)
Premium liability for flow-through shares (ii)(iii)(v)	-	(287,073)
Shares issued for settlement of debts (vi)	3,000,000	1,369,953
Shares issued from exercise of stock options	50,000	12,500
Reclassification of fair value of stock options exercised	-	7,376
Shares issued from exercise of warrants	60,000	15,000
Reclassification of fair value of warrants exercised	-	3,822
Balance, March 31, 2021	43,580,484	$ 23,901,545

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12. SHARE CAPITAL (Continued)

(b) Common Shares Issued (Continued):

(i) During the year ended March 31, 2020, the Company settled total accounts payable and accrued liabilities of $500,000 with 1,111,111 common shares of the Company with shareholders of the Company.

(ii) On July 16, 2020, the Company closed a non-brokered private placement of flow-through units (each, a “FT Unit”) through the issuance of 4,275,000 FT Units at a price of $0.20 per FT Unit for gross proceeds of $855,000.

Each FT Unit consists of one common share of the Company issued on a flow-through basis (each, a “FT Common Share”) and one-half of a common share purchase warrant (each whole warrant, a “FT Warrant”). Each FT Warrant entitles the holder to purchase one common share in the capital of the Company (each, a “Common Share”) at an exercise price of $0.25 for until July 16, 2022 (the “FT Warrant Term”), provided, however, that should the closing price at which the Common Shares trade on the TSX Venture Exchange (the “TSXV”) (or any such other stock exchange in Canada as the Common Shares may trade at the applicable time) exceed $0.375 for 20 consecutive trading days at any time following the date that is four months and one day after the date of issuance, the Company may accelerate the FT Warrant Term such that the FT Warrants shall expire on the date which is 30 business days following the date a press release is issued by the Company announcing the reduced warrant terms. The Company incurred share issuance costs of $34,250 of which $6,850 was allocated to the FT Warrants.

The grant date fair value assigned to the FT Warrants was $136,161, estimated using the Black-Scholes valuation model with the following assumptions: expected dividend yield of 0%, expected volatility of 124.7%, risk-free interest rate of 0.27% and an expected life of 2 years.

The Company also issued 474,000 broker warrants in relation to the private placement. The grant date fair value assigned to the broker warrants was $33,069 estimated using the Black-Scholes valuation model with the following assumptions: expected dividend yield of 0%, expected volatility of 124.7%, risk-free interest rate of 0.27% and an expected life of 2 years.

(iii) In connection with the issuances of FT Common Shares, a flow-through premium of $107,374 was calculated. This amount has been presented as a current liability in the statements of financial position. During the year ended March 31, 2021, $107,374 of the flow-through premium was reversed as expenditure requirements were met and recognized in the statements of operations.

(iv) On January 25, 2021, the Company closed a non-brokered private placement, through the issuance of 1,200,000 units (each, a “Unit”) at a price of $0.25 per Unit for gross proceeds of $300,000. Each Unit is comprised of one common share in the capital of the Company (each, a “Common Share”) and one Common Share purchase warrant (each, a “Warrant”). Each Warrant shall entitle the holder thereof to purchase one Common at a price of $0.35 per Common Share until January 25, 2023 (the “Warrant Term”) provided, that in the event the closing price at which the Common Shares trade on the TSX Venture Exchange (or any such other stock exchange in Canada as the Common Shares may trade at the applicable time) exceed $0.55 for 20 consecutive trading days at any time following May 26, 2021, the Company may accelerate the Warrant Term (the “Reduced Warrant Term”) such that the Warrants shall expire on the date which is 30 business days following the date a press release is issued by the Company announcing the Reduced Warrant Term. The Company incurred share issuance costs of $9,305 of which $3,908 was allocated to the Warrants.

The grant date fair value assigned to the Warrants was $117,972, estimated using the Black-Scholes valuation model with the following assumptions: expected dividend yield of 0%, expected volatility of 147.52%, risk-free interest rate of 0.18% and an expected life of 2 years.

The Company also issued 32,928 broker warrants in relation to the private placement. The grant date fair value assigned to the broker warrants was $9,810 estimated using the Black-Scholes valuation model with the following assumptions: expected dividend yield of 0%, expected volatility of 147.52%, risk-free interest rate of 0.18% and an expected life of 2 years.

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12. SHARE CAPITAL (Continued)

(b) Common Shares Issued (Continued):

(v) On February 4, 2021, the Company closed the flow-through portion of a non-brokered private placement, through the issuance of 2,187,500 flow-through units (each, a “FT Unit”) at a price of $0.32 per FT Unit for gross proceeds of $700,000. Each FT Unit is comprised of one common share in the capital of the Company (each, a “Common Share”) and one-half of one whole Common Share purchase warrant (each whole warrant, a “Warrant”). Each Warrant shall entitle the holder thereof to purchase one Common at a price of $0.35 per Common Share until February 4, 2023 (the “Warrant Term”) provided, that in the event the closing price at which the Common Shares trade on the TSX Venture Exchange (or any such other stock exchange in Canada as the Common Shares may trade at the applicable time) exceed $0.55 for 20 consecutive trading days at any time following June 5, 2021, the Company may accelerate the Warrant Term (the “Reduced Warrant Term”) such that the Warrants shall expire on the date which is 30 business days following the date a press release is issued by the Company announcing the Reduced Warrant Term. The Company incurred share issuance costs of $3,804 of which $992 was allocated to the FT Warrants.

The grant date fair value assigned to the FT Warrants was $128,749, estimated using the Black-Scholes valuation model with the following assumptions: expected dividend yield of 0%, expected volatility of 146.87%, risk-free interest rate of 0.19% and an expected life of 2 years.

The Company also issued 122,750 broker warrants in relation to the private placement. The grant date fair value assigned to the broker warrants was $31,195 estimated using the Black-Scholes valuation model with the following assumptions: expected dividend yield of 0%, expected volatility of 146.87%, risk-free interest rate of 0.19% and an expected life of 2 years.

(vi) During the year ended March 31, 2021, the Company issued 3,000,000 common shares valued at $1,366,953 based on the market price of the Company's shares on the agreement date for settling accounts payable and accrued liabilities of $600,000, resulting a loss on debt settlement of $766,953. See Note 16(a)(ii).

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MINNOVA CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2021 AND 2020 (Expressed in Canadian Dollars)

Page 24

13. SHARE-BASED PAYMENT RESERVES

(a) Stock Options

The Company has granted options for the purchase of common shares to its directors, officers, employees and certain consultants. The purpose of the plan is to attract, retain and motivate these parties by providing them with the opportunity, through share options, to acquire a proprietary interest in the Company and to benefit from its growth. These options are valid for a maximum of 5 years from the date of issue. Vesting terms and conditions are determined by the Board of Directors at the time of the grant. The maximum number of options to be issued under the plan shall not exceed 10% of the total number of common shares issued and outstanding.

The following table shows the continuity of stock options for the years ended March 31, 2021 and 2020:

	Number of	Weighted Average	Weighted Average
	Stock Options		Exercise Price
Balance, March 31, 2019	2,675,000	$	0.52
Expired	(725,000)		(0.40)
Cancelled	(50,000)		(0.75)
Balance, March 31, 2020	1,900,000	$	0.56
Granted (i)(ii)	2,050,000		0.28
Exercised	(50,000)		0.25
Expired	(225,000)		0.36
Balance, March 31, 2021	3,675,000	$	0.42

(i) On July 30, 2020, the Company granted 1,000,000 stock options to certain directors, officers and consultants to purchase common shares of the Company, exercisable at a price of $0.25 per common share for a period of 5 years. These options vested immediately upon grant. The grant date fair value of $147,517 was assigned to the stock options as estimated by using the Black-Scholes option valuation model with the following assumptions: expected dividend yield of 0%, expected volatility of 105.90% based on historical prices of the Company's stock, risk-free rate of return of 0.31% and an expected life of 5 years.

(ii) On March 11, 2021, the Company granted 1,050,000 stock options to certain directors, officers and consultants to purchase common shares of the Company, exercisable at a price of $0.30 per common share for a period of 5 years. These options vested immediately upon grant. The grant date fair value of $204,739 was assigned to the stock options as estimated by using the Black-Scholes option valuation model with the following assumptions: expected dividend yield of 0%, expected volatility of 105% based on historical prices of the Company's stock, risk-free rate of return of 0.92% and an expected life of 5 years.

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MINNOVA CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2021 AND 2020

Page 25

(Expressed in Canadian Dollars)

13. SHARE-BASED PAYMENT RESERVES (Continued)

(a) Stock Options (continued)

The following are the stock options outstanding at March 31, 2021:

				Weighted Average
Number of	Grant Date	Number of	Weighted	Remaining
Options	Fair	Options	Average	Contractual Life
Issued	Value($)	Exercisable	Exercise Price($)	(years)	Expiry Date
250,000	181,097	250,000	0.75	0.32	July 25, 2021
425,000	324,617	425,000	0.85	0.81	January 22, 2022
1,000,000	298,314	1,000,000	0.43	2.84	January 31, 2024
950,000	140,141	950,000	0.25	4.33	July 30, 2025
1,050,000	204,739	1,050,000	0.30	4.95	March 11,2026
3,675,000	1,148,908	3,675,000	0.42	3.42

(b) Share Purchase Warrants

The following table shows the continuity of share purchase warrants for the years ended March 31, 2021 and 2020:

	Number of	Weighted Average	Weighted Average
	Warrants		Exercise Price
Balance, March 31, 2019	3,877,107	$	0.82
Expired	(3,877,107)		0.82
Balance, March 31, 2020	-	$	-
Issued	4,431,250		0.30
Exercised	(60,000)		0.25
Balance, March 31, 2021	4,371,250	$	0.30

The following are the warrants outstanding as at March 31, 2021.

					Weighted Average
Number of		Grant Date		Weighted	Remaining
Warrants		Fair		Average	Contractual Life
Issued		Value($)	Exercise Price($)		(years)	Expiry Date
2,077,500	$	132,339	$	0.25	1.29	July 16, 2022
1,200,000		117,972		0.35	1.82	January 25, 2023
1,093,750		128,749		0.35	1.85	February4,2023
4,371,250		379,060		0.30	1.58

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13. SHARE-BASED PAYMENT RESERVES (Continued)

(c) Broker Warrants

The following table shows the continuity of broker warrants for the years ended March 31, 2021 and 2020:

			Number of	Weighted Average	Weighted Average
			Broker Warrants	Exercise Price
Balance, March	31,	2019	417,370	$	0.65
Expired			(417,370)		(0.65)
Balance, March	31,	2020	-	$	-
Issued			629,678		0.27
Balance, March	**31, **	2021	629,678	$	0.27

The following are the broker warrants outstanding at March 31, 2021:

			Weighted Average
Number of	Grant Date	Weighted	Remaining
Broker Warrants	Fair	Average	Contractual Life
Issued	Value($)	Exercise Price($)	(years)	Expiry Date
474,000	33,069	0.25	1.29	July 16, 2022
32,928	9,810	0.35	1.82	January 25, 2023
122,750	31,195	0.35	1.85	February4,2023
629,678	74,074	0.27	1.43

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MINNOVA CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2021 AND 2020

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(Expressed in Canadian Dollars)

14. GENERAL AND ADMINISTRATIVE

For the Years Ended March 31,		2021		2020
Office and general	$	48,584	$	45,430
Salaries and benefits		-		6,044
Business development		55,708		28,730
Stock exchange and transfer agent fees		38,917		21,671
Shareholder information		15,665		4,121
General and administrative	$	158,874	$	105,996

15. RELATED PARTY TRANSACTIONS

Related parties include the Board of Directors, close family members and enterprises that are controlled by these individuals as well as certain persons performing similar functions.

(a) The Company entered into the following transactions with related parties recorded as professional and consulting fees and share issue costs:

Years Ended March 31,		2021		2020
Irwin Lowy LLP (i) - professional and consulting fees	$	34,885	$	13,596

(i) A director of the Company is a partner at Irwin Lowy LLP, a law firm, and the fees relate to professional services provided by the firm. As at March 31, 2021, the Company owed $34,736 (March 31, 2020 - $17,439) to this firm and this amount is included in accounts payable and accrued liabilities. The amount is unsecured, non-interest bearing with no fixed terms of repayment.

• (ii) As at March 31, 2021, the Company owed $102,928 (March 31, 2020 - $445,953) to a corporation controlled by the Chief Executive Officer ("CEO") of the Company and this amount is included in accounts payable and accrued liabilities. During the year ended March 31, 2021, $215,000 (2020- $180,000) of these fees were recorded as capitalized exploration and evaluation costs and $25,000 (2020 - $60,000) were recorded in management and directors' compensation on the statements of operations and comprehensive loss.

During the year ended March 31, 2021, the Company issued 2,380,125 common shares valued at $1,071,056 based on the market price of the Company's shares on the extinguishment date in settlement of accounts payable and accrued liabilities of $476,025 owed to a corporation controlled by the CEO, resulting a loss on debt settlement of $595,031 (note 12(b)(vi)).

Debts to officers and directors of the Company in the amounts of $64,000 (2020 - $nil), were extinguished through issuance of 320,000 shares (2020 – nil) valued at $144,000 (2020 - $nil). The value of the shares were based on market price on the debt extinguishment date. The transaction resulted in a loss on debt settlement of $80,000 (2020 - $nil).

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(Expressed in Canadian Dollars)

15. RELATED PARTY TRANSACTIONS (Continued)

(b) Remuneration of directors and key management personnel of the Company was as follows:

Years Ended March 31,		2021		2020
Directors fees	$	64,000	$	64,000
Amounts paid or accrued to CEO for
salaries, consulting and benefits	$	240,000	$	240,000
Stock-based payments	$	333,684	$	-

Director fees - the Board of Directors do not have employment or service contracts with the Company. Directors are entitled to director fees and stock options for their services. As at March 31, 2021, the Company owed $65,998 (March 31, 2020 - $60,000) to the directors and $132,625 (March 31, 2020 - $530,778) to the CEO of the Company which was included in the accounts payable and accrued liabilities. These amounts are unsecured, non-interest bearing with no fixed term of repayment.

Salaries and benefits - officers are entitled to stock options, consulting fees or salaries and benefits where employment or service contracts are in place with the Company for their services.

As at March 31, 2021, 1,850,000 stock options (2020 – nil) were issued to officers and directors of the Company. A total value of $333,684 (2020 - $nil) is attributed to these options, of which $148,596 (2020 - $nil) was capitalized to exploration and evaluation assets, and $185,088 (2020 - $nil) was expensed to the consolidated statements of operations and comprehensive loss.

As at March 31, 2021, $127,581 (March 31, 2020 - $75) of cash was held in the Irwin Lowy LLP trust account, a law firm, where the interim CFO is a partner.

16. INCOME TAXES

(a) Provision for income taxes:

Major items causing the Company's effective income tax rate to differ from the Canadian combined and provincial statutory rates of approximately 26.5% (2020 - 26.5%) are as follows:

Years Ended March 31,		2021		2020
Loss before income taxes	$	(1,166,992)	$	(413,542)
Expected income tax (recovery)		(309,000)		(110,000)
Stock based payments		54,000		-
Share issue costs		(24,000)		(24,200)
Flow-through expenditures renounced		253,000		-
Change in deferred tax benefits not recognised		9,000		117,000
Other		17,000		17,000
Deferred income tax recovery	$	-	$	-

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MINNOVA CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2021 AND 2020

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(Expressed in Canadian Dollars)

16. INCOME TAXES (Continued)

• (b) Deferred tax assets

Year Ended March 31,		2021		2020
Deferred income tax assets have been recognized as follows:
Non-capital loss carry-forwards	$	419,000	$	110,000
Explorationproperties		(419,000)		(110,000)
Total	$	-	$	-
Year Ended March 31,		2021		2020
Deferred income tax assets have not been recognized in respect of the following deductible		temporary differences:
Non-capital loss carry-forwards	$	1,922,000	$	1,906,000
Share issue costs		61,000		92,000
Total	$	1,983,000	$	1,998,000

Deferred tax assets have not been recognized in respect of these temporary differences because it is not probable that future taxable profits will be available against which the Company can utilize the benefits.

• (c) As at March 31, 2021, the Company had approximately $15,419,000 (2020 - $15,023,000) of Canadian exploration and development expenditures, which, under certain circumstances may be utilized to reduce taxable income of future years. The Company has $27,000 (2020 - $21,000) non-capital losses in Peru which do not expire. The Company also has approximately $3,503,000 (2020 - $2,300,000) of non-capital losses in Canada, which can be used to reduce taxable income in future years. The Canadian non-capital losses expire as follows:

2034	$	513,000
2035		210,000
2036		333,000
2037		365,000
2038		115,000
2039		135,000
2040		629,000
2040		1,203,000
	$	3,503,000

17. ENVIRONMENTAL CONTINGENCIES

The Company's exploration activities are subject to various laws and regulations governing the protection of the environment. These laws and regulations are continually changing and are generally becoming more restrictive. The Company conducts its operations so as to protect public health and the environment and believes its operations are materially in compliance with all applicable laws and regulations. The Company has made, and expects to make in the future, expenditures to comply with such laws and regulations.

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18. COMMITMENTS AND CONTINGENCIES

Pursuant to the terms of the flow-through share agreements, the Company needs to comply with its flow-through contractual obligations with subscribers with respect to the Income Tax Act (Canada). The Company has indemnified the subscribers of current and previous flow-through share offerings against any tax related amounts that become payable by the shareholder as a result of the Company not meeting its expenditure commitments. As at March 31, 2021, the Company is committed to incurring approximately $360,420 in qualifying exploration expenditures in Canada by December 31, 2022.

The Company is party to a management contract. This contract contains clauses requiring additional payments of up to $480,000 be made upon the occurrence of certain events such as a change of control. As a triggering event has not occurred, the contingent payments have not been reflected in these financial statements. Additional minimum management contractual commitments remaining under the agreement are approximately $480,000, of which $240,000 is due within one year.

19. SUBSEQUENT EVENT

On July 25, 2021, 250,000 stock options expired unexercised.

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