New Target Mining Corp. — Annual Report 2021

Feb 28, 2022

NEW TARGET MINING CORP .

FINANCIAL STATEMENTS

Expressed in Canadian Dollars

FOR THE YEAR ENDED OCTOBER 31, 2021 AND THE PERIOD FROM INCORPORATION ON JULY 28, 2020 TO OCTOBER 31, 2020

Head Office Address

510 - 580 Hornby Street Vancouver, BC, V6C 3B6 Canada

Registered and Records Office Address

510 - 580 Hornby Street Vancouver, BC, V6C 3B6 Canada

==> picture [102 x 29] intentionally omitted <==

Crowe MacKay LLP

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

Independent Auditor's Report

To the Shareholders of New Target Mining Corp.

Opinion

We have audited the financial statements of New Target Mining Corp. ("the Company"), which comprise the statements of financial position as at October 31, 2021 and October 31, 2020 and the statements of loss and comprehensive loss, changes in shareholders' equity and cash flows for the years then ended, and notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as at October 31, 2021 and October 31, 2020, and its financial performance and its cash flows for the years then ended in accordance with International Financial Reporting Standards.

Basis for Opinion

We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the 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.

Material Uncertainty Related to Going Concern

We draw attention to Note 1 to the financial statements which describes the material uncertainty that may 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 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.

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

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

Management is responsible for the preparation and fair presentation of the financial statements in accordance with International Financial Reporting Standards, 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.

Auditor's 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 auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these 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 auditor's 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 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 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 auditor's report is Diana Huang.

"Crowe MacKay LLP"

Chartered Professional Accountants Vancouver, Canada February 25, 2022

NEW TARGET MINING CORP . STATEMENTS OF FINANCIAL POSITION Expressed in Canadian Dollars As at October 31,

	2021 2020
ASSETS Current assets Cash Receivable Prepaid expense Total current assets Non-current assets Exploration and evaluation assets (Note 3) Total assets	$ 397,624 $ 250,210 8,050 5,102 7,292 -
	412,966 255,312
	194,401 113,287
	$ 607,367 $ 368,599
LIABILITIES AND EQUITY Current liabilities Accounts payable and accrued liabilities (Note 5) Equity Capital stock (Note 4) Share-based payment reserve (Note 4) Deficit Total equity Total liabilities and equity	$ 87,753 $ 40,095
	735,209 341,544 25,600 - (241,195) (13,040)
	519,614 328,504
	$ 607,367 $ 368,599
Nature and continuance of operations(Note 1) On behalf of the Board:

“Todd Hanas” Director “Mike Petrina” Director

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

NEW TARGET MINING CORP . STATEMENTS OF LOSS AND COMPREHENSIVE LOSS Expressed in Canadian Dollars

	Year ended October 31, 2021 Period from incorporation on July 28, 2020 to October 31, 2020
EXPENSES Filing and regulatory fees Management fees (Note 5) Office and miscellaneous Professional fees (Note 5) Property investigation Loss and comprehensive loss for the period	$ 84,096 $ - 43,000 1,500 11,967 1,740 82,592 9,800 6,500 -
	$ (228,155) $ (13,040)
Basic and diluted loss per common share	$ (0.02) $ (0.00)
Weighted average number of common shares outstanding	10,345,522 6,689,853

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

NEW TARGET MINING CORP . STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY Expressed in Canadian Dollars

FOR THE YEAR ENDED OCTOBER 31, 2021 AND THE PERIOD FROM INCORPORATION ON JULY 28, 2020 TO OCTOBER 31, 2020

				Share-based	Share-based
	Number of				payment
	shares	Capital stock			reserve		Deficit	Total	equity
July 28, 2020	-	$	-	$	-	$	-	$	-
Issuance of shares	8,636,344		341,544				-		341,544
Loss for the period	-		-				(13,040)		(13,040)
October 31, 2020	8,636,344		341,544		-		(13,040)		328,504
Issuance of shares	3,000,000		450,000		-		-		450,000
Share issuance costs - cash	-		(58,485)		-		-		(58,485)
Share issuance costs - broker warrants	-		(25,600)		25,600		-		-
Shares issued for mineral property	150,000		27,750		-		-		27,750
Loss for the year	-		-		-		(228,155)	(228,155)
October 31, 2021	11,786,344	$	735,209	$	25,600	$	(241,195)	$	519,614

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

NEW TARGET MINING CORP . STATEMENTS OF CASH FLOWS Expressed in Canadian Dollars

	Year ended October 31, 2021 Period from incorporation on July 28, 2020 to October 31, 2020
CASH FLOWS FROM OPERATING ACTIVITIES Loss for the period Changes in non-cash working capital items: Increase in receivable Increase in prepaid expense Decrease in accounts payable and accrued liabilities Net cash used in operating activities CASH FLOWS FROM INVESTING ACTIVITIES Exploration and evaluation costs Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issuance of common shares Share issuance costs Net cash provided by financing activities Change in cash for the period Cash, beginning of period Cash, end of period	$ (228,155) $ (13,040) (2,948) (5,102) (7,292) - 76,764 10,989
	(161,631) (7,153)
	(82,470) (84,181)
	(82,470) (84,181)
	450,000 341,544 (58,485) -
	391,515 341,544
	147,414 250,210 250,210 -
	$ 397,624 $ 250,210

There were no cash paid for interest or taxes for the period from incorporation on July 28, 2020 to October 31, 2020 and year ended October 31, 2021.

Supplementary cash flow information (Note 9)

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

NEW TARGET MINING CORP . NOTES TO THE FINANCIAL STATEMENTS Expressed in Canadian Dollars FOR THE YEAR ENDED OCTOBER 31, 2021 AND THE PERIOD FROM INCORPORATION ON JULY 28, 2020 TO OCTOBER 31, 2020

1. NATURE AND CONTINUANCE OF OPERATIONS

New Target Mining Corp. (the “Company”) was incorporated under the Business Corporations Act (British Columbia) on July 28, 2020. On March 2, 2021 the Company became a reporting issuer. On April 15, 2021, the Company completed its initial public offering and was listed on the TSX Venture Exchange under the symbol NEW. The Company is an exploration stage junior mining company currently engaged in the identification, acquisition and exploration of mineral properties in Canada.

These financial statements have been prepared in accordance with the assumption that the Company will be able to realize its assets and discharge its liabilities in the normal course of business rather than through a process of forced liquidation. The continued operations of the Company are dependent on its ability to develop a sufficient financing plan, receive financial support from related parties, complete sufficient equity financings or generate profitable operations in the future. These material uncertainties may cast significant doubt on the entity’s ability to continue as a going concern. The financial statements do not include any adjustments to the amounts and classifications of assets and liabilities that might be necessary should the Company be unable to continue business.

In March 2020, the World Health Organization declared coronavirus COVID-19 a global pandemic. The impact of the COVID-19 pandemic has major implications for all economic activities, including that of the Company. At this time it is not possible to predict the duration or magnitude of the adverse results of the outbreak, however, management believes that the impact to the Company will be limited mainly to the curtailment of travel and access to mineral projects due to travel and social distancing restrictions as well as its ability to raise financing. There has been no material disruption to the Company’s current operations to date. The Company's current focus is on its project located in British Columbia, Canada and as a result, access to the property is not prohibited. The Company may consider acquisitions of other properties in foreign or domestic jurisdictions in the future.

2. SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

These financial statements have been prepared using accounting policies consistent with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and interpretations of the International Financial Reporting Interpretations Committee (“IFRIC”). They have been prepared on a historical cost basis, except for financial instruments classified as financial instruments at fair value through profit and loss, or fair value through other comprehensive loss which are stated at their fair value. In addition, these financial statements have been prepared using the accrual basis of accounting except for cash flow information. These financial statements are presented in Canadian dollars unless otherwise noted.

The financial statements of the Company for the year ended October 31, 2021 were reviewed by the Audit Committee and approved and authorized for issue by the Board of Directors on February 25, 2022.

NEW TARGET MINING CORP . NOTES TO THE FINANCIAL STATEMENTS Expressed in Canadian Dollars FOR THE YEAR ENDED OCTOBER 31, 2021 AND THE PERIOD FROM INCORPORATION ON JULY 28, 2020 TO OCTOBER 31, 2020

2. SIGNIFICANT ACCOUNTING POLICIES (cont’d…)

Estimates, judgments and assumptions

The preparation of the Company’s financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting year. Estimates and assumptions are continually evaluated and are based on management’s experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Actual results could differ from these estimates.

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

Significant accounting judgments

Significant accounting judgments that management has made in the process of applying accounting policies and that have the most significant effect on the amounts recognized in the financial statements include, but are not limited to, the recoverability of the carrying value of the Company’s exploration and evaluation assets and the going concern assumption.

Critical accounting estimates

There are no key assumptions concerning the future and other key sources of estimation uncertainty that have a significant risk of resulting in a material adjustment to the carrying amount of assets and liabilities within the next financial year.

Financial instruments

Financial assets

The Company classifies its financial assets in the following categories: at fair value through profit or loss (“FVTPL”), at fair value through other comprehensive income (“FVTOCI”) or at amortized cost. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition.

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

Financial assets at FVTOCI - Investments in equity instruments at FVTOCI are initially recognized at fair value plus transaction costs. Subsequently they are measured at fair value, with gains and losses arising from changes in fair value recognized in other comprehensive income. There is no subsequent reclassification of fair value gains and losses to profit or loss following the derecognition of the investment.

Financial assets at amortized cost - Financial assets at amortized cost are initially recognized at fair value plus transaction costs and subsequently carried at amortized cost less any impairment. They are classified as current assets or non-current assets based on their maturity date.

Financial assets are derecognized when they mature or are sold, and substantially all the risks and rewards of ownership have been transferred. Gains and losses on derecognition of financial assets classified as FVTPL or amortized cost are recognized in profit or loss. Gains or losses on financial assets classified as FVTOCI remain within accumulated other comprehensive income.

The Company has classified its cash at fair value through profit and loss.

NEW TARGET MINING CORP . NOTES TO THE FINANCIAL STATEMENTS Expressed in Canadian Dollars

FOR THE YEAR ENDED OCTOBER 31, 2021 AND THE PERIOD FROM INCORPORATION ON JULY 28, 2020 TO OCTOBER 31, 2020

2. SIGNIFICANT ACCOUNTING POLICIES (cont’d…)

Financial instruments (cont’d…)

Financial liabilities

The Company classifies its financial liabilities into one of two categories as follows:

Fair value through profit or loss - This category comprises derivatives and financial liabilities incurred principally for the purpose of selling or repurchasing in the near term. They are carried at fair value with changes in fair value recognized in profit or loss.

Financial liabilities at amortized cost - This category consists of liabilities carried at amortized cost using the effective interest method. These financial liabilities are initially recognized at fair value less directly attributable transaction costs.

The Company’s accounts payable and accrued liabilities are classified at amortized cost.

Financial instruments that are measured at fair value use inputs, which are classified within a hierarchy that prioritizes their significance. 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.

Exploration and evaluation assets

Once the legal right to explore a property has been acquired, all costs related to the acquisition, exploration, and evaluation of mineral properties are capitalized by property. 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 and 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 farmee 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.

NEW TARGET MINING CORP . NOTES TO THE FINANCIAL STATEMENTS Expressed in Canadian Dollars FOR THE YEAR ENDED OCTOBER 31, 2021 AND THE PERIOD FROM INCORPORATION ON JULY 28, 2020 TO OCTOBER 31, 2020

2. SIGNIFICANT ACCOUNTING POLICIES (cont’d…)

Exploration and evaluation assets (cont’d…)

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

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.

Impairment of long-lived assets

At the end of each reporting period, the Company’s assets are reviewed to determine whether there is any indication that those assets may be impaired. If such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment, if any. The recoverable amount is the higher of fair value less costs to sell and value in use. Fair value is determined as the amount that would be obtained from the sale of the asset in an arm’s length transaction between knowledgeable and willing parties. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount and the impairment loss is recognized in profit or loss for the period. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash generating unit to which the asset belongs.

Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but to an amount that does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognized immediately in profit or loss.

Flow-through shares

Under Canadian income tax legislation, a company is permitted to issue flow through shares whereby the Company agrees to incur qualifying expenditures and renounce the related income tax deductions to the investors. The Company allocates the proceeds from the issuance of these shares between the offering of shares and the sale of tax benefits. The allocation is made based on the difference between the quoted price of the shares and the amount the investor pays for the shares. A deferred flow-through premium liability is recognized for the difference. The liability is reversed when the expenditures are made and is recorded in other income. The spending also gives rise to a deferred tax timing difference between the carrying value and tax value of the qualifying expenditure.

As of October 31, 2021, the Company had no remaining flow-through commitments for the Company to fulfill (2020 - $14,692).

NEW TARGET MINING CORP . NOTES TO THE FINANCIAL STATEMENTS Expressed in Canadian Dollars FOR THE YEAR ENDED OCTOBER 31, 2021 AND THE PERIOD FROM INCORPORATION ON JULY 28, 2020 TO OCTOBER 31, 2020

2. SIGNIFICANT ACCOUNTING POLICIES (cont’d…)

Provision for environmental rehabilitation

The Company recognizes liabilities for statutory, contractual, constructive or legal obligations associated with the retirement of exploration and evaluation assets and equipment, when those obligations result from the acquisition, construction, development or normal operation of the assets. The net present value of future rehabilitation cost estimates arising from the decommissioning of plant and other site preparation work is capitalized to mining assets along with a corresponding increase in the rehabilitation provision in the period incurred. Discount rates using a pre-tax rate that reflect the time value of money are used to calculate the net present value. The rehabilitation asset is depreciated on the same basis as mining assets.

The Company’s estimates of reclamation costs could change as a result of changes in regulatory requirements, discount rates and assumptions regarding the amount and timing of the future expenditures. These changes are recorded directly to mining assets with a corresponding entry to the rehabilitation provision. The Company’s estimates are reviewed annually for changes in regulatory requirements, discount rates, effects of inflation and changes in estimates.

Changes in the net present value, excluding changes in the Company’s estimates of reclamation costs, are charged to profit or loss for the period.

As at October 31, 2021, the Company has determined that it does not have any decommissioning obligations.

Loss per share

The Company recognizes the dilutive effect on loss per share based on the use of the proceeds that could be obtained upon exercise of options, warrants and similar instruments. It assumes that the proceeds would be used to purchase common shares at the average market price during the period. For the periods presented, this calculation proved to be anti-dilutive. Basic loss per share is calculated using the weighted average number of common shares outstanding during the period.

Share capital

The Company engages in equity financing transactions to obtain the funds necessary to continue operations and explore and evaluate resource properties. These equity financing transactions may involve issuance of common shares or units. A unit comprises a certain number of common shares and a certain number of share purchase warrants (“Warrants”). Depending on the terms and conditions of each equity financing agreement (“Agreement”), the Warrants are exercisable into additional common shares prior to expiry at a price stipulated by the Agreement. Warrants that are part of units are valued using residual value method which involves comparing the selling price of the units to the Company’s share price on the announcement date of the financing. The market value is then applied to the common share, and any residual amount is assigned to the warrants. Warrants that are issued as payment for agency fee or other transaction costs are accounted for as share-based payments and are recognized in equity. When warrants are forfeited or are not exercised at the expiry date the amount previously recognized in equity is transferred from reserve to deficit.

In situations where share capital is issued, or received, as non-monetary consideration and the fair value of the asset received, or given up is not readily determinable, the fair market value (as defined) of the shares is used to record the transaction. The fair market value of the shares issued, or received, is based on the trading price of those shares on the appropriate Exchange on the date the shares are issued.

Share issuance costs

Share issue costs are deferred and charged directly to share capital on completion of the related equity financing. If the financing is not completed, share issue costs are charged to profit or loss. Costs directly identifiable with the raising of capital will be charged against the related share capital. The Company uses the Black-Scholes option valuation model to value finder’s warrants issued in private placements. The fair value assigned to agent warrants is recorded as share issue costs and an increase to share-based payment reserve.

NEW TARGET MINING CORP . NOTES TO THE FINANCIAL STATEMENTS Expressed in Canadian Dollars FOR THE YEAR ENDED OCTOBER 31, 2021 AND THE PERIOD FROM INCORPORATION ON JULY 28, 2020 TO OCTOBER 31, 2020

2. SIGNIFICANT ACCOUNTING POLICIES (cont’d…)

Income taxes

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 period end, adjusted for amendments to tax payable with regards to previous years.

Deferred tax is recorded using the statement of financial position liability method, providing for temporary differences, between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The following temporary differences are not provided for: goodwill not deductible for tax purposes; the initial recognition of assets or liabilities that affect neither accounting or taxable loss; and differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future. The amount of deferred tax provided is based on the expected manner of realization or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the statement of financial position date.

A deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be available against which the asset can be utilized.

Additional income taxes that arise from the distribution of dividends are recognized at the same time as the liability to pay the related dividend. Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Company intends to settle its current tax assets and liabilities on a net basis.

New accounting standards

We continually monitor the potential impact of new accounting pronouncements on the accounting practices of our assurance clients. There were no pronouncements during the year that would have a significant impact on the financial statements.

The following accounting standards and amendments are effective for future periods.

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

The amendments to IAS1 provide a more general approach to the classification of liabilities based on the contractual arrangements in place at the reporting date.

These amendments are effective for reporting periods beginning on or after January 1, 2023 and are expected to have no significant impact on the Company.

NEW TARGET MINING CORP . NOTES TO THE FINANCIAL STATEMENTS Expressed in Canadian Dollars FOR THE YEAR ENDED OCTOBER 31, 2021 AND THE PERIOD FROM INCORPORATION ON JULY 28, 2020 TO OCTOBER 31, 2020

3. EXPLORATION AND EVALUATION ASSETS

During the year ended October 31, 2021, the following exploration expenses were incurred on the exploration and evaluation assets:

Scarlett Property, British Columbia	Total
Acquisition costs Balance, October 31, 2020 Option payment Balance, October 31, 2021 Exploration costs Balance, October 31, 2020 Assays and GIS Field work Balance, October 31, 2021 Total balance,October 31,2021	$ 12,979 27,750
	40,729
	100,308 9,269 44,095
	153,672
	$ 194,401

During the period ended October 31, 2020, the following exploration expenses were incurred on the exploration and evaluation assets:

Scarlett Property, British Columbia	Total
Acquisition costs Balance, July 28, 2020 Option payment Staking Balance, October 31, 2020 Exploration costs Balance, July 28, 2020 Assays and GIS Field work Balance, October 31, 2020 Total balance,October 31,2020	$ - 12,000 979
	12,979
	- 31,655 68,653
	100,308
	$ 113,287

NEW TARGET MINING CORP . NOTES TO THE FINANCIAL STATEMENTS Expressed in Canadian Dollars

FOR THE YEAR ENDED OCTOBER 31, 2021 AND THE PERIOD FROM INCORPORATION ON JULY 28, 2020 TO OCTOBER 31, 2020

3. EXPLORATION AND EVALUATION ASSETS (cont’d…)

Scarlett Property, British Columbia

On August 5, 2020, the Company entered into an option agreement, subsequently amended, to earn a 100% interest in the Scarlett Property in British Columbia. In order to earn the interest, the Company must make the following option payments:

• i) pay $12,000 (paid) within 10 days of execution of the agreement; ii) issue 150,000 common shares (issued);

• iii) pay $20,000, issue 200,000 common shares and incur $200,000 in exploration expenditures by the 12-month anniversary of the Listing Date;

• iv) pay $20,000, issue 200,000 common shares and incur an additional $200,000 in exploration expenditures by the 24-month anniversary of the Listing Date;

• v) pay $25,000, issue 300,000 common shares and incur an additional $200,000 in exploration expenditures by the 36-month anniversary of the Listing Date;

• vi) pay $50,000, issue 500,000 common shares and incur an additional $200,000 in exploration expenditures by the 48-month anniversary of the Listing Date.

If the Scarlett Property is acquired by the Company, then it will be required to pay a 1.0% net smelter returns royalty payable upon the commencement of commercial production.

4. CAPITAL STOCK

Authorized share capital

Unlimited number of Class A common shares without par value. Unlimited number of Class B preferred shares without par value of which none are issued and outstanding.

Escrow Shares:

The Company entered into an escrow agreement, whereby common shares will be held in escrow and are scheduled for release at 10% on the listing date and 15% every six months from date of listing. At October 31, 2021, there were 2,925,000 (2020 – Nil) common shares held in escrow.

Issued share capital

During the year ended October 31, 2021, the Company:

• i) issued 3,000,000 common shares at $0.15 per share for total proceeds of $450,000 to the public by way of an initial public offering. The Company paid $58,485 in finder’s fees and share issuance costs and issued 240,000 agent warrants as finder fees exercisable at $0.15 until April 15, 2023 with a fair value of $25,600. The fair value was calculated using the Black-Scholes option pricing model using a benchmark 150% volatility, a 0.27% discount rate, a market price of $0.15, a 2 year expected life and an annual dividend rate of NIL. The volatility was calculated based on comparable companies.

• ii) issued 150,000 common shares with a value of $27,750 pursuant to the acquisition for the Scarlett Property (Note 3).

During the period ended October 31, 2020, the Company:

• i) issued 3,000,000 common shares at $0.005 per share for total proceeds of $15,000.

NEW TARGET MINING CORP . NOTES TO THE FINANCIAL STATEMENTS Expressed in Canadian Dollars

FOR THE YEAR ENDED OCTOBER 31, 2021 AND THE PERIOD FROM INCORPORATION ON JULY 28, 2020 TO OCTOBER 31, 2020

4. CAPITAL STOCK (cont’d…)

ii) issued 2,300,000 common flow-through shares at $0.05 per share for total proceeds of $115,000. No flowthrough premium was recorded as the financing was fair valued at $0.05.

• iii) issued 1,100,000 common shares at $0.05 per share for total proceeds of $55,000.

• iv) issued 2,236,344 common shares at $0.07 per share for total proceeds of $156,544.

Issued warrants

As at October 31, 2021, the Company had 240,000 warrants outstanding exercisable at $0.15 until April 15, 2023.

5. RELATED PARTY BALANCES AND TRANSACTIONS

Transactions with related parties and key management personnel are as follows:

Nature of transactions	Year ended October 31, 2021 Period from incorporation on July 28, 2020 to October 31, 2020
	$ 43,000 $ 1,500 22,000 3,500

The amounts due to other related parties and key management personnel included in accounts payable and accrued liabilities are as follows:

	As at October 31, 2021 As at October 31, 2020
Due to the CEO and director Due to the CFO and director, for exploration costs paid on behalf of Company Due to a partnership in which the CFO has an interest	$ 44,100 $ 1,313 - 17,187 26,550 3,500
	$ 70,650 $ 22,000

The amounts due to related parties are unsecured, non-interest bearing and are due on demand.

6. CAPITAL MANAGEMENT

The Company manages its capital structure to maximize its financial flexibility making adjustments to it in response to changes in economic conditions and the risk characteristics of the underlying assets and business opportunities. The Company does not presently utilize any quantitative measures to monitor its capital and is not subject to externally imposed capital requirements. There were no changes in the Company’s approach to capital management during the year ended October 31, 2021.

NEW TARGET MINING CORP . NOTES TO THE FINANCIAL STATEMENTS Expressed in Canadian Dollars

FOR THE YEAR ENDED OCTOBER 31, 2021 AND THE PERIOD FROM INCORPORATION ON JULY 28, 2020 TO OCTOBER 31, 2020

7. FINANCIAL INSTRUMENTS AND RISK

Fair values

The Company’s financial assets measured at fair value on a recurring basis were calculated as follows:

			Quoted Prices in	Quoted Prices in	Significant
			Active Markets		Other	Significant
				for Identical	Observable	Unobservable
				Assets	Inputs	Inputs
		Balance		(Level 1)	(Level 2)	(Level 3)
As at October 31, 2021
Cash	$	397,624	$	397,624	$ -	$ -
As at October 31, 2020
Cash	$	250,210	$	250,210	$ -	$ -

The Company’s risk exposures and the impact on the Company’s financial instruments are summarized below:

Credit risk

Credit risk is the risk of loss associated with the counterparty’s inability to fulfill its payment obligations. As at October 31, 2021, the Company had $8,050 (2020 - $5,102) receivable from government authorities in Canada. The Company believes it has no significant credit risk.

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 October 31, 2021, the Company had a cash balance of $397,624 (2020 - $250,210) to settle accounts payable and accrued liabilities of $87,753 (2020 - $40,095). The Company will require financing from lenders, shareholders and other investors to generate sufficient capital to meet its short-term business requirements. All of the Company’s financial liabilities have contractual maturities of 30 days or due on demand and are subject to normal trade terms.

Market risk

Market risk is the risk of loss that may arise from changes in market factors such as interest rates, foreign exchange rates, commodity and equity prices.

• a) Interest rate risk

The Company has cash balances. The Company is satisfied with the credit ratings of its bank. As of October 31, 2021, the Company did not hold any investments. The Company believes it has no significant interest rate risk.

• b) Foreign currency risk

As at October 31, 2021, the Company was not exposed to foreign currency risk.

NEW TARGET MINING CORP . NOTES TO THE FINANCIAL STATEMENTS Expressed in Canadian Dollars

FOR THE YEAR ENDED OCTOBER 31, 2021 AND THE PERIOD FROM INCORPORATION ON JULY 28, 2020 TO OCTOBER 31, 2020

7. FINANCIAL INSTRUMENTS AND RISK (cont’d…)

c) Price risk

The Company is exposed to price risk with respect to commodity and equity prices. Equity price risk is defined as the potential adverse impact on the Company’s earnings due to movements in individual equity prices or general movements in the level of the stock market. 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 of gold and other precious and base metals, individual equity movements, and the stock market to determine the appropriate course of action to be taken by the Company. Fluctuations may be significant. Much of this is out of the control of management and will be dealt with based on circumstances at any given time.

8. SEGMENTED INFORMATION

The Company has one operating segment, being the exploration of exploration and evaluation assets in Canada.

9. SUPPLEMENTARY CASH FLOW INFORMATION

				Period from
			incorporation
				on July 28,
		Year ended		2020 to
		October 31,		October 31,
		2021		2020
Non-cash investing and financing activities
Exploration and evaluation costs in accounts payable	$	-	$	29,106
Broker’s warrants	$	25,600	$	-
Shares issued for mineral property	$	27,750	$	-

10. INCOME TAXES

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

				Period from
				incorporation on
		Year ended		July 28, 2020 to
		October31,2021		October31,2020
Lossforthe period	$	(228,155)	$	(13,040)
Expected income tax (recovery) – 27%	$	(61,602)	$	(3,521)
Changeinunrecognized deductible temporary differences		61,602		3,521
Total income tax expense (recovery)	$	-	$	-

NEW TARGET MINING CORP . NOTES TO THE FINANCIAL STATEMENTS Expressed in Canadian Dollars

FOR THE YEAR ENDED OCTOBER 31, 2021 AND THE PERIOD FROM INCORPORATION ON JULY 28, 2020 TO OCTOBER 31, 2020

10. INCOME TAXES (cont’d…)

The significant components of the Company’s deferred tax assets and liabilities are as follows that have not been included on the statement of financial position as follows:

				Period from
				incorporation on
		Year ended		July 28, 2020 to
		October31,2021		October31,2020
Exploration and evaluation assets	$	(31,000)	$	-
Non-capital losses		68,000		4,000
Shareissue costs		13,000		-
Unrecognized deferredtax asset	$	50,000	$	4,000

The Company has non-capital loss carry-forwards of approximately $253,000, which may be available to reduce taxable income in future years. The potential of these losses has not been recognized as a deferred tax benefit, as currently it is not probable that such a benefit will be utilized in the foreseeable future. Unless utilized, these losses will start expiring in 2040.

Tax attributes are subject to review, and potential adjustment, by tax authorities.