Panther Minerals — Audit Report / Information 2021

Oct 28, 2021

Gold Lion Resources Inc.

Consolidated Financial Statements For the Year Ended June 30, 2021

(Expressed in Canadian dollars)

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INDEPENDENT AUDITOR’S REPORT

To the Shareholders of Gold Lion Resources Inc.:

Opinion

We have audited the consolidated financial statements of Gold Lion Resources Inc. (the “Company”), which comprise the consolidated statements of financial position as at June 30, 2021 and 2020, and the consolidated statements of comprehensive loss, changes in shareholders’ equity and cash flows for the years ended June 30, 2021 and 2020, and notes to the consolidated financial statements, including a summary of significant accounting policies (collectively referred to as the “financial statements”).

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as at June 30, 2021 and 2020, and its financial performance and its cash flows for the years ended June 30, 2021 and 2020 in accordance with International Financial Reporting Standards.

Basis for Opinion

We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Material Uncertainty Related to Going Concern

We draw attention to note 1 in the financial statements which describes matters and conditions that indicate the existence of a material uncertainty that may cast significant doubt about the Company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.

Other Information

Management is responsible for the other information. The other information comprises the information included in Management’s Discussion and Analysis.

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

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

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

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

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

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

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

Auditor's Responsibilities for the Audit of the Financial Statements

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

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

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

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

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

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

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

The engagement partner on the audit resulting in this independent auditor's report is Barry Hartley.

DALE MATHESON CARR‐HILTON LABONTE LLP CHARTERED PROFESSIONAL ACCOUNTANTS Vancouver, Canada October 25, 2021

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Gold Lion Resources Inc. Consolidated Statement of Financial Position

Expressed in Canadian Dollars

	As at As at June 30, June 30, 2021 2020
Assets Current Cash Sales tax recoverable Interest receivable Mining exploration tax credit recoverable (Note 5) Prepaid expenses	$ 2,189,630 $ 1,427,240 45,894 14,097 ‐ 6,293 ‐ 25,040 15,887 88,084
Non‐current assets Exploration and evaluation asset(Notes 4,5)	2,251,411 1,560,754 4,304,901 2,595,549
Total Assets	$ 6,556,312 $ 4,156,303
Liabilities Current Accountspayable(Note 8)	$80,551 $135,308
Total Liabilities	80,551 135,308
Shareholders’ Equity Capital stock (Note 6) Share‐based payment reserve (Note 6) Deficit	8,069,324 4,539,323 1,286,346 470,886 (2,879,909) (989,214)
Total Shareholder’s Equity	6,475,761 4,020,995
Total Liabilities and Shareholders’ Equity	$ 6,556,312 $ 4,156,303

Nature of operations and going concern (Note 1)

Subsequent event (Note 11)

Approved on behalf of the Board on October 25, 2021:

“Borzoo Zare” Borzoo Zare, Director	“Hannah Jin”
	Hannah Jin, Director

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

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Gold Lion Resources Inc. Consolidated Statement of Comprehensive Loss

Expressed in Canadian dollars

	Year ended June 30, 2021 Year ended June 30, 2020
Expenses Consulting fees (Note 8) Legal Audit and accounting Investor relations General and administrative Stock‐based compensation(Notes 6,8)	$ 327,807 $ 259,634 14,911 64,907 25,433 10,198 37,875 7,875 531,110 220,177 321,561 485,051
Other Items Impairment of exploration and evaluation assets (Note 5) Interest income Gain on accountpayable settlement	(1,258,697) (1,047,842) (695,948) ‐ 6,652 15,471 ‐ 54,519
Net and comprehensive loss	(1,947,993) $(977,852)
Lossper common share – basic and diluted	$(0.05) $(0.04)
Weighted average number of common shares outstanding	35,487,589 21,915,232

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

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Gold Lion Resources Inc.

Consolidated Statement of Changes in Shareholders’ Equity

Expressed in Canadian Dollar

Gold Lion Resources Inc. Consolidated Statement of Changes in Shareholders’ Equity Expressed in Canadian Dollar
	Share Capital Number Amount Subscriptions Received Share‐based Payment Reserve Deficit Total
Balance, June 30, 2019 Shares issued for private placement, net issuance cost (Note 6) Shares issued on exercise of warrants (Note 6) Shares issued for properties (Note 6) Stock‐based compensation (Note 6) Options cancelled (Note 6) Net loss	8,800,000 $ 260,000 $ 637,950 $ ‐ $ (25,527) $ 872,423 12,066,000 2,000,053 (637,950) ‐ ‐ 1,362,103 669,750 133,950 ‐ ‐ ‐ 133,950 6,855,320 2,145,320 ‐ ‐ ‐ 2,145,320 ‐ ‐ ‐ 485,051 ‐ 485,051 ‐ ‐ (14,165) 14,165 ‐ ‐ ‐ ‐ ‐ (977,852) (977,852)
Balance, June 30, 2020 Shares issued for private placement, net issuance cost (Note 6) Shares issued on exercise of warrants (Note 6) Shares issued for properties (Note 6) Shares issued for exercise of options (Note 6) Shares issued for services (Note 6) Stock‐based compensation (Note 6) Options cancelled (Note 6) Net loss	28,391,070 4,539,323 ‐ 470,886 (989,214) 4,020,995 6,666,667 1,962,176 ‐ 585,673 ‐ 2,547,849 61,750 12,350 ‐ ‐ ‐ 12,350 2,600,000 1,456,000 ‐ ‐ ‐ 1,456,000 100,000 70,975 ‐ (34,476) ‐ 36,499 50,000 28,500 ‐ ‐ ‐ 28,500 ‐ ‐ ‐ 321,561 ‐ 321,561 ‐ ‐ (57,298) 57,298 ‐ ‐ ‐ ‐ ‐ (1,947,993) (1,947,993)
Balance, June 30, 2021	37,869,487 $ 8,069,324 $ ‐ $ 1,286,346 $(2,879,909) $ 6,475,761

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

Gold Lion Resources Inc. Consolidated Statement of Cash Flows

Expressed in Canadian Dollars

	Year ended Year ended June 30, 2021 June 30, 2020
Operating activities Net loss for the year Item not affecting cash: Stock‐based compensation Shares issued for services Impairment of exploration and evaluation assets Changes in non‐cash working capital balances: Prepaid expense Sales tax recovery Interest receivable Mineral tax credit recovery Accountspayable and accrued liabilities	$ (1,947,993) $ (977,852) 321,561 485,051 28,500 ‐ 695,948 ‐ 72,197 (88,084) (31,797) (13,666) 6,293 (6,293) 25,040 ‐ (54,757) 2,229
Net cash used by operating activities	(885,008) (598,615)
Investing activities Exploration and evaluation expenditures	(949,300) (285,013)
Net cash used by investing activities	(949,300) (285,013)
Financing activities Proceeds from private placement, net of issuance costs Proceeds from exercise of warrants Proceeds from exercise of options	2,547,849 1,362,103 12,350 133,950 36,499 ‐
Net cashprovided by financing activities	2,596,698 1,496,053
Change in cash Cash, beginning ofyear	762,390 612,425 1,427,240 814,815
Cash, end ofyear	$ 2,189,630 $ 1,427,240

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

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Gold Lion Resources Inc. Notes to the Consolidated Financial Statements For the Year Ended June 30, 2021 Expressed in Canadian dollars

1. NATURE OF OPERATIONS AND GOING CONCERN

The Company was incorporated under the Business Corporations Act (British Columbia) on October 5, 2018 under the name “Blue Lion Holdings Inc.”. The Company changed its name to “Gold Lion Resources Inc.” on November 15, 2018. The Company’s head office is located at #305‐1770 Burrard Street, Vancouver, British Columbia, V6J 3G7, and its registered and records office is located #810– 789 West Pender Street, Vancouver, British Columbia, V6C 1H2.

The Company is engaged in the business of mineral exploration in British Columbia, Canada and Idaho, United States.

These financial statements have been prepared on the basis that the Company will continue as a going concern, which assumes that the Company will be able to meet its commitments, continue operations and realize its assets and discharge its liabilities in the normal course of operations for the foreseeable future. During the year ended June 30, 2021, the Company incurred a net loss of $1,947,993 and at June 30, 2021, the Company’s net working capital is $2,170,860.

The Company expects to incur losses in the development of its business, has no source of operating cash flow, and provides no assurances that sufficient funding, including adequate financing, will be available to conduct further exploration and development of its mineral properties These conditions indicate a material uncertainty that may cast significant doubt on the Company’s ability to continue as a going concern. Management intends to finance operating costs with the proceeds from equity financings, and its current working capital; however, there is no assurance that the Company will be successful in these actions.

In assessing whether the going concern assumption is appropriate, management takes into account all available information about the future, which is at least, but not limited to twelve months from the end of the reporting period. Management is aware, in making its assessment, of material uncertainties related to events and conditions that may cast a significant doubt upon the Company's ability to continue as a going concern as described above, and accordingly, the appropriateness of the use of accounting principles applicable to a going concern. These financial statements do not include any adjustments relating to the realization of assets and liquidation of liabilities that might be necessary should the Company be unable to continue as a going concern. Such adjustments could be material.

On March 11, 2020, the World Health Organization declared COVID‐19 a global pandemic and has adversely affected global workforces, financial markets, and the general economy. It is not possible for the Company to determine the duration or magnitude of the adverse results of COVID‐19 nor its effects on the Company’s business or operations. The Company anticipates this could have an adverse impact on its business, results of operations, financial position and cash flows in fiscal 2022.

2. BASIS OF PREPRATION

a) Basis of Presentation

The financial statements for the year ended June 30, 2021 were prepared in accordance with the International Financial Reporting Standards ("IFRS") and interpretations of IFRS as issued by the International Accounting Standards Board (IASB). The accounting policies set out below are in effect in the financial statements and have been applied consistently to all periods presented unless otherwise indicated.

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Gold Lion Resources Inc. Notes to the Consolidated Financial Statements For the Year Ended June 30, 2021 Expressed in Canadian dollars

2. BASIS OF PREPRATION (continued)

b) Basis of Consolidation

These consolidated financial statements include the accounts of the Company and its subsidiaries. The financial statements of the subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. All inter‐company balances, transactions, income and expenses have been eliminated upon consolidation.

Subsidiaries:

Subsidiaries are entities controlled by the Company. 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 affect its returns. Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies in line with those used by the Company.

The principal subsidiaries of the Company as of June 30, 2021 are as follows:

			Ownership	Ownership
			Interest	Interest
		Place of	June 30,	June 30,
Name of subsidiary	Principal activity	Incorporation	2021	2020
1238339 BC LTD. (“123 LTD.”) Mineral exploration		Canada	100%	100%
Gold Lion Resources (NV) Inc. Mineral exploration		USA	100%	100%
Ohadi Geox Inc.	Mineral exploration	USA	100%	‐

Foreign currency translation:

The presentation currency of the financial statements is the Canadian dollar. The functional currency is the currency of the primary economic environment in which the entity operates and has been determined for each entity within the group. The Company considers the functional currency for itself and each of its subsidiaries to be the Canadian dollar.

Transactions in currencies other than the Canadian dollar are recorded at exchange rates prevailing on the date of transaction. At the end of each reporting period, the monetary assets and liabilities of the Company that are denominated in foreign currencies are translated at the rate of exchange at the statement of financial position date, while non‐monetary assets and liabilities are translated at historical rates. Revenues and expenses are translated at the exchange rates approximating those in effect on the date of the transactions. Exchange gains and losses arising on translation of foreign operations with functional currencies different from the presentation currency are included in the statement of comprehensive loss.

Use of estimates and judgments

The preparation of financial statements in conformity with IFRS requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported revenues and expenses during the year. Although management uses historical experience and its best knowledge of the amount, events or actions to form the basis for judgments and estimates, actual results may differ from these estimates. The most significant accounts that require estimates as the basis for determining the stated amounts include t h e e stimate of assumptions around stock‐based awards and payments, recoverability of non‐financial assets, and recognition of deferred income tax amounts. The assessment of the Company’s ability to continue as a going concern and to raise sufficient funds to pay for its ongoing operating expenditures, meet its liabilities for the ensuing year, and to fund planned and contractual exploration programs, involves significant judgment based on historical experience and other factors, including expectation of future events that are believed to be reasonable under the circumstances.

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Gold Lion Resources Inc. Notes to the Consolidated Financial Statements For the Year Ended June 30, 2021 Expressed in Canadian dollars

3. SIGNIFICANT ACCOUNTING POLICIES

• a) Financial Instruments

(i) Classification

The Company classifies its financial instruments in the following categories: at fair value through profit and loss (“FVTPL”), at fair value through other comprehensive income (loss) (“FVTOCI”) or at amortized cost. The Company determines the classification of financial assets at initial recognition. The classification of debt instruments is driven by the Company’s business model for managing the financial assets and their contractual cash flow characteristics.

Equity instruments that are held for trading are classified as FVTPL. For other equity instruments, on the day of acquisition the Company can make an irrevocable election (on an instrument‐by‐instrument basis) to designate them as at FVTOCI. Financial liabilities are measured at amortized cost, unless they are required to be measured at FVTPL (such as instruments held for trading or derivatives) or if the Company has opted to measure them at FVTPL.

The following table shows the classification of the Company’s financial instruments under IFRS 9:

Financial assets/liabilities	Classification
Cash	FVTPL
Receivables	Amortized cost
Accounts payable	Amortized cost
(ii) Measurement

Financial assets and liabilities at amortized cost

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

Financial assets and liabilities at FVTPL

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

Debt investments at FVOCI

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

Equity investments at FVOCI

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

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Gold Lion Resources Inc. Notes to the Consolidated Financial Statements For the Year Ended June 30, 2021 Expressed in Canadian dollars

3. SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES, AND ASSUMPTIONS (continued)

a) Financial Instruments – (continued)

(iii) Impairment of financial assets at amortized cost

The Company recognizes a loss allowance for expected credit losses on financial assets that are measured at amortized cost. At each reporting date, the Company measures the loss allowance for the financial asset at an amount equal to the lifetime expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition. If at the reporting date, the financial asset has not increased significantly since initial recognition, the Company measures the loss allowance for the financial asset at an amount equal to the twelve month expected credit losses. The Company shall recognize in the statement of comprehensive loss, as an impairment gain or loss, the amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognized.

(iv) Derecognition

The Company derecognizes financial assets only when the contractual rights to cash flows from the financial assets expire, or when it transfers the financial assets and substantially all of the associated risks and rewards of ownership to another entity.

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

Gains and losses on derecognition are recognized in profit or loss.

b) Loss per share

Basic loss per share is calculated by dividing the net loss available to common shareholders by the weighted average number of shares outstanding during the year. Diluted earnings per share reflect the potential dilution of securities that could share in earnings of an entity.

In a loss year, potentially dilutive common shares are excluded from the loss per share calculation as the effect would be anti‐dilutive. Basic and diluted loss per share are the same for the periods presented.

c) Income taxes

Income tax expense comprises current and deferred tax. Income tax is recognized in profit or loss except to the extent that it relates to items recognized directly in equity. Current tax expense is the expected tax payable on taxable income for the year, using tax rates enacted or substantively enacted at period end, adjusted for amendments to tax payable with regards to previous years.

Deferred tax is recorded using the liability method, providing for temporary differences, between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Temporary differences are not provided for relating to 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.

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Gold Lion Resources Inc. Notes to the Consolidated Financial Statements For the Year Ended June 30, 2021 Expressed in Canadian dollars

3. SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES, AND ASSUMPTIONS (continued)

c) Income taxes (continued)

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 end of the reporting period. 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.

d) Exploration and evaluation assets

Exploration and evaluation expenditures include the costs of acquiring licenses, costs associated with exploration and evaluation activity, and the fair value (at acquisition date) of exploration and evaluation assets acquired in a business combination.

Pre‐exploration costs are expensed in the period in which they are incurred. All costs related to the acquisition, and exploration of mineral properties are capitalized by property until the commencement of commercial production. As the options are exercisable entirely at the discretion of the optionee, the amounts payable or receivable are not recorded. Option payments are recorded as property costs or recoveries when the payments are made or received. Government tax credits received are recorded as a reduction to the cumulative costs incurred and capitalized on the related property.

Exploration and evaluation assets are assessed for impairment if (i) sufficient data exists to determine technical feasibility and commercial viability, and (ii) facts and circumstances suggest that the carrying amount exceeds the recoverable amount.

Once the technical feasibility and commercial viability of extracting the mineral resource has been determined, the mineral property is considered to be a mine under development and is classified as “Mining Assets”. Exploration and evaluation expenditures accumulated are also tested for impairment before the property costs are transferred to mining asset.

e) Share based payments

The fair value of share options granted to employees are measured at the fair value of the instruments issued and amortized over the vesting periods. Share‐based payments to non‐employees are measured at the fair value of goods or services received or the fair value of the equity instrument issued, if it is determined the fair value of the goods or services cannot be reliably measured, and are recorded at the date the goods or services are received. The corresponding amount is recorded to the share‐based payments reserve.

The fair value of options is determined using the Black‐Scholes Option Pricing Model. The number of shares and options expected to vest is reviewed and adjusted at the end of each reporting period such that the amount recognized for services received as consideration for the equity instruments granted, shall be based on the number of equity instruments that eventually vest. The value relating to options which are cancelled or expire unexercised is moved to deficit.

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Gold Lion Resources Inc. Notes to the Consolidated Financial Statements

For the Year Ended June 30, 2021 Expressed in Canadian dollars

3. SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES, AND ASSUMPTIONS (continued)

f) Impairment of non‐current assets

Non‐current assets (which consist of exploration and evaluation assets) are reviewed for possible impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If any indication of impairment exists, an estimate of the asset’s recoverable amount is calculated. The recoverable amount is determined as the higher of the fair value less direct costs to sell and the asset value in use (being the present value of the expected future cash flows of the asset). An impairment loss is recognized for the amount by which the carrying amount exceeds its recoverable amount.

g) New standards and interpretations not yet applied

New accounting standards and amendments to existing accounting standards that have been issued but have future effective dates are either not applicable or are not expected to have a significant impact on the Company’s financial statements.

4. ACQUISITION OF OHADI GEOEX INC.

On July 15, 2020, the Company acquired, through the purchase of Ohadi GeoEx Inc. (“Ohadi”), a private Idaho corporation, four gold properties which lie to the south of the Company’s South Orogrande property located near Dixie, Idaho.

Under the terms of the agreement, the Company issued 2,600,000 common shares with a fair value of $0.56 per share to the shareholders of Ohadi.

This acquisition did not meet the definition of a business under IFRS 3; therefore the acquisition of Ohadi was treated as an acquisition of assets. The fair value of the assets acquired as at the date of acquisition were as follows:

as follows:
Net assets acquired
Exploration and evaluation assets	$	1,456,000
Consideration
Fair value of 2,600,000 common shares issued(Notes 5 and 6)	$	1,456,000

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Gold Lion Resources Inc. Notes to the Consolidated Financial Statements

For the Year Ended June 30, 2021 Expressed in Canadian dollars

5. EXPLORATION AND EVALUATION ASSET

Cuteye Group Properties

On January 24, 2020, the Company completed the acquisition of the Cuteye Group of Properties for $1,800,000 (Note 6). The properties include the Mister Jay, Lady Jane, Lama, and Missus Jay claim blocks near Glenora, British Columbia.

Fairview Property

On December 10, 2018, the Company entered into an agreement with Christopher Paul, Oliver Friesen, and 1132902 BC Ltd. to option a 100% interest in the Fairview Property (the “Property”). The Property consists of two mineral titles located in the Kamloops Mining District, British Columbia.

The agreement is subject to a 2% net smelter return (“NSR”). The Company may purchase one third of the NSR for total consideration of $1,000,000 at any time prior to such time when:

(i) the concentrator processing ores, for other than testing purposes, has operated for a period of 45 consecutive days at an average rate of not less than 70% of design capacity; or

(ii) if a concentrator is not erected on the Property, when ores have been produced for a period of 45 consecutive production days at rate of not less than 70% of mining rate specified in a study and mine plane recommending placing the Property in production.

The option will terminate if the Company does not complete all the following within the relevant time period:

(i) Make cash payment of $32,000 upon 60 days of signing of the agreement (paid);

(ii) Incur minimum exploration expenditures of $75,000 by December 31, 2019 (incurred);

(iii) Issuing an aggregate of 255,320 common shares between January 1, 2020 and December 31, 2020 (issued, notes 6 and 8);

(iv) Incur exploration expenditures of $250,000 between January 1, 2021 and December 31, 2021; and

(v) Incur exploration expenditures of $500,000 between January 1, 2022 and December 31, 2022.

Robber Gulch/South Orogrande/Erikson Ridge

On April 7, 2020, the Company’s wholly‐owned subsidiary, Gold Lion Resources (NV) Inc., entered into an option agreement to earn 100% interest in the South Orogrande, Robber Gulch, and Erikson Ridge gold projects (the “Projects”) in Idaho from Bronco Creek Exploration Inc., a wholly‐owned subsidiary of EMX Royalty Corp (“EMX”).

Each Project is covered by a separate exploration and option agreement (each, an “Agreement”). Pursuant to each Agreement, the Company can exercise its option to earn 100% interest in the respective Project by completing the following milestones on or before the dates indicated:

(i) Make cash payment of US$15,000 and issue 200,000 common shares upon of signing of the agreement (paid and issued, Note 6);

(ii) Make cash payment of US$25,000 and incur minimum exploration expenditure of US$100,000 on or before July 7, 2021 (paid and met subsequent to the year end);

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Gold Lion Resources Inc. Notes to the Consolidated Financial Statements

For the Year Ended June 30, 2021 Expressed in Canadian dollars

5. EXPLORATION AND EVALUATION ASSET (continued)

Robber Gulch/South Orogrande/Erikson Ridge (continued)

(iii) Make cash payment of US$40,000 and issue 250,000 common shares and incur minimum exploration expenditure of US$200,000 on or before April 7, 2022;

(iv) Make cash payment of US$70,000 and incur minimum exploration expenditure of US$300,000 on or before April 7, 2023;

(v) Make cash payment of US$150,000 and incur minimum exploration expenditure of US$400,000 on or before April 7, 2024; and

(vi) Make cash payment of US$300,000 and issue 500,000 common shares and incur minimum exploration expenditure of US$500,000 on or before April 7, 2025;

For cash option payments beginning on the 2nd anniversary to the 5th anniversary of the effective date, the Company may elect to pay half of the value of the option payments through the issuance of common shares.

Upon the Company’s exercise of the option for a Project, EMX will retain a 3.5% NSR royalty on the Project, of which the Company may purchase up to 1.0% of the NSR (the first 0.5% for 350 ounces of gold or cash equivalent prior to the third anniversary after exercise of the option, then the remaining 0.5% can be purchased at any time thereafter, until commercial production, for 1,150 ounces of gold or cash equivalent). The Company may, at its election, make up to one‐half of the payment for the first 0.5% through the issuance of common shares. After exercise of the option, annual advance royalty (“AAR”) payments are due starting at US$30,000 on the first anniversary of the exercise of the option and increasing by US$10,000 per year to a maximum of US$80,000 per year. All AAR payments cease upon commencement of commercial production from a Project.

In addition, the Company will make milestone payments for a given Project to EMX consisting of:

• 300 ounces of gold upon completion of a Preliminary Economic Assessment,

• 550 ounces of gold upon completion of a Pre‐Feasibility Study, and

• 650 ounces of gold upon completion of a Feasibility Study.

The Company may elect to make any such milestone payments in cash or in kind as refined bullion.

As of June 30, 2021, management decided not to continue with the Robber Gulch option agreement and subsequent to June 30, 2021 provided notice to Bronco Creek Exploration Inc. of its intention to terminate the option agreement. Accordingly, at June 30, 2021, the Company recognized an impaired charge of $695,948 to reduce the exploration and evaluation assets at Rubber Gulch to $nil.

South Orogrande Extension

On July 15, 2020, the Company acquired through the purchase of Ohadi GeoEx Inc., four additional gold properties, The Doc, Majestic, Mammoth, and Red Cloud. which lie to the south of Gold Lion’s South Orogrande property (Note 4 and 6).

14

Gold Lion Resources Inc. Notes to the Consolidated Financial Statements

For the Year Ended June 30, 2021 Expressed in Canadian dollars

5. EXPLORATION AND EVALUATION ASSET (continued)

The continuity of the Company’s exploration and evaluation assets is as follows:

	Fairview	Robber Gulch	South Orogrande	**Erickson Ridge **	**Cuteye **		Total
Acquisition Costs
Balance, beginning at June 30, 2019	$ 32,000	$ ‐	$ ‐	$ ‐	$	‐	$	32,000
Incurred during the year	135,320	91,200	91,200	91,200	1,800,000		2,208,920
Balance, June 30, 2020	167,320	91,200	91,200	91,200	1,800,000		2,240,920
Deferred Exploration Costs
Balance, beginning at June 30, 2019	83,467	‐	‐	‐		‐		83,467
Equipment rental	‐	15,900	3,695	3,079		‐		22,674
Geological and geophysical	‐	24,375	79,465	4,166		‐		108,006
Management fees	‐	4,284	427	356		‐		5,067
Project preparation and support	‐	2,970	1,980	1,650		‐		6,600
Sampling and analysis costs	‐	62,592	13,650	11,375		‐		87,617
Travel and accommodations	‐	8,544	2,900	2,237		‐		13,681
Report and data compilation	‐	10,080	‐	‐		‐		10,080
Taxes and mineral claims	‐	5,549	1,824	23,104		‐		30,477
Camp costs and field expenses	‐	‐	12,000	‐		‐		12,000
Mining exploration tax credit	(25,040)	‐	‐	‐		‐		(25,040)
Balance, June 30, 2020	58,427	134,294	115,941	45,967		‐		354,629
Impairment	‐	‐	‐	‐		‐		‐
Total	$ 225,747	$ 225,494	$ 207,141	$ 137,167	$ 1,8000,000		$ 2,595,549

Gold Lion Resources Inc. Notes to the Consolidated Financial Statements For the Year Ended June 30, 2021 Expressed in Canadian dollars

5. EXPLORATION AND EVALUATION ASSET (continued)

						South Orogrande
	Fairview	Robber Gulch	South Orogrande	**Erickson Ridge **	**Cuteye **	Extension	Total
Acquisition Costs
Balance, June 30, 2020	$ 167,320	$ 91,200	$ 91,200	$ 91,200	$ 1,800,000	$ ‐	$ 2,240,920
Incurred during the year	‐	‐	‐	‐	‐	1,456,000	1,456,000
Balance, June 30, 2021	167,320	91,200	91,200	91,200	1,800,000	1,456,000	3,696,920
Deferred Exploration Costs
Balance, June 30, 2020	58,427	134,294	115,941	45,967	‐	‐	354,629
Drilling		102,386	‐	‐	‐	‐	102,386
Trenching		20,000	‐	‐	‐	‐	20,000
Equipment rental	‐	60,191	8,617	23,385	‐	‐	92,194
Geological and geophysical	‐	32,501	32,200	76,381	‐	‐	141,082
Project preparation and support	‐	61,615	21,839	30,484	‐	‐	113,938
Permitting	‐	14,546	35,363	25,632	‐	‐	75,540
Sampling and analysis costs	‐	22,861	20,759	‐	‐	‐	43,620
Travel and accommodations	‐	46,990	19,299	11,378	‐	‐	77,667
Report and data compilation	‐	11,777	48,405	7,451	‐	‐	67,633
Taxes and mineral claims	‐	43,923	79,034	30,395	‐	6,435	159,787
Camp costs and field expenses	‐	21,375	‐	‐	‐	‐	21,375
Reclaimation costs	‐	28,031	‐	‐	‐	‐	28,031
Miscellaneous	‐	4,258	‐	1,789	‐	‐	6,047
Balance, June 30, 2021	58,427	604,748	381,458	252,862	‐	6,435	1,303,929
Impairment	‐	(695,948)	‐	‐	‐	‐	(695,948)
Total exploration and evaluation	$ 225,747	$ ‐	$ 472,657	$ 344,062	$ 1,800,000	$ 1,462,435	$ 4,304,901

Gold Lion Resources Inc. Notes to the Consolidated Financial Statements

For the Year Ended June 30, 2021 Expressed in Canadian dollars

6. SHARE CAPITAL

Authorized and Issued:

• Unlimited common shares without par value; and

• 37,869,487 shares issued and outstanding

• 2,074,950 shares are held in escrow and will be released by November 13, 2022.

Issuances:

During the period from July 1, 2019 to June 30, 2021 the Company issued the following shares:

• On July 3, 2019, the Company issued an aggregate of 10,066,000 units at $0.10 per unit for gross proceeds of $1,006,600. Each unit was comprised of one common share of the Company and one‐half of one common share purchase warrant, with each whole common share purchase warrant entitling the holder to purchase an additional common share at a price of $0.20 to July 3, 2021. The Company paid $6,547 in finder’s fees.

• ‐ On January 24, 2020, 6,000,000 common shares with a fair value of $0.30 were issued as part of asset purchase agreement for a total consideration of $1,800,000 (Note 5).

• On April 7, 2020, 600,000 common shares with a fair value of $0.35 per share were issued as part of an option agreement for a total consideration of $210,000 (Note 5).

• On May 22, 2020, the Company issued an aggregate of 2,000,000 units at $0.50 for proceeds of $1,000,000. Each unit is comprised of one common share of the Company and one common share purchase warrant entitling the holder to purchase an additional common share at a price of $0.75 to May 22, 2022.

• On June 4, 2020, 255,320 common shares with a fair value of $0.53 per share were issued to the former CEO of the Company as part of an option agreement for total consideration of $135,320 (Notes 5).

• During year ended June 30, 2020, 669,750 common shares were issued at $0.20 as part of warrant exercise for proceeds of $133,950.

• During the year ended June 30, 2020, the Company cancelled 5,500 warrants.

• On July 10, 2020, the Company issued 50,000 common shares at $0.57 per share as part of shares for services to a consultant.

• On July 15, 2020, 2,600,000 common shares with a fair value of $0.56 were issued as part of asset purchase agreement for a total consideration of $1,456,000 (Notes 4 and 5).

• On July 16, 2020, 100,000 common shares were issued at $0.37 upon exercise of options for proceeds of $36,499 (Note 8).

• On November 2, 2020, as part of a prospectus offering, the Company issued 6,666,667 units at a price of $0.45 per unit for gross proceeds of $3,000,000. Each unit consists of one common share of the Company and one common share purchase warrant entitling the holder to purchase one common share of the Company at a price of $0.60 to November 2, 2022 (Note 8). A value of $466,667 was attributable to the share purchase warrants using the residual method. The Company paid $452,151 and issued 455,875 broker warrants as finder’s fees. Each broker warrant is exercisable to purchase one common share of the Company for a period of two years at a price of $0.45. The value of the broker warrants was determined to be $119,006 using the Black‐Scholes Option Pricing Model using the following assumptions: risk‐free rate of 0.25%, expected life of two years, expected volatility of 150%, and dividend yield of nil.

• During the year ending June 30, 2021, 61,750 common shares were issued at $0.20 as part of warrant exercises for proceeds of $12,350.

17

Gold Lion Resources Inc. Notes to the Consolidated Financial Statements

For the Year Ended June 30, 2021 Expressed in Canadian dollars

6. SHARE CAPITAL (continued)

Stock Option

The Company has adopted a stock option plan, pursuant to which the board of directors of the Company may from time to time, in its discretion, and in accordance with the Canadian Securities Exchange (“Exchange”) 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 exercisable for a period of up to five years from the date of issuance.

On August 20, 2019, the Company issued 1,850,000 stock options at a price of $0.10 per share, expiring August 20, 2024. The estimated fair value of the options was $174,696 which was determined using the Black‐Scholes Option Pricing Model. with the following assumptions: an annualized volatility of 170%; an expected life of 5 years; a dividend yield rate of 0%; and a risk‐free interest rate of 1.19%.

During the year ended June 30, 2020, 150,000 options were cancelled, and a value of $14,165 was transferred to deficit.

On February 18, 2020 the Company issued 100,000 stock options at a price of $0.365 per share, expiring February 18, 2025. The estimated fair value of the options was $34,476 which was determined using the Black‐ Scholes Option Pricing Model with the following assumptions: an annualized volatility of 170%; an expected life of 5 years; a dividend yield rate of 0%; and a risk‐free interest rate of 1.34%.

On May 15, 2020 the Company issued 650,000 stock options at a price of $0.45 per share, expiring May 15, 2025. The options vested on grant. The estimated fair value of the options was $275,879 which was determined using the Black‐Scholes Option Pricing Model with the following assumptions: an annualized volatility of 170%; an expected life of 5 years; a dividend yield rate of 0%; and a risk‐free rate of 0.37%.

On November 9, 2020, the Company issued 150,000 stock options at a price of $0.40 per share, expiring November 8, 2025. The estimated fair value of the options was $54,445 which was determined using the Black‐ Scholes Option Pricing Model with the following assumptions: an annualized volatility of 150%; an expected life of 5 years; a dividend yield rate of 0%; and a risk‐free interest rate of 0.41%.

On November 30, 2020, the Company issued 250,000 stock options at a price of $0.285 per share, expiring November 29, 2025. The estimated fair value of the options was $64,648 which was determined using the Black‐Scholes Option Pricing Model with the following assumptions: an annualized volatility of 150%; an expected life of 5 years; a dividend yield rate of 0%; and a risk‐free interest rate of 0.37%.

On April 14 2021, the Company issued 1,000,000 stock options at a price of $0.185 per share, expiring April 13, 2026. The estimated fair value of the options was $168,116 which was determined using the Black‐Scholes Option Pricing Model with the following assumptions: an annualized volatility of 150%; an expected life of 5 years; a dividend yield rate of 0%; and a risk‐free interest rate of 0.77%.

On May 28, 2021, the Company issued 85,000 stock options at a price of $0.225 per share, expiring May 27, 2026. The estimated fair value of the options was $17,369 which was determined using the Black‐Scholes Option Pricing Model with the following assumptions: an annualized volatility of 150%; an expected life of 5 years; a dividend yield rate of 0%; and a risk‐free interest rate of 0.74%.

On May 31, 2021, the Company issued 85,000 stock options at a price of $0.22 per share, expiring May 30, 2026. The estimated fair value of the options was $16,983 which was determined using the Black‐Scholes Option Pricing Model with the following assumptions: an annualized volatility of 150%; an expected life of 5 years; a dividend yield rate of 0%; and a risk‐free interest rate of 0.75%.

18

Gold Lion Resources Inc. Notes to the Consolidated Financial Statements

For the Year Ended June 30, 2021 Expressed in Canadian dollars

6. SHARE CAPITAL (continued)

On May 27, 2021 the Company cancelled 135,000 stock options at a price of $0.45. The estimate fair value of the options was $57,298 which was transferred from the reserve account to deficit.

The following table summarizes information about stock options outstanding:

June 30, 2021	June 30, 2020
Number of Options Exercise Price Exercisable 1,700,000 $0.10 1,700,000 ‐ ‐ ‐ 515,000 $0.45 515,000 150,000 $0.40 150,000 250,000 $0.285 250,000 1,000,000 $0.185 1,000,000 85,000 $0.225 85,000 85,000 $0.22 85,000	Number of Options Exercise Price Exercisable 1,700,000 $0.10 1,700,000 100,000 $0.365 100,000 650,000 $0.45 515,000 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐

As at June 30, 2021, 3,785,000 (2020: 2,450,000) options outstanding had a weighted average exercise price of $0.20 (2020: $0.20) and a weighted average life of 3.89 (2020: 4.15) years.

Warrants

June 30, 2021	June 30, 2020
Number of Warrants Exercise Price Exercisable 4,296,000 $0.20 4,296,000 2,000,000 $0.75 2,000,000 6,666,667 $0.60 6,666,667 455,875 $0.45 455,875	Number of Warrants Exercise Price Exercisable 4,357,750 $0.20 4,357,750 2,000,000 $0.75 2,000,000 ‐ ‐ ‐ ‐ ‐ ‐

As at June 30, 2021, 13,418,542 (2020: 6,375,750) warrants outstanding had a weighted average exercise price of $0.49 (2020: $0.37) and weighted average life of 0.85 (2020: 1.29) years.

Share‐based payment reserve

The stock option reserve account records items recognized as stock‐based compensation expense until such time that the stock options are exercised, at which time the corresponding amount will be transferred to share capital. If the options expire unexercised or are cancelled, the amount is transferred to deficit.

19

Gold Lion Resources Inc. Notes to the Consolidated Financial Statements

For the Year Ended June 30, 2021 Expressed in Canadian dollars

7. INCOME TAXES

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

	June 30, 2021	June 30, 2020
Loss before income taxes	$ (1,947,993)	$ (977,852)
Statutorytax rate	27%	27%
Expected income tax recovery at statutory rates	(525,958)	(264,020)
Non‐deductible expenses and other	(4,090)	129,196
Increase in unrecognized deferred taxes	530,048	134,824
Deferred income tax recovery	$ ‐	$ ‐

The significant components of the Company’s deferred income tax assets are as follows:

	June 30, 2021	June 30, 2020
Deferred income tax assets:
Non‐capital losses carried forward	$ 362,321	$ 140,302
Share issuance costs	111,551	1,414
Exploration and evaluation assets	194,092	‐
Acquisition costs	3,800	‐
Total unrecognized deferred income tax assets	$671,764	$141,716

Deferred tax assets have not been recognized as it is not probable that future taxable income will be available against which the Company can utilize the benefits from the deductible temporary differences and unused tax losses.

As at June 30, 2021, the Company has non‐capital losses of $1,341,930, which may be carried forward to apply against future years income tax for Canadian income tax purposes.

The non‐capital losses expire as follows:

The non‐capital losses expire as follows:
		Total
2040	$	303,888
2041		1,038,042
Total	$	1,341,930

8. RELATED PARTY TRANSACTIONS

During the year ended June 30, 2021, the Company carried out the following transactions with related parties:

		June 30, 2021		June 30, 2020
Consulting fees to former CEO or to a company controlled by the former
CEO	$	22,500	$	13,750
Consulting fees to the CFO or to a company controlled by the CFO	$	9,115	$	‐
Share‐based compensation (Note 6)	$	139,369	$	357,722
Exploration fees paid to a company controlled by the CEO	$	73,798	$	‐
Consulting fees paid to Directors	$	11,900	$	14,500
Proceeds from the former CEO as part of a private placement (Note 5)	$	49,375	‐	‐
Proceeds from the Company’s directors as part of an option exercise
(Note 6)	$	36,499	$	‐
Shares issued to CEO aspart ofpropertyoptionpayment(Note 5)	$	‐	$	135,320

20

Gold Lion Resources Inc. Notes to the Consolidated Financial Statements For the Year Ended June 30, 2021 Expressed in Canadian dollars

9. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

At June 30, 2021, accounts payable balance to related parties consist of $62,688 (June 30, 2020 ‐ $137,216) owed to companies controlled by the officers. These amounts are unsecured, non‐interest bearing and due on demand.

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 values of accounts payable approximate their carrying values due to the short‐ term maturity of these instruments.

The fair value of the Company’s financial instruments has been classified within the fair value hierarchy as at June 30, 2021 as follows:

June 30, 2021	Level 1	Level 2	Level 3	Total
Financial Instrument Cash Accountspayable	$ 2,189,630 $ 80,551	‐ ‐	‐ ‐	$ 2,189,630 $ 80,551

June 30, 2020	Level 1	Level 2	Level 3	Total
Financial Instrument Cash Accountspayable	$ 1,427,240 $ 135,308			$ 1,427,240 $ 135,308

The Company is exposed to varying degrees to a variety of financial instrument related risks:

Foreign exchange risk

Foreign currency risk is the risk that the fair values of future cash flows of a financial instrument will fluctuate because they are denominated in currencies that differ from the Company’s functional currency. The Company’s functional and reporting currency is the Canadian dollar and major purchases are transacted in Canadian dollars. As a result, the Company’s exposure to foreign currency risk is minimal.

Credit risk

Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. The Company’s primary exposure to credit risk is in its cash. The Company’s cash is largely held in large Canadian financial institutions. The Company maintains cash deposits with financial institution. The Company believes it is not exposed to any significant credit risk.

Interest rate risk

Interest rate risk is the risk the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Financial assets and liabilities with variable interest rates expose the Company to cash flow interest rate risk. The Company does maintain bank accounts which earn interest at variable rates, and does not believe it is currently subject to any significant interest rate risk.

21

Gold Lion Resources Inc. Notes to the Consolidated Financial Statements For the Year Ended June 30, 2021 Expressed in Canadian dollars

9. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (continued)

Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company manages its liquidity risk by forecasting cash flows from operations and anticipating any investing and financing activities. Management and the Board of Directors are actively involved in the review, planning and approval of significant expenditures and commitments. The Company’s access to financing is always uncertain. There can be no assurance of continued access to significant equity funding. The Company believes it has adequate cash at June 30, 2021 to reduce its risk.

Commodity risk

The Company is exposed to price risk with respect to commodity. Commodity price risk is defined as the potential adverse impact on earnings and economic value due to commodity price movements and volatilities.

The Company closely monitors commodity prices to determine the appropriate course of action to be taken by the Company. Currently, the Company’s exposure to commodity risk is minimal.

Global economic risk

General global economic conditions, including, without limitation, general levels of economic activity, fluctuations in the market prices of securities, participation by other investors in the financial markets, economic uncertainty, national and international political circumstances, natural disasters, public health crises (such as the recent global outbreak of a novel coronavirus, COVID‐19, refer to note below) and other events outside of our control, may affect the activities of the Company.

COVID‐19

Since December 31, 2019, the outbreak of the novel strain of coronavirus, specifically identified as “COVID‐19”, has resulted in governments worldwide enacting emergency measures to combat the spread of the virus. Global equity markets have experienced significant volatility and weakness.

The Company may face future disruption to operations, supply chain delays, travel and trade restrictions and impact on economic activity in affected countries or regions can be expected and can be difficult to quantify. Such pandemics or diseases represent a serious threat to maintaining a skilled workforce industry and could be a major health‐care challenge for the Company. There can be no assurance that the Company’s personnel will not be impacted by these pandemic diseases. In addition, the COVID‐19 pandemic has created a dramatic slowdown in the global economy. The duration of the COVID‐19 outbreak and the resultant travel restrictions, social distancing, Government response actions, business closures and business disruptions, can all have an impact on the Company’s operations and access to capital. There can be no assurance that the Company will not be impacted by adverse consequences that may be brought about by the COVID‐19 pandemic on global financial markets may reduce resource prices, share prices and financial liquidity and thereby that may severely limit the financing capital available.

10. CAPITAL MANAGEMENT

The Company’s objective when managing capital is to safeguard the Company’s ability to continue as a going concern such that it can provide returns for shareholders and benefits for other stakeholders. The management of the capital structure is based on the funds available to the Company in order to support the acquisition, exploration and development of mineral properties and to maintain the Company in good standing with the various regulatory authorities. In order to maintain or adjust its capital structure, the Company may issue new shares, sell assets to settle liabilities, issue debt instruments or return capital to its shareholders.

The Company monitors its capital structure and makes adjustments in light of changes in economic conditions and the risk characteristics of the underlying assets. There were no changes in the Company’s approach to capital management during the year. The Company is not subject to externally imposed capital requirements.

22

Gold Lion Resources Inc. Notes to the Consolidated Financial Statements

For the Year Ended June 30, 2021 Expressed in Canadian dollars

11. SUBSEQUENT EVENT

On July 14, 2021, the Company provided Bronco Creek Exploration, Inc. notice of termination for the Robber Gulch Project Agreement dated April 7, 2020 (Note 5).

23