Norra Metals Corp. — Audit Report / Information 2020

Mar 30, 2021

NORRA METALS CORP.

(An Exploration Stage Company)

CONSOLIDATED FINANCIAL STATEMENTS NOVEMBER 30, 2020 AND 2019

(Expressed in Canadian dollars)

INDEPENDENT AUDITOR’S REPORT

To the Shareholders of Norra Metals Corp.

Opinion

We have audited the accompanying consolidated financial statements of Norra Metals Corp. (the “Company”), which comprise the consolidated statements of financial position as at November 30, 2020 and 2019, and the consolidated statements of loss and comprehensive loss, cash flows, and changes in shareholders’ equity (deficiency) for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the Company as at November 30, 2020 and 2019, and its financial performance and its cash flows for the years then ended in accordance with International Financial Reporting Standards (“IFRS”).

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 Auditor's Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained in our audits is sufficient and appropriate to provide a basis for our opinion.

Material Uncertainty Related to Going Concern

We draw attention to Note 1 of the consolidated financial statements, which indicates that the Company had an accumulated deficit of $12,585,752 and has incurred losses since inception. As stated in Note 1, these events and conditions indicate that a material uncertainty exists 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 obtained at the date of this auditor's report includes Management’s Discussion and Analysis.

Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

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

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

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

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with IFRS, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or 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 Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

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

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

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

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

• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

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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 Stephen Hawkshaw.

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Vancouver, Canada

Chartered Professional Accountants

March 30, 2021

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NORRA METALS CORP.

(An Exploration Stage Company)

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Expressed in Canadian dollars) AS AT NOVEMBER 30,

	2020 2019
ASSETS Current assets Cash Receivables (Note 5) Prepaid expenses and deposits (Note 6) Total current assets Non-current assets Reclamation bond (Note 7) Total assets	$ 532,625 $ 199,947 13,547 39,591 143,760 11,999
	689,932 251,537 33,500 29,000
	$ 723,432 $ 280,537
LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIENCY) Current liabilities Accounts payable and accrued liabilities (Notes 8 and 13) Loan payable (Notes 9 and 13) Total liabilities SHAREHOLDERS’ EQUITY (DEFICIENCY) Share capital (Note 10) Reserves (Note 10) Deficit Total shareholders’ equity (deficiency) Total liabilities and shareholders’ equity (deficiency)	$ 370,294 $ 465,945 3,808 103,753
	374,102 569,698
	12,054,195 10,190,179 880,887 868,708 (12,585,752) (11,348,048)
	349,330 (289,161)
	$ 723,432 $ 280,537
Nature and continuance of operations(Note 1) Commitment(Note 15) Subsequent events(Note 18)

Approved by the Board of Directors and authorized for issue on March 30, 2021:

“Minaz Devji” Director Minaz Devji	“Tag Gill” Director Tag Gill

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

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NORRA METALS CORP.

(An Exploration Stage Company)

CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS

(Expressed in Canadian dollars)

FOR THE YEARS ENDED NOVEMBER 30,

	2020 2019
EXPENSES Interest (Note 9) Advertising, marketing and promotion Consulting, director, and management fees (Note 13) Exploration and evaluation expenditures – Property specific (Notes 7 and 13) Exploration and evaluation expenditures – General Financing transaction costs Foreign exchange Gain on sale of subsidiaries (Note 2, 4 and 7) Office and miscellaneous Professional fees (Note 13) Rent Share-based compensation (Note 10) Transfer agent and filing fees Travel expenses Loss and comprehensive loss for the year	$ 55 $ 3,753 78,608 163,277 297,175 140,000 634,999 648,020 27,595 162,628 - 60,800 3,228 422 (17,365) - 28,791 92,931 148,386 203,476 60,939 88,931 47,700 - 16,994 24,509 21,120 133,849
	$ (1,348,225) $ (1,722,596)
Basic and diluted loss per common share	$ (0.02) $ (0.04)
Weighted average number of outstanding common shares –basic and diluted	59,294,994 46,395,886

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

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NORRA METALS CORP.

(An Exploration Stage Company) CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in Canadian dollars)

FOR THE YEAR ENDED NOVEMBER 30,

	2020 2019
CASH FLOW FROM OPERATING ACTIVITIES Loss for the year Items not involving cash: Accrued interest on loan payable Issuance of shares for exploration and evaluation assets Share-based compensation Financing transaction costs Interest Gain on sale of subsidiaries Changes in non-cash working capital items: Decrease in receivables Increase in prepaid expenses Increase (decrease) in accounts payable and accrued liabilities Net cash used in operating activities CASH FLOW FROM INVESTING ACTIVITIES Disposal of subsidiaries, net Reclamation bonds Net cash used in investing activities CASH FLOW FROM FINANCING ACTIVITIES Loan received (repayment) Private placement Share issuance costs Warrants exercised Net cash provided by financing activities Change in cash during the year Cash, beginning of year Cash, end of year	$ (1,348,225) $ (1,722,596) 55 - 600,981 288,526 47,700 - - 60,800 - 3,753 (17,365) - 26,044 26,651 (131,761) (289) (72,220) 321,035
	(894,791) (1,022,120)
	(6,066) - (4,500) -
	(10,566) -
	(100,000) 100,000 1,377,500 919,600 (56,965) (39,476) 17,500 -
	1,238,035 980,124
	332,678 (41,996) 199,947 241,943
	$ 532,625 $ 199,947
Interest received Interest paid	$ - $ - $ - $ -

Supplemental disclosure with respect to cash flows (Note 14)

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

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NORRA METALS CORP.

(An Exploration Stage Company)

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIENCY) (Expressed in Canadian dollars)

	Common shares Share capital Reserves Deficit Total shareholders’ equity (deficiency)
Balance, November 30, 2018 Private placement Share issuance costs - cash Shares issued for evaluation and exploration assets Share issuance costs - cash Expiry of options Warrants issued pursuant to loan agreement Loss and comprehensive loss for the year Balance, November 30, 2019 Private placement Share issuance costs - cash Share issuance costs – broker’s warrants Shares issued for evaluation and exploration assets Expiry of options Cancellation of options Exercise of warrants Share-based compensation Loss and comprehensive loss for the year Balance, November 30, 2020	32,658,336 $ 9,111,529 $ 848,056 $ (9,755,600) $ 203,985 15,926,667 829,600 90,000 - 919,600 - (33,871) - - (33,871) 4,808,770 288,526 - - 288,526 - (5,605) - - (5,605) - - (130,148) 130,148 - - - 60,800 - 60,800 - - - (1,722,596) (1,722,596)
	53,393,773 10,190,179 868,708 (11,348,048) (289,161) 27,550,000 1,377,500 - - 1,377,500 - (56,965) - - (56,965) - (75,000) 75,000 - - 3,556,785 600,981 - - 600,981 - - (68,510) 68,510 - - - (42,011) 42,011 - 175,000 17,500 - - 17,500 - - 47,700 - 47,700 - - - (1,348,225) (1,348,225)
	84,675,558 $ 12,054,195 $ 880,887 $ (12,585,752) $ 349,330

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

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(An Exploration Stage Company) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in Canadian dollars) FOR THE YEARS ENDED NOVEMBER 30, 2020

NORRA METALS CORP.

1. NATURE AND CONTINUANCE OF OPERATIONS

Norra Metals Corp. (formerly OK2 Minerals Ltd.) (the “Company”) is incorporated under the laws of the province of British Columbia, Canada on July 19, 2007 and its common shares are listed on the TSX Venture Exchange (“TSX-V”). On February 6, 2019, the Company changed its name from OK2 Minerals Ltd. to Norra Metals Corp. and commenced trading on the TSX-V under the “NORA” trading symbol on February 15, 2019. The Company’s principal business activities include the acquisition and exploration of resource properties.

The head office of the Company is located at Suite 480 - 505 Burrard Street, Vancouver, BC, Canada, V7X 1M3. The registered address and records office of the Company is located at Suite 1780 - 400 Burrard Street, Vancouver, BC, Canada, V6C 3A6.

Going concern of operations

These consolidated financial statements are 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 incurred losses from inception and does not currently have the financial resources to sustain operations in the long-term.

As at November 30, 2020 the Company had an accumulated deficit of $12,585,752 and has incurred losses since inception. These material uncertainties may raise substantial doubt about the Company’s ability to continue as a going concern. The continuing operations of the Company are dependent upon obtaining necessary financing to meet the Company’s commitments as they come due and to finance the future exploration and development of the Company’s mineral assets, economically recoverable reserves, securing and maintaining title and beneficial interest in the properties and upon future profitable production. Failure to continue as a going concern would require that assets and liabilities be recorded at their liquidation values, which might differ significantly from their carrying values.

		November 30,	November 30,
		2020	2019
Deficit	$	(12,585,752) $	(11,348,048)
Working capital(deficiency)		315,830	(318,161)

In March 2020, the World Health Organization declared coronavirus COVID-19 a global pandemic. This contagious disease outbreak, which has continued to spread, and any related adverse public health developments, has adversely affected workforces, economies, and financial markets globally, potentially leading to an economic downturn. It is not possible for the Company to predict the duration or magnitude of the adverse results of the outbreak and its effects on the Company’s business or ability to raise funds.

2. BASIS OF PREPARATION

Statement of compliance

These financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and interpretations issued by the International Financial Reporting Interpretations Committee (“IFRIC”).

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(An Exploration Stage Company) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in Canadian dollars) FOR THE YEARS ENDED NOVEMBER 30, 2020

NORRA METALS CORP.

2. BASIS OF PREPARATION (cont’d...)

Basis of presentation

These consolidated financial statements have been prepared on a historical cost basis, except for certain financial instruments which are stated at their fair value. In addition, these consolidated financial statements have been prepared using the accrual basis of accounting except for cash flow information. All dollar amounts presented are in Canadian dollars, which is the functional currency of the Company, unless otherwise specified. All amounts are rounded to the nearest dollar.

These consolidated financial statements include the financial statements of the Company and the entities controlled by the Company. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. All significant intercompany transactions and balances have been eliminated.

The consolidated financial statements include the financial information of the Company and its subsidiaries listed in the following table:

	Country of	Ownership Interest at	Ownership Interest at
Name of Subsidiary	Incorporation	November30,2020	November30,2019	Principal Activity
Norra Metals AS	Norway	100%	100%	Holding Company
Norra Metals 1 AS	Norway	-	100%	Holding Company
Norra Metals 2 AS	Norway	-	100%	Holding Company
Norra Metals 3 AS	Norway	100%	100%	Holding Company
Norra Metals
Sweden AB	Sweden	-	100%	Holding Company
Bastutrask Holding
AB	Sweden	-	100%	Holding Company

The consolidated financial statements include the financial statements of Norra Metals AS, Norra Metals 1 AS, Norra Metals 2 AS, and Norra Metals 3 AS from its date of acquisition on February 14, 2019, and Norra Metals Sweden AB and Bastutrask Holding AB from its date of acquisition on May 11, 2019 until the date the Company ceased having control, as disclosed below.

During the year ended November 30, 2019, the Company:

• i) acquired 100% of the share capital of Norra Metals AS, Norra Metals 1 AS, Norra Metals 2 AS, and Norra Metals 3 AS in consideration for a cash payment of $18,445 (NOK 120,000).

• ii) acquired 100% of the share capital of Norra Metals Sweden AB and Bastutrask Holding AB on May 11, 2019.

On November 24, 2020, the Company sold Norra Metals 1 AS, Norra Metals AS 2, Norra Metals Sweden AB, and Bastutrask Holding AB for proceeds of $5 (USD $4).

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NORRA METALS CORP.

(An Exploration Stage Company) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in Canadian dollars) FOR THE YEARS ENDED NOVEMBER 30, 2020

2. BASIS OF PREPARATION (cont’d...)

Significant accounting judgments and critical accounting estimates

The preparation of these consolidated financial statements in conformity with IFRS requires estimates and assumptions that affect the amounts reported in these financial statements.

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 following:

• i) Determination and assessment of the Company’s ability to continue going concern (Note 1); and

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 include, but are not limited to, the following:

• i) Deferred income taxes – The Company is periodically required to estimate the tax basis of assets and liabilities. Where applicable tax laws and regulations are either unclear or subject to varying interpretations, it is possible that changes in these estimates could occur that materially affect the amounts of deferred income tax assets and liabilities recorded in the financial statements. Changes in deferred tax assets and liabilities generally have a direct impact on earnings in the period that the changes occur. Each period, the Company evaluates the likelihood of whether some portion or all of each deferred tax asset will not be realized. This evaluation is based on historic and future expected levels of taxable income, the pattern and timing of reversals of taxable temporary timing differences that give rise to deferred tax liabilities, and tax planning initiatives; and

• ii) Share-based payment – The fair value of share-based payment is determined using a Black-Scholes Option pricing model. Such option pricing models require the input of subjective assumptions including the expected price volatility, option life, dividend yield, risk-free rate and estimated forfeitures at the initial grant.

• iii) Acquisition – Management uses judgment in determining if an acquisition is a business combination or an asset acquisition.

3. SIGNIFICANT ACCOUNTING POLICIES

Resource properties – exploration and evaluation expenditures

The Company expenses exploration and evaluation expenditures as incurred. Exploration and evaluation expenditures include acquisition cost of mineral properties, property option payments and evaluation activities. Once a project has been established as commercially viable and technically feasible, related development expenditures are capitalized. This includes costs incurred in preparing the site for mining operations. Capitalization ceases when the mine is capable of commercial production, with the exception of development costs that give rise to a future benefit.

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NORRA METALS CORP. (An Exploration Stage Company) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in Canadian dollars) FOR THE YEARS ENDED NOVEMBER 30, 2020

3. SIGNIFICANT ACCOUNTING POLICIES (cont’d)

Subsidiaries

Subsidiaries are entities over which the Company has control. Control exists when the Company possesses power over an investee, has exposure to variable returns from the investee and has the ability to use its power over the investee to affects its returns. Subsidiaries are fully consolidated from the date control is transferred to the Company and are de-consolidated from the date control ceases.

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 pretax 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 year. As at November 30, 2020 and 2019, the Company has determined that it does not have any decommissioning obligations.

Financial instruments

Financial assets

The Company classifies tis 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 the income statement. Realized and unrealized gains and losses arising from changes in the fair value of the financial asset held at FVTPL are included in the income statement 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. The Company does not have any financial assets classified as FVTOCI.

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NORRA METALS CORP. (An Exploration Stage Company) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in Canadian dollars) FOR THE YEARS ENDED NOVEMBER 30, 2020

3. SIGNIFICANT ACCOUNTING POLICIES (cont’d...)

Financial instruments (cont’d...)

Financial assets at amortized cost

Financial assets at amortized cost are initially recognized at fair value 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 the income statement. 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. The Company’s receivables are classified at amortized cost.

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, or liabilities acquired or incurred principally for the purpose of selling or repurchasing it in the near term. They are carried in the statement of financial position at fair value with changes in fair value recognized in the statement of loss and comprehensive loss.

Amortized cost: This category includes all other liabilities, all of which are recognized at amortized cost. The Company’s accounts payable and accrued liabilities, and loan payable 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 price in active markets for identical assets or liabilities;

Level 2 – Inputs other than quoted prices that are observables for the asset or liability either directly or indirectly; and

Level 3 – Inputs that are not based on observable market data.

Impairment of financial assets

The Company assesses at each reporting date whether a financial asset is impaired.

The Company recognizes a loss allowance for expected credit losses on financial assets that are measured at amortized cost. At each reporting date, the loss allowance for the financial asset is measured at an amount equal to the lifetime expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition. If at the reporting date, the financial asset has not increased significantly since initial recognition, the loss allowance is measured for the financial asset at an amount equal to twelve month expected credit losses. For trade receivables the Company applies the simplified approach to providing for expected credit losses, which allows the use of a lifetime expected loss provision. Impairment losses on financial assets carried at amortized cost are reversed in subsequent periods if the amount of the loss decreases and the decrease can be objectively related to an event occurring after the impairment was recognized.

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NORRA METALS CORP. (An Exploration Stage Company) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in Canadian dollars) FOR THE YEARS ENDED NOVEMBER 30, 2020

3. SIGNIFICANT ACCOUNTING POLICIES (cont’d...)

Share-based payments

The Company grants stock options to acquire common shares of the Company to directors, officers, employees and consultants. An individual is classified as an employee when the individual is an employee for legal or tax purposes, or provides services similar to those performed by an employee.

The fair value of stock options is measured on the date of grant, using the Black-Scholes option pricing model, and is expensed over the vesting terms. Consideration paid for the shares on the exercise of stock options is credited to share capital. When vested options are forfeited or are not exercised at the expiry date the amount previously recognized in reserves is transferred to accumulated losses (deficit). The Company estimates a forfeiture rate and adjusts the corresponding expense each period based on an updated forfeiture estimate.

In situations where equity instruments are issued to non-employees and some or all of the goods or services received by the Company as consideration cannot be specifically identified, they are measured at the fair value of the sharebased payment. Otherwise, share-based payments are measured at the fair value of goods or services received.

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. Depending on the terms and conditions of each equity financing 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 the 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.

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 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 date of the agreement to issue shares.

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 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 share capital.

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NORRA METALS CORP. (An Exploration Stage Company) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in Canadian dollars) FOR THE YEARS ENDED NOVEMBER 30, 2020

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

Deferred tax is recorded by 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 consolidated 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.

Newly adopted accounting policies

IFRS 16 Leases: The new standard specifies how to recognize, measure, present and disclose leases. The standard provides a single lessee accounting model, requiring lessees to recognize assets and liabilities for all leases unless the lease term is 12 months or less or the underlying asset has a low value. Lessors continue to classify leases as operating or finance, with IFRS 16’s approach to lessor accounting substantially unchanged from its predecessor, IAS 17 Leases. Applicable to annual periods beginning on or after January 1, 2019. This standard did not have a significant impact on the Company’s existing accounting policies or financial statement presentation.

During the year ended November 30, 2020, the Company had an office lease with term less than 12 months since adoption, of the standard which resulted in classifying the lease as operating. As at November 30, 2020, the Company had no office lease agreements in place (Note 15).

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NORRA METALS CORP.

(An Exploration Stage Company) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in Canadian dollars) FOR THE YEARS ENDED NOVEMBER 30, 2020

4. SALE OF SUBSIDARIES

Effective November 24, 2020, the Company sold all of the outstanding shares of its subsidiaries, Norra Metals 1 AS, Norra Metals 2 AS, Norra Metals Sweden AB, and Bastutrask Holding AB that were acquired in fiscal 2019 (note 7), to an arm’s length company. In consideration, the Company received $5 (USD 4), which resulted in a gain of $17,365.

As at the date of the disposition, the assets and liabilities associated with the disposal were classified as follows:

	Carrying value	Carrying value
	November	24, 2020
Asset:
Cash	$	6,071
Liabilities:
Current liabilities	$	23,431

5. RECEIVABLES

The Company’s receivables are as follows:

		November 30,		November 30,
		2020		2019
GST receivable	$	13,547	$	39,591

6. PREPAID EXPENSES AND DEPOSITS

The Company’s prepaid expenses, deposits and advances are as follows:

	November 30, 2020 November 30, 2019
Prepaid expenses Security deposit	$ 138,050 $ 6,289 5,710 5,710
	$ 143,760 $ 11,999

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NORRA METALS CORP.

(An Exploration Stage Company) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Canadian dollars) FOR THE YEARS ENDED NOVEMBER 30, 2020

7. RESOURCE PROPERTIES

	Pyramid Property Kinskuch Property Bleikvassli Property Meraker Property Sagvoll Property Bastutrask Property Total
Exploration and evaluation costs during the year ended November 30, 2020 Acquisition costs - shares Geological and consulting (recovery) Exploration and evaluation costs during the year ended November 30, 2019 Acquisition costs - cash Acquisition costs - shares Geological and consulting	- - 300,491 300,490 - - 600,981 - (4,500) 8,688 29,830 - - 34,018
	$ - $ (4,500) $ 309,179 $ 330,320 $ - $ - $ 634,999
	$ - $ 30,000 $ - $ - $ - $ 7,189 $ 37,189 - - 72,132 72,132 72,131 72,131 288,526 26,400 131,179 55,989 42,073 27,650 39,014 322,305
	$ 26,400 $ 161,179 $ 128,121 $ 114,205 $ 99,781 $ 118,334 $ 648,020

16

(An Exploration Stage Company) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in Canadian dollars) FOR THE YEARS ENDED NOVEMBER 30, 2020

NORRA METALS CORP.

7. RESOURCE PROPERTIES (cont’d...)

Pyramid Copper, Canada

The Company holds a 100% interest in mineral claims collectively known as the Pyramid Copper Property, located in northern British Columbia, Canada.

At November 30, 2020, the Company had a reclamation bond with the B.C. Ministry of Energy and Mines for the Pyramid Copper Property in the amount of $33,500 (2019 - $29,000).

Scandinavian Projects, Norway and Sweden

On December 12, 2018, the Company entered into a purchase and sale agreement with EMX Royalty Corporation (“EMX”), and amended in December 28, 2018, to acquire 100% interest in Bleikvassli, Sagvoll and Meraker polymetallic projects in Norway, and Bastutrask polymetallic project in Sweden.

To acquire the properties, the Company issued 4,808,770 common shares which represented a 9.9% equity ownership in the Company and had the continuing obligation to issue additional shares to maintain 9.9% interest, at no additional cost to EMX, until the Company has raised CDN$5,000,000 in equity; thereafter EMX will have the right to participate pro-rata in future financings at its own costs to maintain its 9.9% interest. There is an additional provision that requires the Company to raise and spend $2,000,000 within a 24-months period, otherwise the 9.9% interest equity ownership shall be increased to 14.9% continuing equity interest (up to a maximum of 21,350,956 common shares). The Company is currently negotiating with EMX to extend the $2,000,000 spending requirement.

As of November 30, 2020, a total of 8,365,555 common shares (valued at $889,507) of the Company were issued to EMX due to the above obligations.

EMX has also been granted a 3% net smelter return (“NSR”) royalty on each of the properties, of which 1% NSR royalty may be purchased by the Company on or before the sixth anniversary of the closing date in 0.5% increments for a total of $2,500,000 in cash or shares.

EMX will receive annual advance royalty (“AAR”) payments of $20,000 for each of the properties commencing on the second anniversary of the closing, with each AAR payment increasing by $5,000 per year until reaching $60,000 per year, except that the Company may forgo AAR payments on two of the four properties in years two and three. Once reaching $60,000, AAR payments will be adjusted each year according to the Consumer Price Index (as published by the U.S. Department of Labor, Bureau of Labor Statistics).

EMX Royalty will receive a 0.5% NSR royalty on any new mineral exploration projects generated by the Company in Sweden or Norway, excluding projects acquired from a third party containing a mineral resource or reserve or an existing mining operation. EMX has the right to nominate one seat on the Board of Directors of the Company.

During the year end November 30, 2020, the Company returned the Norwegian Sagvoll license and the Swedish Bastutrask license back to the vendors through the sale of subsidiaries (Norra Metals 1 AS, Norra Metals 2 AS, Norra Metals Sweden AB, and Bastutrask Holding AB) in consideration of $5 (USD $4) (notes 2 and 4).

17

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in Canadian dollars) FOR THE YEARS ENDED NOVEMBER 30, 2020

NORRA METALS CORP.

(An Exploration Stage Company)

7. RESOURCE PROPERTIES (cont’d...)

Kinskuch Project, Canada

On August 18, 2016, the Company entered into an option agreement, and amended in September 2018, to earn a 100% interest in claims known as the Kinskuch Project, located in northern British Columbia. To earn a 100% interest, the Company must make the following payments:

• i) pay $50,000 on the closing date (paid);

• ii) pay $75,000 and incur $100,000 of exploration expenditures on or before August 18, 2017 (paid and incurred);

• iii) pay $60,000 on or before August 18, 2018 (paid); and incur $20,000 on specified survey results (incurred);

• iv) pay $100,000 and incur $250,000 of exploration expenditures (incurred) on or before November 1, 2019;

• v) pay $170,000 and incur $500,000 of exploration expenditures on or before November 1, 2020;

• vi) pay $270,000 and incur $750,000 of exploration expenditures on or before November 1, 2021; and vii) pay $1,000,000 on or before December 1, 2022.

The Kinskuch property is subject to a 2% NSR of which 1% can be repurchased for $1,100,000 and advanced royalty payments commencing after the Company has earned its 100% interest.

During the year ended November 30, 2020, the Company decided to return the Kinskuch project back to the vendor and no longer has any interest in the claims.

8. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

The Company’s accounts payable and accrued liabilities are as follows:

	November 30, 2020 November 30, 2019
Trade payables Accrued liabilities Due to related parties (Note 13)	$ 143,727 $ 213,764 37,996 30,169 188,571 222,012
	$ 370,294 $ 465,945

18

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in Canadian dollars) FOR THE YEARS ENDED NOVEMBER 30, 2020

NORRA METALS CORP.

(An Exploration Stage Company)

9. LOAN PAYABLE

During the year ended November 30, 2019, the Company received a loan in the amount of $100,000 from a director of the Company. The loan accrues interest at the rate of 10% per annum and the Company granted the lender 2,000,000 loan bonus warrants (valued at $60,800) exercisable for a term of one year at an exercise price of $0.05 per common share, which was recorded as financing transaction costs.

	Loan Payable
Loan payable at November 30, 2018 Loan received Interest accrued Loan payable at November 30, 2019 Loan repayment Interest accrued Loan payable at November 30, 2020	$ - 100,000 3,753
	103,753 (100,000) 55
	$ 3,808

The bonus warrants were valued at $60,800 using the Black-Scholes option model assuming expected life of 1 year, a risk-free interest rate of 1.59%, a forfeiture and dividend rate of 0% and an expected volatility of 169.92%.

10. SHARE CAPITAL AND RESERVES

Authorized

Unlimited number of common shares without par value.

During the year ended November 30, 2020, the Company:

• i) issued 356,400 common shares at a value of $8,910 pursuant to the Scandinavian Projects agreement in maintaining the vendor’s percentage interest of 9.9% (note 7).

• ii) closed a non-brokered private placement of 27,550,000 units at a price of $0.05 per unit for a total proceeds of $1,377,500. Each unit comprises of one common share and one common share purchase warrant. Each warrant will entitle the holder to purchase one additional common share of the Company at a price of $0.15 expiring on September 23, 2022. The Company paid cash finder’s fees of $48,720 and issued 939,400 finders’ warrants (valued at $75,000) as share issuance costs. Each finder’s warrant will entitle the holder to purchase one additional common share of the Company at a price of $0.15 expiring on September 23, 2022.

• iii) issued 3,200,385 common shares at a value of $592,071 pursuant to the Scandinavian Projects agreement in maintaining the vendor’s percentage interest of 9.9% (note 7).

• iv) issued 175,000 common shares at a value of $17,500 pursuant to exercise of warrants.

During the year ended November 30, 2019, the Company:

• i) completed a private placement of 12,326,667 units at a price of $0.06 per unit for gross proceeds of $739,600. Each unit consists of one common share and one-half of one share purchase warrant. Each whole warrant may be exercised to purchase one common share at a price of $0.10 for a period of two years. In relation to the financing, the Company paid finders fees of $26,577 in cash.

19

NORRA METALS CORP.

(An Exploration Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in Canadian dollars) FOR THE YEARS ENDED NOVEMBER 30, 2020

10. SHARE CAPITAL AND RESERVES (cont’d...)

• ii) issued 4,808,770 common shares at a value of $288,526 pursuant to a purchase and sale agreement to acquire a 100% interest in certain mineral exploration licenses located in Norway and Sweden. In relation to the financing, the Company paid finders fees of $5,605 in cash.

• iii) completed the first tranche of a private placement and issued 3,600,000 units at a price of $0.05 per unit for gross proceeds of $180,000, of which $90,000 was allocated to the warrant component of the unit using the residual value approach. Each unit consists of one common share and one-half of one share purchase warrant. Each whole warrant may be exercised to purchase one common share at a price of $0.10 for a period of two years. In relation to the financing, the Company paid finders fees of $5,250 in cash. The Company also paid other share issuance costs of $2,044.

Stock options

The Company has a plan to grant stock options to directors, officers, employees and consultants of the Company. Under the plan, the board of directors has the discretion to issue the equivalent of up to 10% of the issued and outstanding shares of the Company from time to time. Stock options are generally for a term of up to five years from the date granted and are exercisable at a price that is not less than the market price on the date granted.

Vesting terms are determined at the discretion of the board of directors. Options issued to consultants providing investor relations services must vest in stages over a minimum of 12 months with no more than one-quarter of the options vesting in any three-month period.

During the year ended November 30, 2020, the Company granted 700,000 stock options to consultants of the Company. The Company recognized share-based compensation of $47,700.

Stock options outstanding as at November 30, 2020:

Expiry Date Exercise Price	November 30, 2019	Granted	Exercised	Expired / Cancelled		November 30, 2020 Exercisable
June 29, 2020 $ 0.36 May 3, 2021 0.69 August 26, 2021 0.54 August 20, 2023 0.06 September 17, 2023 0.30 November 1, 2023 0.30 Total	228,333 133,333 641,667 - 583,334 83,333	- - - 700,000 - -	- - - - - -	(228,333) - (93,333) - (50,000) -		- - 133,333 133,333 548,334 548,334 700,000 700,000 533,334 533,334 83,333 83,333
	1,670,000	700,000	-	(371,666)		1,998,334 1,998,334
Weighted average exercise price	$ 0.43	$ 0.06	-	$ 0.40	$	0.32 $ 0.32
Weighted average remaining contractual	life					2.04 years

20

NORRA METALS CORP.

(An Exploration Stage Company) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in Canadian dollars) FOR THE YEARS ENDED NOVEMBER 30, 2020

10. SHARE CAPITAL AND RESERVES (cont’d...)

Stock options (cont’d…)

Stock options outstanding as at November 30, 2019:

Expiry Date Exercise Price	November 30, 2018	Granted	Exercised	Expired / Cancelled	November 30, 2019	Exercisable
April 13, 2019 $ 0.69 August 26, 2019 0.54 August 26, 2019 0.54 June 29, 2020 0.36 May 3, 2021 0.69 August 26, 2021 0.54 September 17, 2023 0.30 November 1, 2023 0.30 Total	166,667 75,000 33,333 228,333 133,333 641,667 583,334 83,333	- - - - - - - -	- - - - - - - -	(166,667) (75,000) (33,333) - - - - -	- - - 228,333 133,333 641,667 583,334 83,333	- - - 228,333 133,333 641,667 583,334 83,333
	1,945,000	-	-	(275,000)	1,670,000	1,670,000
Weighted average exercise price	$ 0.46	-	-	$ 0.63	$ 0.43	$ 0.43
Weighted average remaining contractual	life				2.37 years

The following weighted average assumptions were used for the Black-Scholes option pricing model valuation of options granted for the year ended November 30, 2020 and 2019:

	Year ended	Year ended
	November 30,	November 30,
	2020	2019
Risk-free interest rate	0.25%	-
Expected life of options	3 years	-
Expected annualized volatility	157.73%	-
Exercise price	$0.06	-
Weighted average fair value of options granted	$0.07	-
Expected dividend rate	-	-

21

NORRA METALS CORP.

(An Exploration Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in Canadian dollars) FOR THE YEARS ENDED NOVEMBER 30, 2020

10. SHARE CAPITAL AND RESERVES (cont’d...)

Warrants

Warrants outstanding as November 30, 2020:

Expiry Date Exercise Price	November 30, 2019	Granted	Exercised Expired / Cancelled	Exercised Expired / Cancelled	November 30, 2020 Exercisable
December 6, 2019 $ 0.45 December 6, 2019 0.45 July 16, 2020 0.05 February 15, 2021* 0.10 November 8, 2021 0.10 September 23, 2022 0.15 September 23, 2022 0.15 Total	1,570,490 81,359 2,000,000 6,163,334 1,800,000 - -	- - - - - 27,550,000 939,400	- (1,570,490) - (81,359) - (2,000,000) (175,000) - - - - - - -		- - - - - - 5,988,334 5,988,334 1,800,000 1,800,000 27,550,000 27,550,000 939,400 939,400
	11,615,183	28,489,400	(175,000)	(3,651,849)	36,277,734 36,277,734
Weighted average exercise price	$ 0.14	$ 0.15	$ 0.10	$ 0.23	$ 0.14 $ 0.14
Weighted averageremaining contractual	life				1.51years

• 2,625,000 warrants exercised and 3,363,334 warrants expired subsequent to November 30, 2020 (note 18)

Warrants outstanding as at November 30, 2019:

Expiry Date Exercise Price	November 30, 2018	Granted	Exercised	Expired / Cancelled	November 30, 2019 Exercisable
March 2, 2019 $ 0.60 March 8, 2019 0.60 March 8, 2019 0.60 December 6, 2019 0.45 December 6, 2019 0.45 July 16, 2020 0.05 February 15, 2021 0.10 November 8, 2021 0.10 Total	2,166,667 2,455,000 156,667 1,570,490 81,359 - - -	- - - - - 2,000,000 6,163,334 1,800,000	- - - - - - - -	(2,166,667) (2,455,000) (156,667) - - - - -	- - - - - - 1,570,490 1,570,490 81,359 81,359 2,000,000 2,000,000 6,163,334 6,163,334 1,800,000 1,800,000
	6,430,183	9,963,334	-	(4,778,334)	11,615,183 11,615,183
Weighted average exercise price	$ 0.56	$ 0.09	-	$ 0.60	$ 0.14 $ 0.14
Weighted averageremaining contractual	life				1.06 years

The following weighted average assumptions were used for the Black-Scholes option pricing model valuation of compensatory warrants issued for the year ended November 30, 2020 and 2019:

	Year ended	Year ended
	November 30,	November 30,
	2020	2019
Risk-free interest rate	0.35%	-
Expected life of options	2 years	-
Expected annualized volatility	146.10%	-
Exercise price	$0.15	-
Weighted average fair value of warrants granted	$0.08	-
Expected dividend rate	-	-

22

NORRA METALS CORP.

(An Exploration Stage Company) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in Canadian dollars) FOR THE YEARS ENDED NOVEMBER 30, 2020

11. CAPITAL MANAGEMENT

The Company defines its capital as shareholders’ equity. The Board of Directors does not establish quantitative return on capital criteria for management due to the nature of the Company’s business. The Company has in the past invested its capital in liquid investments to obtain adequate returns. The investment decision is based on cash management to ensure working capital is available to meet the Company’s short-term obligations while maximizing liquidity and returns on unused capital. The Company does not pay dividends. The Company is not subject to any externally imposed capital requirements.

The Company raises capital to fund its corporate and exploration costs and other obligations through the sale of its common shares or units consisting of common shares and warrants in order to operate its business and safeguard its ability to continue as a going concern. Although the Company has been successful at raising funds in the past through issuance of share capital, it is uncertain whether it will continue this financing due to uncertain economic conditions. There have been no changes to the Company’s approach to capital management during the year.

12.

SEGMENTED INFORMATION

The Company operates in one segment – the acquisition and exploration of resource properties. As at November 30, 2020, the Company’s operations and assets were held in Canada and Norway.

13. RELATED PARTY TRANSACTIONS

During the year ended November 30, 2020, the Company entered into the following transactions with related parties, directors and key management personnel. Key management personnel are individuals responsible for planning, directing and controlling the activities of the Company and include certain directors and officers.

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

	Paid or accrued to: Nature of transactions	November 30, 2020 November 30, 2019
	Key management personnel: Directors and companies controlled by Directors Director fees A company controlled by the CEO Consulting A company controlled by a Director Geological consulting A company controlled by a Director Professional Total	$ - $ 20,000 120,000 120,000 16,908 120,000 58,700 70,050
		$ 195,608 $ 330,050
	Related parties: A family member of a Director Geological consulting	$ 5,000 $ 66,000

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

	November 30,	November 30,	November 30,	November 30,
		2020		2019
Due to Directors and companies controlled by Directors	$	188,571	$	222,012

As at November 30, 2020, the Company has $3,808 (2019 - $103,753) in the loan payable owing to a director of the Company consisting of $Nil principal and accrued interest expense of $3,808 (Note 9).

23

NORRA METALS CORP.

(An Exploration Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in Canadian dollars) FOR THE YEARS ENDED NOVEMBER 30, 2020

13. RELATED PARTY TRANSACTIONS (cont’d…)

The amounts paid to related parties included in prepaid expenses are as follows:

	November 30,	November 30,	November 30,	November 30,
		2020		2019
Due from Directors	$	21,000	$	-

14. SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS

Significant non-cash transactions during the year ended November 30, 2020 include the Company:

• i) allocated $68,510 of reserves to deficit pursuant to the expiry of options.

• ii) allocated $42,011 of reserves to deficit pursuant to the cancellation of options.

iii) recorded $75,000 in reserves pursuant to agent warrants granted in relations to a private placement.

Significant non-cash transactions during the period ended November 30, 2019 include the Company:

• i) allocated $130,148 of reserves to deficit pursuant to the expiry of options.

ii) allocated $90,000 to the warrant component of the unit issued in connection with the private placement.

15. COMMITMENT

Leased Premises

The Company was committed to the minimum payments (before applicable taxes) for the leased premises located at suite 480 – 505 Burrard Street, through July 2020 (expired). No new lease was entered into during fiscal 2020.

16. FINANCIAL AND CAPITAL RISK MANAGEMENT

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 described below.

Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 - inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and

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

Fair value of financial instruments

The Company has various financial instruments including cash, receivables, accounts payable and accrued liabilities and a loan payable. The carrying values of receivables, accounts payable and accrued liabilities, and loan payable approximate their fair values due to the short-term nature of these financial instruments.

Cash is carried at a level 1 fair value measurement.

24

NORRA METALS CORP. (An Exploration Stage Company) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in Canadian dollars) FOR THE YEARS ENDED NOVEMBER 30, 2020

16. FINANCIAL AND CAPITAL RISK MANAGEMENT (cont’d...)

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

Credit risk

The Company is exposed to credit risk only with respect to uncertainties as to timing and amount of collectability of receivables. The Company believes its credit risk is low because a portion of receivables are comprised of goods and services tax (GST) and other government refunds, which is recoverable from the governing body in Canada. Management does not believe the receivables are impaired. The Company doesn’t believe there is significant credit risk associated with cash as these amounts are held with major Canadian banks.

Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company’s approach to managing liquidity risk is to ensure that it will have sufficient liquidity to meet liabilities when due. As at November 30, 2020, the Company had a cash balance of $532,625 (2019 – $199,947) to settle current liabilities of $374,102 (2019 – $569,698). All of the Company’s financial liabilities have contractual maturities of 30 days or due on demand and are subject to normal trade terms.

Interest rate risk

Interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The risk that the Company will realize such a loss is limited as it does not have any significant interest-bearing financial instruments.

Price risk

Mineral prices, in particular gold and silver, are volatile, and have fluctuated sharply in recent periods. The prices are subject to market supply and demand, political and economic factors, and commodity speculation, all of which can interact with one another to cause significant price movement from day to day and hour to hour. These price movements can affect the Company’s ability to operate and to raise financing through the sale of its common shares.

Foreign currency risk

As at November 30, 2020 and 2019, the Company is exposed to foreign currency risk as certain monetary financial instruments are denominated in Swedish, Norwegian and United States currencies. The Company’s sensitivity analysis suggests that reasonably expected changes in the rates of exchange in Norway, and the United States would change foreign exchange gain or loss by an insignificant amount.

25

NORRA METALS CORP. (An Exploration Stage Company) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in Canadian dollars) FOR THE YEARS ENDED NOVEMBER 30, 2020

17. INCOME TAXES

The actual income tax provisions differ from the expected amounts calculated by applying the Canadian combined federal and provincial corporate income tax rates to the Company’s loss before income taxes. The components of these differences are as follows:

	November 30,	November 30,	November 30,	November 30,
		2020		2019
Loss before taxes for the year	$	(1,348,225)	$	(1,722,596)
Canadian federal and provincial income tax rates		27.00%		27.00%
Expected income tax recovery based on the above rate	$	(364,000)	$	(465,000)
Effect of change in tax rates		-		10,000
Non-deductible items		(5,000)		(2,000)
Tax benefit non recognized		169,000		457,000
Adjustment to prior years provision		200,000		-
Total income taxes	$	-	$	-
Current income tax	$	-	$	-
Deferred tax recovery	$	-	$	-

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

	November 30,	November 30,	November 30,	November 30,
		2020		2019
Non-capital losses	$	1,638,000	$	1,466,000
Cumulative exploration and development expenses		715,000		713,000
Share issuance costs		29,000		34,000
	$	2,382,000	$	2,213,000
Unrecognized deferred tax assets		(2,382,000)		(2,213,000)
Net deferred taxassets	$	-	$	-

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

			Expiry Date			Expiry Date
		2020	Range		2019	Range
Temporary Differences
Exploration and evaluation assets	$	2,648,000	No expiry date	$	2,640,000	No expiry date
Share issue costs		109,000	2038 to 2043		125,000	2038 to 2042
Non-capital losses available for
futureperiods		6,066,000	2026 to 2040		5,429,000	2026 to 2039

26

NORRA METALS CORP.

(An Exploration Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in Canadian dollars) FOR THE YEARS ENDED NOVEMBER 30, 2020

18. SUBSEQUENT EVENTS

Subsequent to November 30, 2020, the Company:

• i) issued 2,625,000 common shares pursuant to the exercise of warrants for a total proceeds of $262,500.

• ii) granted 5,000,000 stock options to directors, officers, and consultants of the Company. The options are exercisable at a price of $0.11, expiring on March 5, 2024.

27