Ophir Metals Corp. — Interim / Quarterly Report 2021

Jan 26, 2021

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(formerly Minkap Resources Inc.)

UNAUDITED CONDENSED INTERIM FINANCIAL STATEMENTS For the three and six month periods ended November 30, 2020 and 2019

NOTICE OF NO AUDITOR REVIEW OF INTERIM FINANCIAL STATEMENTS

Under National Instrument 51-102, Part 4, subsection 4.3(3) (a), if an auditor has not performed a review of the interim financial statements; they must be accompanied by a notice indicating that the financial statements have not been reviewed by an auditor. The Company’s independent auditor has not performed a review of these financial statements in accordance with standards established by the Canadian Institute of Chartered Accountants for a review of interim financial statements by an entity’s auditor.

OPHIR GOLD CORP.

(formerly Minkap Resources Inc.) UNAUDITED CONDENSED INTERIM STATEMENTS OF FINANCIAL POSITION (Expressed in Canadian dollars)

		November 30,		May 31,
		2020		2020
ASSETS
CURRENT
Cash	$	507,350	$	209,519
Marketable securities (Note 4)		45,000		10,000
HST and other receivables (Note 3)		24,985		10,880
Prepaids and deposits		20,104		1,063
		597,439		231,462
NON-CURRENT
EXPLORATION AND EVALUATION ASSETS(Note 5)		1,058,348		-
TOTAL ASSETS	$	1,655,787	$	231,462
LIABILITIES
CURRENT
Accountspayable and accrued liabilities(Note 6)	$	293,424	$	202,131
TOTAL LIABILITES		293,424		202,131
SHAREHOLDERS’ EQUITY
Share capital (Note 7)		5,246,478		4,255,443
Shares to be issued (Note 7)		22,500		-
Contributed surplus		2,039,921		1,569,921
Deficit		(5,946,536)		(5,796,033)
TOTAL SHAREHOLDERS' EQUITY		1,362,363		29,331
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	1,655,787	$	231,462

NATURE OF BUSINESS AND GOING CONCERN (Note 1) BASIS OF PREPARATION (Note 2) COMMITMENTS (Note 9) EVENTS AFTER THE REPORTING PERIOD (Note 12)

Approved and authorized for issue on behalf of the Board on January 25, 2021:

“Signed” Jon Bey

“Signed” Shawn Westcott

The accompanying notes form an integral part of these unaudited condensed interim financial statements

OPHIR GOLD CORP.

(formerly Minkap Resources Inc.)

UNAUDITED CONDENSED INTERIM STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Expressed in Canadian dollars)

(Expressed in Canadian dollars)
	Three months	ended		Six months	ended
	November	30,		November 30,
	2020		2019	2020		2019
GENERAL AND ADMINISTRATION:
Consulting (Note 6)	$ 71,341	$	23,000	$ 98,341	$	52,725
Investor relations	8,540		2,743	9,650		2,863
Office and miscellaneous	31,327		939	31,948		1,438
Professional fees	23,111		9,808	29,683		20,923
Transfer agent and filing fees	14,845		4,284	15,881		5,781
	(149,164)	$	(40,774)	(185,503)	$ (83,730)
Unrealized gain (loss) on marketable securities (Note 4)	15,000		(30,000)	35,000	(30,000)
NET LOSS AND COMPREHENSIVE LOSS	$(134,164)	$	(70,774)	$(150,503)	$ (113,730)
LOSS PER COMMON SHARE, basic and diluted	$ (0.00)	$	(0.00)	$ (0.01)	$	(0.01)
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING,
basic and diluted	28,430,147	15,838,390		23,000,363	13,219,763

The accompanying notes form an integral part of these unaudited condensed interim financial statements

OPHIR GOLD CORP. (formerly Minkap Resources Inc.) UNAUDITED CONDENSED INTERIM STATEMENTS OF CASH FLOWS

(Expressed in Canadian dollars)

For the six month period ended November 30,	2020	2019
OPERATING ACTIVITIES
Net loss	$ (150,503)	$ (113,730)
Items not involving cash:
Unrealized (gain) loss on marketable securities	(35,000)	30,000
Changes in non-cash working capital items:
Prepaid expenses	(19,041)	6,067
HST and other receivables	(14,105)	314
Accounts payable and accrued liabilities	22,824	(11,739)
Cash flow used in operating activities	(195,825)	(89,088)
INVESTING ACTIVITIES
Additions to exploration and evaluation assets	(340,129)	-
Cash flow used in investing activities	(340,129)	-
FINANCING ACTIVITIES
Issuance of shares/units for cash	750,000	350,000
Funds received for exercise of warrants	90,000	-
Funds received for shares to be issued	22,500	-
Share issue costs	(28,715)	(10,500)
Cash flow from financing activities	833,785	339,500
CHANGE IN CASH	297,831	250,412
CASH, BEGINNING OF YEAR	209,519	15,079
CASH, END OF YEAR	$ 507,350	$ 265,491
SUPPLEMENTAL INFORMATION
Exploration and evaluation assets included in
accounts payable and accrued liabilities	$ 68,469	$ -
Shares issued for exploration and evaluation assets	398,750	-
Warrants issued for exploration and evaluation assets	251,000	-

The accompanying notes form an integral part of these unaudited condensed interim financial statements

OPHIR GOLD CORP.

(formerly Minkap Resources Inc.)

UNAUDITED CONDENSED INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIENCY) (Expressed in Canadian dollars)

						Total
						Shareholders’
	Number of		Shares to be	Contributed		Equity
	Shares*	Share Capital	Issued	Surplus	Deficit	(Deficiency)
		$		$	$	$
Balance, May 31, 2019	10,629,599	4,011,443	-	1,476,921	(5,558,562)	(70,198)
Net loss for the period	-	-	-	-	(113,730)	(113,730)
Issued for cash pursuant to private placements	7,000,000	350,000	-	-	-	350,000
Warrants issued pursuant to private placements	-	(93,000)	-	93,000	-	-
Share issue costs(cash)	-	(10,500)	-	-	-	(10,500)
Balance, November 30, 2019	17,629,599	4,257,943	-	1,569,921	(5,672,292)	155,572
Share issue costs (cash)	-	(2,500)	-	-	-	(2,500)
Net loss for theperiod	-	-	-	-	(123,741)	(123,741)
Balance, May 31, 2020	17,629,599	4,255,443	-	1,569,921	(5,796,033)	29,331
Net loss for the period	-	-	-	-	(150,503)	(150,503)
Issued for cash pursuant to private placements	9,999,998	750,000	22,500	-	-	772,500
Warrants issued pursuant to private placements	-	(231,000)	-	231,000	-	-
Share issue costs (cash)	-	(28,715)	-	-	-	(28,715)
Issued for cash pursuant to exercise of warrants	900,000	90,000	-	-	-	90,000
Transfer of contributed surplus on exercise of warrants	-	12,000	-	(12,000)	-	-
Shares Issued pursuant to property agreements (Note 5)	2,750,000	398,750	-	-	-	398,750
Warrants issuedpursuant topropertyagreements(Note 5)	-	-	-	251,000	-	251,000
Balance,November 30,2020	31,279,597	5,246,478	22,500	2,039,921	(5,946,536)	1,362,363

• On April 23, 2019, the Company consolidated the common shares in the capital of the Company on a 6 for 1 basis.

The accompanying notes form an integral part of these unaudited condensed interim financial statements

OPHIR GOLD CORP. (formerly Minkap Resources Inc.) NOTES TO THE FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTH PERIODS ENDED NOVEMBER 30, 2020 AND 2019 (Expressed in Canadian dollars)

1. NATURE OF BUSINESS AND GOING CONCERN

Ophir Gold Corp. (the “Company” or “Ophir”), (formerly MinKap Resources Inc.) was incorporated under the Business Corporations Act in British Columbia on April 26, 2010. The head office, principal address and records office of the Company are located at 595 Howe Street, Suite 206, Vancouver, BC V6C 2T5. The Company’s registered address is 700 West Georgia Street, 25[th] Floor, Vancouver, British Columbia, V7Y 1B3.

Effective April 23, 2019 the Company implemented a consolidation of its common shares on the basis of 6 old for 1 new common share of the Company. All share and per share information has been retroactively restated to reflect the consolidation. Additionally, the Company changed its name from Kapuskasing Gold Corp. to MinKap Resources Inc. On October 9, 2020, the Company further changed its name from MinKap Resources Inc. to Ophir Gold Corp.

At the end of 2019, a novel strain of coronavirus (“COVID-19”) was reported in China. The COVID-19 outbreak has developed rapidly in 2020, with a significant number of infections around the world. On March 11, 2020, it was labelled a pandemic by the World Health Organization. During the first quarter of 2020, attempts at containment of COVID-19 have resulted in decreased economic activity, which has adversely affected the broader global economy. The rapid development and fluidity of the situation precludes any prediction as to the ultimate impact of COVID-19; however, the Company seeks to obtain the best possible information to enable the assessment of the risks involved, and implement appropriate measures to respond. The Company has taken a number of measures to safeguard the health of its workers and the local communities where it operates. The Company, with proper mitigation measures in place, is able to explore its mineral assets at this time, although there is no guarantee the situation will remain as such.

GOING CONCERN

The Company’s principal business activities include the acquisition and exploration of mineral property assets. At November 30, 2020, the Company had not yet determined whether the properties contain ore reserves that are economically recoverable. The recoverability of amounts shown for an exploration and evaluation asset is dependent upon the discovery of economically recoverable reserves, confirmation of the Company's interest in the underlying mineral claims, the ability of the Company to obtain the necessary financing to complete the development of and future profitable production from the properties or realizing proceeds from their disposition.

The Company has taken the appropriate steps to verify title to the properties on which it is conducting exploration and in which it has an interest, and to the best of the Company’s knowledge the Company holds title to its properties. These steps have been taken in accordance with industry standards for the current stage of exploration of such properties; however, these procedures may not always guarantee the Company's title. Dependent on jurisdiction, property title may be subject to unregistered prior agreements, unregistered claims, aboriginal claims, and/or non-compliance with regulatory and environmental requirements.

The Company's ability to retain the rights to certain of its properties is dependent upon the Company continuing to make option payments and/or meet other commitments (see note 9).

The Company has an accumulated deficit of $5,946,536 as at November 30, 2020 (May 31, 2020 - $5,796,033). The Company's ability to continue its operations and to realize its assets at their carrying values is dependent upon obtaining additional financing and generating revenues sufficient to cover its operating costs.

As at November 30, 2020, the Company’s current cash resources are insufficient to cover the expected expenditures in fiscal 2021. The Company’s ability to continue as a going concern is dependent on being able to obtain the necessary financing to satisfy its liabilities as they become due. There can be no assurances that management will be successful in securing adequate financing.

During the six month period ended November 30, 2020 and 2019, the Company reported a net loss of $150,503 and a net loss of $113,730 respectively. Historically, the Company has recognized recurring losses and the need for continued financing to further successful exploration may cast significant doubt as to the Company’s ability to continue as a going concern.

These unaudited condensed interim financial statements do not give effect to any adjustments which would be necessary should the Company be unable to continue as a going concern and therefore be required to realize its assets and discharge its liabilities in other than the normal course of business and at amounts different from those reflected in the accompanying financial statements.

OPHIR GOLD CORP. (formerly Minkap Resources Inc.) NOTES TO THE FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTH PERIODS ENDED NOVEMBER 30, 2020 AND 2019 (Expressed in Canadian dollars)

2. BASIS OF PREPARATION

2.1 Statement of Compliance

These unaudited condensed interim financial statements, including comparatives, have been prepared in accordance with International Accounting Standards (“IAS”) 34 ‘Interim Financial Reporting’ (“IAS 34”) using accounting policies consistent with the International Financial Reporting Standards (“IFRS”) issued by the International Accounting Standards Board (“IASB”) and Interpretations of the International Financial Reporting Interpretations Committee (“IFRIC”).

These unaudited condensed interim financial statements were authorized by the Board of Directors of the Company on January 25, 2021.

2.2 Basis of Preparation and Functional and Presentation Currency

These unaudited condensed interim financial statements have been prepared on the basis of accounting policies and methods of computation consistent with those applied in the Company’s May 31, 2020 annual financial statements.

The financial statements are presented in Canadian Dollars, which is also the functional currency of the Company.

2.3 Significant Accounting Judgments and Estimates

The preparation of financial statements in conformity with IFRS requires management to make judgments and estimates and form assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. On an ongoing basis, management evaluates its judgments and estimates in relation to assets, liabilities, revenue and expenses. Management uses historical experience and various other factors it believes to be reasonable under the given circumstances as the basis for its judgments and estimates. Actual outcomes may differ from these estimates under different assumptions and conditions.

The most significant estimates and judgments relate to, but are not limited to, the following:

• determination of the flow-through share premium requires the use of estimates when using the residual value method while calculating the premium associated with the issuance of flow-through shares compared with common shares;

• calculation of the fair value of share-based payments requires the use of estimates of inputs in the Black-Scholes option pricing valuation model;

• assessment of the carrying value of exploration and evaluation assets at each reporting date to determine whether any indication of impairment exists. When an impairment exists, the calculation of recoverable amount requires the use of estimates and assumptions such as long-term commodity prices, discount rates, recoverable metals, and operating performance;

• ownership and control of property requires the use of judgment; and

• assessment of the going concern assumption as detailed in Note 1 to the financial statements.

OPHIR GOLD CORP. (formerly Minkap Resources Inc.) NOTES TO THE FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTH PERIODS ENDED NOVEMBER 30, 2020 AND 2019 (Expressed in Canadian dollars)

3. HST RECEIVABLE

ST RECEIVABLE
As at HST receivable	November 30, 2020 May 31, 2020
	$ 24,985 $10,880
Total HST receivable	$ 24,985 $10,880

At November 30, 2020, the Company anticipates full recovery of these amounts and therefore no impairment has been recorded against these receivables. The credit risk on the receivables has been further discussed in Note 11.

The Company holds no collateral for any receivable amounts outstanding as at November 30, 2020.

4. MARKETABLE SECURITIES

Marketable securities are comprised of 1,000,000 (May 31, 2020 – 1,000,000) shares of Ubique Minerals Ltd. The Company has classified this investment as fair value through profit and loss investments.

As at November 30, 2020, the shares were valued at their fair value of $45,000 ($0.045 per share) (May 31, 2020 - $10,000 ($0.01 per share)) based on current market price. The impact to the financial statements of this revaluation to market value resulted in an unrealized gain of $35,000 for the six-month period ended November 30, 2020 (2019 – $30,000 unrealized loss).

5. EXPLORATION AND EVALUATION ASSETS

Exploration and evaluation asset expenditures during the six-month periods ended November 30, 2020 and 2019, by nature are detailed as follows:

	2020	2019
	$	$
Acquisition costs	760,233		-
Exploration costs	298,115		-
Total	1,058,348		-

Exploration and evaluation assets by properties are detailed as follows:

	Acquisition net	Exploration	Write		November 30,	May 31, 2020
			downs		2020
	$	$				$
			$		$
Breccia Property	760,233	298,115		-	1,058,348		-
Total	760,233	298,115		-	1,058,348		-

OPHIR GOLD CORP. (formerly Minkap Resources Inc.) NOTES TO THE FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTH PERIODS ENDED NOVEMBER 30, 2020 AND 2019 (Expressed in Canadian dollars)

5. EXPLORATION AND EVALUATION ASSETS (continued)

BRECCIA PROPERTY, IDAHO

The Company’s Breccia Property is comprised of two continuous claim groups subject to two separate Option Agreements; the Lightning Tree Property Agreement with Canarc Resource Corp., and the Breccia Agreement with DG Resource Management. The claims subject to these two agreements collectively comprise the Company’s Breccia Property.

Lightning Tree Property Agreement with Canarc Resource Corp.

Under the terms of the definitive agreement, the Company has an option to acquire a 100% undivided interest in the Lightning Tree Property from Canarc Resource Corp. (“Canarc”) by completing the following:

• Issuing an aggregate of 2,500,000 common shares and 2,500,000 common share purchase warrants over a 2-year period to Canarc as follows:

• 1,250,000 common shares (issued) and 1,250,000 warrants (issued) exercisable at $0.095 for a period of 3 years, within 5 days of approval date

• 1,250,000 common shares and 1,250,000 warrants exercisable at a 20-day volume weighted average price for a period of 3 years, within 12 months of approval date

• Total cash consideration of $137,500 payable as follows:

  • $12,500 due on the Approval Date (paid);

  • $25,000 due on the first anniversary from the Approval Date;

  • $50,000 due on the second anniversary from the Approval Date;

  • $50,000 due on the third anniversary from the Approval Date;

• Spend an aggregate $2,000,000 in exploration expenditures over three (3) years, commencing on the date Ophir receives an exploration drill permit for the Property (the "Permit Date");

• Issuing to Canarc a 2.5% net smelter return royalty ("Canarc NSR") in respect of the Property, subject to the Company retaining an option to acquire 1% of the Canarc NSR for a cash payment of $1,000,000;

• File, on the Company's SEDAR issuer profile, a mineral resource estimate in compliance with NI 43-101 on the Property within 3 years of the Permit Date.

Breccia Property Agreement with DG Resource Management

Under the terms of the definitive agreement, the Company has an option to acquire a 100% undivided interest in the Breccia Property from DG Resource Management (“DGRM”) by completing the following:

• Issuing an aggregate of 2,500,000 common shares and 2,500,000 common share purchase warrants over a 2-year period to DGRM as follows:

• 1,250,000 common shares (issued) and 1,250,000 warrants (issued) exercisable at $0.095 for a period of 3 years, within 5 days of approval date

• 1,250,000 common shares and 1,250,000 warrants exercisable at a 20-day volume weighted average price for a period of 3 years, within 12 months of approval date

• Total cash consideration of $137,500 payable as follows:

• $12,500 due on the Approval Date (paid);

• $25,000 due on the first anniversary from the Approval Date;

• $50,000 due on the second anniversary from the Approval Date;

• $50,000 due on the third anniversary from the Approval Date;

• Spend an aggregate $2,000,000 in exploration expenditures over three (3) years, commencing on the date Ophir receives an exploration drill permit for the Property (the "Permit Date");

• Issuing to DGRM a 2.5% net smelter return royalty ("DGRM NSR") subject to the Company retaining an option to acquire 1% of the DGRM NSR for a cash payment of $1,000,000;

• File, on the Company's SEDAR issuer profile, a mineral resource estimate in compliance with NI 43-101 on the Property within 3 years of the Permit Date.

OPHIR GOLD CORP. (formerly Minkap Resources Inc.) NOTES TO THE FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTH PERIODS ENDED NOVEMBER 30, 2020 AND 2019 (Expressed in Canadian dollars)

5. EXPLORATION AND EVALUATION ASSETS (continued)

Pursuant to the Purchase Agreement, Ophir shall, prior to the date (the “Expiry Date”) that is thirty-six (36) months from the date on which Ophir receives an exploration drill permit in respect of the Properties (the “Permit Date”), incur aggregate exploration expenditures of at least $4,000,000 (the “Expenditure Commitment”) in connection with the Properties (being the aggregate of incurring at least $2,000,000 with respect to each of the Lightning Tree Property and the Breccia Gold Property, respectively), provided that not less than $4,000,000 of such Expenditure Commitment shall be incurred in connection with the Property prior to the Expiry Date, such Expenditure Commitment to be made as follows:

• Cumulative Exploration Expenditures of at least $300,000 within one (1) year from the Permit Date (with 50% of such amount to be spent of each of the Breccia Gold Property and the Lightning Tree Property);

• Cumulative Exploration Expenditures of at least $2,000,000 within two (2) years from the Permit Date (with 50% of such amount to be spent of each of the Breccia Gold Property and the Lightning Tree Property); and

• Cumulative exploration expenditures of at least $4,000,000 within three (3) years from the Permit Date (with 50% of such amount to be spent of each of the Breccia Gold Property and the Lightning Tree Property);

Pursuant to the definitive agreement, Ophir has also agreed to grant to DGRM and Canarc, together, a one-time bonus payment (the "Bonus Payment") of $1.00 per ounce of gold or gold equivalent, up to a maximum of $1,000,000 upon the SEDAR filing of a NI 43-101 compliant resource of 1,000,000 ounces of gold or gold equivalent. The Bonus Payment will be payable to DGRM and Canarc on a pro rata basis based on the number of ounces of gold or gold equivalent from each of their respective claims relative to the 1,000,000 ounces as defined in the NI 43-101 compliant technical report to be prepared in respect of the Property.

The Company has agreed to pay a certain eligible third party a finder’s fee in connection with the Transaction as consideration for introducing the Company to the respective Vendors, payable through the issuance of an aggregate of 250,000 common shares in the capital of the Company.

DANIELS HARBOUR PROPERTY, NEWFOUNDLAND

On May 10, 2017, the Company signed a non-binding Letter of Intent to purchase a 100% undivided interest in 42 claims comprising the Daniels Harbour Property located on the Great Northern Peninsula of Newfoundland. Under the proposed terms, the Company can acquire the property for staged cash payments totaling $60,000 ($25,000 paid), issuing 291,667 common shares (291,667 shares issued) to the vendor, and carrying out $100,000 in exploration by the second anniversary of TSX-V acceptance of the agreement. The Vendor shall retain a 3% net smelter royalty (“NSR”) interest. The Company retains the option to buy back 2% of the NSR for $2,000,000. In the event the Company delineates a NI 43-101 compliant resource of 5,000,000 tonnes of ore grade zinc (Grade of at least 7% Zn), the vendor will receive a one- time bonus payment equating to $50,000 payable in cash or shares at the election of the Company on the day of which said report is filed on SEDAR.

The vendor shall retain a 3.0% NSR interest, 2.0% of which can be purchased by the Company for $2,000,000.

On September 10, 2017, the Company entered into an agreement to acquire the Daniels Harbour Property according to the terms of the Letter of Intent.

On September 14, 2017, the Company executed and finalized the formal option agreement to earn a 100% interest in the Daniels Harbour Zinc Property located on the Great Northern Peninsula of Newfoundland, approximately 10 km’s north east of the community of Daniels Harbour.

On February 8, 2018, the Company executed the asset purchase agreement for a 100% interest in the DH Unity Claims consisting of 30 claims (750 hectares) in the Daniels Harbour area, situated nearby the Company’s Daniels Harbour Zinc Property. The Company can purchase a 100% interest in the DH Unity Claims Property for total consideration of 50,000 shares (issued), and a $1,950 (paid) one time cash payment.

On February 14, 2019, the Company and Ubique Minerals Limited (“Ubique”) executed the option agreement which provides for Ophir granting Ubique an option to earn a 55% or greater interest in Ophir’s Daniel’s Harbour Zinc property in western Newfoundland. The property comprises 42 claim units covering an aggregate area of 1,326 hectares, adjoining Ubique’s Daniel’s Harbour property to its west and making for a contiguous property area of more than 4,000 hectares.

OPHIR GOLD CORP. (formerly Minkap Resources Inc.) NOTES TO THE FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTH PERIODS ENDED NOVEMBER 30, 2020 AND 2019 (Expressed in Canadian dollars)

5. EXPLORATION AND EVALUATION ASSETS (continued)

The option agreement requires Ubique to exercise the option by making work and payment commitments as follows:

• On the date of signing of the definitive agreement, $10,000 cash (received) and 500,000 shares of Ubique (received);

• Prior to March 9, 2019, a minimum work expenditure of $12,000 (met) and file an assessment report;

• Prior to September 15, 2019, a minimum work expenditure of $100,000 (met) inclusive of the $12,000 above;

• Prior to the 1-year anniversary from the definitive agreement date, $10,000 in cash (received) and an additional

• 500,000 common shares of Ubique (received);

• Prior to February 28, 2020, make a minimum additional work expenditure of $200,000 (met);

• Prior to the 2-year anniversary from the definitive agreement date issue an additional 200,000 common shares of Ubique;

• Prior to February 28, 2021, a minimum additional work expenditure of $300,000, of which expenditures will include any payments and commitments needed to be made to the underlying vendors of the optioned property;

• Upon Ubique having made the above expenditures and payments; Ubique will have earned a 55% interest in the property. Ubique will be granted the option to earn an additional 15% interest in the property by spending an additional $400,000 on exploration and paying the underlying vendors a cash payment of $40,000 as required by the underlying agreement with the vendors.

Upon Ubique earning either a 55% or 70% interest in the property, the companies will form a joint venture to continue exploration, or Ophir may elect to grant Ubique the right to earn an additional 5% interest in the property for every additional work expenditure of $100,000 to a limit of 95% ownership by Ubique, at which time the agreement provides for Ophir’s interest to be converted to a 2% Net Smelter Royalty (“NSR”). Ubique will then have the right to buy back 1.75% of the NSR for $2,000,000. The underlying vendors are entitled to a NSR of 3% of which 2% may be repurchased for $2,000,000. In addition, the underlying vendors are entitled to a bonus payment in the event that the Operator delineates a NI 43-101 compliant resource of a minimum of 5,000,000 tonnes of ore with a grade of at least 7% zinc.

OPHIR GOLD CORP. (formerly Minkap Resources Inc.) NOTES TO THE FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTH PERIODS ENDED NOVEMBER 30, 2020 AND 2019 (Expressed in Canadian dollars)

6. RELATED PARTY TRANSACTIONS AND BALANCES

Key management personnel include persons having the authority and responsibility for planning, directing, and controlling the activities of the Company as a whole. The Company has determined its key management personnel to be executive and non-executive officers and directors of the Company.

The following table discloses the total compensation incurred to the Company’s key management personnel during the six months ended November 30, 2020 ad 2019:

		For the six months	ended
		November 30, 2020	November	30, 2019
	Footnote	$		$
Shawn Westcott, CEO
Consulting		36,000		32,000
Marco Guidi, CFO
Consulting	(1)	12,000		12,000
Jonathan Armes, President
Consulting		42,000		-
Jonathan Bey, Chairman
Share issuance costs	(2) (4)	10,000		-
Garry Clark, VP Exploration
Consulting	(3)	7,500		-
Darren Smith, Director
Consulting		-		-
Total		107,500		44,000

• 1) Paid to ITCA Consulting., a private company in which Mr. Guidi is a principal.

• 2) Paid to Steel Rose Capital, a private company in which Mr. Bey is the President, CEO and Director.

• 3) Paid to Clark Exploration Consulting Inc., a private company in which Mr. Clark is a principal.

• 4) Share issuance costs related to the private placement completed during the six months ended November 30, 2020.

As at November 30, 2020, included in accounts payable and accrued liabilities is $137,000 (May 31, 2020 - $104,000) payable to directors and officers. Amounts payable to related parties are unsecured, non-interest bearing and are due on demand.

OPHIR GOLD CORP. (formerly Minkap Resources Inc.) NOTES TO THE FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTH PERIODS ENDED NOVEMBER 30, 2020 AND 2019 (Expressed in Canadian dollars)

7. SHARE CAPITAL

• a) Share capital

Authorized

Unlimited common shares without par value.

Issued and outstanding:

On April 23, 2019, the Company consolidated the common shares in the capital of the Company on a 6 for 1 basis. All share and per share information has been retroactively restated to reflect the consolidation.

As at November 30, 2020, the issued share capital is comprised of 31,279,597 common shares (May 31, 2020 – 17,629,599):

Fiscal 2021

• i. On September 22, 2020, the Company completed a non-brokered private placement through the issuance of an aggregate of 9,999,998 units of the company at a price of 7.5 cents per unit for gross proceeds of $749,999.85. Each unit consists of one common share in the capital of the Company and one common share purchase warrant. Each warrant entitles the holder thereof to purchase one common share at a price of $0.15 for a period of 24 months from the closing date of the offering.

A fair value of $231,000 was allocated to the warrants using the Black-Scholes model with the following assumptions: term of 2 years, dividend yield 0%, expected volatility of 100%, and a risk free interest rate of 0.26%.

• ii. On September 23, 2020, the Company issued 2,750,000 shares at a price of $0.145 per share with a value of $398,750 related to property acquisitions for the Breccia Property as described in Note 5. The Company also issued 2,500,000 warrants exercisable at a price of $0.095 for a period of 3 years pursuant to property acquisitions for the Breccia Property as described in Note 5

A fair value of $251,000 was allocated to the warrants using the Black-Scholes model with the following assumptions: term of 2 years, dividend yield 0%, expected volatility of 100%, and a risk free interest rate of 0.26%.

Fiscal 2020

• i. During the year ended May 31, 2020, the Company closed a non-brokered financing of 7,000,000 units of the Company at a price of $0.05 per unit for gross proceeds of $350,000. Each unit consists of one common share in the capital of the Company and one common share purchase warrant. Each warrant will be exercisable into one common share at $0.10 for a period of 24 months from the closing of the financing.

A fair value of $93,000 was allocated to the warrants using the Black-Scholes model with the following assumptions: term of 2 years, dividend yield 0%, expected volatility of 100%, and a risk free interest rate of 1.60%.

OPHIR GOLD CORP. (formerly Minkap Resources Inc.) NOTES TO THE FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTH PERIODS ENDED NOVEMBER 30, 2020 AND 2019 (Expressed in Canadian dollars)

7. SHARE CAPITAL (continued)

b) Stock options

The Company has adopted an incentive stock option plan, which provides that the Board of Directors of the Company may from time to time, in its discretion, and in accordance with the TSX-V requirements, grant to directors, officers, and technical consultants to the Company, non-transferable options to purchase common shares, provided that the number of common shares reserved for issuance will not exceed 10% of the issued and outstanding common shares of the Company. Such options will be exercisable for a period of up to 5 years from the date of grant, and must comply with the rules of the TSXV. The stock options vest at the Board’s discretion.

As at November 30, 2020, the Company had 2,427,960 (May 31, 2020 – 1,062,960) options available for issuance.

• (i) A summary of the changes to the Company’s issued and outstanding stock options is as follows:

		Weighted
		Average
	Number	Exercise
	of Options	Price
Balance, May 31, 2019	866,666	$0.36
Expired/Cancelled	(166,667)	$0.60
Balance, May 31, 2020 and November 30, 2020	699,999	$0.30

(ii) The following table provides additional information about outstanding stock options at November 30, 2020:

		Weighted
		Average
		Remaining	Weighted
	No. of Options	Life	Average	No. of Options Currently
Expiry Date	Outstanding	(Years)	Exercise Price	Exercisable
July20,2021	258,333	0.63	$0.30	258,333
October 12,2022	441,666	1.86	$0.30	441,666

c) Warrants and finder’s warrants

(iii) The following warrants were outstanding and exercisable as at November 30, 2020:

Warrants	Warrants	Exercise	Expiry
Outstanding	Exercisable	Price	Date
8,333	8,333	$0.30	May	17, 2021
4,100,000	4,100,000	$0.10	September 18, 2021,	October
2,000,000	2,000,000	$0.10		11, 2021
9,999,998	9,999,998	$0.15	September	22, 2022
2,500,000	2,500,000	$0.095	September	23,2022
18,608,331	18,608,331

OPHIR GOLD CORP. (formerly Minkap Resources Inc.) NOTES TO THE FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTH PERIODS ENDED NOVEMBER 30, 2020 AND 2019 (Expressed in Canadian dollars)

7. SHARE CAPITAL (continued)

(ii) A summary of the changes to the Company’s issued outstanding share purchase warrants is as follows:

	Number of	Weighted Average
	Warrants	Exercise Price
Balance, May 31, 2019	1,908,889	$0.49
Issued	7,000,000	0.10
Expired	(1,200,556)	0.60
Balance, May 31, 2020	7,708,333	$0.12
Issued	12,499,998	0.14
Exercised	(900,000)	0.10
Expired	(700,000)	0.30
Balance, November 30, 2020	18,608,331	$0.13

8. BASIC AND DILUTED EARNINGS (LOSS) PER SHARE

The calculation of basic and diluted loss per share for the three and six month periods ended November 30, 2020 and 2019 was based on the loss attributable to common shareholders of $134,164 and $150,503 respectively (2019 – $70,774 and $113,730 respectively) and the weighted average number of common shares outstanding of 28,430,147 and 23,000,363 respectively (2019 – 15,838,390 and 13,219,763 respectively). None of the outstanding options and warrants had a dilutive impact during the three and six month periods ended November 30, 2020 and 2019.

9. COMMITMENTS

The Company is obligated to make certain payments and issue shares as described in Note 5 in connection with the acquisition and continued exploration of its exploration and evaluation assets.

10. MANAGEMENT OF CAPITAL

The Company considers its capital to be all components of shareholders’ equity. The Company manages the capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. The Board of Directors does not establish quantitative return on capital criteria, but rather relies on the expertise of management and other professionals to sustain future development of the business.

The Company’s properties are in the exploration and development stage and, as a result, the Company currently has no source of operating cash flow. The Company intends to raise such funds as and when required to complete its projects. There is no assurance that the Company will be able to raise additional funds on reasonable terms. The only sources of future funds presently available to the Company are through the exercise of outstanding stock options or warrants, the sale of equity capital of the Company or the sale by the Company of an interest in any of its properties in whole or in part. The ability of the Company to arrange such financing in the future will depend in part upon the prevailing capital market conditions as well as the business performance of the Company. There can be no assurance that the Company will be successful in its efforts to arrange additional financing, if needed, on terms satisfactory to the Company.

Management reviews is capital management approach on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable.

There were no changes in the Company’s approach to capital management during the six month period ended November 30, 2020. The Company is not subject to externally imposed capital restrictions.

OPHIR GOLD CORP. (formerly Minkap Resources Inc.) NOTES TO THE FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTH PERIODS ENDED NOVEMBER 30, 2020 AND 2019 (Expressed in Canadian dollars)

11. FINANCIAL INSTRUMENTS

The Company is exposed to varying degrees to a variety of financial instrument related risks. The Board approves and monitors the risk management processes. The type of risk exposure and the way in which such exposure is managed is provided as follows:

Credit Risk

Credit risk is the risk of potential loss to the Company if a counterparty to a financial instrument fails to meet its contractual obligations. The Company’s credit risk is primarily attributable to its liquid financial assets including cash. The Company limits the exposure to credit risk by only investing its cash with high-credit quality financial institutions.

Price Risk

The Company holds the common shares of a TSX Venture Exchange traded company. The Company has classified this investment as fair value through profit and loss investments and such common shares are subject to stock market volatility. The value of this financial instrument fluctuates on a daily basis due to external market factors that are not within the control of the Company. The Company monitors the trading value of these common shares in order to ensure that, if in the best interest of the Company, sale of the shares is made under favourable conditions. A 10% increase (decrease) in the share price would increase (decrease) net loss by $4,500 (2019 - $500).

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 manages liquidity risk through the management of its capital structure and financial leverage as described in Note 10.

The Company monitors its ability to meet its short-term exploration and administrative expenditures by raising additional funds through share issuance when required. All of the Company’s financial liabilities have contractual maturities of 30 days or due on demand and are subject to normal trade terms. The Company does not have investments in any asset backed deposits.

In the normal course of business, the Company enters into contracts that give rise to commitments for future minimum payments. The following table summarizes the Company’s significant commitments and corresponding maturities:

		<1 year	1 – 3 Years	Total
Accountspayable and accrued liabilities	$	293,424	-	$293,424

Foreign Exchange Risk

The Company currently does not have significant foreign exchange risk as all of its transactions are in Canadian dollars.

Interest Rate Risk

The Company is not exposed to significant interest rate risk.

Commodity Price Risk

The Company’s ability to raise capital to fund exploration activities is subject to risks associated with fluctuations in the market price of mineral resources. The Company closely monitors commodity prices to determine the appropriate course of action to be taken.

OPHIR GOLD CORP. (formerly Minkap Resources Inc.) NOTES TO THE FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTH PERIODS ENDED NOVEMBER 30, 2020 AND 2019 (Expressed in Canadian dollars)

11. FINANCIAL INSTRUMENTS (continued)

Fair Value Measurements

Financial instruments measured at fair value are classified into one of three levels in the fair value hierarchy according to the relative reliability of the inputs used to estimate the fair values. The three levels of the fair value hierarchy are:

• Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities;

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

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

The fair value of cash and marketable securities is determined based on “Level 1” inputs which consist of quoted prices in active markets for identical assets. As at November 30, 2020, the Company believes that the carrying values of accounts payable and accrued liabilities approximates its fair value because of their nature and relatively short maturity dates or durations.

Assets measured at fair value on a recurring basis were presented on the Company’s Statements of Financial Position as of November 30, 2020, as follows:

		Level 1		Level 2		Level 3	Total
Cash	$	507,350	$	-	$	-	$ 507,350
Marketable securities		45,000		-		-	45,000

12. EVENTS AFTER THE REPORTING PERIOD

• On December 2, 2020, the Company announced that, pursuant to its stock option plan, it has granted an aggregate of 2,150,000 options to purchase common shares in the capital of the Company to certain directors, officers and consultants of the Company, exercisable at a price of $0.19 per share for a period of five (5) years from the date of grant.

• On December 18, 2020, the Company closed a non-brokered private placement through the issuance of an aggregate of 18,336,532 units of the company at a price of 15 cents per unit for gross proceeds of $2,750,480 (the “Offering”).

Each Unit is comprised of one common share in the capital of the Company (each a "Common Share") and one Common Share purchase warrant (each a "Warrant"). Each Warrant entitles the holder thereof to acquire one Common Share at an exercise price of $0.22 at any time on or before December 17, 2022.

In connection with the Offering, Red Cloud Securities Inc. ("Red Cloud") acted as a finder. As consideration for introducing certain purchasers of the Units to the Company, the Company paid to Red Cloud a cash commission of C$55,650 and issued to Red Cloud an aggregate of 371,000 finder warrants (each a "Finder Warrant"). Each Finder Warrant entitles the holder thereof to acquire one Common Share at an exercise price of C$0.15 at any time on or before December 17, 2022. In addition, as consideration for financial advisory services provided by Red Cloud, the Company paid Red Cloud a financial advisory fee of C$51,450 and issued an aggregate of 343,000 advisory warrants (each an "Advisory Warrant") to Red Cloud. The Advisory Warrants have the same terms and conditions as the Finder Warrants.

• On January 5, 2021, the Company announced that, pursuant to its stock option plan, it has granted an aggregate of 500,000 options to purchase common shares in the capital of the Company to certain officers and consultants of the Company, exercisable at a price of C$0.28 per share for a period of five (5) years from the date of grant.