Riverside Resources Inc. — Interim / Quarterly Report 2021

Mar 1, 2021

RIVERSIDE RESOURCES INC.

(An Exploration Stage Enterprise) (Expressed in Canadian Dollars) Condensed Interim Consolidated Financial Statements For the Three Months Ended December 31, 2020 and 2019 (Unaudited- Prepared by Management)

RIVERSIDE RESOURCES INC.

Index to Condensed Interim Consolidated Financial Statements

December 31, 2020

	Page
NOTICE OF NON-REVIEW OF CONDENSED INTERIM CONSOLIDATED FINANCIAL STATMENTS	3
CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Condensed Interim Consolidated Statements of Financial Position	4
Condensed Interim Consolidated Statements of Income and Comprehensive Income	5
Condensed Interim Consolidated Statements of Cash Flows	6
Condensed Interim Consolidated Statements of Changes in Shareholders' Equity	7
Notes to the Condensed Interim Consolidated Financial Statements	8-29

NOTICE OF NON-REVIEW OF CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

In accordance with National Instrument 51‐102 Part 4, subsection 4.3(3)(a), if an auditor has not performed a review of these condensed interim consolidated financial statements, they must be accompanied by a notice indicating that these condensed interim consolidated financial statements have not been reviewed by an auditor.

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

The attached condensed interim consolidated financial statements for the three months ended December 31, 2020 have not been reviewed by the Company’s auditors.

RIVERSIDE RESOURCES INC.

(An Exploration Stage Enterprise) Consolidated Statements of Financial Position as at, (Expressed in Canadian Dollars)

	Note	December 31,		September 30,
		2020		2020
Assets
Current assets:
Cash and cash equivalents	15	$ 3,935,516	$	4,588,578
Short-term investments	5	1,901,213		1,463,312
Share subscription receivable	12	13,750		13,750
Receivables	6	816,055		596,452
Prepaid expenses	7	78,449		109,672
		6,744,983		6,771,764
Equipment	8	234,441		232,011
Explorationand evaluationassets	9	5,558,127		5,217,947
		$ 12,537,551	$ 12,221,722
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and accrued liabilities	10	$ 1,402,215	$	1,635,890
Provision liability	18	1,053,170		990,184
		2,455,385		2,626,074
Government loan	11	32,776		31,970
		2,488,161		2,658,044
Shareholders’ equity:
Capital stock	12	25,014,779		24,961,986
Reserves	12	3,578,752		3,458,788
Deficit		(16,546,405)		(16,596,443)
Accumulated other comprehensive loss		(1,997,736)		(2,260,653)
		10,049,390		9,563,678
		$ 12,537,551	$12,221,722

Nature and continuance of operations (Note 1) Subsequent events (Note 19)

On behalf of the Board on March 1, 2021

“Walter Henry” Director “Carol Ellis” Director Water Henry Carol Ellis

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

4

RIVERSIDE RESOURCES INC.

(An Exploration Stage Enterprise)

Condensed Interim Consolidated Statements of Income and Comprehensive Income For the three months ended December 31, (Unaudited- Expressed in Canadian Dollars)

	Note	2020	2019
Expenses
Management and consulting fees	13	$ 1,410	$ 61,482
Depreciation	8	18,493	13,640
Director fees	13	9,000	9,000
Foreign exchange loss		89,699	31,825
General and administration		26,012	17,394
Interest expense	11	806	-
Investor relations		76,154	58,106
Professional fees		37,794	49,794
Property investigation and evaluation		2,828	1,699
Rent		20,315	19,348
Share-based payments	12,13	135,332	30,338
Finance income		(2,480)	(12,655)
Other income	5,13	(32,907)	(6,000)
Unrealized loss (gain) on short-term investments	5	(432,494)	(1,345,279)
Realized loss (gain) on short-term investments	5	-	385,114
Income for the period		50,038	686,194
Foreign exchange movements		262,917	144,035
Comprehensive income for the period		312,955	830,229
Income per share– basic and diluted		$ 0.00	$ 0.01
Weighted average number of
common shares outstanding
– basic		64,028,731	54,363,054
– diluted		72,605,175	54,363,054

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

5

RIVERSIDE RESOURCES INC.

(An Exploration Stage Enterprise)

Condensed Interim Consolidated Statements of Cash Flows for the period ended December 31, (Unaudited- Expressed in Canadian Dollars)

	Note	2020	2019
OPERATING ACTIVITIES
Income for the period		$ 50,038	$ 686,194
Items not involving cash:
Depreciation	8	18,493	13,640
Share-based payments	12,13	135,332	30,338
Realized (gain) loss on short-term investments	5	-	385,114
Unrealized (gain) loss on short-term investments	5	(432,494)	(1,345,279)
Other income	5,13	(32,907)	(6,000)
Accrued interest on government loan	11	806	-
Change in non-cash working capital items:
Prepaid expenses		31,223	10,905
Receivables		(186,696)	(10,583)
Accounts payable and accrued liabilities		(132,727)	(84,953)
		(548,932)	(320,624)
INVESTING ACTIVITIES
Exploration advances – accounts payable and accrued
liabilities		(194,111)	(354,455)
Exploration and evaluation assets		(56,974)	(147,751)
Purchase of equipment	8	(4,440)	-
Sale (Purchase) of short-term investments	5	(5,408)	784,207
		260,933	282,001
FINANING ACTIVITIES
Proceeds from shares issuance, net of issuance costs	12	37,425	-
		37,425	-
Effect of foreign exchange on cash and cash equivalents		119,378	1,231
Increase (decrease) in cash and cash equivalents		(653,062)	(37,392)
Cash and cash equivalents, beginning of the period		4,588,578	3,443,996
Cash and cash equivalents, end of the period		$ 3,935,516	$ 3,406,604

Supplemental disclosures with respect to cash flows (Note 15)

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

6

RIVERSIDE RESOURCES INC.

(An Exploration Stage Enterprise)

Condensed Interim Consolidated Statements of Changes in Shareholders’ Equity (Unaudited - Expressed in Canadian Dollars)

Note	Capital Stock Accumulated Shares Amount Reserves Deficit other comprehensive loss Total
Balance at September 30, 2019 Issued for: Share-based payments 12 Income for the period Foreign exchange movements	62,841,188 $ 27,344,879 $ 3,3292,482 $ (19,277,987) $ (1,346,728) $ 10,062,586 - - 30,338 - - 30,338 - - - 686,194 - 686,194 - - - - 144,035 144,035
Balance at December 31, 2019 Balance at September 30, 2020 Issued for: Exercise of warrants 12 Exercise of options 12 Share-based payments 12 Income for the period Foreign exchange movements	62,841,188 27,344,879 3,322,760 (18,541,793) (1,202,693) 10,923,153 68,127,131 24,961,986 3,458,788 (16,596,443) (2,260,653) 9,563,678 125,000 21,250 - - - 21,250 142,500 31,543 (15,368) - - 16,175 - - 135,332 - - 135,332 - - - 50,038 - 50,038 - - - - 262,917 262,917 68,394,631 $ 25,014,779 $ 3,578,752 $ (16,546,405) $ (1,997,736) $ 10,049,390
Balance at December 31, 2020

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

7

RIVERSIDE RESOURCES INC. (An Exploration Stage Enterprise) Notes to the Condensed Interim Consolidated Financial Statements For the three months ended December 31, 2020 (Unaudited - Expressed in Canadian Dollars)

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	1,082,717
evaluation assets
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.

8

RIVERSIDE RESOURCES INC. (An Exploration Stage Enterprise) Notes to the Condensed Interim Consolidated Financial Statements For the three months ended December 31, 2020 (Unaudited - Expressed in Canadian Dollars)

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 and Statement of compliance

These condensed interim consolidated financial statements have been prepared on a historical cost basis, except for financial instruments classified as financial instruments as fair value through profit and loss or available for sale, which are stated at their fair value. All dollar amounts presented are in Canadian dollars unless otherwise specified. In addition, these condensed interim consolidated financial statements have been prepared using the accrual basis of accounting except for cash flow information.

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

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.

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

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.

9

(An Exploration Stage Enterprise) Notes to the Condensed Interim Consolidated Financial Statements For the three months ended December 31, 2020 (Unaudited - Expressed in Canadian Dollars)

RIVERSIDE RESOURCES INC.

4. Significant accounting policies (continued)

New Accounting Policies Adopted (continued)

IFRS 16 - Leases (new; replaces IAS 17) (continued)

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:

	December31,2020	December31,2020		September30,2020	September30,2020
	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	1,530,000	1,500,000	398,632	990,000
Guerrero Exploration Inc.	1,926,000	343,049	-	1,926,000	343,049	-
Carlyle Commodities Corp.(2)	1,500,000	450,000	187,500	1,500,000	450,000	270,000
Sierra Madre Developments Inc.	1,250,322	1,103,791	137,535	1,250,322	1,103,791	162,542
Sinaloa Resources Corp.(3)	1,000,000	100,000	-	1,000,000	100,000	-
First Helium Inc.(4)	154,500	45,308	45,308	77,250	39,900	39,900
UpperCanadaMiningInc. (5)	600,000	-	-	600,000	-	-
		$2,451,800	$1,901,213		$2,446,392	$1,463,312

(1) 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 (e) for additional details.

10

RIVERSIDE RESOURCES INC.

(An Exploration Stage Enterprise) Notes to the Condensed Interim Consolidated Financial Statements For the three months ended December 31, 2020 (Unaudited - Expressed in Canadian Dollars)

5. Short-term investments (continued)

• (3) 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 December 31, 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.

• (4) 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 13 (iii) & Note 15 (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. On November 9, 2020, the Company acquired the additional 772,500 pre-consolidated shares of First Helium Inc. at $0.007 per share by paying cash of $5,408.

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

• (5) 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.

6. Receivables

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

	December 31, 2020 September 30, 2020
GST recoverable amounts in Canada IVA recoverable amounts in Mexico Land taxes recovery in Mexico Other receivable	$ 13,939 $ 8,713 780,340 565,165 21,776 20,474 - 2,100 $ 816,055 $ 596,452

7. Prepaid expenses

The breakdown of prepaid expenses is as follows:

	December 31, 2020 September 30, 2020
Conferences and courses Expense advances Insurance Rent	$ 9,651 $ 10,662 31,605 64,201 26,342 23,980 10,851 10,829 $ 78,449$ 109,672

11

RIVERSIDE RESOURCES INC.

(An Exploration Stage Enterprise)

Notes to the Condensed Interim Consolidated Financial Statements For the three months ended December 31, 2020 (Unaudited - Expressed in Canadian Dollars)

8. Equipment

	Computer	Exploration	Furniture &
	hardware	equipment	fixtures	Vehicles	TOTAL
Cost
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
Additions	-	-	-	4,440	4,440
Foreign exchange movement	1,035	12,119	1,252	12,406	26,812
Balance at December 31, 2020	$ 89,840	$ 217,641	$ 32,605	$ 209,910	$ 549,996
Accumulated depreciation
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)
Depreciation	(1,123)	(5,426)	(213)	(11,731)	(18,493)
Foreign exchange movement	(483)	(5,833)	(1,082)	(2,931)	(10,329)
Balance at December 31, 2020	$ (80,901)	$ (113,632)	$ (28,537)	$ (92,485)	$ (315,555)
Net book value
Balance at September 30, 2020	$ 9,510	$ 103,149	$ 4,111	$ 115,241	$ 232,011
Balance at December 31, 2020	$ 8,939	$ 104,009	$ 4,068	$ 117,425	$ 234,441

12

RIVERSIDE RESOURCES INC.

(An Exploration Stage Enterprise)

Notes to the Condensed Interim Consolidated Financial Statements For the three months ended December 31, 2020 (Unaudited - Expressed in Canadian Dollars)

9. Exploration and evaluation assets

For the period ended December 31, 2020

																			El Valle, Llano del	El Valle, Llano del
		Tajitos		La Silla		Australia		Ariel		Cecilia		Teco		Suaqui Verde		Los Cuarentas		La Union	Nogalo & El Pima			Northwestern
		Mexico		Mexico		Mexico		Mexico		Mexico		Mexico		Mexico		Mexico		Mexico		Mexico	Ontario Canada			Total
Acquisition costs	$	6,403	$	-	$	-	$	-	$	-	$	-	$	-	$	-			$	-	$	-	$	6,403
Exploration costs:
Assaying		-		-		-		-		-		-		-		-		-		-		3,467		3,467
Drilling		-		-		-		-		-		-		-		21,757		-		-		-		21,757
Field & camp costs		8,800		4,395		1,067		-		-		-		-		-		-		-		1,226		15,488
Geological consulting		1,500		3,675		-		-		-		-		-		-		-		-		21,240		26,415
Transport&support		12,748		5,425		-		-		-		-		-				-		-		20,278		38,451
Totalcurrentexplorationcosts		23,048		13,495		1,067		-		-		-		-		21,757		-		-		46,211		105,578
Professional & other fees:
Professional consulting		-		9,327		-		-		-		3,000		-		-		-		-		23,326		35,653
Legal fees		1,018		300		-		-		-		-		-		-		-		-		-		1,318
Others		1,185		-		-		-		-		-		-		-		-		-		-		1,185
Totalcurrent professional& other fees		2,203		9,627		-		-		-		3,000		-		-		-		-		23,326		38,156
Total costs incurred during the period		31,654		23,122		1,067		-		-		3,000		-		21,757		-		-		69,537		150,137
Balance, Opening		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
Foreign exchange movements		112,552		14,628		1,969		2,168		34,422		11,126		1,518		9,210		2,300		150		-		190,043
Balance,End of theperiod	$	2,604,518	$	475,862	$	36,441	$	97,360	$	1,340,118	$	208,113	$	25,382	$	131,231	$	49,571	$	2,504	$	587,027	$	5,558,127
Cumulative costs:
Acquisition	$	1,036,908	$	56,506	$	2,655	$	9,235	$	624,814	$	67,516	$	3,894	$	150,233	$	16,990	$	1,950	$	66,897	$	2,037,598
Exploration		1,554,725		506,118		22,139		73,077		975,879		121,092		22,562		93,928		31,047		180		354,198		3,754,945
Professional & other fees		315,133		95,066		13,450		16,816		149,119		8,124		-		15,189		3,430		490		165,932		782,749
Recoveries		-		(164,000)		-		-		(500,000)		-		-		(122,519)		-		-		-		(786,519)
Foreignexchangemovements		(302,248)		(17,828)		(1,803)		(1,768)		90,306		11,381		(1,074)		(5,600)		(1,896)		(116)		-		(230,646)
	$	2,604,518	$	475,862	$	36,441	$	97,360	$	1,340,118	$	208,113	$	25,382	$	131,231	$	49,571	$	2,504	$	587,027	$	5,558,127

13

RIVERSIDE RESOURCES INC.

(An Exploration Stage Enterprise)

Notes to the Condensed Interim Consolidated Financial Statements For the three months ended December 31, 2020 (Unaudited - Expressed in Canadian Dollars)

9. Exploration and evaluation assets (continued)

For the year ended September 30, 2020

																					El Valle, Llano del	El Valle, Llano del
		Penoles		Tajitos		La Silla		Australia		Ariel		Cecilia		Teco		Suaqui Verde		Los Cuarentas		La Union	Nogalo & El Pima			Northwestern
		Mexico		Mexico		Mexico		Mexico		Mexico		Mexico		Mexico		Mexico		Mexico		Mexico		Mexico	Ontario 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
Totalcurrentexplorationcosts		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
Others		(102,608)		4,228		-		-		1,297		140		2,245		-		396		3,026		-		5,106		(86,170)
Totalcurrent professional& other fees		(88,440)		18,889		33,306		13,450		6,297		9,852		3,354		-		15,189		3,026		490		92,606		108,019
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		(1,082,717)		-		-		-		-		-		-		-		-		-		-		-		(1,082,717)
Foreign exchange movements		(421,362)		(200,480)		(26,106)		(3,633)		(3,802)		(62,203)		(19,855)		(2,745)		(14,133)		(4,149)		(266)		-		(758,734)
Balance,End ofthe 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		612,406		312,930		85,439		13,450		16,816		149,119		5,124		-		15,189		3,430		490		142,606		1,356,999
Recoveries		(4,665,613)		-		(164,000)		-		-		(500,000)		-		-		(122,519)		-		-		-		(5,452,132)
Transferred to Capitan		(1,082,717)		-		-		-		-		-		-		-		-		-		-		-		(1,082,717)
Foreignexchangemovements		(1,002,833)		(414,800)		(32,456)		(3,772)		(3,936)		55,884		255		(2,592)		(14,810)		(4,196)		(266)		-		(1,423,522)
	$	-	$	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

14

(An Exploration Stage Enterprise) Notes to the Condensed Interim Consolidated Financial Statements For the three months ended December 31, 2020 (Unaudited - Expressed in Canadian Dollars)

RIVERSIDE RESOURCES INC.

9. Exploration and evaluation assets (continued)

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.

• (c) La Silla, Sinaloa, Mexico

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:

==> picture [438 x 143] intentionally omitted <==

----- Start of picture text -----

Due date Cash Common shares Cumulative
exploration
expenditures
May 30, 2018 (signing of $ 25,000 (received) [(1)] - -
LOI)
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
----- End of picture text -----

15

RIVERSIDE RESOURCES INC. (An Exploration Stage Enterprise) Notes to the Condensed Interim Consolidated Financial Statements For the three months ended December 31, 2020 (Unaudited - 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.

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 silvergold 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:

==> picture [464 x 207] intentionally omitted <==

----- Start of picture text -----

Due Date Cash Common shares Exploration Percentage
expenditures earned
September 11, 2020 600,000 (received) - -
(signing of LOI)
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%
----- End of picture text -----*

*As at March 1, 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.

16

RIVERSIDE RESOURCES INC. (An Exploration Stage Enterprise) Notes to the Condensed Interim Consolidated Financial Statements For the three months ended December 31, 2020 (Unaudited - Expressed in Canadian Dollars)

9. Exploration and evaluation assets (continued)

• (d) Ariel, Sonora, Mexico

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

• (e) 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:

==> picture [459 x 115] intentionally omitted <==

----- Start of picture text -----

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)
----- End of picture text -----

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.

==> picture [464 x 104] intentionally omitted <==

----- Start of picture text -----

Due date Cash Common shares Special Exploration
warrants expenditures
June 23, 2020 (signing $10,000 (received) [(1)] - - -
of LOI)
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
----- End of picture text -----

17

(An Exploration Stage Enterprise) Notes to the Condensed Interim Consolidated Financial Statements For the three months ended December 31, 2020 (Unaudited - Expressed in Canadian Dollars)

RIVERSIDE RESOURCES INC.

9. Exploration and evaluation assets (continued)

• (e) Cecilia, Sonora, Mexico (continued)

• (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 December 31, 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. During the period ended December 31, 2020, the Company had spent the overall $150,000 for the generative exploration program.

During the period ended December 31, 2020, the Company received $600,000 in total as exploration advance from Carlyle for generative exploration in 2021.

• (f) 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.

• (g) 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.

• (h) Suaqui Verde, Suaqui Grande, Mexico

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

• (i) 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.

18

RIVERSIDE RESOURCES INC. (An Exploration Stage Enterprise) Notes to the Condensed Interim Consolidated Financial Statements For the three months ended December 31, 2020 (Unaudited - Expressed in Canadian Dollars)

9. Exploration and evaluation assets (continued)

• (i) Palo Fierro, Sonora, Mexico

On September 2, 2020, the Company received US$134,635 as exploration advance for the additional gravity survey project under the first High Value Work Program (“HVWP”) for the exploration expenditures incurred from September to November 2020. During the period ended December 31, 2020, the Company had spent the overall US$134,635 for the gravity survey project.

On December 16, 2020, the Company received US$340,855 as exploration advance for the additional MT survey project under the second HVWP for the exploration expenditures incurred from December 2020 to March 2021.

• (j) 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.

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.

==> picture [442 x 90] intentionally omitted <==

----- Start of picture text -----

Due date Cumulative exploration expenditures
June 17, 2021 (1 [st] 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
----- End of picture text -----

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

19

RIVERSIDE RESOURCES INC.

(An Exploration Stage Enterprise) Notes to the Condensed Interim Consolidated Financial Statements For the three months ended December 31, 2020 (Unaudited - Expressed in Canadian Dollars)

9. Exploration and evaluation assets (continued)

• (j) Los Cuarentas, Sonora, Mexico (continued)

• 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.

==> picture [442 x 66] intentionally omitted <==

----- Start of picture text -----

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
----- End of picture text -----

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.

On November 30, 2020, the Company received US$228,699 as exploration advance for the generative exploration for the period from October 1, 2020 to December 31, 2020.

• (k) 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.

• (l) Northwestern Ontario, Canada

In April 2019, the Company acquired a 100% interest in the Oakes, Longrose, Pichette and Vincent projects in Northwestern Ontario, Canada. In July 2020, the Company expanded and acquired a 100% interest in the High Lake (Kenora) project in Western Ontario, Canada. As at December 31, 2020, the Company owned 1,282 claims for these projects (September 31, 2020 – 1,282).

20

(An Exploration Stage Enterprise) Notes to the Condensed Interim Consolidated Financial Statements For the three months ended December 31, 2020 (Unaudited - Expressed in Canadian Dollars)

RIVERSIDE RESOURCES INC.

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:

Payables to vendors *Exploration advances	$ 118,603 $ 158,167 1,283,612 1,477,723 $ 1,402,215 $1,635,890

*Exploration advances is in connection to the BHP, Carlyle and Hochschild projects during the period ended December 31, 2020. Refer to Note 9 (e), (i) and (j) 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:

		December 31,		September 30,
		2020		2020
Opening balance	$	31,970	$	-
Addition		-		30,927
Interest expense		806		1,043
Ending balance	$	32,776	$	31,970

21

(An Exploration Stage Enterprise) Notes to the Condensed Interim Consolidated Financial Statements For the three months ended December 31, 2020 (Unaudited - Expressed in Canadian Dollars)

RIVERSIDE RESOURCES INC.

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 period ended December 31, 2020

• (a) During the period ended December 31, 2020, the Company issued 125,000 common shares for the exercise of warrants for net proceeds of $21,250.

• (b) During the period ended December 31, 2020, the Company issued 142,500 common shares for the exercise of options for net proceeds of $31,543.

Shares issued for the year ended September 30, 2020

• (c) 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 (e)).

• (d) 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.

• (e) During the year ended September 30, 2020, the Company issued 667,000 common shares for the exercise of options for proceeds of $100,561.

Share purchase and finders’ warrants

	Number of	Weighted average
	warrants	exerciseprice
Outstanding warrants, September 30, 2019	17,516,875	$ 0.22
Exercised as of August 14, 2020	(3,555,343)	0.22
Exercised as ofSeptember30,2020	(663,600)	0.22
Outstanding warrants, September 30, 2020	13,297,932	0.22
Exercised as of December 31, 2020	(125,000)	0.22
Outstanding warrants, December 31, 2020	13,172,932	$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 period ended December 31, 2020, 125,000 of Riverside’s warrants were exercised, as a result, Capitan issued 32,425 common shares and Riverside compensated Capitan for $6,250 (included in accounts payable and accrued liabilities).

22

RIVERSIDE RESOURCES INC. (An Exploration Stage Enterprise) Notes to the Condensed Interim Consolidated Financial Statements For the three months ended December 31, 2020 (Unaudited - Expressed in Canadian Dollars)

12. Capital stock and reserves (continued)

Share purchase and finders’ warrants (continued)

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.

As at December 31, 2020, the following share purchase warrants were outstanding and exercisable:

	Number of	Weighted average
Expiry date	warrants	remaining life	Exercise
(mm/dd/yyyy)	outstanding	inyears	price
03/19/2021	*13,172,932	0.21	$ 0.22
	13,172,932	0.21	$ 0.22

*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 period ended December 31, 2020, nil (September 30, 2020 - nil) 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 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 period ended December 31, 2020, using the Black-Scholes option pricing model was $135,332 (September 30, 2020 - $228,800), 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:

23

(An Exploration Stage Enterprise) Notes to the Condensed Interim Consolidated Financial Statements For the three months ended December 31, 2020 (Unaudited - Expressed in Canadian Dollars)

RIVERSIDE RESOURCES INC.

12. Capital stock and reserves (continued)

Stock options (continued)

	2021	2020
Forfeiture rate	0.00%	0.00%
Estimated risk-free rate	1.16 %	1.32 %
Expected volatility	89.30%	84.38%
Estimated annual dividend yield	0.00 %	0.00 %
Expected life of options	5.00 years	5.00 years
Fair value per option granted	$ 0.19	$ 0.09

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

	Number of	Weighted average
	options	exerciseprice
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
Granted	1,330,000	$ 0.30
Exercised	(142,500)	$ 0.11
Outstanding options, December 31, 2020	5,058,000	$0.19

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.

During the period ended December 31, 2020, 142,500 stock options were exercised.

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.

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.

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.

24

(An Exploration Stage Enterprise) Notes to the Condensed Interim Consolidated Financial Statements For the three months ended December 31, 2020 (Unaudited - Expressed in Canadian Dollars)

RIVERSIDE RESOURCES INC.

12. Capital stock and reserves (continued)

Stock options (continued)

As at December 31, 2020, the Company has outstanding stock options exercisable as follows:

	Number of	Weighted average		Number of
Expiry date	options	remaining life	*Exercise	options
(mm/dd/yyyy)	outstanding	inyears	price	exercisable
01/07/2021	440,000	0.02	$ 0.11	440,000
12/16/2021	935,000	0.96	$ 0.32	935,000
11/03/2022	688,000	1.84	$ 0.21	688,000
01/08/2024	560,000	3.02	$ 0.13	560,000
11/15/2024	955,000	3.88	$ 0.11	955,000
03/27/2025	150,000	4.24	$ 0.12	112,500
10/19/2025	1,330,000	4.80	$ 0.30	-
	5,058,000			3,690,500

* 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. Related party transactions

The Company entered into the following transactions with related parties:

==> picture [487 x 254] intentionally omitted <==

----- Start of picture text -----

Payee / Payer Nature of Period ending Fees Shares Amount payable
transactions December 31, (Income) ($) (receivable) at
($) period end ($)
Arriva Management and 2020 58,200 Nil Nil
Management Inc. consulting fees (i) 2019 58,200 Nil 10,005
GSBC Financial Management and 2020 24,000 Nil Nil
Management Inc. consulting fees (i) 2019 24,000 Nil Nil
Alberto Orozco Consulting fees (i) 2020 479 Nil Nil
2019 41,250 Nil Nil
Omni Resource Consulting fees (i) 2020 25,000 Nil Nil
Consulting Ltd. 2019 15,000 Nil 16,699
Brian Groves Director fees(ii) 2020 3,000 Nil Nil
2019 3,000 Nil Nil
James Clare Director fees(ii) 2020 Nil Nil Nil
2019 Nil Nil Nil
Carol Ellis Director fees(ii) 2020 3,000 Nil Nil
2019 3,000 Nil Nil
Walter Henry Director fees(ii) 2020 3,000 Nil Nil
2019 3,000 Nil Nil
First Helium Inc. Rent (iii) 2020 (6,000) Nil Nil
2019 (6,000) Nil (6,300)
----- End of picture text -----

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 period ended December 31, 2020 and 2019 are as follows:

25

RIVERSIDE RESOURCES INC.

(An Exploration Stage Enterprise) Notes to the Condensed Interim Consolidated Financial Statements For the three months ended December 31, 2020 (Unaudited - Expressed in Canadian Dollars)

13. Related party transactions

	2020	2019
Directors’ fees (ii) Management and consulting fees (i) Share-based payments	$ 9,000 112,679 57,604 $ 179,283	$ 9,000 138,450 19,619 $ 167,069

• (i) Management and consulting fees of the key management personnel for the year were allocated as follows: $27,000 (2019 - $27,000) expensed to consulting fees, $25,800 (2019 - $111,450) capitalized to exploration and evaluation assets and $59,879 (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 period ended December 31, 2020, the Company recognized rental recovery of $6,000 (2019 - $6,000) from First Helium, which was recorded in other income.

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. On November 9, 2020, the Company acquired the additional 772,500 preconsolidated shares of First Helium Inc. at $0.007 per share by paying cash of $5,408. Please refer to Note 5 & Note 15 (a) for additional details.

14. 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:

Equipment Canada Mexico Exploration and evaluation assets Canada Mexico Total	$ 5,303 $ 5,628 229,138 226,383
	234,441 232,011
	2,331,889 2,238,866 3,226,238 2,979,081
	5,558,127 5,217,947
	$ 5,792,568 $ 5,449,958

26

RIVERSIDE RESOURCES INC.

(An Exploration Stage Enterprise)

Notes to the Condensed Interim Consolidated Financial Statements For the three months ended December 31, 2020 (Unaudited - Expressed in Canadian Dollars)

15. Supplemental disclosure with respect to cash flows

	December 31,	September 30,
	2020	2020
Cash	$ 3,800,474	$ 4,453,401
Cash equivalents	135,042	135,177
	3,935,516	4,588,578

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

• a) The Company received 300,000 pre-consolidated 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(4))

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

• c) The Company received 1,500,000 Carlyle Commodities Corp. (“Carlyle”) shares valued at $450,000 as exploration and evaluation assets recoveries (Note 9 (e)).

• d) Included in accounts payable was $26,756 in exploration and evaluation asset expenditures.

16. 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 period ended December 31, 2020.

The Company is not currently subject to externally imposed capital requirements.

17. 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.

27

(An Exploration Stage Enterprise) Notes to the Condensed Interim Consolidated Financial Statements For the three months ended December 31, 2020 (Unaudited - Expressed in Canadian Dollars)

RIVERSIDE RESOURCES INC.

17. Financial instruments (continued)

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.

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 December 31, 2020, the Company had cash and cash equivalents of $3,935,516 to settle current liabilities of $2,455,385. 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 December 31, 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 $372,776.

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 $278,386.

28

RIVERSIDE RESOURCES INC. (An Exploration Stage Enterprise) Notes to the Condensed Interim Consolidated Financial Statements For the three months ended December 31, 2020 (Unaudited - Expressed in Canadian Dollars)

18. 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.

As at December 31, 2020, the Company recognized $1,053,170 (September 30, 2020, $990,184) as provision liability as a result of the foreign exchange movement. The Company is currently negotiating with the tax authority on a settlement.

19. Subsequent events

Subsequent to the period ended December 31, 2020, 212,500 stock options expired unexercised.

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

As of March 1, 2021, the Company issued 475,000 common shares for the exercise of options for net proceeds of $37,382.

On February 10, 2021, the Company announced the sales of Oakes, Pichette and Longrose projects in northwestern Ontario for 8,000,000 common shares and a one-time bonus $500,000 in cash or share consideration for drill results of 100 g/m gold intercept at any of the three properties sold by the Company to iMetal Resources Inc., as well as the Company retaining a 2.5% Net Smelter Royalty (NSR) on each project.

29