MTB Metals Corp. — Audit Report / Information 2019

Mar 13, 2020

==> picture [294 x 84] intentionally omitted <==

MOUNTAIN BOY MINERALS LTD.

FINANCIAL STATEMENTS

For the years ended November 30, 2019 and 2018

Mountain Boy Minerals Ltd. Suite 410 – 325 Howe Street Vancouver, BC V6C 1Z7

Trading Symbol: MTB Telephone: 604-687-3520 Fax: 1-888-889-4874

==> picture [457 x 83] intentionally omitted <==

INDEPENDENT AUDITORS’ REPORT

To the Shareholders and Directors of Mountain Boy Minerals Ltd.

We have audited the financial statements of Mountain Boy Minerals Ltd. (the “Company”) which comprise the statements of financial position as at November 30, 2019 and 2018, and the statements of comprehensive loss, changes in equity and cash flows for the years then ended, and the related notes comprising a summary of significant accounting policies and other explanatory information.

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as at November 30, 2019 and 2018, and its financial performance and its cash flows for the years then ended in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board.

Basis for Opinion

We conducted our audits in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the 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 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.

Emphasis of Matter – Material Uncertainty Related to Going Concern

We draw attention to Note 2(c) of the accompanying financial statements, which describes matters and conditions that indicate the existence of a material uncertainty that may cast significant doubt about the Company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.

Other Information

Management is responsible for the other information, which comprises the information included in the Company’s Management Discussion & Analysis to be filed with the relevant Canadian securities commissions.

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

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. We have nothing to report in this regard.

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

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

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

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

==> picture [457 x 83] intentionally omitted <==

Auditors’ Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ 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 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 financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

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

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

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

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

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 auditors’ report is Joseph Bonvillain.

==> picture [186 x 32] intentionally omitted <==

CHARTERED PROFESSIONAL ACCOUNTANTS Vancouver, British Columbia March 12, 2020

MOUNTAIN BOY MINERALS LTD. STATEMENTS OF FINANCIAL POSITION

(Expressed in Canadian dollars)

Note ASSETS Current Cash Deferred financing costs Marketable securities 5 Receivables Due from joint venture partners 6(b) Prepaid expenses Non-current Exploration and evaluation assets 6 Reclamation bonds LIABILITIES Current Trade and other payables Due to joint venture partner 6(b) Non-current Deferred tax liabilities 11 EQUITY Share capital 7 Shares subscriptions 7 Contributed surplus 7 Deficit	November 30, 2019 November 30, 2018
	169,653 $ 160,313 $ 3,000 - 561,206 3,984,618 9,447 4,370 - 37,521 7,143 9,537
	750,449 4,196,359
	14,272,224 13,320,935 120,954 119,931
	14,393,178 13,440,866
	15,143,627 $ 17,637,225 $
	104,075 $ 119,800 $ 50,000 1,135,278
	154,075 1,255,078
	3,142,000 3,231,000
	3,296,075 4,486,078
	24,338,570 24,189,850 55,000 - 4,328,023 4,245,063 (16,874,041) (15,283,766)
	11,847,552 13,151,147
	15,143,627 $ 17,637,225 $

Corporate Information – Note 1 Going Concern – Note 2(c) Subsequent Events – Note 13

These financial statements were authorized for issue by the Board of Directors on March 12, 2020. They are signed on the Company’s behalf by:

“Mark T. Brown” Director “Lawrence Roulston” Director Mark T. Brown Lawrence Roulston

The accompanying notes are an integral part of these financial statements

2

MOUNTAIN BOY MINERALS LTD. STATEMENTS OF COMPREHENSIVE LOSS

(Expressed in Canadian dollars)

Note Expenses Accounting and audit fees Filing fees Investor relations Legal fees Management fees Office and miscellaneous Shareholder communications Share-based payments 8 Telephone Transfer agent fees Other items Gain on sale of exploration and evaluation assets 6(e) Gain on settlement of debt 6(b) Fair value gain (loss) on marketable securities 5 Realized (loss) on marketable securities 5 Other income Income (loss) before income taxes Income taxes Deferred income tax recovery (expense) 11 Net loss and comprehensive loss Basic and diluted loss per share Weighted average number of shares outstanding	2019 2018 For the years ended November 30
	119,921 $ 126,400 $ 8,161 12,443 36,000 24,750 8,799 7,288 37,100 17,600 12,432 8,383 23,233 39,585 82,960 856,440 796 523 12,245 11,913
	(341,647) (1,105,325)
	- 580,927 172,757 - (926,362) 569,231 (589,296) - 5,273 101,002
	(1,337,628) 1,251,160
	(1,679,275) 145,835 89,000 (195,000)
	(1,590,275) $ (49,165) $
	(0.05) $ (0.00) $
	34,719,423 32,999,327

The accompanying notes are an integral part of these financial statements

3

MOUNTAIN BOY MINERALS LTD. STATEMENTS OF CHANGES IN EQUITY (Expressed in Canadian dollars)

		Number of				Share	Shares to be	Shares to be	Contributed	Contributed
	Note	shares	Share capital		subscriptions			issued		surplus	Deficit		Total equity
Balance as at November 30, 2017	1	31,107,882	$	22,936,871	$	-	$	50,000	$	3,804,077	(15,234,601) $	$	11,556,347
Private placements	7	1,002,500		274,612		-		-		3,200	-		277,812
Share issurance costs		-		(5,787)		-		-		-	-		(5,787)
Exercise of options	7	1,580,000		395,000				(50,000)		-	-		345,000
Reclassification on exercise of options		-		418,654				-		(418,654)	-		-
Property option payments	6	620,000		170,500		-		-		-	-		170,500
Share-based payments		-		-		-		-		856,440	-		856,440
Net loss and comprehensive loss		-		-		-		-		-	(49,165)		(49,165)
Balance as at November 30, 2018		34,310,382		24,189,850		-		-		4,245,063	(15,283,766)		13,151,147
Share subsciption	7	-		-		55,000		-		-	-		55,000
Share issurance costs		-		(1,480)		-		-		-	-		(1,480)
Property option payments	6	760,000		150,200		-		-		-	-		150,200
Share-based payments		-		-		-		-		82,960	-		82,960
Net loss and comprehensive loss		-		-		-		-		-	(1,590,275)		(1,590,275)
Balance as at November 30, 2019		35,070,382	$	24,338,570	$	55,000	$	-	$	4,328,023	(16,874,041) $	$	11,847,552

The accompanying notes are an integral part of these financial statements

4

MOUNTAIN BOY MINERALS LTD. STATEMENTS OF CASH FLOWS

(Expressed in Canadian dollars)

Cash provided by (used for): Operating activities Net loss Items not involving cash: Share-based payments Deferred income tax (recovery) expense Gain on sale of exploration and evaluation assets Gain on settlement of debt Fair value (gain) loss on marketable securities Realized loss on marketable securities Other income Changes in non-cash working capital items: Receivables Due from joint venture partner Prepaid expenses Trade and other payables Cash used in operating activities Investing activities Exploration and evaluation assets Proceeds from sale of marketable securities Reclamation bonds Cash provided by (used in) investing activities Financing activities Share subscriptions Net proceeds from issuance of common shares Cash provided by financing activities Net increase in cash Cash - beginning of the year Cash - end of the year	2019 2018 For the years ended November 30
	(1,590,275) $ (49,165) $ 82,960 856,440 (89,000) 195,000 - (580,927) (172,757) - 926,362 (569,231) 589,296 - - (99,188) (5,077) 15,606 - (6,500) 2,394 7,831 (12,463) (1,056)
	(268,560) (231,190)
	(1,141,921) (274,070) 1,367,324 - (1,023) (1,283)
	224,380 (275,353)
	55,000 - (1,480) 644,213
	53,520 644,213
	9,340 137,670 160,313 22,643
	169,653 $ 160,313 $

Supplemental disclosure with respect to cash flows - Note 9

The accompanying notes are an integral part of these financial statements

5

Mountain Boy Minerals Ltd. Notes to the Financial Statements For the years ended November 30, 2019 and 2018 (Expressed in Canadian dollars)

1. Corporate Information

Mountain Boy Minerals Ltd. (the “Company”) is an exploration stage company incorporated on April 26, 1999, under the laws of the Province of British Columbia, Canada. Its principal business activity is the acquisition, exploration and evaluation of mineral properties located in the Province of British Columbia, Canada. The Company’s common shares are traded on the TSX Venture Exchange (“TSX-V”) under the symbol “MTB”. On November 12, 2018, the Company consolidated its share capital on the basis of one new share for every five old shares. All references to the number of shares and per share amounts have been retroactively restated to reflect the consolidation (see Note 7(b)).

The Company’s head office is 410-325 Howe Street, Vancouver, BC V6C 1Z7.

2. Basis of Preparation

a) Statement of Compliance

The financial statements of the Company have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).

b) Basis of Measurement

These financial statements have been prepared using the historical cost basis except for financial instruments that have been measured at fair value.

The financial statements are presented in Canadian dollars, which is the Company’s functional currency and presentation currency.

The preparation of financial statements in compliance with IFRS requires management to make certain critical accounting estimates. It also requires management to exercise judgement in applying the Company’s accounting policies. The areas involving a higher degree of judgement of complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in Note 4.

c) Going Concern

At November 30, 2019, the Company has not generated revenue or cash flow from operations and has an accumulated deficit of $16,874,041 and expects to incur further losses in the exploration and evaluation of its mineral properties. These financial statements have been prepared on a going concern basis which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company has not yet determined whether its mineral properties contain economically recoverable reserves. The recoverability of the amounts shown for exploration and evaluation assets is dependent upon the confirmation of economically recoverable reserves, the Company’s ability to obtain adequate financing to develop the reserves, and its ability to commence profitable operations in the future. These conditions form a material uncertainty which may cast significant doubt about the Company’s ability to continue as a going concern.

To date, the Company has been able to fund its operations and its mineral property exploration programs through equity financings and the sale of a non-core asset. The continued volatility in the equity markets may make it difficult to raise capital through the private placement of shares. The junior mining industry is considered speculative in nature which could make it more difficult to fund. While the Company is using its best efforts to achieve its business plans by examining various financing alternatives, there is no assurance that the Company will be successful with its financing ventures.

6

Mountain Boy Minerals Ltd. Notes to the Financial Statements For the years ended November 30, 2019 and 2018 (Expressed in Canadian dollars)

2. Basis of Preparation – (continued)

c) Going Concern (continued)

These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

3. Significant Accounting Policies

These financial statements have, in management’s opinion, been properly and consistently prepared within reasonable limits of materiality and within the framework of the significant accounting policies summarized below:

a) Mineral Exploration and Evaluation Expenditures

Pre-exploration Costs

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

Exploration and Evaluation Expenditures

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, surveying costs, drilling costs, payments made to contractors and depreciation on plant and equipment during the exploration phase. Costs not directly attributable to exploration and evaluation activities, including general administrative overhead costs, are expensed in the period in which they occur.

The Company may occasionally enter into farm-out arrangements, whereby the Company will transfer part of a mineral interest, as consideration, for an agreement by the transferee to meet certain exploration and evaluation expenditures which would have otherwise been undertaken by the Company. The Company does not record any expenditures made by the farmee on its behalf. Any cash consideration received from the agreement is credited against the costs previously capitalized to the mineral interest given up by the Company, with any excess cash accounted for as a gain on disposal.

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 the statement of comprehensive loss.

The Company assesses exploration and evaluation assets for impairment when facts and circumstances suggest that the carrying amount of an asset may exceed its recoverable amount.

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 “mines under construction”. Exploration and evaluation assets are also tested for impairment before the assets are transferred to development properties.

As the Company currently has no operational income, any incidental revenues earned in connection with exploration activities are applied as a reduction to capitalized exploration costs.

Mineral exploration and evaluation expenditures are classified as intangible assets.

7

Mountain Boy Minerals Ltd. Notes to the Financial Statements For the years ended November 30, 2019 and 2018 (Expressed in Canadian dollars)

1. Significant Accounting Policies – (continued)

b) Impairment of Non-Financial Assets

Impairment tests on intangible assets with indefinite useful economic lives are undertaken annually at the financial year-end. Other non-financial assets, including exploration and evaluation assets are subject to impairment tests whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Where the carrying value of an asset exceeds its recoverable amount, which is the higher of value in use and fair value less costs to sell, the asset is written down accordingly.

Where it is not possible to estimate the recoverable amount of an individual asset, the impairment test is carried out on the asset's cash-generating unit, which is the lowest group of assets in which the asset belongs for which there are separately identifiable cash inflows that are largely independent of the cash inflows from other assets. The Company has one cash-generating unit for which impairment testing is performed.

An impairment loss is charged to the profit or loss, except to the extent they reverse gains previously recognized in other comprehensive loss.

c) Financial Instruments

On December 1, 2018, the Company adopted IFRS 9 - Financial Instruments ("IFRS 9") which replaced IAS 39 - Financial Instruments: Recognition and Measurement (“IAS 39”). IFRS 9 provides a revised model for recognition and measurement of financial instruments and a single, forward-looking 'expected loss' impairment model. IFRS 9 also includes significant changes to hedge accounting. The standard is effective for annual periods beginning on or after January 1, 2018. The Company adopted the standard using the modified retrospective approach. IFRS 9 did not impact the Company's classification and measurement of financial assets and liabilities. The standard also had no impact on the carrying amounts of the Company’s financial instruments at the transition date.

The following summarizes the significant changes in IFRS 9 compared to the current standard:

• IFRS 9 uses a single approach to determine whether a financial asset is classified and measured at amortized cost or fair value. The classification and measurement of financial assets is based on the Company's business models for managing its financial assets and whether the contractual cash flows represent solely payments for principal and interest. Most of the requirements in IAS 39 for classification and measurement of financial liabilities were carried forward in IFRS 9. The change did not impact the carrying amounts of any of the Company’s financial assets on transition date.

The following table summarizes the classification of financial assets and financial liabilities under IAS 39 and the new measurement under IFRS 9:

	IAS 39	IFRS 9
Financial Assets
Cash	FVTPL	FVTPL
Marketable securities	FVTPL	FVTPL
Due from joint venture partner	Loans and receivables	Amortized cost
Reclamation bonds	Loans and receivables	Amortized cost
Financial Liabilities
Trade and other payables	Other financial liabilities	Amortized cost
Due to joint venture partner	Other financial liabilities	Amortized cost

8

Mountain Boy Minerals Ltd. Notes to the Financial Statements For the years ended November 30, 2019 and 2018 (Expressed in Canadian dollars)

3. Significant Accounting Policies – (continued)

d) 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 period in which the obligation is incurred. Rehabilitation activities include restoration, reclamation and re-vegetation 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 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 period in which they occur. At November 30, 2019 and 2018, the Company did not have any rehabilitation provisions.

Other Provisions

Provisions are recognized for liabilities of uncertain timing or amount that have arisen as a result of past transactions, including legal or constructive obligations. The provision is measured at the best estimate of the expenditure required to settle the obligation at the reporting date.

e) Income Taxes

Income tax expense comprises current and deferred tax. Current tax and deferred tax are recognized in net income except to the extent that it relates to a business combination, or items recognized directly in equity or in other comprehensive loss.

Current income taxes are recognized for the estimated income taxes payable or receivable on taxable income or loss for the current year and any adjustment to income taxes payable in respect of previous years. Current income taxes are determined using tax rates and tax laws that have been enacted or substantively enacted by the year-end date.

Deferred tax assets and liabilities are recognized where the carrying amount of an asset or liability differs from its tax base, except for taxable temporary differences arising on the initial recognition of goodwill and temporary differences arising on the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction affects neither accounting or taxable profit or loss.

Recognition of deferred tax assets for unused tax losses, tax credits and deductible temporary differences is restricted to those instances where it is probable that future taxable profit will be available against which the deferred tax asset can be utilized. At the end of each reporting period, the Company reassesses unrecognized deferred tax assets. The Company recognizes a previously unrecognized deferred tax asset to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

9

Mountain Boy Minerals Ltd. Notes to the Financial Statements For the years ended November 30, 2019 and 2018 (Expressed in Canadian dollars)

3. Significant Accounting Policies – (continued)

f) Government Grants

The province of B.C. provides mining exploration tax credits for certain exploration expenditures incurred in B.C. that are recorded as a reduction of the exploration and development costs of the respective exploration and evaluation assets. Until such time that there is significant certainty with regard to collections and assessments, the Company will record any recovered tax credits at the time of receipt. No gain or loss is realized during the exploration stage until all carrying costs of the specific interest have been offset.

g) Share Capital

Financial instruments issued by the Company are classified as equity only to the extent that they do not meet the definition of a financial liability or financial asset. The Company’s common shares are classified as equity instruments.

The fair value of the common shares issued in a private placement unit of shares and warrants is determined to be the more easily measurable component and are valued at their fair value, as determined by the closing quoted price on the issuance date. The remaining proceeds, if any, are allocated to the attached warrants. Any fair value attributed to the warrants is recorded as contributed surplus. If the warrants are issued as share issuance costs, the fair value of agent’s warrants are measured using the Black-Scholes option pricing model and recognized in equity as a deduction from the proceeds.

Costs directly attributable to the issue of new shares are recognized in equity as a deduction from the proceeds. Costs attributable to the listing of existing shares are expensed as incurred.

h) Loss per Common Share

Basic loss per share is computed by dividing the net loss applicable to the common shares by the weighted average number of common shares outstanding during the period.

Diluted loss per common share is computed by dividing the net loss applicable to the common shares by the sum of the weighted average number of common shares issued and outstanding and all additional common shares that would have been outstanding, if potentially dilutive instruments were converted. When a loss is incurred during the period; basic and diluted loss per share are the same as the exercise of stock options and share purchase warrants is anti-dilutive.

i) Share-based Payments

Where equity-settled share options are awarded to employees, the fair value of the options at the date of grant is charged to the statement of comprehensive loss over the vesting period. Performance vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each reporting date so that, ultimately, the cumulative amount recognized over the vesting period is based on the number of options that eventually vest. Nonvesting conditions and market vesting conditions are factored into the fair value of the options granted. As long as all other vesting conditions are satisfied, a charge is made irrespective of whether these vesting conditions are satisfied. The cumulative expense is not adjusted for failure to achieve a market vesting condition or where a non-vesting condition is not satisfied.

Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to the statement of comprehensive loss over the remaining vesting period.

10

Mountain Boy Minerals Ltd. Notes to the Financial Statements For the years ended November 30, 2019 and 2018 (Expressed in Canadian dollars)

3. Significant Accounting Policies – (continued)

i) Share-based Payments – (continued)

Where equity instruments are granted to employees, they are recorded at the fair value of the equity instrument granted at the grant date. The grant date fair value is recognized in comprehensive loss over the vesting period, described as the period during which all the vesting conditions are to be satisfied.

Where equity instruments are granted to non-employees, they are recorded at the fair value of the goods or services received in the statement of comprehensive loss, unless they are related to the issuance of shares. Amounts related to the issuance of shares are recorded as a reduction of share capital.

When the value of goods or services received in exchange for the share-based payment cannot be reliably estimated, the fair value is measured by use of a valuation model. The expected life used in the model is adjusted, based on management’s best estimate, for the effects of nontransferability, exercise restrictions, and behavioural considerations.

All equity-settled share-based payments are reflected in contributed surplus, until exercised. Upon exercise, shares are issued from treasury and the amount reflected in contributed surplus is credited to share capital, adjusted for any consideration paid.

Where a grant of options is cancelled or settled during the vesting period, excluding forfeitures when vesting conditions are not satisfied, the Company immediately accounts for the cancellation as an acceleration of vesting and recognizes the amount that otherwise would have been recognized for services received over the remainder of the vesting period. Any payment made to the employee on the cancellation is accounted for as the repurchase of an equity interest except to the extent the payment exceeds the fair value of the equity instrument granted, measured at the repurchase date. Any such excess is recognized as an expense.

j) Flow-through Shares

The resource expenditure deductions for income tax purposes related to exploration and development activities funded by flow-through share arrangements are renounced to investors in accordance with Canadian tax legislation. On issuance, the premium recorded on the flowthrough share, being the difference in price over a common share with no tax attributes, is recognized as a liability. As expenditures are incurred, the liability associated with the renounced tax deductions is recognized through profit and loss with a pro-rata portion of the deferred premium.

11

Mountain Boy Minerals Ltd. Notes to the Financial Statements For the years ended November 30, 2019 and 2018 (Expressed in Canadian dollars)

1. Significant Accounting Policies – (continued)

k) New accounting standards and interpretations

There was no impact on the Company’s financial statements from the adoption of IFRS 15 – Revenue from Contracts with Customers effective December 1, 2018.

Pronouncements that are not applicable or that do not have a significant impact on the Company have not been included in these financial statements. The following standards are those that the Company reasonably expects to have an impact on disclosures, financial position or performance when applied at a future date.

• IFRS 16 Leases (effective December 1, 2019);

• IFRIC 23 Uncertainty over Income Tax Treatments (effective December 1, 2019)

The Company anticipates that the application of the above new and revised standards, amendments and interpretations will have no material impact on its future results and financial position as the Company does not have any leases as at November 30, 2019.

4. Critical Accounting Estimates 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 comprehensive income in the period of the change, if the change affects that period only; or in the period of the change and future periods, if the change affects both. 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 financial statements are discussed below:

a) Exploration and Evaluation Expenditures

The application of the Company’s accounting policy for exploration and evaluation expenditure requires judgment in determining whether it is likely that future economic benefits will flow to the Company, which may be based on assumptions about future events or circumstances. Estimates and assumptions made may change if new information becomes available. If, after expenditure is capitalized, information becomes available suggesting that the recovery of expenditure is unlikely, the amount capitalized is written off in the profit or loss in the period the new information becomes available.

b) Title to Mineral Properties

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.

12

Mountain Boy Minerals Ltd. Notes to the Financial Statements For the years ended November 30, 2019 and 2018 (Expressed in Canadian dollars)

4. Critical Accounting Estimates and Judgments – (continued)

c) Rehabilitation Provisions

Rehabilitation provisions have been determined to be $Nil based on the Company’s internal estimates. Assumptions, based on the current economic environment, have been made which management believes are a reasonable basis upon which to estimate the future liability. These estimates take into account any material changes to the assumptions that occur when reviewed regularly by management. Estimates are reviewed annually and are based on current regulatory requirements. Significant changes in estimates of contamination, restoration standards and techniques will result in changes to provisions from period to period.

d) Share-Based Payments

The Company uses the Black Scholes Option Pricing Model for valuation of share based payments. Option pricing models require the input of subjective assumptions including expected price volatility, interest rate and forfeiture rate. Changes in the input assumptions can materially affect the fair value estimate and the Company’s earnings and equity reserves.

e) Recognition of Deferred Tax Assets and Liabilities

The carrying amounts of deferred tax assets and liabilities are reviewed at the end of each reporting period and recognized only to the extent that it is probable that sufficient taxable income will be available to allow all or part of the deferred income tax asset to be utilized. Changes in estimates of future taxable income can materially affect the amount of deferred income tax assets and liabilities recognized.

f) Going Concern

Management has applied judgments in the assessment of the Company’s ability to continue as a going concern when preparing its financial statements. Management prepares the financial statements on a going concern basis unless management either intends to liquidate the entity or to cease trading, or has no realistic alternative to do so. In assessing whether the going concern assumption is appropriate, management takes into account all available information about the future, which is at least, but is not limited to, twelve months from the end of the reporting period. Please refer to Note 2(c) for additional information.

5. Marketable Securities

The Company holds shares of a publicly traded company which are measured and presented at the observable market share price as at the date of the statements of financial position. The shares were acquired in the transaction described in Note 6(e).

November 30, 2019	Shares		Cost		Fair value
Ascot Resources Ltd.	1,020,374	$	918,337	$	561,206
November 30, 2018	Shares		Cost		Fair value
Ascot Resources Ltd.	3,794,874	$	3,415,387	$	3,984,618

13

Mountain Boy Minerals Ltd. Notes to the Financial Statements For the years ended November 30, 2019 and 2018 (Expressed in Canadian dollars)

5. Marketable Securities – (continued)

	November 30, 2019	November 30, 2018
Net changes in fair value on marketable securities through
profit or loss:
Realized loss	(589,296)	-
Change in unrealizedgain(loss)	(926,362)	569,231

6. Exploration and Evaluation Assets

a) Barbara (BA) and Surprise Creek Properties

By an agreement dated September 21, 2006, the Company acquired a 50% interest in the Barbara property which consists of ten mineral claims situated in the Skeena Mining Division of British Columbia. The Company was required to complete an 800 metre drill program on the property (completed). The property is subject to a 2% net smelter return royalty to a former director of the Company of which 1% may be purchased for $500,000. During the year ended November 30, 2007, the Company acquired the remaining 50% interest in the property.

On January 28, 2010, the Company entered into an option and joint venture agreement with Great Bear Resources Ltd. (“Great Bear”) which granted Great Bear the option to acquire up to a 70% interest in the Barbara, Stro, Booze and George Copper properties. On April 1, 2010, the Company received TSX-V approval for the agreement and issued 120,000 common shares valued at $1.00 per share as a finder’s fee with respect to this transaction. The agreement gave Great Bear the option to earn an initial 50% interest in the Barbara and George Copper properties by paying $158,000 (paid) and incurring $5,500,000 in exploration expenditures on or before December 31, 2013 (incurred).

The agreement was amended on October 25, 2010 in which Great Bear could earn an additional 20% interest by completing a bankable feasibility study on or before December 31, 2015. Great Bear did not complete a bankable feasibility study by December 31, 2015 and therefore did not execute their option to acquire an additional 20% interest in the properties. In consideration of the amendment, Great Bear included the Surprise Creek Property under the terms of the agreement and the acquisition costs for the Surprise Creek Property were borne entirely by Great Bear, and were applied against the earn-in requirement towards the Barbara Property. The Surprise Creek Property consists of 19 mineral claims situated in the Skeena Mining Division of British Columbia.

On October 18, 2016, the Company and Great Bear amended their agreement and entered into separate joint venture agreements for the Barbara and Surprise Creek Properties. The joint venture agreements set Great Bear as the operator of the Barbara Property and set the Company as the operator of the Surprise Creek Property. Both the Company and Great Bear retain a 50% ownership interest in the Surprise Creek and Barbara Properties.

On June 1, 2017, the Company and Great Bear entered into an additional option agreement in which the Company was granted the option to acquire Great Bear’s 50% interest in the Barbara and Surprise Creek properties by issuing a total of 2,000,000 common shares and paying $1,300,000 to Great Bear in stages between the date of TSX-V acceptance of the agreement and August 20, 2020 as follows:

14

Mountain Boy Minerals Ltd. Notes to the Financial Statements For the years ended November 30, 2019 and 2018 (Expressed in Canadian dollars)

6. Exploration and Evaluation Assets – (continued)

a) Barbara (BA) and Surprise Creek Properties – (continued)

• On signing, Great Bear will receive 500,000 shares (issued)

• $150,000 by August 20, 2017 (paid);

• $150,000 by November 20, 2017 (paid);

• 500,000 shares by April 15, 2018 (issued) and $300,000 by August 20, 2018 (deferred to March 20, 2019 by issuing 120,000 shares; the Company transferred 323,000 common shares of Ascot to Great Bear in lieu of making the $300,000 cash payment (Note 6(e)));

• 500,000 shares by April 15, 2019 (issued) and $350,000 by August 20, 2019 (the Company transferred 425,000 common shares of Ascot to Great Bear in lieu of making the $350,000 cash payment (Note 6(e)));

• 500,000 shares by April 15, 2020 (subsequently issued) and $350,000 by August 20, 2020.

In addition, the Company will make cash payments to Great Bear on achieving certain milestones toward establishing an economic resource, which could amount to as much as $3,700,000 were both properties to go into production.

b) Red Cliff Property

The Company had a 100% interest in the Red Cliff claims which are located in the Skeena Mining Division of British Columbia. The Red Cliff property was subject to a 2% net smelter return royalty (“NSR”) of which 1% may be purchased for $1,000,000.

On November 19, 2008, Decade Resources Ltd. (“Decade”), a public company, with a former director in common with the Company acquired a 60% interest in Red Cliff claims by incurring $1,250,000 in exploration expenditures on the Red Cliff Claims. Decade became the operator of the property.

On October 31, 2011, the Company informed Decade that it could not finance its share of exploration expenditures and therefore would have its interest diluted under the terms of the joint venture agreement. At October 31, 2011, the Company owed Decade $435,785 in exploration expenditures related to its 40% interest in the Red Cliff property. Effective November 1, 2011, the Company agreed to dilute its interest by 5% in lieu of the $435,785 thereby reducing its interest to 35%.

On October 23, 2017, Decade and the Company purchased a 1% NSR in the Red Cliff claims whereby the Company paid $3,500 in cash and issued 34,286 common shares for the Company’s 35% interest in the NSR.

On March 28, 2019, Decade and the Company signed a settlement and amending agreement to settle the amount owed by the Company to Decade (net of the receivable from Decade) up to the date of the agreement being $925,000 and such amount shall be paid on or before June 30, 2019. As a result, the Company recorded a gain on settlement of debt of $172,757 during the year ended November 30, 2019 (2018 - $nil). As of November 30, 2019, the Company had a balance payable to Decade of $50,000 (subsequently paid) (November 30, 2018: $1,135,278) for joint venture exploration costs on Red Cliff which was included in due to joint venture partner and Decade owed $nil (November 30, 2018: $37,521) to the Company for the reimbursement of expenses.

During the year ended November 30, 2019, the Company incurred $8,533 (2018: $767,568) in joint venture exploration costs to Decade on the Red Cliff property.

15

Mountain Boy Minerals Ltd. Notes to the Financial Statements For the years ended November 30, 2019 and 2018 (Expressed in Canadian dollars)

6. Exploration and Evaluation Assets – (continued)

c) American Creek West Project (formerly Mountain Boy Silver Property)

The Company has a 100% interest in seven mineral claims located in the Skeena Mining Division in the Province of British Columbia.

The claims are subject to a 2% net smelter return royalty which may be purchased for $1,000,000, or one half of it may be purchased for $500,000.

On March 1, 2019, the Company entered into an option agreement to earn 100% interest in the Dorothy Property. To earn the 100% interest, over a four-year period the Company is to pay a total of $120,000 to the optionors plus issue 800,000 common shares as purchase consideration.

							Cumulative
		Cash		Shares			Exploration Work
						Commitments
5 days from TSXV approval	$	5,000	Paid	100,000	Issued	$	-
			Subsequently		Subsequently
March 1, 2020		15,000	paid	100,000	issued	$	50,000
March 1, 2021		25,000		150,000		$	125,000
March 1, 2022		25,000		200,000		$	200,000
March 1,2023		50,000		250,000		$	500,000
TOTAL	$	120,000		800,000

On March 17, 2019, the Company entered into an option agreement to acquire a 100% interest in a portion of the Silver Crown property. Under the agreement with Auramex Resources Corp. (“Auramex”), the Company participated in an underlying option agreement, by which the two companies divide the property based on the relative areas, each taking portions adjacent to existing projects, with Auramex being responsible for 15% of the payments to the underlying owners and the Company being responsible for 85% of the payments.

Auramex and the Company have one director in common with the decision on this agreement determined by the other directors.

The underlying Auramex option of the Silver Crown property is an arm's-length transaction and, in order to exercise the option, Auramex must pay to the vendor a total of $120,000 and 500,000 common shares of Auramex over a four-year period. The vendor retains a 2% net smelter return royalty, of which one-half can be purchased for $1 million until 90 days after the start of commercial production, with an advance royalty commencing in 2026. Auramex is required to keep the property in good standing. The Company is required to pay Auramex back 85% of the payments that Auramex made in cash within 5 business days and for the payments Auramex made in shares, the Company will make an equivalent cash payment based on the value that Auramex records as the transaction.

16

Mountain Boy Minerals Ltd. Notes to the Financial Statements For the years ended November 30, 2019 and 2018 (Expressed in Canadian dollars)

6. Exploration and Evaluation Assets – (continued)

c) American Creek West (formerly Mountain Boy Silver Property) – (continued)

Cash	Shares
March 15, 2019 10,000 $ Paid by Auramex and reimbursed by the Company 5 days from TSXV approval - March 15, 2020 15,000 March 15, 2021 20,000 March 15, 2022 25,000 March 15, 2023 50,000 TOTAL 120,000 $	- 100,000 Issued by Auramex and reimbursed by the Company 100,000 100,000 100,000 100,000 500,000

d) More Creek Property

The More Creek property is located in the Skeena Mining Division in the Province of British Columbia. On August 23, 2019, the Company acquired 100% interest in this property through staking and a purchase agreement with a third party by issuing 160,000 common shares of the Company (issued).

e) Silver Coin Properties

The Silver Coin claims are a group of thirty-two mineral claims located in the Skeena Mining Division of British Columbia where the Company had a 20% interest while its joint venture partner Jayden Resources Inc. (“Jayden”) had an 80% interest.

On August 12, 2018, the Company entered into an agreement to sell its 20% interest in the Silver Coin property to Ascot Resources Ltd. (“Ascot”). On October 26, 2018, the Company received 3,794,874 common shares of Ascot as sale proceeds.

The Company accounted for the sale of the Silver Coin property to Ascot in the following summary during the year ended November 30, 2018:

Sale proceeds of 3,746,874 shares of Ascot Less: Capitalized cost of Silver Coin property Gain on sale of Silver Coin property	$ 3,415,387 (2,834,460)	$ 3,415,387 (2,834,460)
		$ 580,927

On the date of sale, the proceeds were valued at the quoted market price of the shares received, with the amount of proceeds first credited towards the capitalized cost of the Silver Coin property and the excess recorded as a gain on sale.

f) Other Properties

Stro, Booze and George Copper Properties

The Company has a 100% interest in the Stro, Booze and George Copper mineral properties located in the Skeena Mining Division of British Columbia.

As part of the joint venture and option agreement on the Barbara property, the Company granted Great Bear Resources Ltd. the option to acquire up to a 70% interest in the Stro, Booze and George Copper properties. See Note 6(a) – Barbara and Surprise Creek Properties.

17

Mountain Boy Minerals Ltd. Notes to the Financial Statements For the years ended November 30, 2019 and 2018 (Expressed in Canadian dollars)

1. Exploration and Evaluation Assets – (continued)

f) Other Properties – (continued)

West George Copper Property

On August 30, 2017, the Company entered into an option agreement with Auramex Resource Corp. (“Auramex”) whereby the Company can earn a 60% interest in West George Copper property as follows:

• On signing, Auramex received $700,000 in portable assessment credits;

• $10,000 cash (paid) and $30,000 of work expenditures before the second anniversary (amended and extended to August 30, 2020);

• $20,000 cash and $50,000 of work expenditures before the third anniversary;

• After earning a 60% interest, each $250,000 of work expenditures will increase the percentage ownership by 5%;

• If the Company earns a 95% interest, the remaining 5% converts to a 1.5% net smelter return royalty;

• Once the option is exercised, Auramex will receive a 2% net smelter return royalty of which 1% can be purchased for $1,000,000.

The property consists of 288 hectares adjacent to the Company's 100% owned George Copper property.

Manuel Creek Property

On December 9, 2016, the Company acquired a 100% interest in the Manuel Creek zeolite property located northeast of Keremeos, British Columbia for $15,000.

The Company acquired two claims covering the Manuel Creek zeolite property for $3,500 in April 2018.

g) British Columbia Mining Exploration Tax Credit (“BC METC”)

During the year ended November 30, 2019, the Company received BC METC of $215,032 which is recorded as a reduction of exploration and development costs.

18

Mountain Boy Minerals Ltd.

Notes to the Financial Statements For the years ended November 30, 2019 and 2018 (Expressed in Canadian dollars)

6. Exploration and Evaluation Assets – (continued)

	Barbara and Surprise Creek Red Cliff American Creek West More Creek Other Properties Total
Property acquisition costs Balance November 30, 2018 Property payments Balance November 30, 2019 Deferred exploration costs Balance November 30, 2018 Assays Camp costs Drilling General and administration Geological Helicopter Holding costs Labour Supplies and miscellaneous Trucking Balance November 30, 2019 Less: Mining tax credit BC METC Total	$ 1,027,065 $ 201,974 $ 920,547 $ - $ 43,557 $ 2,193,143 635,430 - 39,395 35,876 10,000 720,701
	1,662,495 201,974 959,942 35,876 53,557 2,913,844
	4,164,533 5,243,406 1,583,097 - 136,756 11,127,792
	16,235 - 14,795 2,036 - 33,066 33,406 240 25,876 6,320 - 65,842 10,059 - - - - 10,059 669 - 497 85 - 1,251 127,096 8,293 101,895 19,521 1,200 258,005 44,095 - 13,387 8,160 - 65,642 - - - 93 3,580 3,673 - - 2,000 - - 2,000 1,889 - 1,286 39 - 3,214 152 - 2,487 229- 2,868
	233,601 8,533 162,223 36,483 4,780 445,620
	4,398,134 5,251,939 1,745,320 36,483 141,536 11,573,412
	-(215,032)- - -(215,032)
	$6,060,629$5,238,881$2,705,262$72,359$195,093$14,272,224

19

Mountain Boy Minerals Ltd.

Notes to the Financial Statements For the years ended November 30, 2019 and 2018 (Expressed in Canadian dollars)

6. Exploration and Evaluation Assets – (continued)

	Barbara and Surprise Creek Red Cliff Mountain Boy Silver Silver Coin Other Properties Total
Property acquisition costs Balance November 30, 2017 Property payments Balance November 30, 2018 Deferred exploration costs Balance November 30, 2017 Assays Drilling Equipment rental Geological Geophysics Helicopter Labour Supplies and miscellaneous Balance November 30, 2018 Less: Sale of exploration and evaluation assets Total	$ 706,565 $ 201,974 $ 920,547 $ 80,124 $ 40,057 $ 1,949,267 320,500 - - -3,500324,000
	1,027,065 201,974 920,547 80,124 43,557 2,273,267
	4,134,8764,475,8381,577,797 2,754,336136,05613,078,903
	9,907 35,507 - - - 45,414 - 633,453 - - - 633,453 - 19,810 - - - 19,810 13,100 15,405 5,300 - 700 34,505 6,650 - - - - 6,650 - (2,602) - - - (2,602) - 40,657 - - - 40,657 - 25,338 - - - 25,338
	29,657 767,568 5,300- 700 803,225
	4,164,533 5,243,4061,583,097 2,754,336136,75613,882,128
	- - -(2,834,460)-(2,834,460)
	$5,191,598$5,445,380$2,503,644 $ -$180,313$13,320,935

18

Mountain Boy Minerals Ltd. Notes to the Financial Statements For the years ended November 30, 2019 and 2018 (Expressed in Canadian dollars)

7. Share Capital

• a) Authorized

Unlimited common shares without par value

• b) On November 12, 2018, the Company consolidated its share capital on the basis of one new share for every five old shares. All references to the number of shares and per share amounts have been retroactively restated to reflect the consolidation.

• c) Details of issuance of common shares

During the Year Ended November 30, 2019:

The Company issued 100,000 common shares with a fair value of $20,000 to the optionors for an option payment on the Dorothy property (Note 6(c)).

The Company issued 500,000 common shares with a fair value of $95,000 to Great Bear pursuant to the June 1, 2017 option agreement (Note 6(a)).

The Company issued 160,000 common shares with a fair value of $35,200 to purchase the More Creek property (Note 6(d)).

In November 2019, the Company received $55,000 for a non-brokered private placement that closed in December 2019 (Note 13).

During the Year Ended November 30, 2018:

The Company issued 500,000 common shares with a fair value of $137,500 to Great Bear for an option payment on the Barbara and Surprise Creek properties. The Company also issued 120,000 common shares with a fair value of $33,000 to Great Bear to defer payment of $300,000 from August 20, 2018 to March 20, 2019.

The Company issued 1,580,000 common shares at $0.25 per share for proceeds of $395,000 pursuant to the exercise of stock options.

On September 4, 2018, the Company issued 362,500 flow-through common shares at $0.40 per share for total proceeds of $145,000. The Company recorded a flow-through premium liability of $27,188 and incurred share issuance costs of $867.

On November 19, 2018, the Company issued 640,000 units at $0.25 per unit for total proceeds of $160,000. Each unit consisted of one common share and one share purchase warrant to purchase an additional common share at $0.30 per share until November 19, 2020. Under the residual value method, $3,200 was assigned to the warrant component of the units. The Company incurred share issuance costs of $4,920.

20

Mountain Boy Minerals Ltd. Notes to the Financial Statements For the years ended November 30, 2019 and 2018 (Expressed in Canadian dollars)

7. Share Capital – (continued)

d) Warrants

A continuity of warrants for the year ended November 30, 2019 is as follows:

	Exercise	November 30,	November 30,							November 30,	November 30,
Expiry date	price ($)		2018		Issued		Exercised		Expired		2019
March 15, 2019	0.50		728,733		-		-		(728,733)		-
September 25, 2019	0.50		566,000		-		-		(566,000)		-
September 25, 2019	0.65		720,000		-		-		(720,000)		-
November 19, 2020	0.30		640,000		-		-		-		640,000
Warrants outstanding			2,654,733		-		-		(2,014,733)		640,000
Weighted average
exerciseprice($)		$	0.49	$	-	$	-	$	0.55	$	0.30

The weighted average remaining life of the outstanding warrants as at November 30, 2019 is 0.97 years (November 30, 2018 – 0.95 years).

A continuity of warrants for the year ended November 30, 2018 is as follows:

	Exercise	November 30,	November 30,							November 30,	November 30,
Expiry date	price ($)		2017		Issued		Exercised		Expired		2018
October 11, 2018	0.35		2,160,000		-		-		(2,160,000)		-
March 15, 2019	0.50		728,733		-		-		-		728,733
September 25, 2019	0.50		566,000		-		-		-		566,000
September 25, 2019	0.65		720,000		-		-		-		720,000
November 19, 2020	0.30		-		640,000		-		-		640,000
Warrants outstanding			4,174,733		640,000		-		(2,160,000)		2,654,733
Weighted average
exerciseprice($)		$	0.45	$	0.30	$	-	$	0.35	$	0.49

e) Share Purchase Option Compensation Plan

The Company has a stock option plan under which the maximum number of stock options available for grant cannot exceed 10% of the issued and outstanding common shares of the Company at the date of the grant. Stock options may be granted for a maximum term of five years and expire 90 days from termination of employment or holding office as a director or officer of the Company. Unless otherwise stated, stock options vest when granted.

A continuity of options for the year ended November 30, 2019 is as follows:

	Exercise	November 30,	November 30,						Expired /	November 30,	November 30,
Expiry date	price ($)		2018		Issued		Exercised		forfeited		2019
August 17, 2021	0.25		240,000		-		-		-		240,000
September 7, 2021	0.375		600,000		-		-		-		600,000
July 10, 2023	0.40		2,160,000		-		-		-		2,160,000
July10,2024	0.21		-		400,000		-		-		400,000
Options outstanding			3,000,000		400,000		-		-		3,400,000
Options exercisable			3,000,000		400,000		-		-		3,400,000
Weighted average
exerciseprice($)		$	0.38	$	0.21	$	-	$	-	$	0.36

The weighted average remaining life of the outstanding options as at November 30, 2019 is 3.27 years (November 30, 2018 – 4.09 years).

21

Mountain Boy Minerals Ltd. Notes to the Financial Statements For the years ended November 30, 2019 and 2018 (Expressed in Canadian dollars)

7. Share Capital – (continued)

e) Share Purchase Option Compensation Plan – (continued)

A continuity of options for the year ended November 30, 2018 is as follows:

	Exercise	November 30,	November 30,						Expired /	November 30,	November 30,
Expiry date	price ($)		2017		Issued		Exercised		forfeited		2018
August 17, 2021	0.25		240,000		-		-		-		240,000
August 22, 2021	0.25		800,000		-		(800,000)		-		-
September 7, 2021	0.375		600,000		-		-		-		600,000
May 16, 2022	0.25		780,000		-		(780,000)		-		-
July10,2023	0.40		-		2,160,000		-		-		2,160,000
Options outstanding			2,420,000		2,160,000		(1,580,000)		-		3,000,000
Options exercisable			2,420,000		2,160,000		(1,580,000)		-		3,000,000
Weighted average
exerciseprice($)		$	0.28	$	0.40	$	0.25	$	-	$	0.38

The fair value of the stock options granted during the year ended November 30, 2019 was $82,960 or $0.21 per option. The following table summarizes the assumptions used in the Black-Scholes Option Pricing Model to estimate the fair value of the options:

	2019	2018
Risk-free interest rate	1.33%	1.30%
Expected stock price volatility	222.20%	234.88%
Expected option life in years	5 years	5 years
Expected dividend yield	Nil	Nil
Forfeiture rate	0.00%	0.00%
Share price on grant date	$0.21	$0.08

8. Related Party Transactions

Payments to related parties were made in the normal course of operations and were valued at fair value. Amounts due to or from related parties are unsecured, non-interest bearing and due on demand. There are no commitments or guarantees associated with the outstanding balances.

					Years	ended	ended	Payable as at	Payable as at	Payable as at	Payable as at
				November 30		November 30		November 30		November 30
Amountsinaccounts payable:			Servicesfor:		2019		2018		2019		2018
Lawrence Roulston			Management fee	$	95,000	$	25,000	$	-	$	1,250
Rene Bernard			Management fee		-		7,500		-		-
			Accounting and
A private company controlled by			management
a director of the Company	(a)		services		95,421		103,500		8,400		8,400
A private company controlled by			Marketing
an officer of the Company	(b)		services		36,000		15,000		-		-
			Geological
			services and
A public company with a director			property option
in common with the Company		(c)	payments		42,054		-		-		-
A private company controlled by			Geological
an officer of the Company	(d)		services		223,591		-		-		-
Total				$	492,066	$	151,000	$	8,400	$	9,650

22

Mountain Boy Minerals Ltd. Notes to the Financial Statements For the years ended November 30, 2019 and 2018 (Expressed in Canadian dollars)

1. Related Party Transactions – (continued)

2. (a) Mark T. Brown was appointed as the Chief Executive Officer and director effective December 15, 2017 and resigned as the Chief Executive Officer on June 27, 2018, but remains as a director. Mark T. Brown is the president of this private company.

3. (b) Nancy Curry was appointed as the Vice President Corporate Development effective July 3, 2018.

4. (c) Lawrence Roulston was appointed as the director effective December 15, 2017 and he is also a director of this public company.

5. (d) Lucia Theny, the Vice President Exploration effective April 23, 2019, is a co-owner of this private company where it employs several geologists to provide geological services to the Company.

Key management personnel compensation includes all compensation paid to executive management and members of the board of directors of the Company.

For the year ended November 30, 2019:

	Short-term employee benefits	Post- employment benefits	Other long- term benefits	Termination benefits	Other expenses	Share-based payments (1)	Total
Lawrence Roulston
Chief Executive Officer,	$95,000	$Nil	$Nil	$Nil	$Nil	$Nil	$95,000
Director
Lucia Theny VP Exploration	$Nil	$Nil	$Nil	$Nil	$Nil	$82,960	$82,960
Total:	$95,000	$Nil	$Nil	$Nil	$Nil	$82,960	$177,960

For the year ended November 30, 2018:

	Short-term employee benefits	Post- employment benefits	Other long- term benefits	Termination benefits	Other expenses	Share-based payments (1)	Total
Lawrence Roulston
Chief Executive Officer,	$25,000	$Nil	$Nil	$Nil	$Nil	$237,900	$262,900
Director
Rene Bernard
Former Chief Financial	$7,500	$Nil	$Nil	$Nil	$Nil	$79,300	$86,800
Officer, Director
Mark T. Brown
Former Chief Executive	$Nil	$Nil	$Nil	$Nil	$Nil	$158,600	$158,600
Officer, Director
Winnnie Wong Chief Financial Officer	$Nil	$Nil	$Nil	$Nil	$Nil	$79,300	$79,300
Nancy Curry
VP Corporate	$Nil	$Nil	$Nil	$Nil	$Nil	$237,900	$237,900
Development
Ron Cannan Director	$Nil	$Nil	$Nil	$Nil	$Nil	$63,440	$63,440
Total:	$32,500	$Nil	$Nil	$Nil	$Nil	$856,440	$888,940

(1) Share-based payments are the fair values of the stock options granted during the years ended November 30, 2019 and 2018 calculated using the Black-Scholes Option Pricing Model (see Note 7(e)).

23

Mountain Boy Minerals Ltd. Notes to the Financial Statements For the years ended November 30, 2019 and 2018 (Expressed in Canadian dollars)

9. Non-Cash Transactions

Investing and financing activities that do not have a direct impact on cash flows are excluded from the statements of cash flows. The following transactions were excluded from the statements of cash flows:

During the year ended November 30, 2019:

• a) The Company incurred exploration and evaluation costs of $389 which are included in trade and other payables at November 30, 2019.

• b) The Company issued 500,000 common shares with a fair value of $95,000 to Great Bear for an option payment on the Barbara and Surprise Creek properties, 100,000 common shares with a fair value of $20,000 for an option payment on the Dorothy property, and 160,000 common shares with a fair value of $35,200 for an option payment on the More Creek property.

• c) The Company transferred 748,000 common shares of Ascot with a fair value of $540,430 to Great Bear for option payments on the Barbara and Surprise Creek properties.

• d) The Company incurred deferred financing costs of $3,000 which are included in trade and other payables as at November 30, 2019.

During the year ended November 30, 2018:

• a) The Company incurred exploration and evaluation costs of $767,569 which are included in due to joint venture partner and $6,651 which are included in trade and other payables at November 30, 2018.

• b) The Company received 3,794,874 common shares of Ascot with a fair value of $3,415,387 for selling the Company’s 20% interest in the Silver Coin property which had a capitalized cost of $2,834,460.

• c) The Company issued 620,000 common shares with a fair value of $170,500 to Great Bear for an option payment on the Barbara and Surprise Creek properties.

• d) The Company reclassified $418,654 from contributed surplus to share capital on the exercise of 1,580,000 stock options.

10. Financial Instruments

The fair values of the Company’s financial assets and liabilities approximate their carrying amounts because of their current nature.

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.

24

Mountain Boy Minerals Ltd. Notes to the Financial Statements For the years ended November 30, 2019 and 2018 (Expressed in Canadian dollars)

10. Financial Instruments – (continued)

The Company’s financial instruments consist of cash, marketable securities, due from joint venture partner, reclamation bonds, trade and other payables and due to joint venture partner. Cash and marketable securities are measured at fair value through profit and loss. Due from joint venture partner and reclamation bonds are measured at amortized cost. Trade and other payables and due to joint venture partner are measured at amortized cost.

The fair value of the Company’s cash and marketable securities is measured using level one of the fair value hierarchy.

The Company’s financial instruments are exposed to certain financial risks. The risk exposures and the impact on the Company’s financial instruments are summarized below.

Credit Risk

Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. The Company’s cash is exposed to credit risk. The Company reduces its credit risk on cash by placing these instruments with institutions of high credit worthiness.

Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s cash is exposed to interest rate risk.

Liquidity Risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities. The Company’s accounts payable are all current and due within 90 days of the balance sheet date. At November 30, 2019, the Company had working capital of $596,374 which will provide sufficient capital to meet its short-term financial obligations.

Market Risk

Market risk is the risk that the fair value of, or future cash flows from, the Company’s financial instruments will significantly fluctuate due to changes in market prices. The sale of financial instruments can be affected by changes in interest rates, foreign exchange rates, and equity prices. The Company is exposed to market risk in trading its investments, and unfavourable markets conditions could result in dispositions of investments at less than favourable prices. The Company’s investments are accounted for at estimated fair values and are sensitive to changes in markets prices, such that changes in market prices results in a proportionate change in the carrying value of the Company’s investments.

25

Mountain Boy Minerals Ltd. Notes to the Financial Statements For the years ended November 30, 2019 and 2018 (Expressed in Canadian dollars)

11. Income Taxes

The difference between tax expense for the year and the expected income taxes based on the statutory tax rates arises as follows:

tatutory tax rates arises as follows:
Income (loss) before income taxes Combined statutory tax rate Expected income tax expense (recovery) Permanent and other differences Change in unrecognized deferred tax assets Deferred income tax expense (recovery)	2019 $ (1,679,275) 27.00% (453,000) 120,000 244,000 $ (89,000)	2018 $ 145,835
		26.92% 39,300 226,600 (70,900)
		$ 195,000

Deferred Tax Assets and Liabilities

No deferred tax asset has been recognized in respect of the following losses and temporary differences as it is not considered probable that sufficient future taxable profit will allow the deferred tax to be recovered:

Non-capital losses Capital losses Financing costs Exploration and evaluation assets Marketable securities Deferred tax assets - unrecognised Deferred tax liability - recognised	2019 $ 1,016,000 128,000 3,000 (3,142,000) 96,000 (1,243,000) $ (3,142,000)	2018 $ 946,000 49,000 4,000 (3,077,000) (154,000) (999,000) $ (3,231,000)

At November 30, 2019, the Company has estimated non-capital losses for income tax purposes of $3,761,000 that may be carried forward to reduce taxable income in future taxation years.

The non-capital tax losses expire as follows:

on-capital tax losses expire as follows:
2027 2029 2030 2031 2032 2033 2034 2035 2036 2037 2039	$ 341,000 296,000 206,000 538,000 633,000 296,000 218,000 162,000 384,000 429,000 258,000
	$ 3,761,000

26

Mountain Boy Minerals Ltd. Notes to the Financial Statements For the years ended November 30, 2019 and 2018 (Expressed in Canadian dollars)

11. Income Taxes – (continued)

During the year ended November 30, 2019, the Company renounced $nil (2018: $145,000) of resource expenditures. Expenditures related to the use of flow-through share proceeds are included in exploration costs but are not available as a tax deduction to the Company as the tax benefits of these expenditures are renounced to the investors.

12. Capital Disclosures

The Company’s objectives when managing capital are to safeguard its ability to continue as a going concern to pursue the development of its mineral properties, finance corporate overhead costs, meet obligations as they come due, and to maintain a flexible capital structure which optimizes the cost of capital within a framework at an acceptable risk. In the management of capital, the Company includes the components of shareholders’ equity, as well as cash. The Company has no earning and therefore has historically financed its acquisition and exploration activities and corporate overhead costs by the sale of common shares.

The Company manages the capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. To maintain or adjust its capital structure, the Company may issue new shares, issue new debt, acquire or dispose of assets or adjust the amount of cash. In order to maximize development efforts, the Company does not pay out dividends.

The Company is dependent on the capital markets as its sole source of operating capital and the Company’s capital resources are largely determined by the strength of the junior resources markets and by the status of the Company’s projects in relation to these markets, and its ability to compete for the investor support of its projects. The Company is not subject to any externally imposed capital requirements.

13. Subsequent Events

• a) On December 20, 2019, the Company completed a non-brokered private placement by issuing 1,040,000 flow-through shares (“FT Share”) at a price of $0.25 per FT Share for gross proceeds of $260,000. In connection with the financing, the Company paid $15,000 as a cash finder’s fee and issued 60,000 finder’s warrants, each of which is exercisable into one common share at a price of $0.25 for a period of 12 months.

• b) On February 25, 2020, the Company issued 500,000 common shares to Great Bear pursuant to the June 1, 2017 option agreement (Note 6(a)).

• c) On February 26, 2020, the Company issued 100,000 common shares to the optionors for Dorothy Property (Note 6(c)).

27