Playfair Mining Ltd. — Interim / Quarterly Report 2020

Oct 30, 2020

PLAYFAIR MINING LTD.

CONDENSED INTERIM FINANCIAL STATEMENTS (Unaudited) (Expressed in Canadian Dollars)

FOR THE SIX MONTH PERIOD ENDED AUGUST 31, 2020

NOTICE OF NO AUDITOR REVIEW OF CONDENSED 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 condensed interim financial statements, they must be accompanied by a notice indicating that an auditor has not reviewed the financial statements.

The accompanying unaudited condensed interim financial statements of the Company have been prepared by and are the responsibility of the Company’s management.

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.

PLAYFAIR MINING LTD.

CONDENSED INTERIM STATEMENTS OF FINANCIAL POSITION (Unaudited - Expressed in Canadian Dollars) AS AT

	August 31, 2020	February 29, 2020
ASSETS Current Cash Receivables Prepaid expenses (Note 6) Advances receivable(Note 3) Equipment(Note 4) Exploration and evaluation assets(Note 5)	$ 389,649 17,636 20,000 427,285 41,251 189 610,382 $ 1,079,107	$ 10,123 5,271 68,805 84,199 88,751 210 511,825 $ 684,985
LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIENCY) Current Accounts payable and accrued liabilities (Note 6) Shareholders’ Equity (Deficiency) Share capital (Note 7) Subscriptions receivable (Note 7) Reserves (Note 7) Deficit	$ 142,346 31,919,291 (235,000) 316,971 (31,064,501) 936,761 $ 1,079,107	$ 239,983 31,156,096 (180,000) 395,778 (30,926,872) 445,002 $ 684,985

Nature and continuance of operations (Note 1) Subsequent events (Note 11)

Approved and authorized by the Board on October 29, 2020.

Donald G. Moore

Director D. Neil Briggs Director

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

PLAYFAIR MINING LTD.

CONDENSED INTERIM STATEMENTS OF LOSS AND COMPREHENSIVE LOSS (Unaudited - Expressed in Canadian Dollars) FOR THE

	Six Month Period Ended August 31, 2020	Six Month Period Ended August 31, 2019	Three Month Period Ended August 31, 2020	Three Month Period Ended August 31, 2019
GENERAL AND ADMINISTRATIVE EXPENSES Amortization (Note 4) Filing fees Investor relations Management fees Office and miscellaneous Professional fees Property costs Rent Shareholder communications Share-based payments (Note 7) Telephone Transfer agent and regulatory fees Travel and trade show Loss and comprehensive loss for the period	$ 21 10,680 10,500 30,000 15,658 15,000 5,312 17,728 26,199 6,615 3,782 3,415 2,996 $ (147,906)	$ 28 11,431 4,250 - 16,384 24,512 - 22,945 13,945 - - 2,567 5,748 $ (101,810)	$ 11 10,680 10,500 15,000 15,498 11,500 5,312 11,370 10,195 6,615 3,782 1,809 - $ (102,272)	$ 14 2,602 2,350 - 10,896 13,512 - 9,510 1,490 - - 1,472 2,787 $ (44,633)
Basic and diluted loss per common share	$ (0.01)	$ (0.01)	$ (0.01)	$ (0.01)
Weighted average number of common shares outstanding	81,834,062	64,302,812	86,533,791	72,331,617

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

PLAYFAIR MINING LTD.

CONDENSED INTERIM STATEMENTS OF CASH FLOWS (Unaudited - Expressed in Canadian Dollars)

FOR THE SIX MONTH PERIOD ENDED AUGUST 31

	2020	2019
CASH FLOWS FROM OPERATING ACTIVITIES Loss for the period Items not affecting cash: Amortization Shared-based payments (Note 7) Changes in non-cash working capital items: Receivables Prepaid expense Accounts payables and accrued liabilities Net cash used in operating activities CASH FLOWS FROM INVESTING ACTIVITIES Advance to related party Exploration and evaluation expenditures Net cash provided by/(used in) investing activities CASH FLOWS FROM FINANCING ACTIVITIES Issuance of common shares Subscription advance/(receivable) Share issuance costs Net cash provided by financing activities Change in cash for the period Cash, beginning of period Cash, end of period	$ (147,906) 21 6,615 (12,365) 48,805 (50,239) (155,069) 47,500 (145,955) (98,455) 637,500 - (4,450) 633,050 379,526 10,123 $ 389,649	$ (101,810) 28 - (1,656) 2,961 47,231 (53,246) (14,310) (205,861) (220,171) 435,000 (42,500) - 392,500 119,083 4,798 $ 123,881

Supplemental disclosure with respect to cash flows (Note 8)

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

PLAYFAIR MINING LTD.

CONDENSED INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited - Expressed in Canadian Dollars)

		Share Capital Number Amount	Share Capital Number Amount	Reserves	Subscriptions receivable	Deficit	Total
		Number
Balance at February 28, 2019 Issued for: Private placement Shares issued for property acquisition Expiry of options Loss for the period Balance at August 31, 2019 Issued for: Private placement Shares issued for property acquisition Exercise of stock options Share issue costs Share-based payments Loss for the year Balance at February 29, 2020 Issued for: Private placement Exercise of stock options Share issue costs Share-based payments Expiry of options Loss for the year Balance at August 31, 2020		61,350,095 8,700,000 3,000,000 - - 73,050,095 - 3,000,000 500,000 - - - 76,550,095 12,000,000 1,225,000 - - - - 89,775,095	$ 30,440,491 435,000 135,000 - - $ 31,010,491 - 105,000 47,491 (6,886) - - $ 31,156,096 600,000 167,645 (4,450) - - - $ 31,919,291	$ 327,488 - - (1,137) - $ 326,351 - - (22,491) - 91,918 - $ 395,778 - (75,145) - 6,615 (10,277) - $ 316,971	$ (180,000) (42,500) - - - $ (222,500) 42,500 - - - - - $ (180,000) (55,000) - - - - - $ (235,000)	$ (30,611,941) - - 1,137 (101,810) $ (30,712,614) - - - - - (214,258) $ (30,926,872) - - - - 10,277 (147,906) $ (31,064,501)	$ (23,962) 392,500 135,000 - (101,810) $ 401,728 42,500 105,000 25,000 (6,886) 91,918 (214,258) $ 445,002 545,000 92,500 (4,450) 6,615 - (147,906) $ 936,761

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

PLAYFAIR MINING LTD. NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS (Unaudited - Expressed in Canadian Dollars) FOR THE SIX MONTH PERIOD ENDED AUGUST 31, 2020

1. NATURE AND CONTINUANCE OF OPERATIONS

Playfair Mining Ltd. (the “Company”) is an exploration stage company incorporated under the laws of the Province of British Columbia on August 26, 1988. The Company has not yet determined whether its exploration and evaluation assets contain economic ore reserves.

The Company’s registered and records office is 2900-595 Burrard Street, Vancouver, British Columbia, Canada.

These financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) with the assumption that the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company has incurred ongoing losses. A number of alternatives including, but not limited to completing a financing, are being evaluated with the objective of funding ongoing activities and obtaining additional working capital. The continuing operations of the Company are dependent upon its ability to continue to raise adequate financing and to commence profitable operations in the future and repay its liabilities arising from normal business operations as they become due. These material uncertainties may cast significant doubt about the Company’s ability to continue as a going concern.

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

The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue in existence.

2. BASIS OF PREPARATION

Statement of Compliance

These condensed consolidated 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”).

Basis of Presentation

These 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 February 29, 2020 annual financial statements.

Adoption of new accounting standards

IFRS 16 – Leases

IFRS 16 – replaces the current standard IAS 17, “Leases”, and its associated interpretative guidance. Early adoption is permitted, provided the Company has adopted IFRS 15. This standard sets out a new model for lease accounting. A lessee can choose to apply IFRS 16 using either a full retrospective approach or a modified retrospective approach.

The adoption of IFRS 16 did not impact the Company’s classification and measurement of leases as the Company does not have any lease obligations.

PLAYFAIR MINING LTD. NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS (Unaudited - Expressed in Canadian Dollars) FOR THE SIX MONTH PERIOD ENDED AUGUST 31, 2020

3. ADVANCES RECEIVABLE

The Company advances funds to a management company owned by a former officer. The management company incurs administration expenditures and settles certain exploration expenditures on behalf of the Company. At August 31, 2020 the Company had advanced $41,251 (February 29, 2020 - $88,751). The advances were unsecured and noninterest bearing.

4. EQUIPMENT

	Office equipment	Computer equipment	Total
Cost Balance, February 28, 2018, February 28, 2019 and February 29, 2020	$ 26,089	$ 33,173	$ 59,262
Accumulated amortization Balance, February 28, 2019 Amortization for the year Balance, February 29, 2020 Amortization for the period Balance, August 31, 2020	$ 25,846 49 25,895 18 $ 25,913	$ 33,150 7 33,157 3 $ 33,160	$ 58,996 56 59,052 21 $ 59,073
Carrying amounts As at August 31, 2020 As at February29,2020	$ 176 $ 194	$ 13 $ 16	$ 189 $ 210

5. EXPLORATION AND EVALUATION ASSETS

August 31, 2020		RKV Project
Acquisition costs:
Balance, beginning of period	$	240,000
Acquisition of exploration and evaluation assets		-
Balance, end of period		240,000
Exploration costs:
Balance, beginning of period		271,825
Assay		12,319
Field expenses		86,238
Balance, end of period		370,382
Balance, August 31, 2020	$ 610,382

PLAYFAIR MINING LTD. NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS (Unaudited - Expressed in Canadian Dollars) FOR THE SIX MONTH PERIOD ENDED AUGUST 31, 2020

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

February 29, 2020		RKV Project
Acquisition costs:
Balance, beginning of year	$	-
Acquisition of exploration and evaluation assets		240,000
Balance, end of year		240,000
Exploration costs:
Balance, beginning of year		-
Assay		33,420
Drilling		50,000
Fees & license		72,522
Field expenses		26,498
Geological consulting		75,000
Travel		14,385
Balance, end of year		271,825
Balance, February 29, 2020	$ 511,825

Title to mineral properties

Title to mineral properties involves certain inherent risks due to the difficulties of determining the validity of certain claims as well as the potential for problems arising from the frequently ambiguous conveyancing history characteristic of many mineral properties. The Company has investigated title to all of its mineral properties and, to the best of its knowledge, title to all of its properties are in good standing.

RKV Project property, Norway

One February 28, 2019, the Company had entered into an option and exploration agreement to acquire a 100% interest in the Rostvangen and Vakkerlien properties in South Central Norway (“RKV Project”) from Eurasian Minerals Sweden AB (“EMX”). To acquire the properties, the Company issued 3,000,000 shares (valued at $135,000) and reimbursed EMX’s government fees and licensing costs of $49,994 with a condition to the exercise of the option that the Company must incur $250,000 in exploration expenditures within one year (incurred). Furthermore, the Company had exercised their option and issued an additional 3,000,000 shares (valued at $105,000). EMX will transfer 100% of the property to the Company and EMX will receive a 3% net smelter royalty (“NSR”) on the property. Within 5 years, the Company will have the option to buy back up to 1% of the NSR for $3 million, leaving EMX with a 2% NSR.

EMX will receive annual advance royalty (“AAR”) payments of $30,000 commencing on the second anniversary of the option exercise, with the AAR payments increasing by $5,000 per year until reaching $80,000 per year.

Following exercise of the option the Company undertakes to complete a minimum of 1,000 meters of drilling in the following year and a cumulative 2,000 meters within 2 years following the option exercise. In addition, the Company undertakes to use commercially reasonable efforts to raise an additional $2.75 million for advancement of the RKV Project on or before the 5[th] anniversary of the agreement.

No later than 2 years after the signing the Company will issue sufficient shares to EMX to bring EMX’s ownership of the Company to 9.9% of issued and outstanding share capital. The Company will maintain EMX’s interest in the Company, at no additional cost to EMX until the Company has raised a cumulative $3,000,000 in equity to fund exploration and development on the properties or until 5 years after Exchange approval, whichever occurs first. Thereafter, EMX will have the right to participate pro-rata in future financings at its own cost to maintain its interest in the Company.

PLAYFAIR MINING LTD. NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS (Unaudited - Expressed in Canadian Dollars) FOR THE SIX MONTH PERIOD ENDED AUGUST 31, 2020

6. RELATED PARTY TRANSACTIONS

The key management personnel of the Company are the Directors, Chief Executive Officer, and the Chief Financial Officer.

Included in accounts payable at August 31, 2020 is $1,143 (February 29, 2020 - $18,143) due to directors of the Company. Included in advances receivable at August 31, 2020 is $41,251 (February 29, 2020 - $88,751) due from a company owned by a former officer of the Company. Included in accounts receivable at August 31, 2020 is $12,720 (February 29, 2020 - $Nil) due from a company with common directors. Included in prepaid expenses at August 31, 2020 is $20,000 (February 29, 2020 - $50,000) paid to a company owned by a former officer of the Company. Included in accounts payable and accrued liabilities at August 31, 2020 is $Nil (February 29, 2020 - $4,280) due to a company with common directors.

Compensation of the Company’s key management personnel is comprised of the following:

		August 31,		August 31,
		2020		2019
Professional Fees	$	7,500	$	15,000

7. SHARE CAPITAL AND RESERVES

Authorized share capital

As at August 31, 2020, the authorized share capital of the Company is an unlimited number of common shares without par value.

Issued share capital

As at August 31, 2020, the Company had 89,775,095 common shares issued and outstanding.

Share issuances

During the six month period ended August 31, 2020, the Company issued 12,000,000 common shares at $0.05 per share for gross proceeds of $600,000 of which $55,000 is in subscription receivable. The Company incurred share issuance costs of $4,450.

During the year ended February 29, 2020, the Company issued 8,700,000 common shares at $0.05 per share for gross proceeds of $435,000. The Company incurred share issuance costs of $6,886.

During the year ended February 29, 2020 the Company issued 6,000,000 common shares valued at $240,000 for the acquisition of the RKV project.

PLAYFAIR MINING LTD. NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS (Unaudited - Expressed in Canadian Dollars) FOR THE SIX MONTH PERIOD ENDED AUGUST 31, 2020

7. SHARE CAPITAL AND RESERVES (cont’d…)

Stock options

Stock option transactions are summarized as follows:

		StockOptions
		Number Weighted Average Exercise Price
Outstanding and exercisable, February 28, 2018 and 2019 Granted Exercised Expired Outstanding and exercisable, February 29, 2020 Granted Exercised Expired Outstandingand exercisable,August 31,2020		4,630,000 $ 0.08 2,700,000 0.05 (500,000) 0.05 (30,000) 0.10 6,800,000 $ 0.07 250,000 0.12 (2,225,000) 0.07 (175,000) 0.07 4,650,000 $ 0.07

The following stock options were outstanding at August 31, 2020:

	Number	Exercise
	of Shares	Price	ExpiryDate
Options	1,700,000*	$0.10	August 22, 2021
	250,000*	$0.12	July 6, 2022
	2,700,000*	$0.05	December 20, 2024

Share-based payments

The Company has an incentive stock options plan in place under which it is authorized to grant options to directors and employees to acquire up to 10% of the Company’s issued and outstanding common shares. Under the plan, the exercise price of each option may not be less than the market price of the Company’s stock as calculated on the date of grant less the applicable discount. The options can be granted for a maximum term of 5 years and vesting periods are determined by the Board of Directors.

During the year ended August 31, 2020, the Company granted 250,000 (February 29, 2020 – 2,700,000) options with a weighted-average fair value of $0.03 per option (February 29, 2020 - $0.03) to directors and consultants. Accordingly, using the Black-Scholes option pricing model, the stock options are recorded at fair value in the statement of loss and comprehensive loss. Total share-based payments recognized in the statement of loss and comprehensive loss during the year ended August 31, 2020 was $6,615 (February 29, 2020 – $91,918) for incentive options granted, vested and amended. This amount was also recorded as reserves on the statement of financial position.

PLAYFAIR MINING LTD. NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS (Unaudited - Expressed in Canadian Dollars) FOR THE SIX MONTH PERIOD ENDED AUGUST 31, 2020

7. SHARE CAPITAL AND RESERVES (cont’d…)

Share-based payments (cont’d…)

The following weighted average assumptions were used for the Black-Scholes option pricing model for the six month period ended August 31, 2020:

	August 31, 2020	February 29, 2020
Risk free rate	0.26%	1.64%
Expected life of options	1	3.75
Annualized volatility	137.89%	121.82%
Dividend rate	Nil	Nil
Forfeiture rate	Nil	Nil

8. SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS

The significant non-cash transactions for the period ended August 31, 2020 consisted of the Company:

• a) reclassifying the expired 175,000 stock options valued at $10,277 to deficit;

• b) reclassifying the exercised 2,225,000 stock options valued at $142,619;

The significant non-cash transactions for the period ended August 31, 2019 consisted of the Company:

• a) reclassifying the expired 30,000 stock options valued at $1,137 to deficit;

• b) issuing 3,000,000 shares on the RKV Project property valued at $105,000;

• c) incurring exploration and evaluation expenditures of $38,423 through accounts payable and accrued liabilities;

9.

SEGMENTED INFORMATION

The Company operates in one reportable operating segment, being the acquisition and exploration of mineral properties in Canada and Ireland. Geographic information is disclosed in Note 6.

10. FINANCIAL AND CAPITAL RISK MANAGEMENT

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

The fair value of the Company’s receivables, advances receivable, and accounts payable and accrued liabilities approximate their carrying values due to their short-term nature. The Company’s other financial instrument, being cash, is measured at fair value using Level 1 inputs.

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

PLAYFAIR MINING LTD. NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS (Unaudited - Expressed in Canadian Dollars) FOR THE SIX MONTH PERIOD ENDED AUGUST 31, 2020

10. FINANCIAL AND CAPITAL RISK MANAGEMENT (cont’d…)

Credit risk

Credit risk is the risk of an unexpected loss if a customer or third party to a financial instrument fails to meet its contractual obligations. The Company’s cash is held at large Canadian financial institution in interest bearing accounts. The Company has no investment in asset backed commercial paper. Receivables consist of receivables due from the government of Canada and amounts due from related parties.

Liquidity risk

The Company’s approach to managing liquidity risk is to ensure that it will have sufficient liquidity to meet liabilities when they come due. As at August 31 2020, the Company had a cash balance of $389,649 to settle current liabilities of $142,346. To maintain liquidity, the Company is currently investigating financing opportunities and new exploration projects. The Company primarily raises cash through equity financings and there can be no assurance these efforts will be successful in the future. All of the Company’s financial liabilities are subject to normal trade terms. The Company is exposed to liquidity risk.

Market risk

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

• a) Interest rate risk

The Company has a limited exposure to interest rate risk.

b) Foreign currency risk

The Company does not have any balances denominated in a foreign currency and believes it has no significant foreign currency risk.

• c) Price risk

The Company is exposed to price risk with respect to commodity prices. Changes in commodity prices will impact the economics of development of the Company’s mineral properties. The Company closely monitors commodity prices to determine the appropriate course of action to be taken.

Capital management

The Company manages its capital structure and makes adjustments to it, based on the funds available to the Company, in order to support the acquisition and exploration of mineral properties. The Board of Directors does not establish quantitative return on capital criteria for management, but rather relies on the expertise of the Company’s management to sustain future development of the business. The Company defines capital that it manages as shareholders’ equity.

The properties in which the Company currently has an interest are in the exploration stage; as such the Company has historically relied on the equity markets to fund its activities. There is no certainty with respect to the Company’s ability to raise capital. The Company will continue to assess new properties and seek to acquire an interest in additional properties if it feels there is sufficient geologic or economic potential and if it has adequate financial resources to do so. Management reviews its capital management approach on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable.

The Company currently is not subject to externally imposed capital requirements. There were no changes in the Company’s approach to capital management.