(An Exploration Stage Enterprise) (Expressed in Canadian Dollars) Consolidated Financial Statements For the Years Ended September 30, 2020 and 2019

Index to Consolidated Financial Statements

September 30, 2020

	Page
INDEPENDENT AUDITORS' REPORT	3-5
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Statements of Financial Position	6
Consolidated Statements of Income (Loss) and Comprehensive Income (Loss)	7
Consolidated Statements of Cash Flows	8
Consolidated Statements of Changes in Shareholders' Equity	9
Notes to the Consolidated Financial Statements	10-38

INDEPENDENT AUDITOR'S REPORT

To the Shareholders of Riverside Resources Inc.

Opinion

We have audited the accompanying consolidated financial statements of Riverside Resources Inc. (the "Company"), which comprise the consolidated statements of financial position as at September 30, 2020 and 2019, and the consolidated statements of income (loss) and comprehensive income (loss), cash flows, and changes in shareholders' equity for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

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

Basis for Opinion

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

Other Information

Management is responsible for the other information. The other information obtained at the date of this auditor's report includes Management's Discussion and Analysis.

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

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

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

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

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

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

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

Auditor's Responsibilities for the Audit of the Consolidated Financial Statements

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

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

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

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 Catherine Tai.

January 28, 2021

Vancouver, Canada Chartered Professional Accountants

(An Exploration Stage Enterprise)

Consolidated Statements of Financial Position as at September 30, (Expressed in Canadian Dollars)

	Note	2020	2019
Assets
Current assets:
Cash and cash equivalents	16	\$ 4,588,578	\$ 3,443,996
Short-term investments	5	1,463,312	1,698,383
Share subscription receivable	12	13,750	-
Receivables	6	596,452	487,391
Prepaid expenses	7	109,672	101,498
		6,771,764	5,731,268
Equipment	8	232,011	173,250
Exploration and evaluation assets	9	5,217,947	6,436,939
		\$ 12,221,722	\$ 12,341,457

Current liabilities:
Accounts payable and accrued liabilities	10	\$ 1,635,890	\$ 1,175,052
Provision liability	19	990,184	1,103,819
		2,626,074	2,278,871
Government loan	11	31,970	-
		2,658,044	-
Shareholders' equity:
Capital stock	12	24,961,986	27,344,879
Reserves	12	3,458,788	3,292,422
Deficit		(16,596,443)	(19,227,987)
Accumulated other comprehensive loss		(2,260,653)	(1,346,728)
		9,563,678	10,062,586

		\$ 12,221,722	\$ 12,341,457

Nature and continuance of operations (Note 1) Subsequent events (Note 20)

On behalf of the Board on January 28, 2021

"Walter Henry"	Director	"Carol Ellis"	Director
Water Henry		Carol Ellis

(An Exploration Stage Enterprise) Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) For the years ended September 30, (Expressed in Canadian Dollars)

	Note	2020	2019
Expenses
Management and consulting fees	14	\$ 189,745	\$ 288,237
Depreciation	8	58,972	21,701
Director fees	14	36,000	39,000
Foreign exchange gain		(23,502)	(21,828)
General and administration		155,692	107,822
Interest expense	11	1,043	-
Investor relations		325,198	246,946
Professional fees		95,460	148,486
Property investigation and evaluation		4,470	10,879
Rent		80,294	77,392
Share-based payments	12,14	228,800	96,397
Finance income		(39,250)	(42,591)
Gain on disposal of equipment	8	-	(32,852)
Gain on spin-out of exploration and evaluation assets	2,9	(2,417,283)	-
Other income	5,14	(69,621)	(1,305,993)
Gain on debt settlement	14	-	(26,846)
Write-down of exploration and evaluation assets	9	-	96,062
Unrealized loss (gain) on short-term investments	5	(1,066,407)	339,689
Realized loss (gain) on short-term investments	5	(191,155)	137,304
Provision tax penalty	19	-	1,131,026
Income (loss) for the year		2,631,544	(1,310,831)
Foreign exchange movements		(913,925)	(221,918)
Comprehensive income (loss) for the year		1,717,619	(1,532,749)
Income (loss) per share – basic and diluted		\$ 0.04	\$ (0.02)
Weighted average number of common shares outstanding – basic – diluted	4(h) 4(h)	63,938,595 72,605,175	54,363,054 54,363,054

(An Exploration Stage Enterprise) Consolidated Statements of Cash Flows for the years ended September 30, (Expressed in Canadian Dollars)

	Note	2020	2019
OPERATING ACTIVITIES
Income (loss) for the year		\$ 2,631,544	\$ (1,310,831)
Items not involving cash:
Depreciation	8	58,972	21,701
Share-based payments	12,14	228,800	96,397
Write-down of exploration and evaluation assets	9	-	96,062
Realized (gain) loss on short-term investments	5	(191,155)	137,304
Unrealized (gain) loss on short-term investments	5	(1,066,407)	339,689
Gain on disposal of equipment	8	-	(32,852)
Gain on spin-out of exploration and evaluation assets	2,9	(2,417,283)	-
Other income	5,14	(69,621)	(1,305,993)
Accrued interest on government loan	11	1,043	-
Change in non-cash working capital items:
Prepaid expenses		(8,174)	7,207
Receivables		(138,917)	13,488
Accounts payable and accrued liabilities		62,456	(56,988)
Provision liability	19	-	1,103,819
		(908,742)	(890,997)
INVESTING ACTIVITIES
Exploration advances – accounts payable and accrued
liabilities		471,458	1,019,882
Exploration and evaluation assets		(1,075,918)	(1,268,483)
Purchase of equipment	8	(129,840)	(136,072)
Sale of short-term investments	5	1,963,633	23,363
		1,229,333	(361,310)
FINANING ACTIVITIES
Proceeds from shares issuance, net of issuance costs	12	998,673	2,633,361
Proceeds from government loan	11	40,000	-
		1,038,673	2,633,361
Effect of foreign exchange on cash and cash equivalents		(214,682)	2,864
Increase in cash and cash equivalents		1,144,582	1,383,918

Cash and cash equivalents, beginning of the year		3,443,996	2,060,078
Cash and cash equivalents, end of the year		\$ 4,588,578	\$ 3,443,996

Supplemental disclosures with respect to cash flows (Note 16)

(An Exploration Stage Enterprise) Consolidated Statements of Changes in Shareholders' Equity (Expressed in Canadian Dollars)

			Capital Stock			Accumulated
						other	Total
						comprehensive
	Note	Shares	Amount	Reserves	Deficit	loss

Balance at September 30, 2018		44,609,313	\$ 24,590,428	\$ 3,194,415	\$ (17,917,156)	\$ (1,124,810)	\$ 8,742,877
Issued for:
Private placement	12	17,516,875	2,631,751	1,610	-	-	2,633,361
Performance bonus shares	12	265,000	47,700	-	-	-	47,700
Shares issued for exploration and evaluation	9	450,000	75,000	-	-	-	75,000
assets
Share-based payments	12	-	-	96,397	-	-	96,397
Loss for the year		-	-	-	(1,310,831)	-	(1,310,831)
Foreign exchange movements		-	-	-	-	(221,918)	(221,918)

Balance at September 30, 2019		62,841,188	27,344,879	3,292,422	(19,227,987)	(1,346,728)	10,062,586
Issued for:
Shares issued for exploration and evaluation
assets	9,12	400,000	56,000	-	-	-	56,000
Transfer of exploration and evaluation
assets pursuant to spin-out	2,9,12	-	(3,500,000)	-	-	-	(3,500,000)
Exercise of warrants	12	4,218,943	898,112	-	-	-	898,112
Exercise of options	12	667,000	163,763	(63,202)	-	-	100,561
Fair value of replacement warrants	12	-	(768)	768	-	-	-
Share-based payments	12	-	-	228,800	-	-	228,800
Income for the year		-	-	-	2,631,544	-	2,631,544
Foreign exchange movements		-	-	-	-	(913,925)	(913,925)

Balance at September 30, 2020		68,127,131	\$ 24,961,986	\$ 3,458,788	\$ (16,596,443)	\$ (2,260,653)	\$ 9,563,678

1. Nature and continuance of operations

Riverside Resources Inc. (the "Company" or "Riverside") is a mineral exploration and evaluation company operating as a prospect generator listed on the TSX Venture Exchange (the "Exchange") under the symbol "RRI" and is engaged in the acquisition, exploration and evaluation of exploration and evaluation assets in the Americas including Canada, the United States and Mexico.

The Company's head office address is 550 – 800 West Pender Street, Vancouver, British Columbia, Canada V6C 2V6.

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 Company's ability to continue operations is uncertain and is dependent upon the ability of the Company to obtain necessary financing to meet the Company's liabilities and commitments as they become payable, acquiring assets or a business, and the ability to generate future profitable production or operations or sufficient proceeds from the disposition thereof. The outcome of these matters cannot be predicted at this time. The consolidated financial statements do not include adjustments to amounts and classifications of assets and liabilities that might be necessary should the Company be unable to continue operations. Management believes that the Company has sufficient working capital to maintain its operations and activities for the next fiscal year.

2. Plan of Arrangement

On October 30, 2019, the Company incorporated a new subsidiary, Capitan Mining Inc. ("Capitan") and Rios DE Suerte S.A de C.V., another new subsidiary was incorporated on November 29, 2019 in order to facilitate a plan of arrangement ("Arrangement") whereby the Company's 100% interest in the Peñoles Project was spun out to Capitan.

On August 14, 2020, the Company transferred its 100% interest in the Peñoles Project and completed the Arrangement to spin out the shares of Capitan to the shareholders of Riverside. Pursuant to the Arrangement, holders of common shares of Riverside on August 13, 2020 received one new common share of Riverside (each, a "Riverside Share") and 0.2594 of a Capitan share (each, a "Capitan Share") for each common share held.

The carrying value of the net assets transferred to Capitan, pursuant to the Arrangement, consisted of the following assets:

Assets	\$
Carrying value of exploration and evaluation assets	1,082,717
Fair value of net assets transferred	3,500,000
Gain on transfer of spin-out assets	2,417,283

In accordance with IFRIC 17, Distribution of Non-cash Assets to Owners, the Company recognized the transfer of net assets to Riverside shareholders at fair value with the difference between that value and the carrying amount of the net assets recognized in the consolidated statement of comprehensive income (loss). The fair value of net assets transferred was based on the expected market value of a Capitan share of \$0.20 per share as per private placement completed on August 24, 2020.

The Arrangement resulted in a reduction of share capital amounting to \$3,500,000.

2. Plan of Arrangement (continued)

Under the terms of the Arrangement, each issued and outstanding Riverside option has been adjusted for the assets spunout. The exercise prices of the Riverside replacement stock options were adjusted based on the proportional market value of the two companies after completion of the Arrangement. See Note 12.

3. Basis of presentation

The consolidated financial statements have been prepared on a historical cost basis, except for financial instruments classified as and measured at their fair value. All dollar amounts presented are in Canadian dollars unless otherwise specified. In addition, the financial statements have been prepared using the accrual basis of accounting, except for cash flow information.

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

4. Significant accounting policies

(a) Principles of consolidation

These consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All inter-company transactions and balances have been eliminated upon consolidation.

Name of subsidiary	Country of incorporation	Proportion of ownership interest	Principal activity

Riverside Resources Mexico, S.A. de C.V.	Mexico	100%	Mineral exploration
RRM Exploracion, S.A.P.I. de C.V.	Mexico	100%	Mineral exploration
RRM Minas S DE RL de C.V.	Mexico	100%	Mineral exploration
RRI Exploration Inc.	United States	100%	Mineral exploration
RRI Holdings Limited	Canada	100%	Holding company
Riverside Resources (BC) Inc.	Canada	100%	Mineral exploration

(b) Foreign currency translation

The functional currency of an entity is the currency of the primary economic environment in which the entity operates. The functional currency of the Company, Riverside Resources (BC) Inc., RRI Holdings Limited, and RRI Exploration Inc. is the Canadian dollar and the Mexican Peso for Riverside Resources Mexico, S.A. de C.V., RRM Exploration S.A.P.I. de C.V. and RRM Minas S DE RL de C.V. The functional currency determinations were conducted through an analysis of the consideration factors identified in IAS 21, The Effects of Changes in Foreign Exchange Rates.

Transactions in currencies other than the functional currency for an entity are recorded at exchange rates prevailing on the dates of the transactions. At the end of each reporting period, monetary assets and liabilities denominated in foreign currencies are translated at the period end exchange rate 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 are included in the profit or loss.

(b) Foreign currency translation (continued)

The subsidiaries with a Mexican Peso functional currency have been translated into Canadian dollars as follows: assets and liabilities are translated at year end exchange rates, while revenues and expenses are translated using average rates over the year. Translation gains and losses relating to the foreign operations are included in accumulated other comprehensive loss as a separate component of shareholders' equity.

Cash equivalents include: Canadian guaranteed investment certificates that are readily convertible into cash or have maturities at the date of purchase of ninety days or less; and short-term investments include: marketable securities in publicly traded and private companies. Both types of instruments are classified as financial assets at fair value through profit or loss.

(d) Equipment

Equipment is carried at cost less accumulated depreciation and impairment losses. Depreciation is calculated using the declining balance method at the following annual rates:

	Computer hardware	45%
	Exploration equipment	20%
	Furniture & fixtures	20%
Vehicles		30%

(e) Exploration and evaluation assets

Pre-exploration costs are expensed as incurred. The Company records exploration and evaluation asset interests, which consist of the right to explore for mineral deposits, at cost. The Company records deferred exploration costs, which consist of costs attributable to the exploration of exploration and evaluation asset interests, at cost. All direct and indirect costs relating to the acquisition and exploration of these exploration and evaluation asset interests are capitalized on the basis of specific claim blocks until the exploration and evaluation asset interests to which they relate are placed into production, disposed of through sale, or where management has determined there to be an impairment. If an exploration and evaluation asset interest is abandoned, the exploration and evaluation asset interests and deferred exploration costs will be written off to operations in the period of abandonment.

On an on-going basis, the capitalized costs are reviewed on a property-by-property basis to consider if there is any impairment on the subject property. Management's determination for impairment is based on: 1) whether the Company's exploration programs have significantly changed, such that previously identified resource targets are no longer being pursued; 2) whether exploration results to date are promising and whether additional exploration work is being planned in the foreseeable future; or 3) whether remaining lease terms are insufficient to conduct necessary studies or exploration work.

The recorded cost of exploration and evaluation asset interests is based on cash paid and the assigned value of share consideration issued (where shares are issued) for exploration and evaluation asset interest acquisitions and exploration costs incurred. The recorded amount may not reflect the recoverable value, as this will be dependent on future development programs, the nature of the mineral deposit, commodity prices, adequate funding and the ability of the Company to bring its projects into production.

Property option payments received from its farm-out partners are recorded as a reduction to the capitalized cost of exploration and evaluation assets. Once the capitalized cost is recovered, they are recorded as property income. Management fees received pursuant to exploration alliance arrangements are recorded as a reduction in consulting fees.

(f) Provision for environmental rehabilitation

The Company recognizes liabilities for legal or constructive obligations associated with the retirement of exploration and evaluation assets and equipment. The net present value of future rehabilitation costs is capitalized to the related asset along with a corresponding increase in the rehabilitation provision in the period incurred. Discount rates using a pre-tax rate that reflect the time value of money are used to calculate the net present value.

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

The increase in the provision due to the passage of time is recognized as interest expense. The Company currently does not have any significant provisions for environmental rehabilitation.

(g) Impairment of long-lived assets

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

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

(h) Income (loss) per share

Basic income (loss) per common share is calculated by dividing income (loss) attributable to common shareholders by the weighted average number of shares outstanding during the year. The effect of dilutive stock options, warrants and similar instruments on income (loss) per share is recognized on the use of the proceeds that could be obtained upon of these and similar instruments. It assumes that the proceeds would be used to purchase common shares at the average market price during the year. Diluted income (loss) per share excludes all dilutive potential common shares if their effect is anti-dilutive.

The calculation of basic income (loss) per share for the year ended September 30, 2020 was based on the income attributable to common shareholders of \$2,361,544 (2019 – loss of \$1,310,831) and a weighted average number of common shares outstanding of 63,938,595 (2019 – 54,363,054).

The calculation of diluted income per share for the year ended September 30, 2020 includes the weighted average number of common shares outstanding adjusted for the effects of all potentially dilutive common shares, which comprise 1,523,879 stock options and 7,142,701 warrants.

The calculation of diluted loss per share for the year ended September 30, 2019 did not include the effect of stock options and warrants as they were considered anti-dilutive.

(i) Critical accounting estimates, judgments, and assumptions

The preparation of these consolidated financial statements requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, and contingent liabilities at the date of the financial statements and reported amount of expenses during the reporting period. Actual outcomes could differ from these estimates. These consolidated financial statements include estimates that, by their nature, are uncertain. The impacts of such estimates are pervasive throughout the consolidated financial statements and may require accounting adjustments based on future occurrences. Revisions to accounting estimates are recognized in the period in which the estimate is revised and future periods if the revision affects both current and future periods. These estimates are based on historical experience, current and future economic conditions and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Information about significant areas of estimation uncertainty in applying accounting policies that have the most significant effect on the amounts recognized in the consolidated financial statements are noted below with further details of the assumptions contained in the relevant note.

Exploration and evaluation assets

Exploration and evaluation costs are initially capitalized as intangible exploration assets with the intent to establish commercially viable reserves. The Company is required to make estimates and judgments about the future events and circumstances regarding whether the carrying amount of intangible exploration assets exceeds its recoverable amount. Recoverability is dependent on various factors, including the discovery of economically recoverable reserves, the ability of the Company to obtain the necessary financing to complete the development and upon future profitable production or proceeds from the disposition of the exploration and evaluation assets themselves. Additionally, there are numerous geological, economic, environmental and regulatory factors and uncertainties that could impact management's assessment as to the overall viability of its properties or the ability to generate future cash flows necessary to cover or exceed the carrying value of the Company's exploration and evaluation assets properties.

Share-based payments

Charges for share-based payments are based on the fair value on the date the awards are granted. Stock options are valued using the Black-Scholes option pricing model, and inputs to the model include assumptions on share price volatility, discount rates and expected life outstanding.

Contingencies

Contingencies are resolved only when one or more events transpire. As a result, the assessment of contingencies inherently involves estimating the outcome of future events. As at September 30, 2019, the Company recorded a provision with respect to a legal dispute with the Government of Mexico. See Note 19.

Critical accounting judgments

the measurement of income taxes payable and deferred tax assets and liabilities requires management to make judgments in the interpretation and application of the relevant tax laws. Deferred tax assets require management to assess the likelihood that the Company will generate taxable income in future periods in order to utilize recognized deferred tax assets;
going concern presentation of the consolidated financial statements as discussed in Note 1, which assumes that the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities in the normal course of operations as they come due; and
management's determination of the functional currency of the Company and each of its subsidiaries requires judgment based on the factors outline in IAS 21, The Effects of Changes in Foreign Exchange Rates.

(j) Income taxes

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 the reporting date, adjusted for amendments to tax payable with regards to previous years.

Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they revert, based on the laws that have been enacted or substantively enacted by the reporting date.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current income tax liabilities and assets, and they relate to income taxes levied by the same tax authority for the same taxable entity. A deferred tax asset is recognized for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related income tax benefit will be realized.

(k) Financial instruments

Financial assets

The Company classifies its financial assets in the following categories: at fair value through profit or loss ("FVTPL"), at fair value through other comprehensive income ("FVTOCI") or at amortized cost. The determination of the classification of financial assets is made at initial recognition. Equity instruments that are held for trading (including all equity derivative instruments) 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.

The Company's accounting policy for each of the categories is as follows:

Financial assets at FVTPL: Financial assets carried at FVTPL are initially recorded at fair value and transaction costs are expensed as incurred. Realized and unrealized gains and losses arising from changes in the fair value of the financial assets held at FVTPL are recognized in profit or loss.

Financial assets at FVTOCI: Investments in equity instruments at FVTOCI are initially recognized at fair value plus transaction costs. Subsequently they are measured at fair value, with gains and losses arising from changes in fair value recognized in other comprehensive income (loss).

Financial assets at amortized cost: A financial asset is measured at amortized cost if the objective of the business model is to hold the financial asset for the collection of contractual cash flows, and the asset's contractual cash flows are comprised solely of payments of principal and interest. They are classified as current assets or non-current assets based on their maturity date and are initially recognized at fair value and subsequently carried at amortized cost less any impairment.

Impairment of financial assets at amortized cost: The Company assesses all information available, including on a forward-looking basis, the expected credit losses associated with its assets carried at amortized cost. The impairment methodology applied depends on whether there has been a significant increase in credit risk. To assess whether there is a significant increase in credit risk, the Company compares the risk of a default occurring on the asset as at the reporting date, with the risk of default as at the date of initial recognition, based on all information available, and reasonable and supportive forward-looking information.

(k) Financial Instruments (continued)

Financial liabilities

The Company classifies its financial liabilities into one of two categories, depending on the purpose for which the liability was acquired. The Company's accounting policy for each category is as follows:

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

Other financial liabilities - This category comprises liabilities initially recognized at fair value less directly attributable transaction costs. Subsequently, they are measured at amortized cost using the effective interest method.

The following table shows the classification of the Company's financial assets and liabilities:

Financial asset or liability	IFRS 9 Classification
Cash and cash equivalents	FVTPL
Short-term investments	FVTPL
Receivables	Amortized cost
Accounts payable and accrued liabilities	Amortized cost
Government loan	Amortized cost

(l) Share-based payments

The stock option plan allows the Company's employees, directors and consultants to acquire shares of the Company. The fair value of options granted is recognized as a share-based payments expense with a corresponding increase in shareholders' equity. An individual is classified as an employee when the individual is an employee for legal or tax purposes (direct employee) or provides services similar to those performed by a direct employee. Consideration paid on the exercise of stock options is credited to share capital and the fair value of the options is reclassified from reserves to capital stock.

The fair value is measured at grant date and each tranche is recognized over the period during which the options vest. The fair value of the options granted is measured using the Black-Scholes Option Pricing Model taking into account the terms and conditions upon which the options were granted. At each financial position reporting date, the amount recognized as an expense is adjusted to reflect the number of stock options that are expected to vest.

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

(m) Capital stock

Common shares are classified as shareholders' equity. Incremental costs directly attributable to the issue of common shares and stock options are recognized as a deduction from shareholders' equity. Common shares issued for consideration other than cash, are valued based on their market value at the date the shares are issued.

(m) Capital stock (continued)

The Company has adopted a residual value method with respect to the measurement of shares and warrants issued as private placement units. The residual value method first allocates value to the more easily measurable component based on fair value and then the residual value, if any, to the less easily measurable component. The Company considers the fair value of common shares issued in the private placements to be the more easily measurable component and the common shares are valued at their fair value, as determined by the closing market price on the announcement date. The balance, if any, is allocated to the attached warrants. Any fair value attributed to the warrants is recorded as reserves.

(n) Management fees

Management fees are earned on exploration alliance arrangements where the Company is the operator of the underlying exploration program. Management fees received pursuant to exploration alliance arrangements are recorded as a reduction in consulting fees.

(o) Government Assistance

The Company received certain government assistance in the form of forgivable loans from the Canadian government in connection with the COVID-19 pandemic. Pursuant to IAS 20 Accounting for Government Grants and Disclosure, the benefit of a government loan at below market rate is treated as a government grant and measured in accordance with IFRS 9 Financial Instruments: the benefit of below-market rate is measured as the difference between the initial carrying value of the loan and the proceeds received. The difference will be accredited to the loan liability over the term of the loan and offset to other income on the statement of income (loss) and comprehensive income (loss).

New Accounting Policies Adopted

The following accounting standards were adopted by the Company effective October 1, 2019:

IFRS 16 - Leases (new; replaces IAS 17)

On October 1, 2019, the Company adopted IFRS 16, which supersedes IAS 17- Leases ("IAS 17"). The standard provides a single lessee accounting model, requiring lessees to recognize assets and liabilities for all leases unless the lease term is 12 months or less or the underlying asset has a low value. Lessors continue to classify leases as operating or finance, with IFRS 16's approach to lessor accounting substantially unchanged from its predecessor, IAS 17.

IFRS 16 requires lessees to recognize a right of use of asset and a lease obligation at the lease commencement date. The Company has assessed its monthly office rent payments and concluded that it does not meet the definition of a lease in the context of IFRS 16. As such, the adoption of the standard did not have an impact on the Company's consolidated financial statements.

IFRIC 23 - Uncertainty over Income Tax Treatments

On October 1, 2019, the Company adopted IFRIC 23, which is a new standard to clarify the accounting for uncertainties in income taxes. The interpretation provides guidance and clarifies the application of the recognition and measurement criteria in IAS 12 "Income Taxes" when there is uncertainty over income tax treatments. The adoption of this standard did not have a significant impact on the Company's consolidated financial statements.

5. Short-term investments

Short-term investments include marketable securities received as a result of property option agreements. Marketable securities comprise common shares in publicly traded and private companies as follows:

		September 30, 2020		September 30, 2019
	Number of		Fair market	Number of		Fair market
	shares	Cost	value	shares	Cost	value
Arcus Development Group Inc.	29,000	\$ 11,020	\$ 870	29,000	\$ 11,020	\$ 870
Arizona Metals Corp. (1)	1,500,000	398,632	990,000	7,300,000	1,940,010	1,277,500
Guerrero Exploration Inc.	1,926,000	343,049	-	1,926,000	343,049	-
(2) Carlyle Commodities Corp.	1,500,000	450,000	270,000	-	-	-
E3 Metals Corp. (3)	-	-	-	-	-	-
Sierra Madre Developments Inc.	1,250,322	1,103,791	162,542	1,250,322	1,103,791	50,013
Silver Viper Minerals Corp. (4)	-	-	-	1,000,000	250,000	270,000
Sinaloa Resources Corp. (5)	1,000,000	100,000	-	1,000,000	100,000	100,000
First Helium Inc. (6)	77,250	39,900	39,900	-	-	-
Upper Canada Mining Inc. (7)	600,000	-	-	-	-	-
		\$ 2,446,392	\$ 1,463,312		\$ 3,747,870	\$ 1,698,383

(1) During the year ended September 30, 2019, the Company had received an additional 4,300,000 shares from Arizona Metals Corp. as a result of the Sugarloaf Peak option agreement and amending agreement that the Company entered into December 2014 and 2015. The Sugarloaf Peak property has a carrying value of \$nil, therefore the Company recognized \$1,289,993 in other income during the year ended September 30, 2019.

On November 13, 2019, the Company sold 4,400,000 shares for net proceeds of \$784,207. Subsequently, the Company sold 900,000 shares for net proceeds of \$450,000 on May 1, 2020. Lastly, the Company sold an additional 500,000 shares for net proceeds of \$309,102 on July 31, 2020.

(2) On July 13, 2020, the Company received 1,500,000 shares of Carlyle Commodities Corp. with a fair market value of \$450,000, as per the option agreement for the Cecilia property. Please refer to Note 9 (f) for additional details.
(3) During the year ended September 30, 2019, the Company sold all 55,087 shares for net proceeds of \$23,363.
(4) On July 31, 2020, the Company sold all 1,000,000 shares for net proceeds of \$439,224.
(5) On February 20, 2019, the Company received 1,000,000 shares of Sinaloa Resources Corp. ("Sinaloa") with a fair market value of \$100,000, as per the option agreement for the La Silla property. As at September 30, 2020, the fair market value of the shares was determined to be \$nil based on the current status of Sinaloa's financial position. Please refer to Note 9 (c) for additional details.
(6) On November 30, 2019, the Company received 300,000 pre-consolidated shares of First Helium Inc. to settle \$21,000 in debt. Please refer to Note 14 (iii) & Note 16 (a) for additional details. On September 8, 2020, the Company acquired an additional 472,500 pre-consolidated shares of First Helium Inc. at \$0.04 per share by paying cash of \$18,900.

First Helium Inc. completed a 10:1 share consolidation on November 27, 2020. These shares been retroactively restated in the table above.

(7) On September 11, 2020, the Company received 600,000 shares of Upper Canada Mining Inc. ("Upper Canada") with a fair market value of \$nil, as per the Letter of Intent for the La Silla property. Please refer to Note 9 (c) for additional details.

(Expressed in Canadian Dollars)

6. Receivables

Receivables mainly consist of tax refunds from the Federal Government of Canada and Mexico.

	September 30, 2020	September 30, 2019
GST recoverable amounts in Canada	\$ 8,713	\$ 15,070
IVA recoverable amounts in Mexico	565,165	432,698
Land taxes recovery in Mexico	20,474	22,823
Other receivable	2,100	16,800
	\$ 596,452	\$ 487,391

7. Prepaid expenses

The breakdown of prepaid expenses is as follows:

	September 30,	September 30,
	2020	2019
Conferences and courses	\$ 10,662	\$ 39,479
Expense advances	64,201	39,342
Insurance	23,980	10,216
Rent	10,829	12,461
	\$ 109,672	\$ 101,498

(An Exploration Stage Enterprise) Notes to the Consolidated Financial Statements for the year ended September 30, 2020 (Expressed in Canadian Dollars)

8. Equipment

	Computer	Exploration	Furniture &
	hardware	equipment	fixtures	Vehicles	TOTAL
Cost
Balance at September 30, 2018	\$ 86,041	\$ 127,071	\$ 34,265	\$ 112,466	\$ 359,843
Additions	17,458	-	-	118,614	136,072
Disposals	-	-	-	(54,408)	(54,408)
Foreign exchange movement	(468)	(3,243)	(654)	(3,653)	(8,018)
Balance at September 30, 2019	\$ 103,031	\$ 123,828	\$ 33,611	\$ 173,019	\$ 433,489
Additions	769	91,107	-	37,964	129,840
Foreign exchange movement	(14,995)	(9,413)	(2,258)	(17,919)	(44,585)
Balance at September 30, 2020	\$ 88,805	\$ 205,522	\$ 31,353	\$ 193,064	\$ 518,744

Accumulated depreciation
Balance at September 30, 2018	\$ (83,803)	\$ (100,121)	\$ (27,219)	\$ (86,249)	\$ (297,392)
Depreciation	(1,673)	(5,349)	(1,399)	(13,280)	(21,701)
Disposals	-	-	-	54,408	54,408
Foreign exchange movement	404	2,704	532	806	4,446
Balance at September 30, 2019	\$ (85,072)	\$ (102,766)	\$ (28,086)	\$ (44,315)	\$ (260,239)
Depreciation	(7,837)	(9,612)	(1,069)	(40,454)	(58,972)
Foreign exchange movement	13,614	10,005	1,913	6,946	32,478
Balance at September 30, 2020	\$ (79,295)	\$ (102,373)	\$ (27,242)	\$ (77,823)	\$ (286,733)

Net book value
Balance at September 30, 2019	\$ 17,959	\$ 21,062	\$ 5,525	\$ 128,704	\$ 173,250
Balance at September 30, 2020	\$ 9,510	\$ 103,149	\$ 4,111	\$ 115,241	\$ 232,011

9. Exploration and evaluation assets

RIVERSIDE RESOURCES INC. (An Exploration Stage Enterprise)





	Notes to the Consolidated Financial Statements for the year ended September 30, 2020
(Expressed in Canadian Dollars)

9. Exploration and evaluation assets



For the year ended September 30, 2020
											El Valle, Llano del
	Penoles	Tajitos	La Silla	Australia	Ariel	Cecilia	Teco	Suaqui Verde	Los Cuarentas	La Union	Nogalo & El Pima	Western Ontario
	Mexico	Mexico	Mexico	Mexico	Mexico	Mexico	Mexico	Mexico	Mexico	Mexico	Mexico	Canada	Total
Acquisition costs	\$ 33,799 \$	75,354 \$	5,572 \$	928 \$	3,944 \$	197,746 \$	12,890 \$	994 \$	91,156	\$ 16,990 \$	1,950 \$	63,356 \$	504,679
Exploration costs: Assaying	408	-	-	-	-	-	-	-	3,099	-	-	3,869	7,376
Field & camp costs	12,395	13,451	3,497	4,034	773	327	6,280	1,281	2,189	7,667	-	7,557	59,451
Geological consulting	149,646	19,123	15,738	384	4,804	18,063	4,852	-	41,282	7,968	47	123,892	385,799
Transport & support	35,688	13,162	3,262	2,926	2,561	5,817	2,060	-	15,731	10,690	133	87,624	179,654
Total current exploration costs	198,137	45,736	22,497	7,344	8,138	24,207	13,192	1,281	62,301	26,325	180	222,942	632,280
Professional & other fees: Professional consulting	9,000	1,000	24,000	1,541	5,000	7,000	1,000	-	-	-	-	87,500	136,041
Legal fees	5,168	13,661	9,306	11,909	-	2,712	109	-	14,793	-	490	-	58,148
	(102,608)	4,228	-	-	1,297	140	2,245	-	396	3,026	-	5,106	(86,170)
Others				13,450	6,297	9,852	3,354	-	15,189	3,026	490	92,606	108,019
Total current professional & other fees	(88,440)	18,889	33,306
Total costs incurred during the year	143,496	139,979	61,375	21,722	18,379	231,805	29,436	2,275	168,646	46,341	2,620	378,904	1,244,978
Balance, Opening	1,360,583	2,520,813	402,843	15,316	80,615	1,636,094	184,406	24,334	68,270	5,079	-	138,586	6,436,939
Recoveries	-	-	-	-	-	(500,000)	-	-	(122,519)	-	-	-	(622,519)
Transferred to Capitan Foreign exchange movements	(1,082,717) (421,362)	- (200,480)	- (26,106)	- (3,633)	- (3,802)	- (62,203)	- (19,855)	- (2,745)	- (14,133)	- (4,149)	- (266)	- -	(1,082,717) (758,734)
Balance, End of the year	\$ - \$	2,460,312 \$	438,112 \$	33,405 \$	95,192 \$	1,305,696 \$	193,987 \$	23,864 \$	100,264	\$ 47,271 \$	2,354 \$	517,490 \$	5,217,947

Cumulative costs:
Acquisition	\$ 4,014,438 \$	1,030,505 \$	56,506 \$	2,655 \$	9,235 \$	624,814 \$	67,516 \$	3,894 \$	150,233	\$ 16,990 \$	1,950 \$	66,897 \$	6,045,633
Exploration	2,124,319	1,531,677	492,623	21,072	73,077	975,879	121,092	22,562	72,171	31,047	180	307,987	5,773,686
Professional & other fees Recoveries	612,406 (4,665,613)	312,930 -	85,439 (164,000)	13,450 -	16,816 -	149,119 (500,000)	5,124 -	- -	15,189 (122,519)	3,430 -	490 -	142,606 -	1,356,999 (5,452,132)
Transferred to Capitan	(1,082,717)	-	-	-	-	-	-	-	-	-	-	-	(1,082,717)
Foreign exchange movements	(1,002,833) \$ - \$	(414,800) 2,460,312 \$	(32,456) 438,112 \$	(3,772) 33,405 \$	(3,936) 95,192 \$	55,884 1,305,696 \$	255 193,987 \$	(2,592) 23,864 \$	(14,810) 100,264	(4,196) \$ 47,271 \$	(266) 2,354 \$	- 517,490 \$	(1,423,522) 5,217,947

(An Exploration Stage Enterprise) Notes to the Consolidated Financial Statements for the year ended September 30, 2020 (Expressed in Canadian Dollars)

9. Exploration and evaluation assets (continued)

		Penoles	Tajitos	La Silla	Australia	Thor	Ariel	Cecilia	Teco	Suaqui Verde	Los Cuarentas	La Union Western Ontario
		Mexico	Mexico	Mexico	Mexico	Mexico	Mexico	Mexico	Mexico	Mexico	Mexico	Mexico	Canada	Total
Acquisition costs		28,937 \$	$81,267$ \$	3,432 S	666 S	8,699 S	1,931 \$	193,071 \$	11,015 \$	2,900 S	59,077 \$	$\sim$	$3,541$ \$	394,536
Exploration costs:
Assaying		2,306	$\overline{\phantom{a}}$	$\overline{\phantom{a}}$	2,110	$\overline{\phantom{a}}$	$\overline{\phantom{a}}$	16,491	$\overline{\phantom{a}}$	$\,$	$\overline{\phantom{a}}$	$\overline{\phantom{a}}$	5,368	26,275
Field & camp costs		12,135	15,723	4,304	35	$\overline{\phantom{a}}$	952	6,582	2,370	1,260	151	736	2,548	46,796
Geological consulting		226,359	130,329	73,184	4,056	6,974	10,956	296,843	15,979	18,746	3,075	2,700	41,162	830,363
Transport & support		48,250	42.833	13,453	965	15,044	6.666	57.591	2.239	1.275	6.644	1.286	35.967	232,213
Total current exploration costs		289,050	188,885	90,941	7,166	22,018	18,574	377,507	20.588	21,281	9,870	4,722	85,045	1,135,647
Professional & otherfees:
Professional consulting		6,000	$\blacksquare$	12,000			191	11,000	٠			$\overline{\phantom{a}}$	50,000	79,191
Legal fees		10,429	21,543	591				2,442	246			404	$\overline{\phantom{a}}$	35,655
Others			6,069	$\overline{\phantom{a}}$		$\overline{\phantom{a}}$		5,725	$\overline{\phantom{a}}$	$\overline{\phantom{a}}$	$\overline{\phantom{a}}$	$\overline{\phantom{a}}$	$\overline{\phantom{a}}$	11,794
Total current professional & other fees		16,429	27,612	12,591	$\overline{\phantom{a}}$	$\overline{\phantom{a}}$	191	19,167	246	$\overline{\phantom{a}}$	$\overline{\phantom{a}}$	404	50,000	126,640
Total costs incurred during the year		334,416	297,764	106,964	7.832	30,717	20,696	589,745	31,849	24,181	68,947	5,126	138,586	1,656,823
Balance, Opening		1,274,557	2,276,354	441,391	7,694	65,701	60,890	1,060,703	157,459			$\overline{\phantom{a}}$	$\overline{\phantom{a}}$	5,344,749
Recoveries		(141, 213)	$\overline{\phantom{a}}$	(139,000)		$\overline{\phantom{a}}$		$\overline{\phantom{a}}$	$\overline{\phantom{a}}$					(280, 213)
Write off			$\overline{\phantom{a}}$			(96, 062)		$\overline{\phantom{a}}$	$\overline{\phantom{a}}$					(96, 062)
Foreign exchange movements		(107, 177)	(53, 305)	(6,512)	(210)	(356)	(971)	(14, 354)	(4,902)	153	(677)	(47)		(188, 358)
Balance, End of the year		1.360.583 \$	2,520,813 \$	402,843 \$	15.316 S	$\sim$	$80,615$ \$	1,636,094 \$	184,406 \$	24,334 \$	68,270 \$	5,079	138,586 \$	6.436.939
Cumulative costs:
Acquisition	S	3,980,639 S	955,151 \$	50,934 S	1,727 - S	$30,615$ S	$5,291$ \$	427,068 \$	54,626 \$	2,900 S	59,077 \$	$\overline{\phantom{a}}$	$3,541$ \$	5,571,569
Exploration		1,926,182	1.485.941	470,126	13,728	54,885	64.939	951,672	107.900	21,281	9,870	4,722	85,045	5,196,291
Professional & other fees		700,846	294,041	52,133	$\overline{\phantom{a}}$	7,237	10,519	139,267	1,770			404	50,000	1,256,217
Recoveries		(4,665,613)	$\overline{\phantom{a}}$	(164,000)		$\overline{\phantom{a}}$	$\overline{\phantom{0}}$						$\overline{\phantom{a}}$	(4, 829, 613)
Write-off					$\overline{\phantom{a}}$	(96, 062)								(96, 062)
Foreign exchange movements		(581.471)	(214, 320)	(6,350)	(139)	3.325	(134)	118,087	20,110	153	(677)	(47)		(661, 463)
		1,360,583	2,520,813 \$	402,843 S	15,316 S	$\overline{\phantom{a}}$	$80,615$ S	1,636,094 \$	184,406	24,334 S	68,270	5,079	138,586	6,436,939

Title to exploration and evaluation asset interests 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 claims. The Company has investigated title to all of its exploration and evaluation asset interests and, to the best of its knowledge, title to all of its interests are in good standing. The exploration and evaluation asset interests in which the Company has committed to earn an interest are located in Mexico and Canada.

The terms and commitments of the Company with respect to its exploration and evaluation assets are subject to change if and when the Company and its partners mutually agree to new terms and conditions.

(a) Peñoles, Durango, Mexico

The Company owned 100% of the Peñoles Property, a gold-silver project, subject to a 2% NSR payable to the underlying concession holder.

During the year ended September 30, 2020, the Company received \$nil (2019 - \$141,213) in cash as land taxes recovery from the Government in Mexico.

On August 14, 2020, the Company completed the Arrangement and transferred its 100% interest of the gold-silver resource at the Peñoles Project to Capitan as previously mentioned in Note 2. In connection with the Arrangement, the Company recognized a gain on spin-out of Peñoles Project of \$2,417,283 in consideration for 17,500,000 common shares of Capitan with a value of \$3,500,000. There were \$1,082,717 historical capitalized costs associated with this project transferred to Capitan.

(b) Tajitos, Sonora, Mexico

The Company has a 100% interest in the Tajitos Property, a gold project.

In October 2015, the Company acquired two mining concessions in the La Silla gold-silver district in Sinaloa through a lottery process.

On May 30, 2018, the Company entered into an option agreement, signing a Definitive Agreement on January 30, 2019, with Sinaloa whereby Sinaloa could acquire a 70% interest in the La Silla Property, a silver-gold project, by paying \$60,000 in cash, issuing \$1,000,000 in common shares, and incurring exploration expenditures of \$2,000,000 over a three-year period as follows:

Due date	Cash	Common shares	Cumulative exploration expenditures
May 30, 2018 (signing of LOI)	\$ 25,000 (received)(1)	-	-
January 28, 2019	\$ 35,000 (received)(2)	\$100,000(received)(3)	-
January 28, 2020(4)	-	\$100,000	\$ 300,000
January 28, 2021(4)	-	\$100,000	\$ 1,000,000
January 28, 2022	-	\$700,000	\$ 2,000,000

(An Exploration Stage Enterprise) Notes to the Consolidated Financial Statements for the year ended September 30, 2020 (Expressed in Canadian Dollars)

9. Exploration and evaluation assets (continued)

(c) La Silla, Sinaloa, Mexico (continued)
(1) Option payments were received in June and July 2018.
(2) Option payment was received on January 25, 2019.

(3) 1,000,000 common shares were received on February 20, 2019.

(4) Option agreement was terminated during the year ended September 30, 2020, please see below paragraph for further details.

The Company did not receive the \$100,000 payment in common shares that were due on January 28, 2020 from Sinaloa. Furthermore, Sinaloa did not incur the \$300,000 in exploration expenditures due on January 28, 2020. During the year ended September 30, 2020, the Company terminated the option agreement with Sinaloa and therefore, Sinaloa has no further obligation with respect to the project.

On September 11, 2020, the Company entered into a Letter of Intent ("LOI") with Upper Canada Mining Inc. ("Upper Canada") and received 600,000 shares of Upper Canada whereby Upper Canada could acquire up to a 100% interest in the La Silla Property. The shares received from Upper Canada had a fair market value of \$nil. The Company signed a Definitive Agreement with Upper Canada subsequent to the year ended September 30, 2020. Refer to Note 20 for additional details.

(d) Thor Project, Sonora, Mexico

Thor is a porphyry copper project, located in Sonora, Mexico. The Company acquired a 100% interest in the Thor Copper Project on June 1, 2017.

During the year ended September 30, 2019, the Company decided not to continue with further exploration at the project and chose to write off the property and the historical capitalized costs of \$96,062.

(e) Ariel, Sonora, Mexico

The Company acquired a 100% exploration concession interest in the Ariel Property on June 1, 2017.

(f) Cecilia, Sonora, Mexico

In January 2017, the Company signed letter agreements with Gunpoint Exploration Ltd. ("Gunpoint") and Millrock Resources Inc. ("Millrock") to acquire three La Cecilia Margarita concessions owned by Gunpoint, and to acquire the Violeta concession owned by Millrock into a unified Cecilia Gold Project. The Company could acquire a 100% interest in the La Cecilia Margarita concessions from Gunpoint with the following terms:

Due date	Cash	Common shares
Upon signing of letter agreement (January 31, 2017)	\$ 10,000 (paid)	-
Upon signing of Mexican agreement (June 2017)	\$ 15,000 (paid)	100,000 (issued, fair value: \$46,000)
January 31, 2018	\$ 25,000 (paid)	200,000 (issued, fair value: \$54,000)
January 31, 2019	\$ 75,000 (paid)	300,000 (issued, fair value: \$51,000)
January 31, 2020	\$ 125,000 (paid)	400,000 (issued, fair value: \$56,000)

(f) Cecilia, Sonora, Mexico (continued)

In addition to the payments made to Gunpoint above, the Company acquired a 100% interest in the Violeta concession from Millrock during the year ended September 30, 2017 by paying \$10,000 and issuing 100,000 common shares with a fair value of \$46,000 to Millrock upon completion of property title transfer, subject to 0.5% NSR.

On July 15, 2020, the Company entered into an Definitive Option Agreement with Carlyle Commodities Corp. ("Carlyle") whereby Carlyle could acquire a 100% interest in the Cecilia Property, a silver-gold project, by paying \$200,000 in cash, issuing 1,500,000 common shares and 3,000,000 special warrants, and incurring exploration expenditures of \$2,500,000 over a three-year period as per below, while retaining a 2.5% NSR.

Due date	Cash	Common shares	Special warrants	Exploration expenditures
June 23, 2020 (signing of LOI)	\$10,000 (received)(1)	-	-	-
July 15, 2020	\$40,000 (received)(2)	1,500,000 (received)(3)	3,000,000 (received) (3)	-
July 15, 2021	\$50,000	-	-	\$ 750,000
July 15, 2022	\$50,000	-	-	\$ 500,000
July 15, 2023	\$50,000	-	-	\$ 1,250,000

(1) Option payments were received on June 23, 2020

(2) Option payment was received on July 16, 2020

(3) 1,500,000 common shares and 3,000,000 special warrants were received on July 13, 2020. The special warrants are subject to the following vesting schedule: 500,000 vested 12 months after issuance, 500,000 vested 18 months after issuance, 500,000 vested 24 months after issuance, 500,000 vested 30 months after issuance, and 1,000,000 vested 36 months after issuance. Unless the option agreement expires or is terminated, the special warrants will be converted to common shares in Carlyle with no additional consideration. Upon expiration or termination of the option agreement, any unvested special warrants are terminated. As at September 30, 2020, none of the special warrants are vested.

On August 17, 2020, the Company received \$150,000 as exploration advance from Carlyle for generative exploration during the period from July 15 to September 30, 2020.

(g) Teco, Sonora, Mexico

Teco Project is made up of two concessions: Teco and Suaqui Grande. The Company acquired a 100% interest in the Suaqui Grande concession on March 24, 2017.

(h) Australia, Sonora, Mexico

Australia Project is made up of two concessions: Sandy and Sandy 2. The Company acquired a 100% interest in the Sandy and Sandy 2 concessions on February 28, 2018 and October 12, 2018, respectively.

(i) Suaqui Verde, Suaqui Grande, Mexico

The Company acquired a 100% interest in Suaqui Verde Property on October 12, 2018.

(j) Palo Fierro, Sonora, Mexico

On May 15, 2019, the Company entered into an exploration financing agreement with BHP Exploration Chile SpA ("BHP") for funding of generative exploration in the copper producing belt of Mexico (the "Program"). Per the agreement, BHP will fund US\$1,000,000 on an annual basis for a minimum of two years for generative grass-roots exploration within northeastern Sonora. On May 29, 2019, the Company received US\$1,000,000 as exploration advances for the generative exploration in the first year. During the year ended September 30, 2020, the Company had spent the US\$1,000,000 for generative exploration in the first year.

On June 5, 2019, the Company gained a 100% exploration concession interest in the Palo Fierro Property, a copper project, which is a part of the Program with BHP.

On January 29, 2020, the Company received US\$195,000 as exploration advances for the refinement exploration from January to March 2020. During the year ended September 30, 2020, the Company had spent the overall US\$195,000 for the refinement exploration program.

On June 12, 2020, the Company received US\$720,000 as exploration advances for the generative exploration during the period from July 1, 2020 to December 31, 2020 in the second year.

On September 2, 2020, the Company received US\$134,635 as exploration advances for the additional gravity survey project during the next three months from September 1 to November 30, 2020.

(k) Los Cuarentas, Sonora, Mexico

On June 24, 2019, the Company entered into a binding letter agreement ("Letter Agreement") with Millrock to acquire a 100% undivided right, title, and interest in five projects, including Los Cuarentas, La Union, El Valle, Llano del Nogalo and El Pima, at a purchase price of \$35,000 cash (paid) and 150,000 common shares (issued at a fair market value of \$24,000). As at September 30, 2020, the Company has not officially obtained ownership of the properties of Llano del Nogalo and EI Valle.

On June 17, 2020, the Company entered into a Definitive Option Agreement (the "Agreement") with Minera Hochschild Mexico, S.A. de C.V. ("Hochschild"), a wholly-owned subsidiary of Hochschild Mining PLC for the Company's 100% owned Los Cuarentas Gold-Silver Project (the "Project").

Details of the Agreement:

Phase I Earn-in Option: Hochschild can earn-in an undivided 51% by incurring US\$8,000,000 in exploration expenditures over five (5) years.

On July 20, 2020, the Company received US\$90,467 on signing the Agreement and to reimburse the Company for prepaid maintenance fees.

(k) Los Cuarentas, Sonora, Mexico (continued)

Hochschild to incur expenditures as listed in the table below totaling at least US\$8,000,000 of qualifying exploration expenditures before the fifth anniversary of the effective date of the executed Agreement.

Due date	Cumulative exploration expenditures
June 17, 2021 (1st anniversary of the effective date)	US\$700,000
June 17, 2022	US\$1,700,000
June 17, 2023	US\$2,700,000
June 17, 2024	US\$5,000,000
June 17, 2025	US\$8,000,000

Upon completion of Phase I obligations, Hochschild can elect to form a 51:49 joint venture.

Phase II Earn-in Option: Hochschild can elect to earn an additional 24% by incurring a further US\$3,000,000 in qualifying exploration expenditures and delivering a completed feasibility study.

Due date	Cumulative exploration expenditures
June 17, 2026	US\$9,000,000
June 17, 2027	US\$10,000,000
June 17, 2028	US\$11,000,000

Upon Hochschild's completion of the Phase II Earn-in and Riverside's acceptance, the parties can form a Joint Venture with Riverside having a 25% interest, and Hochschild having 75% interest. Riverside will have the option to sell its interest in the project to Hochschild for US\$20,000,000, while retaining a 1% Net Smelter Royalty (NSR).

On July 27, 2020, the Company received US\$312,614 as exploration advances for the generative exploration for the period from July 1, 2020 to September 30, 2020.

(l) La Union, Sonora, Mexico

The La Union Property is a part of the Letter Agreement with Millrock. As a result, the Company gained a 100% exploration concession interest in the La Union Property on June 24, 2019.

(m) Western Ontario, Canada

In April 2019, the Company acquired a 100% interest in the Oakes, Longrose, Pichette and Vincent projects in Western Ontario, Canada. In July 2020, the Company expanded and acquired a 100% interest in the Kenora project in Western Ontario, Canada. As at September 30, 2020, the Company owned 1,282 claims for these projects (2019 – 35).

10. Accounts payable and accrued liabilities

Accounts payable and accrued liabilities consist of payables to vendors and exploration advances from alliance partners. The breakdowns of accounts payable and accrued liabilities are as follows:

	September 30, 2020	September 30, 2019
Payables to vendors *Exploration advances	\$ 158,167 1,477,723	\$ 155,170 1,019,882
	\$ 1,635,890	\$ 1,175,052

*Exploration advances is in connection to the BHP, Carlyle and Hochschild projects during the year ended September 30, 2020. Refer to Note 9 (f), (j) and (k) for further details.

11. Government loan

In May 2020, the Company secured a \$40,000 interest-free operating line of credit after applying for the governmentsponsored Canada Emergency Business Account ("CEBA") under the Government of Canada COVID-19 relief program.

Terms of the CEBA loan:

The CEBA funds are intended for non-deferrable operating expenses, including but not limited to payroll, rent and insurance,
If there is a balance outstanding after December 31, 2020, the remaining outstanding amount will be converted into a 2-year interest-free term loan effective January 1st, 2021,
If \$30,000 is repaid by December 31, 2022, \$10,000 of the loan will be forgiven,
On December 31, 2022, the term loan will be automatically extended for another 3 years at the rate of 5% per annum on any balance remaining.

The Company has estimated the initial carrying value of the CEBA loan at \$30,927, using a discount rate of 10%, which was the estimated rate for a similar loan without the interest-free component. The difference of \$9,073 will be accredited to the loan liability over the term of the CEBA loan and offset to other income on the statements of income (loss) and comprehensive income (loss).

The details of the CEBA loan is as follows:

	September 30, 2020	September 30, 2019
Opening balance	\$ -	\$ -
Addition	30,927	-
Interest expense	1,043	-
Ending balance	\$ 31,970	\$ -

12. Capital stock and reserves

The authorized capital stock of the Company consists of an unlimited number of common and preferred voting shares without nominal or par value.

Issued and outstanding

Shares issued for the year ended September 30, 2020

(a) On January 31, 2020, the Company issued 400,000 common shares with a fair value of \$56,000 to Gunpoint in accordance with the letter agreements for the Cecilia property (Note 9 (f)).
(b) During the year ended September 30, 2020, the Company issued 4,218,943 common shares for the exercise of warrants for proceeds of \$898,112. As at September 30, 2020, there was \$13,750 in share subscription receivable for the exercise of warrants.
(c) During the year ended September 30, 2020, the Company issued 667,000 common shares for the exercise of options for proceeds of \$100,561.

Shares issued for the year ended September 30, 2019

(d) On January 8, 2019, the Company issued 265,000 bonus shares at a fair value of \$47,700 to certain executive officers and consultants of the Company in accordance with the Company's shareholder approved bonus share plan.
(e) On January 31, 2019, the Company issued 300,000 common shares with a fair value of \$51,000 to Gunpoint in accordance with the letter agreements for the Cecilia property (Note 9 (f)).
(f) On March 19, 2019 the Company completed a private placement consisting of 17,488,875 units at a price of \$0.16 per unit for gross proceeds of \$2,798,220. As part of the financing, the Company paid \$164,859 in share issuance costs and issued 28,000 additional units and warrants as finder's fees with a fair value of \$4,480 and \$1,610 respectively, recorded as share issuance cost. Each unit consisted of one common share and one whole common share purchase warrant. Each common share purchase warrant is exercisable into one common share for a period of two years from closing at a price of \$0.22 per share. The term of the warrants are subject to an accelerated exercise provision. The fair value of the finders' warrants is calculated using the Black-Scholes option pricing with the following assumptions: estimated risk-free rate of 1.64%, volatility of 82.4%, annual dividend yield of 0% and life of warrant of 2 years.
(g) On September 20, 2019, the Company issued 150,000 common shares with a fair value of \$24,000 to Millrock in accordance with the Letter Agreement for acquiring a 100% undivided right, title, and interest in five projects, including Los Cuarentas, La Union, El Valle, Llano del Nogalo and El Pima (Note 9 (k&l)).

(An Exploration Stage Enterprise) Notes to the Consolidated Financial Statements for the year ended September 30, 2020 (Expressed in Canadian Dollars)

12. Capital stock and reserves (continued)

Share purchase and finders' warrants

	Number of	Weighted average
	warrants	exercise price
Outstanding warrants, September 30, 2018	3,204,767	\$ 0.85
Issued	17,516,875	0.22
Expired	(3,204,767)	0.85
Outstanding warrants, September 30, 2019	17,516,875	0.22
Exercised as of August 14, 2020	(3,555,343)	0.22
Exercised as of September 30, 2020	(663,600)	0.22
Outstanding warrants, September 30, 2020	13,297,932	\$ 0.22

Capitan is liable to issue shares pursuant to the Arrangement, whereby a holder exercises a Riverside warrant they will be entitled to receive one new Riverside common share and 0.2594 of a Capitan common share. The exercise price of the Riverside warrants will remain the same; however, Riverside will need to compensate Capitan for each Capitan common share that is issued on exercise of a Riverside warrant. During the year ended September 30, 2020, 601,100 of Riverside's warrants were exercised, as a result, Capitan issued 155,923 common shares and Riverside compensated Capitan for \$30,055 (included in accounts payable and accrued liabilities).

The incremental fair value of 22,000 finders' warrants repriced during the year ended September 30, 2020, as result of the Arrangement, was estimated to be \$768 on the modification date using the Black-Scholes option pricing model with the following weighted average assumptions: Risk-free interest rate – 0.27%, Expected life – 0.59 year, Expected volatility - 114.05%, Expected dividend yield – Nil, Weighted average fair value per warrant - \$0.30.

Expiry date (mm/dd/yyyy)	Number of warrants outstanding	Weighted average remaining life in years	Exercise price
03/19/2021	*13,297,932	0.47	\$ 0.22
	13,297,932	0.47	\$ 0.22

As at September 30, 2020, the following share purchase warrants were outstanding and exercisable:

*For 12,375,932 of the warrants outstanding, in the event that after July 20, 2019, the closing price of the Company's shares trades at a volume weighted average price (VWAP) greater than or equal to \$0.45 for 10 consecutive trading days, the Company can elect to accelerate the expiry date of the warrants via a press release wherein the warrants will expire on the 30th trading day after the date of the press release's issuance.

Bonus share plan

The Company has a bonus share plan ("Bonus Plan") that enables the directors to approve the issuance of bonus shares to employees, officers, directors and consultants of the Company. The Bonus Plan puts the number of bonus shares that may be issued under the Bonus Plan to be 400,000 common shares per year. During the year ended September 30, 2020, nil (2019 - 265,000) bonus shares were issued under this plan.

Stock options

The Company has established a rolling stock option plan ("Option Plan") enabling the directors to grant options to employees, officers, directors, and consultants of the Company. From time to time, shares may be reserved by the Board, in its discretion, for options under the Option Plan, provided that the total number of shares reserved for issuance by the Board shall not exceed 10% of the issued and outstanding listed shares (on a non-diluted basis) less that portion of the 400,000 that may be issued as bonus shares that have not been so issued as at the date of grant. Options are non-assignable

12. Capital stock and reserves (continued)

and may be granted for a term not exceeding that permitted by the Exchange, currently ten years. All stock options issued are subject to vesting terms. Options issued to directors, vest in the amount of 33% every six months from the date of grant; and options issued to officers and/or consultants vest between 12 and 24 months depending on date of grant and nature of service. The exercise price of each option equals the market price, minimum price, or discounted market price of the Company's shares as calculated on the date of grant.

Share-based payments relating to options vested during the year ended September 30, 2020, using the Black-Scholes option pricing model was \$228,800 (2019 - \$96,397), of which \$93,455 was associated with the incremental fair value of stock options repriced as a result of the Arrangement. The associated share-based payment expense for the options granted during the year was calculated based on the following weighted average assumptions:

	2020	2019
Forfeiture rate	0.00%	0.00%
Estimated risk-free rate	1.32 %	1.33 %
Expected volatility	84.38%	82.34%
Estimated annual dividend yield	0.00 %	0.00 %
Expected life of options	5.00 years	5.00 years
Fair value per option granted	\$ 0.09	\$ 0.12

The number and weighted average exercise prices of the stock options are as follows:

	Number of options	Weighted average exercise price
Outstanding options, September 30, 2018	3,201,000	\$ 0.29
Forfeited	(140,500)	\$ 0.31
Granted	785,000	\$ 0.17
Outstanding options, September 30, 2019	3,845,500	\$ 0.26
Expired	(723,000)	\$ 0.27
Granted	1,415,000	\$ 0.14
Exercised	(667,000)	\$ 0.15
Outstanding options, September 30, 2020	3,870,500	\$ 0.18

During the year ended September 30, 2019, 140,500 stock options were forfeited.

During the year ended September 30, 2020, 723,000 stock options expired unexercised.

During the year ended September 30, 2020, 667,000 stock options were exercised.

On January 8, 2019, the Company granted 785,000 incentive stock options (the "Options") to certain directors, officers and consultants of the Company. The Options are exercisable at \$0.17 per share for a period of five years from the date of grant. Options granted to individuals in their capacity as a Director vest in three equal installments over 18 months and Options granted to Officers and Consultants vest in four equal installments over 12 months.

On November 15, 2019, the Company granted 1,265,000 incentive stock options (the "Options") to certain directors, officers and consultants of the Company. The Options are exercisable at \$0.135 per share for a period of five years from the date of grant. Options granted to individuals in their capacity as a director vest in three equal installments over 18 months and Options granted to officers and consultants vest in four equal installments over 12 months.

12. Capital stock and reserves (continued)

On March 27, 2020, the Company granted 150,000 incentive stock option (the "Options") to certain consultants of the Company. The Options are exercisable at \$0.16 per share for a period of five years from the date of grant. Options granted to consultants vest in four equal installments over 12 months.

As at September 30, 2020, the Company has outstanding stock options exercisable as follows:

Expiry date (mm/dd/yyyy)	Number of options outstanding	Weighted average remaining life in years	*Exercise price	Number of options exercisable
01/07/2021	457,500	0.27	\$ 0.11	457,500
12/16/2021	935,000	1.21	\$ 0.32	935,000
11/03/2022	688,000	2.09	\$ 0.21	688,000
01/08/2024	585,000	3.27	\$ 0.13	585,000
11/15/2024	1,055,000	4.13	\$ 0.11	687,083
03/27/2025	150,000	4.49	\$ 0.12	75,000
	3,870,500	2.49		3,427,583

*According to the Arrangement with Capitan on August 14, 2020, each Riverside Option were exchanged for one Riverside Replacement Option to acquire one New Riverside Share and one Capitan Option to acquire 0.2594 of a Capitan Share. As a result, the above exercise prices have been properly reflected to the new Riverside Replacement Option prices.

13. Income taxes

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

	2020	2019
Income (loss) for the year	\$ 2,631,544	\$ (1,310,831)

Expected income tax expense (recovery)	\$ 711,000	\$ (354,000)
Share issue costs	-	(46,000)
Change in statutory, foreign tax, foreign exchange rates and other	(247,000)	(134,000)
Permanent difference	(825,000)	444,000
Tax impact of gain on spin-out	473,000	-
Impact on prior year provision per statutory tax return and expiry
of non-capital losses	24,000	452,000
Change in unrecognized deductible temporary differences	(136,000)	(362,000)
Total income taxes	\$ -	\$ -

13. Income taxes (continued)

The significant components of the Company's deferred tax assets and liabilities are as follows:

	2020	2019
Deferred tax assets (liabilities) Non-capital losses Equipment Exploration and evaluation assets	\$ 1,547,000 - (1,547,000)	\$ 1,815,000 75,000 (1,890,000)
	\$ -	\$ -

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

	September 30, 2020	Expiry dates	September 30, 2019	Expiry dates
Share issue costs	\$ 138,000	2041-2044	\$ 209,000	2040-2043
Allowable capital losses	-	N/A	1,002,000	N/A
Non-capital losses	10,752,000	See below	10,412,000	See below
Capital assets	433,000	N/A	131,000	N/A
Exploration and evaluation assets	557,000	N/A	739,000	N/A
Marketable securities	983,000	N/A	839,000	N/A

Canada	9,360,000	2027-2040	9,232,000	2027-2039
USA	5,000	2032-	16,000	2032-2036
		indefinitely
Mexico	1,387,000	2026-2030	1,164,000	2026-2029

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

RIVERSIDE RESOURCES INC. (An Exploration Stage Enterprise) Notes to the Consolidated Financial Statements for the year ended September 30, 2020 (Expressed in Canadian Dollars)

14. Related party transactions

The Company entered into the following transactions with related parties:

Payee / Payer	Nature of transactions	Year ending September 30,	Fees (Income) (\$)	Shares (\$)	Amount payable (receivable) at year end (\$)
Arriva	Management and	2020	249,997	Nil	7,736
Management Inc.	consulting fees (i)	2019	250,440	18,000	45,603
GSBC Financial	Management and	2020	96,000	Nil	Nil
Management Inc.	consulting fees (i)	2019	96,000	9,000	Nil
Alberto Orozco	Consulting fees (i)	2020	93,468	Nil	Nil
		2019	68,750	Nil	Nil
Omni Resource	Consulting fees (i)	2020	120,000	Nil	Nil
Consulting Ltd.		2019	107,500	9,000	16,699
Brian Groves	Director fees(ii)	2020	12,000	Nil	Nil
		2019	12,000	Nil	Nil
James Clare	Director fees(ii)	2020	Nil	Nil	Nil
		2019	3,000	Nil	Nil
Carol Ellis	Director fees(ii)	2020	12,000	Nil	Nil
		2019	12,000	Nil	Nil
Walter Henry	Director fees(ii)	2020	12,000	Nil	Nil
		2019	12,000	Nil	Nil
First Helium Inc.	Rent (iii)	2020	(24,000)	Nil	(2,100)
		2019	(16,000)	Nil	(16,800)

Key management personnel include those persons having authority and responsibility for planning, directing and controlling the activities of the Company as a whole. The Company has determined that key management personnel consist of executive and non-executive members of the Company's Board of Directors and corporate officers. The remuneration of directors and key management personnel during the year ended September 30, 2020 and 2019 are as follows:

	2020	2019
Directors' fees (ii)	\$ 36,000	\$ 39,000
Management and consulting fees (i)	559,465	522,690
Performance bonus shares	-	36,000
Share-based payments	131,506	66,012
	\$ 726,971	\$ 663,702

(i) Management and consulting fees of the key management personnel for the year were allocated as follows: \$108,000 (2019 - \$108,000) expensed to consulting fees, \$344,068 (2019 - \$414,690) capitalized to exploration and evaluation assets and \$107,397 (2019 - \$nil) capitalized to exploration work performed for alliances that will be reimbursed.

(ii) Starting from January 1, 2019, James Clare, director, agreed not to receive director fees from the Company and waived \$26,846 in amounts owed to him from the Company. As a result, the Company recognized a gain on debt settlement of \$26,846 during the year ended September 30, 2019.
(iii) Starting from February 2019, the Company agreed to share their office space with First Helium Inc. ("First Helium"), a company with a common officer with the Company. During the year ended September 30, 2020, the Company recognized rental recovery of \$24,000 (2019 - \$16,000) from First Helium, which was recorded in other income.

14. Related party transactions (continued)

On November 30, 2019, the Company received 300,000 pre-consolidated shares of First Helium Inc. to settle \$21,000 in debt. On September 8, 2020, the Company acquired an additional 472,500 pre-consolidated shares of First Helium Inc. at \$0.04 per share by paying cash of \$18,900. Please refer to Note 5 & Note 16 (a) for additional details.

15. Segmented information

The Company operates in one business segment, the exploration of exploration and evaluation assets and prospect generation. The Company's exploration activities are centralized whereby management of the Company is responsible for business results and the everyday decision-making. Geographical information is as follows:

	September 30,	September 30,
	2020		2019
Equipment
Canada	\$ 5,628	\$	7,418
Mexico	226,383		165,832

	232,011		173,250
Exploration and evaluation assets
Canada	2,238,866		138,586
Mexico	2,979,081		6,298,353

	5,217,947		6,436,939

Total	\$ 5,449,958	\$	6,610,189

16. Supplemental disclosure with respect to cash flows

	September 30, 2020	September 30, 2019
Cash Cash equivalents	\$ 4,453,401 135,177	\$ 2,647,409 796,587
	4,588,578	3,443,996

The significant non-cash transactions for the year ended September 30, 2020 were as follows:

a) The Company received 300,000 First Helium Inc. shares at a value of \$21,000 as settlement of debts for the previous rental recovery from February to November 2019, which was recorded as other income. (Note 5(6))

b) The Company issued 400,000 common shares at \$56,000 for the Cecilia Project (Note 9(f)).

c) The Company received 1,500,000 Carlyle Commodities Corp. ("Carlyle") shares valued at \$450,000 as exploration and evaluation assets recoveries (Note 9 (f)).
d) Included in accounts payable was \$26,756 in exploration and evaluation asset expenditures.

The significant non-cash transactions for the year ended September 30, 2019 were as follows:

a) The Company issued 265,000 common shares at a value of \$47,700 to certain executive officers and consultants in accordance with the Company's bonus share plan. The amount was capitalized to exploration and evaluation assets.
b) The Company issued 300,000 common shares valued at \$51,000 for the Cecilia Project (Note 9(f)).

16. Supplemental disclosure with respect to cash flows (continued)

c) The Company received 1,000,000 Sinaloa Resources Corp. shares valued at \$100,000 as exploration and evaluation asset recoveries (Note 9 (c)).
d) The Company issued 28,000 finder's units issued with a fair value of \$1,610 as share issuance costs.
e) The Company issued 150,000 common shares valued \$24,000 for the Los Cuarentas, La Union, El Valle, Llano del Nogalo and El Pima Projects (Note 9(k&l)).
f) Included in accounts payable was \$86,215 in exploration and evaluation asset expenditures.

17. 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 exploration and evaluation assets. In the management of capital, the Company includes components of shareholders' equity. 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 properties in which the Company currently has an interest are in the exploration stage; as such the Company is dependent on external financing to fund activities. In order to carry out planned exploration and pay for administrative costs, the Company will spend its existing working capital and raise additional funds as needed. 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.

There were no changes in the Company's approach to capital management during the year ended September 30, 2020. The Company is not currently subject to externally imposed capital requirements.

18. Financial instruments

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 the Company's receivables, accounts payable and accrued liabilities and government loan approximate carrying value, which is the amount recorded on the statements of financial position. The fair value of the Company's cash and cash equivalents and public company short-term investments, under the fair value hierarchy are based on level 1 quoted prices in active markets for identical assets and liabilities. Financial instruments valued at level 2 inputs consist of the Company's private company short-term investments. The key assumptions driving the valuation of the private company short-term investments include, but are not limited to the value of completed financings by the investee.

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

Credit risk

Credit risk is the risk of loss associated with a counterparty's inability to fulfill its payment obligations. The Company's cash and cash equivalents are held with major financial institutions in Canada and Mexico which management believes the risk of loss to be remote. Receivables consist of tax refunds from the Federal Government of Canada and Mexico, in which regular collection occurs, and land tax recovery. The Company believes its credit risk is equal to the carrying value of this balance.

RIVERSIDE RESOURCES INC. (An Exploration Stage Enterprise) Notes to the Consolidated Financial Statements for the year ended September 30, 2020 (Expressed in Canadian Dollars)

18. Financial instruments (continued)

Liquidity risk

The Company's approach to managing liquidity risk is to ensure that it will have sufficient liquidity to meet liabilities when due. As at September 30, 2020, the Company had cash and cash equivalents of \$4,588,578 to settle current liabilities of \$2,626,074. The Company believes it has sufficient funds to meet its current liabilities as they become due.

Interest rate risk

The Company has interest-bearing cash balances. The interest earned on cash balances approximates fair value rates, and the Company is not at a significant risk to fluctuating interest rates. The Company's current policy is to invest excess cash in investment-grade short-term deposit certificates issued by its banking institutions. The Company periodically monitors the investments it makes and is satisfied with the credit ratings of its banks. As of September 30, 2020, the Company had investments in short-term deposit certificates of \$23,000.

Price risk

The Company is exposed to price risk with respect to commodity and equity prices. Equity price risk is defined as the potential adverse impact on the Company's earnings due to movements in individual equity prices or general movements in the level of the stock market. Commodity price risk is defined as the potential adverse impact on profit or loss and economic value due to commodity price movements and volatilities. The Company closely monitors commodity prices of gold, silver and copper, individual equity movements, and the stock market to determine the appropriate course of action to be taken by the Company.

The Company currently maintains short-term investments, which include marketable securities (Note 5). There can be no assurance that the Company can exit these positions if required, resulting in proceeds approximating the carrying value of these securities.

Foreign currency risk

The Company is exposed to foreign currency risk on fluctuations related to cash and cash equivalents, receivables, and accounts payable and accrued liabilities that are denominated in US dollars (US) and Mexican pesos.

Sensitivity analysis

The Company operates in Mexico and is exposed to risk from changes in the US dollar and the Mexican peso. A simultaneous 10% fluctuation in the US dollar and Mexican peso against the Canadian dollar would affect loss for the period by \$445,089.

The Company holds marketable securities and is exposed to risk from changes in the share price of the marketable securities. A simultaneous 15% fluctuation in share prices would affect short-term investments and profit or loss for the year by approximately \$219,497.

19. Mexico tax liability

During the year ended September 30, 2019, the Company received a final verdict of a lawsuit against the Government of Mexico. The funds provided by the Company to its wholly-owned subsidiary Riverside Resources Mexico S.A. de C.V. ("RRM") in fiscal 2010 were deemed to be income. The Mexican tax authority passed a decision to impose a lien on RRM's assets and a tax penalty of \$1,131,026 on RMM. Accordingly, the Company recorded a tax penalty totaling \$1,131,026. The Mexican tax authority has not enforced the lien and the lien does not impede RRM's ability to carry out its business operations.

19. Mexico tax liability

As at September 30, 2020, the Company recognized \$990,184 (2019, \$1,103,819) as provision liability as a result of the foreign exchange movement. The Company is currently negotiating with the tax authority on a settlement.

20. Subsequent events

Subsequent to the year ended September 30, 2020, 212,500 stock options expired unexercised.

On October 19, 2020, the Company granted 1,330,000 incentive stock options (the "Options") to certain directors, officers and consultants of the Company. The Options are exercisable at \$0.30 per share for a period of five years from the date of grant. Options granted to individuals in their capacity as a director vest in three equal installments over 18 months and Options granted to officers and consultants vest in four equal installments over 12 months.

On January 5, 2021, the Company sold 700,000 shares of Arizona Metals Corp. for net proceeds of \$712,053.

As of January 28, 2021, the Company issued 125,000 common shares for the exercise of warrants for net proceeds of \$21,250.

As of January 28, 2021, the Company issued 567,500 common shares for the exercise of options for net proceeds of \$62,925.

On December 9, 2020, the Company entered into an option agreement, signing a Definitive Agreement with Upper Canada Inc. whereby Upper Canada could acquire up to a 100% undivided interests in the La Silla Property, a silver-gold project, by paying \$500,000 in cash, issuing 10,600,000 common shares and incurring exploration expenditures of \$20,000,000 over a four-year period as follows:

Due Date	Cash	Common shares	Exploration expenditures	Percentage earned
September 11, 2020 (signing of LOI)		600,000 (received)	-	-
December 9, 2020	*\$50,000	5,000,000(received)	-	-
March 9, 2021	\$50,000	2,500,000	-	-
June 9, 2021	\$75,000	2,500,000	-	-
December 9, 2021	\$150,000	-	\$5,000,000	51%
December 9, 2022	\$100,000	-	\$2,500,000	60%
December 9, 2023	\$50,000	-	\$7,500,000	-
December 9, 2024	\$25,000	-	\$5,000,000	100%

*As at January 28, 2021, the Company has not received the \$50,000 cash payment and the Company is actively under negotiation with Upper Canada to ensure the agreement is still in good standing.

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Riverside Resources Inc. — Audit Report / Information 2021

46047_rns_2021-01-28_173fbde2-a704-477f-848d-80ba0f30a68b.pdf

Index to Consolidated Financial Statements

September 30, 2020

INDEPENDENT AUDITOR'S REPORT

Opinion

Basis for Opinion

Other Information

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

Auditor's Responsibilities for the Audit of the Consolidated Financial Statements

(An Exploration Stage Enterprise)

1. Nature and continuance of operations

2. Plan of Arrangement

2. Plan of Arrangement (continued)

3. Basis of presentation

4. Significant accounting policies

(a) Principles of consolidation

(b) Foreign currency translation

Exploration and evaluation assets

Share-based payments

Contingencies

Critical accounting judgments

Financial assets

Financial liabilities

(l) Share-based payments

(m) Capital stock

New Accounting Policies Adopted

IFRS 16 - Leases (new; replaces IAS 17)

IFRIC 23 - Uncertainty over Income Tax Treatments

5. Short-term investments

6. Receivables

7. Prepaid expenses

8. Equipment

9. Exploration and evaluation assets

9. Exploration and evaluation assets (continued)

9. Exploration and evaluation assets (continued)

Details of the Agreement:

10. Accounts payable and accrued liabilities

11. Government loan

Terms of the CEBA loan:

12. Capital stock and reserves

Issued and outstanding

12. Capital stock and reserves (continued)

Share purchase and finders' warrants

Bonus share plan

Stock options

12. Capital stock and reserves (continued)

12. Capital stock and reserves (continued)

13. Income taxes

13. Income taxes (continued)

RIVERSIDE RESOURCES INC. (An Exploration Stage Enterprise) Notes to the Consolidated Financial Statements for the year ended September 30, 2020 (Expressed in Canadian Dollars)

14. Related party transactions

14. Related party transactions (continued)

15. Segmented information

16. Supplemental disclosure with respect to cash flows

16. Supplemental disclosure with respect to cash flows (continued)

17. Capital management

18. Financial instruments

Credit risk

RIVERSIDE RESOURCES INC. (An Exploration Stage Enterprise) Notes to the Consolidated Financial Statements for the year ended September 30, 2020 (Expressed in Canadian Dollars)

18. Financial instruments (continued)

Liquidity risk

Interest rate risk

Price risk

Foreign currency risk

Sensitivity analysis

19. Mexico tax liability

19. Mexico tax liability

20. Subsequent events

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Riverside Resources Inc. Audit Report / Information 2021