Rockhaven Resources Ltd. — Audit Report / Information 2021

Mar 25, 2021

Rockhaven Resources Ltd.

Financial Statements December 31, 2020 (Expressed in Canadian Dollars)

INDEPENDENT AUDITOR’S REPORT

To the Shareholders of Rockhaven Resources Ltd.

Opinion

We have audited the accompanying financial statements of Rockhaven Resources Ltd. (the “Company”), which comprise the statements of financial position as at December 31, 2020 and 2019, and the statements of changes in shareholders’ equity, loss and comprehensive loss, and cash flows for the years then ended, and notes to the financial statements, including a summary of significant accounting policies.

In our opinion, these financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 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 Financial Statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained 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 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 financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

We obtained Management’s Discussion and Analysis prior to the date of this 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 Financial Statements

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

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

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

Auditor's Responsibilities for the Audit of the Financial Statements

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

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

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

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

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

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

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

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

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

The engagement partner on the audit resulting in this independent auditor’s report is Stephen Hawkshaw.

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Vancouver, Canada

Chartered Professional Accountants

March 24, 2021

Rockhaven Resources Ltd.

Statements of Financial Position

As at December 31, 2020 and December 31, 2019

		December 31,	December 31,
		2020	2019
	Note	$	$
Assets
Current assets
Cash and cash equivalents	3	5,112,734	2,829,887
Receivables and prepayments	4	80,474	68,813
Marketable securities	5	99,600	47,033
		5,292,808	2,945,733
Non-current assets
Prepaid exploration expenditures		153	3,116
Mineralpropertyinterests	6	38,702,490	35,977,545
		38,702,643	35,980,661
Total assets		43,995,451	38,926,394
Liabilities and shareholders' equity
Current liabilities
Accounts payable and accrued liabilities		142,716	58,004
Accounts payable to related parties	9	52,406	43,225
Flow-throughpremium liability	13	1,398,963	481,598
		1,594,085	582,827
Non-current liabilities
Deferred income tax liability	10	2,430,811	1,995,556
Total liabilities		4,024,896	2,578,383
Shareholders' equity
Share capital	7	51,198,002	47,353,983
Contributed surplus	7	882,939	897,398
Deficit		(12,110,386)	(11,903,370)
Total shareholders' equity		39,970,555	36,348,011
Total liabilities and shareholders' equity		43,995,451	38,926,394
Nature of operations and going concern	1
Commitments	13
Approved on behalf of the Board of Directors on March 24, 2021:

“Randy C. Turner” Director “Glenn R. Yeadon” Director

3

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

Rockhaven Resources Ltd.

Statements of Changes in Shareholders’ Equity

For the years ended December 31, 2020 and December 31, 2019

					Total
	Number	Share	Contributed		shareholders'
	of shares	capital	surplus	Deficit	equity
	#	$	$	$	$
January 1, 2019	157,718,093	43,809,966	1,254,918	(12,035,132)	33,029,752
Re-allocated on expiry of options	-	-	(337,401)	337,401	-
Re-allocated on cancellation of options	-	-	(31,709)	31,709	-
Private placement units issued	29,917,500	4,569,308	-	-	4,569,308
Flow-through premium liability	-	(962,541)	-	-	(962,541)
Share issue costs	-	(62,750)	11,590	-	(51,160)
Loss and comprehensive for theyear	-	-	-	(237,348)	(237,348)
December 31, 2019	187,635,593	47,353,983	897,398	(11,903,370)	36,348,011
January 1, 2020	187,635,593	47,353,983	897,398	(11,903,370)	36,348,011
Re-allocated on expiry of options	-	-	(387,442)	387,442	-
Re-allocated on cancellation of options	-	-	(14,088)	14,088	-
Private placement units issued	20,400,877	5,601,750	-	-	5,601,750
Flow-through premium liability	-	(1,521,575)	-	-	(1,521,575)
Share issue costs	-	(276,156)	45,100	-	(231,056)
Warrants issued	-	-	51,300	-	51,300
Re-allocated on expiry of warrants	-	40,000	(95,300)	55,300	-
Share-based payments	-	-	385,971	-	385,971
Loss and comprehensive for theyear	-	-	-	(663,846)	(663,846)
December 31, 2020	208,036,470	51,198,002	882,939	(12,110,386)	39,970,555

4

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

Rockhaven Resources Ltd.

Statements of Loss and Comprehensive loss

For the years ended December 31, 2020 and December 31, 2019

		December 31,	December 31,	December	31,
		2020		2019
	Note	$		$
Expenses
General and administrative expenses			32,734		13,698
Insurance			20,333		19,789
Investor relations and shareholder information			117,693	105,000
Management,administrative and corporate development fees	9		44,703		51,490
Management,administrative and corporate development salaries	9		78,549		98,402
Office rent	9		30,000		30,000
Professional fees	9		106,712		80,673
Share-based payments	7,9		385,971		-
Transferagent andfilingfees			18,915		11,849
Loss from operating expenses		(835,610)		(410,901)
Interest income			35,701		24,260
Unrealized gainon marketable securities	5		52,567		5,533
Loss for the year before income taxes		(747,342)		(381,108)
Deferredincome tax recovery	10		83,496	143,760
Loss and comprehensive loss for theyear		(663,846)		(237,348)
Loss per share
Weighted average number of common shares outstanding
- Basic #	8	195,049,026		167,124,082
- Diluted #	8	195,049,026		167,124,082
Basic loss per share $	8		(0.00)		(0.00)
Diluted lossper share$	8		(0.00)		(0.00)

5

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

Rockhaven Resources Ltd.

Statements of Cash Flows

For the years ended December 31, 2020 and December 31, 2019

		December 31,	December 31,
		2020	2019
	Note	$	$
Operating activities
Loss for theyear		(663,846)	(237,348)
Adjustments for:
Share-basedpayments		385,971	-
Unrealizedgain on marketable securities		(52,567)	(5,533)
Interest income		(35,701)	(24,260)
Deferred income tax recovery		(83,496)	(143,760)
Net changein non-cash working capital items	11	32,814	(21,725)
		(416,825)	(432,626)
Financing activities
Issue of units for cash		5,601,750	4,569,308
Shareissue costs		(324,166)	(62,433)
		5,277,584	4,506,875
Investing activities
Interest received		35,701	24,260
Prepaid exploration(expenditures)recovery		(153)	18,193
Mineralpropertyacquisition costs		(32,723)	(31,925)
Deferred explorationand evaluationexpenditures		(2,580,737)	(1,722,688)
		(2,577,912)	(1,712,160)
Increase in cash and cash equivalents		2,282,847	2,362,089
Cash and cash equivalents, beginning ofyear		2,829,887	467,798
Cash and cash equivalents, end ofyear		5,112,734	2,829,887

Supplemental cash flow information 11

6

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

Rockhaven Resources Ltd. Notes to the Financial Statements

For the years ended December 31, 2020 and December 31, 2019

1. Nature of operations and going concern

Rockhaven Resources Ltd. (the “Company” or “Rockhaven”) was incorporated under the laws of the Province of Alberta, Canada and has been continued as a Company under the laws of the Province of British Columbia, Canada. The Company’s head office is located at 1016 - 510 West Hastings Street, Vancouver, British Columbia, Canada, V6B 1L8. Its records office is located at 1710 - 1177 West Hastings Street, Vancouver, British Columbia, Canada, V6E 2L3. Its main business activity is the acquisition, exploration and evaluation of mineral property interests located in Canada. Its common shares trade on the TSX Venture Exchange (“TSX-V”).

The Company is in the process of exploring its mineral property interests and has not yet determined whether its mineral property interests contain mineral reserves that are economically recoverable. The Company's continuing operations and the underlying value and recoverability of the amounts shown for mineral property interests are entirely dependent upon the existence of economically recoverable mineral reserves, the ability of the Company to obtain the necessary financing to complete the exploration and development of the mineral property interests, obtaining the necessary permits to mine, and on future profitable production or proceeds from the disposition of the mineral property interests.

These financial statements are prepared on the basis that the Company will continue as a going concern, which assumes that the Company will be able to continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities and commitments in the normal course of operations. As an exploration stage company, the Company does not have traditional sources of revenue, and historically has relied on property option or sale proceeds and share capital financing to cover its operating expenses. As at December 31, 2020, the Company had working capital of $3,698,723 (December 31, 2019 – $2,362,906) and shareholders’ equity of $39,970,555 (December 31, 2019 - $36,348,011). Management has assessed that this working capital is sufficient for the Company to continue as a going concern beyond one year. If the going concern assumption were not appropriate for these financial statements, it could be necessary to restate the Company’s assets and liabilities on a liquidation basis.

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 ability to raise capital or conduct exploration activities. There are various community travel restrictions and health and safety concerns that may prohibit or delay exploration programs from proceeding. Operations will depend on obtaining necessary field supplies, obtaining contractor services and safeguarding all personnel during the outbreak, which may be prohibitive or too costly. Various Government wage and loan subsidies are available to qualified companies to assist them with operating costs during the pandemic. To date, the Company has not qualified for assistance, but the various programs are constantly being expanded and relaxed, which may qualify the Company for assistance. The Company’s requirement to incur flow-through expenditures by the end of 2021 has been relaxed by the Government allowing the Company an extension of one year (note 13). However, it may not be possible to complete these expenditures if the pandemic continues and access to its projects prove insurmountable.

2. Significant accounting policies

(a) Basis of presentation

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

These financial statements have been prepared on an historical cost basis, except for financial instruments measured at fair value. In addition, these financial statements have been prepared using the accrual basis of accounting, except for cash flow information.

All amounts on the financial statements are presented in Canadian dollars which is the functional currency of the Company.

7

Rockhaven Resources Ltd. Notes to the Financial Statements

For the years ended December 31, 2020 and December 31, 2019

2. Significant accounting policies (continued)

(b) Financial instruments

The Company classifies its financial instruments in the following categories: as fair value through profit or loss (“FVTPL”), financial assets at amortized cost and other financial liabilities. The classification depends on the purpose for which the financial assets or liabilities were acquired. Management determines the classification of financial assets and liabilities at initial recognition. The Company accounts for non-derivative financial assets and liabilities as follows:

Recognition

The Company recognizes financial assets and financial liabilities on the date the Company becomes a party to the contractual provisions of the instruments.

Classification

The Company classifies its financial assets and financial liabilities using the following measurement categories:

• (a) Those to be measured subsequently at fair value (either through other comprehensive income (loss) or through profit or loss); and

• (b) Those to be measured at amortized cost.

The classification of financial assets depends on the business model for managing the financial assets and the contractual terms of the cash flows. Financial liabilities are classified as those to be measured at amortized cost unless they are designated as those to be measured subsequently at fair value through profit or loss (an irrevocable election at the time of recognition). For assets and liabilities measured at fair value, gains and losses are either recorded in profit or loss or other comprehensive income (loss).

The Company reclassifies financial assets when and only when its business model for managing those assets changes. Financial liabilities are not reclassified.

8

Rockhaven Resources Ltd. Notes to the Financial Statements

For the years ended December 31, 2020 and December 31, 2019

2. Significant accounting policies (continued)

• (b) Financial instruments (continued)

The Company’s marketable securities are classified as FVTPL. Marketable securities held in companies with an active market are classified as current assets at fair value. Marketable securities held in non-public companies without an active market are classified as non-current assets and are valued at fair value. In situations where fair value is indeterminable or impracticable to determine, the shares are recorded at cost. This may occur when nonpublic company shares are received as payment for mineral property interests. In such situations cost is determined by reference to the issue price of similar shares issued by the non-public entity for cash, at or near the time of issue of the investment shares, and in similar volumes. When, at future measurement dates fair value is still indeterminable, or impracticable, cost is used as the measure of fair value.

Cash and cash equivalents are classified as FVTPL and are accounted for at fair value. Cash equivalents include highly liquid investments such as cashable investment certificates, which are redeemable on demand, and which are subject to an insignificant risk of change in value. Cash equivalents are held for the purpose of meeting shortterm cash commitments rather than for investment or other purposes.

(i) Derivative financial assets

Warrants are classified as derivative financial assets and are recorded at FVTPL. Warrants without an active market that are received as attachments to common share units are initially recorded at nominal amounts. At the time of purchase the total unit cost is allocated in full to each common share. Subsequent value is determined at measurement date using a valuation technique, such as the BlackScholes option pricing model, or when the valuation technique input variables are not reliable, using the intrinsic value, which is equal to the higher of the market value of the underlying security, less the exercise price of the warrant, or zero. The Company did not own any warrants as at December 31, 2020 and 2019.

(ii) Other financial liabilities

The Company has the following other financial liabilities: accounts payable and accrued liabilities and accounts payable to related parties.

Such financial liabilities are recognized initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition these financial liabilities are measured at amortized cost using the effective interest method. Interest expense is recorded to profit or loss.

9

Rockhaven Resources Ltd. Notes to the Financial Statements

For the years ended December 31, 2020 and December 31, 2019

2. Significant accounting policies (continued)

(c) Mineral property interests

The acquisition costs of mineral property interests and any subsequent exploration and evaluation costs are capitalized until the properties to which they relate are placed into production, sold, allowed to lapse or abandoned. Exploration and evaluation costs incurred prior to obtaining ownership, or the right to explore a property, are expensed as incurred as property examination costs. Properties that have close proximity and have the possibility of being developed as a single mine are grouped as projects and are considered separate cash generating units (“CGU”) for the purpose of determining future mineral reserves and impairments.

The acquisition costs include the cash consideration paid and the fair market value of any shares issued for mineral property interests being acquired or optioned pursuant to the terms of relevant agreements.

Proceeds received from a partial sale or option of a mineral property interest are credited against the carrying value of the property. When the proceeds exceed the carrying costs the excess is recorded in profit or loss in the period the excess is received. When all the interest in a property is sold, subject only to any retained royalty interests which may exist, the accumulated property costs are written-off, with any gain or loss included in profit or loss in the period the transaction takes place. No initial value is assigned to any retained royalty interest. The royalty interest is subsequently assessed for value by reference to developments on the underlying mineral property.

Management reviews its mineral property interests at each reporting period for signs of impairment and annually after each exploration season to consider if there is impairment in value taking into consideration current year exploration results, or likely gains from the disposition or option of the property. If a property is abandoned, or inactive for a prolonged period, or considered to have no future economic potential, the acquisition and deferred exploration and evaluation costs are written-off to profit or loss.

Once an economically viable resource has been determined for an area and the decision to proceed with development has been approved, mineral property interests attributable to that area are first tested for impairment and then reclassified to property and equipment. Subsequent recovery of the resulting carrying value depends on successful development or sale of the undeveloped project. Should a project be put into production, the costs of acquisition, exploration and evaluation will be amortized over the life of the project based on estimated economic reserves. If the carrying value of a project exceeds its estimated net realizable value or value in use, an impairment provision is recorded.

Exploration costs renounced to shareholders pursuant to flow-through share subscription agreements remain capitalized, however, for income tax purposes the Company has no right to claim these costs as tax deductible expenses.

When entitled, the Company records refundable mineral exploration tax credits or incentive grants on an accrual basis and as a reduction of the carrying value of the mineral property interest. When the Company is entitled to non-refundable exploration tax credits, and it is probable that they can be used to reduce future taxable income, a deferred income tax benefit is recognized.

(d) Impairment

• (i) Financial assets

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 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.

(ii) Non-financial assets

Non-financial assets are reviewed quarterly by management for indicators that carrying value is impaired and may not be recoverable. When indicators of impairment are present the recoverable amount of an asset is evaluated at the CGU level, which is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. The recoverable amount of a CGU is the greater of the CGU’s fair value less costs to sell and its value in use. An impairment loss is recognized in profit or loss to the extent that the carrying amount exceeds the recoverable amount. The Company’s mineral property interest impairment policy is more specifically discussed in note 2(c) above.

10

Rockhaven Resources Ltd. Notes to the Financial Statements

For the years ended December 31, 2020 and December 31, 2019

2. Significant accounting policies (continued)

(e) Share capital

Common shares are classified as equity. Transaction costs directly attributable to the issue of common shares and share options are recognized as a deduction from equity, net of any tax effects. Common shares issued for consideration other than cash, are valued based on their trading value at the date the shares are issued.

When share capital recognized as equity is repurchased, the amount of the consideration paid, which includes directly attributable costs, net of any tax effects, is recognized as a deduction from equity. Share capital is reduced by the average per-common-share carrying amount, with the difference between this amount and the consideration paid, added to or deducted from contributed surplus.

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 a unit private placement to be the more easily measurable component. The balance, if any, is allocated to the attached warrants, except where there is a related flow-through share premium, as detailed in the next paragraph. Any value attributed to the warrants is recorded as contributed surplus.

(f) Share-based payment transactions

The Company has a stock option plan that provides for the granting of options to Officers, Directors, related company employees and consultants to acquire shares of the Company. The fair value of the options is measured on grant date and is recognized as an expense with a corresponding increase in contributed surplus as the options vest.

Options granted to employees and others providing similar services are measured on grant date at the fair value of the instruments issued. Fair value is determined using the Black-Scholes option pricing model taking into account the terms and conditions upon which the options were granted. The amount recognized as an expense is adjusted to reflect the actual number of share options that are expected to vest. Each tranche in an award with graded vesting is considered a separate grant with a different vesting date and fair value. Each grant is accounted for on that basis.

Options granted to non-employees are measured at the fair value of the goods or services received, unless that fair value cannot be estimated reliably, in which case the fair value of the equity instruments issued is used. The value of the goods or services is recorded at the earlier of the vesting date, or the date the goods or services are received.

Over the vesting period, share-based payments are recorded as an operating expense and as contributed surplus. When options are exercised, the consideration received is recorded as share capital and the related share-based payments originally recorded as contributed surplus are transferred to share capital. When an option is cancelled, or expires, the initial recorded value is reversed from contributed surplus and credited to deficit.

(g) Flow-through share private placement

As an incentive to complete private placements the Company may issue common shares, which by agreement are designated as flow-through shares. Such agreements require the Company to spend the funds from these placements on qualified exploration expenditures and renounce the expenditures and income tax benefits to the flow-through shareholders, resulting in no exploration deductions to the Company.

The shares are usually issued at a premium to the trading value of the Company’s common shares. The premium is a reflection of the value of the income tax benefits that the Company must pass on to the flow-through shareholders. On issue, share capital is increased only by the non-flow-through share equivalent value. Any premium is recorded as a flow-through share premium liability.

The deferred income tax liability and reversal of the flow-through share premium liability are recorded on a prorata basis as the required exploration expenditures are completed.

11

Rockhaven Resources Ltd. Notes to the Financial Statements

For the years ended December 31, 2020 and December 31, 2019

2. Significant accounting policies (continued)

(h) Environmental rehabilitation

An obligation to incur restoration, rehabilitation and environmental costs arises when environmental disturbance is caused by the exploration, development or ongoing production of a mineral property interest. The estimated costs arising from the decommissioning of plant and other site preparation work, discounted to their net present value, are determined, and capitalized at the start of each project to the carrying amount of the asset, as soon as the obligation to incur such costs arises. Discount rates, using a pre-tax rate that reflects the time value of money, are used to calculate the net present value. These costs are charged against profit or loss over the economic life of the related asset, through amortization using either the unit-of-production or the straight-line method. The related liability is adjusted at each reporting date for the unwinding of the discount rate, for changes to the current marketbased discount rate, and for changes to the amount or timing of the underlying cash flows needed to settle the obligation. Costs for restoration of subsequent site damage which is created on an ongoing basis during production are provided for at their net present values and charged against profit or loss as extraction progresses.

The Company has no known restoration, rehabilitation or environmental costs, of any significance, related to its mineral property interests.

(i) Income taxes

Income tax expense is comprised of current and deferred income taxes. Current income tax and deferred income tax are recognized in profit or loss, except to the extent that they relate to items recognized directly in equity or equity investments.

Current income tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.

Deferred income 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 income tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred income 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 income 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 income 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.

(j) Loss per share

The Company presents basic and diluted earnings (loss) per share (“EPS”) data for its common shares. Basic EPS is calculated by dividing the profit or loss attributable to common shareholders of the Company by the weighted average number of common shares outstanding during the year, adjusted for own shares held. Diluted EPS is determined by dividing the profit or loss attributable to common shareholders by the weighted average number of common shares outstanding, adjusted for own shares held, and for the effects of all potential dilutive common shares related to outstanding stock options and warrants issued by the Company for the years presented, except if their inclusion proves to be anti-dilutive.

12

Rockhaven Resources Ltd. Notes to the Financial Statements

For the years ended December 31, 2020 and December 31, 2019

2. Significant accounting policies (continued)

(k) Use of estimates and critical judgments

The preparation of financial statements requires management to make estimates and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the year. Actual results could differ from those estimates and judgments. Those areas requiring the use of management estimates and judgments include:

Estimates

• (i) Option or sale agreements, under which the Company may receive shares as payment, require the Company to determine the fair value of the shares and/or warrants received. Many factors can enter this determination, including, if public shares, the number of shares received, the trading value of the shares, and volume of shares, and if non-public shares, the underlying asset value of the shares, or value of the claims under option or sale. This determination is subjective and does not necessarily provide a reliable single measure of the fair value of the shares received.

• (ii) Recorded costs of flow-through share premium liabilities reflect the premium received by the Company on the issue of flow-through shares. The premium is subject to measurement uncertainly and requires the Company to assess the value of non-flow through shares. This determination is subjective and does not necessarily provide a reliable single measure of the fair value of the premium liability.

• (iii) The determination of the fair value of stock options or warrants using stock pricing models requires the input of highly subjective variables, including expected price volatility. Wide fluctuations in the variables could materially affect the fair value estimate; therefore, the existing models do not necessarily provide a reliable single measure of the fair value of the Company’s stock options and warrants.

Judgments

• (i) Recorded costs of mineral property interests and deferred exploration and evaluation costs are not intended to reflect present or future values of these properties. The recorded costs are subject to measurement uncertainty and it is reasonably possible, based on existing knowledge, that changes in future conditions could require a material change in the recognized amount. Management is required, at each reporting period, to review its mineral property interests for signs of impairment. This is a highly subjective process taking into consideration exploration results, metal prices, economics, financing prospects and sale or option prospects. Management makes these judgments based on information available, but there is no certainty that a property is or is not impaired. Although the Company has taken steps to verify title to mineral properties in which it has an interest, these procedures do not guarantee the Company’s title. Such properties may be subject to prior agreements or transfers and title may be affected by undetected defects.

• (ii) The determination of deferred income tax assets or liabilities requires subjective assumptions regarding future income tax rates and the likelihood of utilizing tax carry-forwards. Changes in these assumptions could materially affect the recorded amounts, and therefore do not necessarily provide certainty as to their recorded values.

(l) Standards issued but not yet effective

Certain pronouncements have been issued by the IASB or IFRIC that are effective for accounting periods beginning on or after January 1, 2021. The Company has reviewed these updates and determined that many of these updates are not applicable or consequential to the Company and have been excluded from discussion within these significant accounting policies.

13

Rockhaven Resources Ltd. Notes to the Financial Statements

For the years ended December 31, 2020 and December 31, 2019

3. Cash and cash equivalents

Cash and cash equivalents consist of the following:

Cash and cash equivalents Cash and cash equivalents consist of the following:
	December 31,	December 31,
	2020	2019
	$	$
Bank balances	5,112,734	17,273
Cashable investment certificates	-	2,812,614
	5,112,734	2,829,887

4. Receivables and prepayments

Receivables and prepayments consist of the following:

Receivables and prepayments Receivables and prepayments consist of the following:
	December 31,	December 31,
	2020	2019
	$	$
Goods and services tax recoverable	40,728	27,904
Prepaid expenses	39,746	40,909
	80,474	68,813

5. Marketable securities

Marketable securities consist of common shares received on the option of mineral property interests as follows:

	Cost	Fair value	Gain
	$	$	$
January 1, 2019	2,132,934	41,500
Unrealizedgain for theyear	-	5,533	5,533
December 31,2019	2,132,934	47,033	5,533
January 1, 2020	2,132,934	47,033
Unrealizedgain for theyear	-	52,567	52,567
December 31, 2020	2,132,934	99,600	52,567

The fair values of the marketable securities are based on the bid prices of the shares on the TSX-V at each year end.

14

Rockhaven Resources Ltd. Notes to the Financial Statements

For the years ended December 31, 2020 and December 31, 2019

6. Mineral property interests

The Company’s mineral property interests consist of its wholly-owned Klaza project located in the Yukon Territory, Canada.

Changes in the project carrying amounts for the years ended December 31, 2020 and December 31, 2019 are summarized as follows:

summarized as follows:
January 1, Acqusition and Exploration and December 31, 2020 assessments evaluation 2020 $ $ $ $	January 1, Acqusition and Exploration and December 31, 2019 assessment evaluation 2019 $ $ $ $
Klaza 35,517,040 32,723 2,692,222 38,241,985 BBB 99,657 - - 99,657 Sked/Desk 53,554 - - 53,554 Dade 18,638 - - 18,638 Queen 20,909 - - 20,909 Nor 26,751 - - 26,751 Val 240,996 - - 240,996	33,677,297 31,925 1,807,818 35,517,040 99,657 - - 99,657 53,554 - - 53,554 18,638 - - 18,638 20,909 - - 20,909 26,751 - - 26,751 240,996 - - 240,996
35,977,545 32,723 2,692,222 38,702,490	34,137,802 31,925 1,807,818 35,977,545

Exploration and evaluation expenditures on the Klaza project consisted of the following:

	2020	2019
Years ended December 31,	$	$
Assays	145,731	227,340
Excavating and drilling	855,229	612,152
Field	320,814	256,081
Labour (note 9)	730,085	495,152
Resource and environmental studies	387,264	97,059
Surveys and consulting (note 7)	110,000	23,805
Traveland accommodation	143,099	96,229
	2,692,222	1,807,818

Klaza project

The Klaza project includes a 100% interest in the Klaza group of claims, which consists of various mineral claims located in the Whitehorse Mining District, Yukon Territory. The claims were acquired under various agreements for consideration totaling $975,000. Certain of the claims are subject to a 1.5% net smelter returns royalty (“NSR”) on all commercial production from the claims.

The Klaza project also includes the Val claims located in the Whitehorse Mining District, Yukon Territory, which were acquired under an option agreement that completed in 2015. Total payments under the option were $105,000 and the issue of 250,000 common shares having a value on issue of $96,957. There are no NSR interests against the claims.

The Klaza project also includes the BBB, Sked, Desk, Dade, Queen and Nor claims located in the Whitehorse Mining District, Yukon Territory, which were acquired in 2015 from controlling shareholder Strategic Metals Ltd. (“Strategic”) in exchange for certain properties and a cash payment from Strategic. The Desk claims are subject to a 1% precious metal NSR and a ½% non-precious metal NSR on all commercial production from the claims.

15

Rockhaven Resources Ltd. Notes to the Financial Statements

For the years ended December 31, 2020 and December 31, 2019

7. Share capital

The authorized share capital of the Company consists of unlimited common shares without par value and unlimited preferred shares without par value. All issued shares are fully paid.

Transactions for the issue of share capital during the year ended December 31, 2020:

• (a) On August 20, 2020, the Company completed a private placement consisting of the issue of 2,500,000 nonflow-through units at a price of $0.20 per unit for gross proceeds of $500,000, which included 1,700,000 units purchased by Strategic (note 9). Each unit consisted of one non-flow-through common share and one-half of a share purchase warrant, with each whole warrant being exercisable into a non-flow-through common share at an exercise price of $0.29 until August 20, 2022. No value was allocated to the warrant component of the unit.

• (b) On August 20, 2020, the Company completed a flow-through private placement consisting of the issue of 17,900,877 flow-through units at a price of $0.285 per unit for gross proceeds of $5,101,750. Each unit consisted of one flow-through common share and one-half of a share purchase warrant, with each whole warrant being exercisable into a non-flow-through common share at an exercise price of $0.29 until August 20, 2022.

The flow-through units were issued at a premium to the trading value of the Company’s common shares, which is a reflection of the value of the income tax write-offs that the Company will renounce to the flow-through shareholders. The premium was determined to be $1,521,575 and was recorded as a reduction of share capital. An equivalent flow-through share premium liability was recorded, which will be reversed pro-rata as the required exploration expenditures are incurred (note 13). No value was allocated to the warrant component of the unit.

Finders’ fees totaling $294,100 were incurred in respect of the placements, including the issue of 888,000 finders’ warrants having a fair value of $45,100. Legal and filing fees amounted to $67,516. The share issue costs were recorded as a reduction of share capital, net of deferred income tax benefits of $85,460.

Transactions for the issue of share capital during the during the year ended December 31, 2019:

• (c) On August 30, 2019, the Company completed a private placement consisting of the issue of 9,000,000 nonflow-through units at a price of $0.12 per unit for gross proceeds of $1,080,000, which included 2,226,000 units purchased by Strategic (note 9). Each unit consisted of one non-flow-through common share and one share purchase warrant, with each warrant being exercisable into a non-flow-through common share at an exercise price of $0.20 until August 30, 2024. No value was allocated to the warrant component of the unit.

• (d) On August 30, 2019, the Company completed a flow-through private placement consisting of the issue of 17,584,167 flow-through units at a price of $0.17 per unit for gross proceeds of $2,989,308. Each flow-through unit consisted of one flow-through common share and one share purchase warrant, with each warrant being exercisable into a non-flow-through common share at an exercise price of $0.20 until August 30, 2024.

The flow-through units were issued at a premium to the trading value of the Company’s common shares, which is a reflection of the value of the income tax write-offs that the Company renounced to the flow-through shareholders. The premium was determined to be $879,208 and was recorded as a reduction of share capital. An equivalent flow-through share premium liability was recorded, which was reversed as the required exploration expenditures were incurred (note 13). No value was allocated to the warrant component of the unit.

Finders’ fees totaling $25,068 were incurred in respect of the placements, including the issue of 100,320 finders’ warrants having a fair value of $11,590. Legal and filing fees amounted to $48,955. The share issue costs were recorded as a reduction of share capital, net of deferred income tax benefits of $16,857.

16

Rockhaven Resources Ltd. Notes to the Financial Statements

For the years ended December 31, 2020 and December 31, 2019

7. Share capital (continued)

Transactions for the issue of share capital during the during the year ended December 31, 2019: (continued)

• (e) On November 12, 2019, the Company completed a non-brokered private placement consisting of 3,333,333 flow-through units at a price of $0.15 per unit for total consideration of $500,000. Each unit consisted of one flow-through common share and one share purchase warrant, with each warrant entitling the holder to purchase one additional non-flow-through common share at a price of $0.20 until November 12, 2022.

• The flow-through units were issued at a premium to the trading value of the Company’s common shares, which is a reflection of the value of the income tax write-offs that the Company will renounce to the flowthrough shareholders. The premium was determined to be $83,333 and was recorded as a reduction of share capital. An equivalent flow-through share premium liability was recorded, which was reversed as the required exploration expenditures were incurred (note 13). No value was allocated to the warrant component of the unit.

There were no finders’ fees paid in respect of the placement. Legal and filing fees amounted to $7,650. The share issue costs were recorded as a reduction of share capital, net of deferred income tax benefits of $2,066.

Stock options

The Company has adopted an incentive stock option plan (the “Plan”). The essential elements of the Plan provide that the aggregate number of common shares of the Company’s capital stock issuable pursuant to options granted under the Plan may not exceed 10% of the issued and outstanding common shares. Options granted under the Plan will have a maximum term of ten years. The exercise price of options granted under the Plan will not be less than the market price of the common shares (defined as the last closing market price of the Company’s common shares immediately preceding the issuance of a news release announcing the granting of the options, or the date of grant in respect of options granted to consultants), or such other price as may be agreed to by the Company and accepted by the TSX-V. Vesting terms are determined by the Board of Directors at the time of grant.

A summary of the status of the Company’s stock options as at December 31, 2020 and December 31, 2019, and changes during the years then ended is as follows:

	Year	ended	Year	ended
	December 31, 2020		December 31, 2019
		Weighted average		Weighted average
	Options	exercise price	Options	exercise price
	#	$	#	$
Options outstanding, beginning of year	5,705,000	0.25	8,585,000	0.25
Granted	6,550,000	0.15	-	-
Expired	(3,130,000)	0.25	(2,645,000)	0.25
Cancelled	(265,000)	0.18	(235,000)	0.25
Options outstanding, end ofyear	8,860,000	0.18	5,705,000	0.25

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

Options	Options	Exercise
outstanding	exercisable	price	Expiry date
#	#	$
2,485,000	2,485,000	0.25	June 30, 2021
6,375,000	4,781,250	0.15	February13,2025
8,860,000	7,266,250

The following table summarizes information about the stock options outstanding as at December 31, 2020:

Number of	Weighted average	Weighted average
options outstanding	remaining life	exercise price
#	(years)	$
8,860,000	3.11	0.18

17

Rockhaven Resources Ltd. Notes to the Financial Statements

For the years ended December 31, 2020 and December 31, 2019

7. Share capital (continued)

Stock options (continued)

During the year ended December 31, 2020, 6,550,000 stock options were granted to Officers, Directors, related company employees, and consultants. The Company recorded the fair value of all options granted using the BlackScholes option pricing model. Share-based payment expense was calculated using the following weighted average assumptions: expected life of options – five years, stock price volatility – 71.00%, no dividend yield, and a risk-free interest rate yield – 1.41%. The fair value is particularly impacted by the Company’s stock price volatility, determined using data from the previous five years. No stock options were granted during the year ended December 31, 2019.

Using the above assumptions, the fair value of options granted during the year ended December 31, 2020, was $0.065 per option, for a total of $424,211. The total share-based payment expense for the year ended December 31, 2020 was $385,971, which is presented as an operating expense, and includes only those options that vested during the year, and an accrual for the fourth vesting period which will occur in the next fiscal quarter.

During the year ended December 31, 2020, 3,130,000 Officer, Director, and related company employee options, exercisable at $0.25 each, expired unexercised, and 265,000 related company employee options exercisable at a weighted average price of $0.18 each were cancelled. Accordingly, the original fair value of the expired options of $387,442 and the cancelled options of $14,088 was reversed from contributed surplus and credited to deficit.

During the year ended December 31, 2019, 2,645,000 Officer, Director, and related company employee options, exercisable at $0.25 each, expired unexercised. The original fair value of the cancelled options was $337,401 and on vesting was charged to share-based payment expense and credited to contributed surplus. As a result of the options expiring, $337,401 was reversed from contributed surplus and credited to deficit.

Additionally, during the year ended December 31, 2019, 235,000 related company employee options, exercisable at $0.25 each were cancelled upon the employee leaving employment. The original fair value of the cancelled options was $31,709 and on vesting was charged to share-based payment expense and credited to contributed surplus. As a result of the options expiring, $31,709 was reversed from contributed surplus and credited to deficit.

18

Rockhaven Resources Ltd. Notes to the Financial Statements

For the years ended December 31, 2020 and December 31, 2019

7. Share capital (continued)

Warrants

As an incentive to complete private placements, the Company may issue units which include common shares and common share purchase warrants. Using the residual value method, the Company determines whether a value should be allocated to the warrants attached to the units sold in completed private placements. Finders’ warrants may be issued as a private placement share issue cost and are valued using the Black-Scholes option pricing model.

On August 20, 2020, the Company issued 888,000 finders’ warrants in connection with the completed private placements. Each warrant is exercisable into a non-flow-through common share at an exercise price of $0.29 until August 20, 2022. The value of the finders’ warrants was determined to be $45,100 using the Black-Scholes option pricing model with the following weighted average assumptions: expected life of warrants – two years, stock price volatility – 67.00%, no dividend yield, and a risk-free interest rate yield – 0.29%.

On September 11, 2020, the Company issued 500,000 share purchase warrants pursuant to the Exploration Benefits Agreement to replace, on expiry, the 500,000 share purchase warrants previously issued under such agreement (note 13). Upon expiry of the warrants previously issued, the original fair value of $55,300 was reversed from contributed surplus and credited to deficit. The newly issued warrants are exercisable at $0.17 each until August 5, 2025. The value of the share purchase warrants was determined to be $51,300 using the Black-Scholes option pricing model with the following weighted average assumptions: expected life of warrants – 4.90 years, stock price volatility – 76.00%, no dividend yield, and a risk-free interest rate yield – 0.36%. The value of these warrants was recorded to mineral property interests within surveys and consulting (note 6).

On August 30, 2019, the Company issued 100,320 finders’ warrants in connection with the completed private placements. Each warrant is exercisable into a non-flow-through common share at an exercise price of $0.20 until August 30, 2024. The value of the finders’ warrants was determined to be $11,590 using the Black-Scholes option pricing model with the following weighted average assumptions: expected life of warrants – five years, stock price volatility – 101.43%, no dividend yield, and a risk-free interest rate yield – 1.25%.

A summary of the status of the Company’s warrants as at December 31, 2020 and December 31, 2019, and changes during the years then ended is as follows:

during the years then ended is as follows:
	Year ended		Year ended
	December 31, 2020		December 31, 2019
		Weighted average		Weighted average
	Warrants	exercise price	Warrants	exercise price
	#	$	#	$
Warrants outstanding, beginning of year	32,517,820	0.20	2,500,000	0.19
Private placement warrants issued	10,200,439	0.29	29,917,500	0.20
Finders' warrants issued	888,000	0.29	100,320	0.20
Other warrants issued	500,000	0.17	-	-
Expired	(2,500,000)	0.19	-	-
Warrants outstanding, end ofyear	41,606,259	0.22	32,517,820	0.20

As at December 31, 2020, the Company had warrants outstanding and exercisable as follows:

Warrants	Warrants	Exercise
outstanding	exercisable	price	Expiry date
#	#	$
11,088,439	11,088,439	0.29	August 20, 2022
3,333,333	3,333,333	0.20	November 12, 2022
26,684,487	26,684,487	0.20	August 30, 2024
500,000	500,000	0.17	August 5,2025
41,606,259	41,606,259

During the year ended December 31, 2020, 2,000,000 private placement warrants expired exercisable at $0.20 each, expired unexercised. As a result of the warrants expiring, the original residual value of the warrants of $40,000 was reversed from contributed surplus and credited to share capital.

19

Rockhaven Resources Ltd. Notes to the Financial Statements

For the years ended December 31, 2020 and December 31, 2019

7. Share capital (continued)

Contributed surplus

Contributed surplus includes the accumulated fair value of stock options recognized as share-based payments, the fair value of finders’ warrants issued on private placements, the fair value of other compensatory warrants issued, and the residual value of warrants attached to private placement units, if any. Contributed surplus is increased by the fair value of these items on vesting and/or issuance and is reduced by corresponding amounts when the options or warrants expire or are exercised or cancelled.

expire or are exercised or cancelled.
	Options	Warrants	Total
	$	$	$
January 1, 2019	1,159,618	95,300	1,254,918
Options expired	(337,401)	-	(337,401)
Options cancelled	(31,709)	-	(31,709)
Finders' warrants issued	-	11,590	11,590
December 31,2019	790,508	106,890	897,398
January 1, 2020	790,508	106,890	897,398
Options granted	385,971	-	385,971
Options expired	(387,442)	-	(387,442)
Options cancelled	(14,088)	-	(14,088)
Finders' warrants issued	-	45,100	45,100
Other warrants issued	-	51,300	51,300
Warrants expired	-	(95,300)	(95,300)
December 31, 2020	774,949	107,990	882,939

8. Loss per share

The calculation of basic and diluted loss per share for the year ended December 31, 2020 was based on the loss attributable to common shareholders of $663,846 (2019 – $237,348) and a weighted average number of common shares outstanding of 195,049,026 (2019 – 167,124,082).

All options and warrants were excluded from the diluted weighted average number of common shares calculation, as their effect would have been anti-dilutive.

20

Rockhaven Resources Ltd. Notes to the Financial Statements

For the years ended December 31, 2020 and December 31, 2019

9. Related party payables and transactions

A number of key management personnel and Directors hold positions in other entities that result in them having control or significant influence over the financial or operating policies of these entities. There were no loans to management personnel or Directors, or entities over which they have control or significant influence, during the years ended December 31, 2020 and December 31, 2019.

Matthew Turner, the Company’s President and CEO receives a monthly salary and incentive stock options. No other key management personnel or Directors receive salaries, non-cash benefits (other than incentive stock options), or other remuneration directly from the Company, other than noted below, and there are no employment contracts with them that cannot be terminated without penalty on thirty days’ notice. Key management personnel and Directors participate in the Company’s stock option plan.

During the year ended December 31, 2020, 4,200,000 stock options were granted to key management personnel and Directors having a fair value on grant of $272,013. The options granted are exercisable at $0.15 each until February 13, 2025, and vest over a one-year period ending on February 13, 2021. No stock options were granted to related parties during the year ended December 31, 2019.

During the year ended December 31, 2020, 2,125,000 Officer and Director options expired, which had a fair value on grant date of $263,040. During the year ended December 31, 2019, 1,875,000 Officer and Director options expired, which had a fair value on grant date of $239,962.

On August 20, 2020, Strategic subscribed to 1,700,000 non-flow-through units of the Company for gross proceeds of $340,000 (note 7(a)), and on August 30, 2019 it purchased 2,226,000 non-flow-through units of the Company for total consideration of $267,120 (note 7(c)).

The Company transacted with the following related parties:

• (a) Archer, Cathro & Associates (1981) Limited (“Archer Cathro”) is a geological consulting firm over which the CEO of Strategic has significant influence and ownership. Charges are for property location, acquisition, exploration, management, and office rent and administration.

• (b) Glenn Yeadon is a Director and the Company’s Secretary. He controls Glenn R. Yeadon Personal Law Corporation (“Yeadon Law Corp.”) which provides the Company with legal services.

• (c) Larry Donaldson is the Company’s CFO. He is a principal of Donaldson Brohman Martin CPA, Inc. (“DBM CPA”), a firm in which he has significant influence. DBM CPA provides the Company with accounting and tax services.

• (d) Ian Talbot is the Company’s COO. He provides the Company with monthly management services.

• (e) Matthew Turner is the Company’s President and CEO. He provides the Company with management, administrative, corporate development and technical services.

• (f) Strategic has a controlling interest in the Company.

21

Rockhaven Resources Ltd. Notes to the Financial Statements

For the years ended December 31, 2020 and December 31, 2019

9. Related party payables and transactions (continued)

The aggregate value of transactions and outstanding balances with key management personnel and Directors and entities over which they have control or significant influence were as follows:

		Transactions	Transactions	Transactions	Transactions	Balances	Balances	Balances	Balances
		year ended		year ended		outstanding		outstanding
		December	31,	December	31,	December	31,	December	31,
		2020		2019		2020		2019
		$		$		$		$
	Archer, Cathro
	- geological services		979,055		648,220		23,055		15,538
	- rent and administration		41,112		40,209		4,093		5,108
		1,020,167			688,429		27,148		20,646
(1)	Yeadon Law Corp.		64,994		52,842		10,583		11,579
	DBM CPA		39,450		36,200		11,000		11,000
	Ian Talbot		31,729		42,000		3,675		-
(2)	Matthew Turner		160,148		160,146		-		-
		1,316,488			979,617		52,406		43,225

(1) Includes share issue costs of $20,000 for the year ended December 31, 2020 (2019 - $28,650)

• (2) Includes geological services (within exploration (note 6)) of $85,696 for the year ended December 31, 2020 (2019 - $65,696).

All related party balances are unsecured and are due within thirty days without interest.

The transactions with the key management personnel and Directors are included in operating expenses as follows:

• (a) Management, administration and corporate development fees

• Includes the services of the Company’s COO, Ian Talbot.

• Includes charges by Archer Cathro for administrative personnel.

• (b) Management, administration and corporate development salaries

• Includes the portion of Matt Turner’s salary related to management, administrative and corporate development services. The remainder of Matt Turner’s salary is allocated to deferred exploration and evaluation expenditures for his project technical services.

• (c) Office rent

• Charged by Archer Cathro.

• (d) Professional fees

• Includes the legal services of the Company’s Director and Secretary, Glenn Yeadon, charged to the Company by Yeadon Law Corporation.

• Includes the accounting and tax services of Company’s CFO, Larry Donaldson, charged to the Company by DBM CPA.

22

Rockhaven Resources Ltd. Notes to the Financial Statements

For the years ended December 31, 2020 and December 31, 2019

10. Income taxes

Income tax recovery varies from the amount that would be computed from applying the combined federal and provincial income tax rate to loss before income taxes as follows:

income tax rate to loss before income taxes as follows:
	December 31,	December 31
	2020	2019
	$	$
Loss for the year before income taxes	(747,342)	(381,108)
StatutoryCanadian corporate tax rate	27.00%	27.00%
Anticipated income tax recovery	201,782	102,899
Change in tax resulting from:
Unrecognized items for tax purposes	(110,889)	1,424
Tax benefits to be renounced/renounced on flow-through expenditures	(611,607)	(441,506)
Flow-throughpremium liabilityreduction	604,210	480,943
Net deferred income tax recovery	83,496	143,760

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

	December 31,	December 31,
	2020	2019
	$	$
Mineral property interests	(4,817,983)	(4,090,129)
Unclaimed investment tax credits	538,775	538,775
Non-capital loss carry forwards	1,758,282	1,511,043
Share issue and other costs	90,115	44,755
Net deferred income tax liability	(2,430,811)	(1,995,556)

As at December 31, 2020, the Company has non-capital loss carry forwards of approximately $6,512,000 which expire as follows: $109,000 in 2026, $97,000 in 2027, $391,000 in 2028, $332,000 in 2029, $373,000 in 2030 and $5,210,000 thereafter.

As at December 31, 2020, the Company has unused capital losses of approximately $2,274,000 (December 31, 2019 - $2,274,000) which have no expiry dates and can only be used to reduce future income from capital gains. The Company has not recognized a deferred income tax benefit on these losses or on accumulated unrealized losses, as it is unlikely that capital gains will be realized to utilize the losses.

As at December 31, 2020, the Company has unclaimed resource and other deductions in the amount of approximately $20,858,000 (December 31, 2019 - $20,829,000), which may be deducted against future taxable income.

As at December 31, 2020, the Company has share issue and other capital costs totaling approximately $334,000 (December 31, 2019 - $166,000), which have not been claimed for income tax purposes.

As at December 31, 2020, the Company has unused investment tax credits totaling approximately $738,000 (December 31, 2019 - $738,000), which have not been claimed for income tax purposes. The tax credits expire as follows: $364,000 in 2031, $319,000 in 2032 and $51,000 in 2033, and $4,000 in 2034.

Income tax attributes are subject to review and potential adjustments by tax authorities.

23

Rockhaven Resources Ltd. Notes to the Financial Statements

For the years ended December 31, 2020 and December 31, 2019

11. Supplemental cash flow information

Changes in non-cash operating working capital during the years ended December 31, 2020 and December 31, 2019 were comprised of the following:

were comprised of the following:
	December 31,	December 31,
	2020	2019
	$	$
Receivables and prepayments	(11,661)	(47,178)
Accounts payable and accrued liabilities	35,161	19,728
Accountspayable to relatedparties	9,314	5,725
Net change	32,814	(21,725)

The Company incurred non-cash financing and investing activities during the years ended December 31, 2020 and December 31, 2019 as follows:

December 31, 2019 as follows:
	December 31,	December 31,
	2020	2019
	$	$
Non-cash financing activities:
Contributed surplus on finders' warrants issued	45,100	11,590
Share issue costs on finders' warrants issued	(45,100)	(11,590)
Contributed surplus on issue of share purchase warrants (note 13)	51,300	-
Deferred exploration expenditures paid by issue of share purchase warrants (note 13)	(51,300)	-
Share issue costs included in related party payables	-	7,650
Share capital reduced byflow-through sharepremium	1,521,575	962,541
	1,521,575	970,191
Non-cash investing activity:
Deferred exploration expenditures included in accountspayable and relatedparty payables	76,757	19,688
	76,757	19,688

During the years ended December 31, 2020 and December 31, 2019, no amounts were paid on account of interest or income taxes.

24

Rockhaven Resources Ltd. Notes to the Financial Statements

For the years ended December 31, 2020 and December 31, 2019

12. Financial risk management

Capital management

The Company is a junior exploration company and considers items included in shareholders' equity as capital. The Company manages its capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of underlying assets. In order to maintain or adjust its capital structure, the Company may issue new shares, purchase shares for cancellation pursuant to normal course issuer bids or make special distributions to shareholders. The Company is not subject to any externally imposed capital requirements and does not presently utilize any quantitative measures to monitor its capital. As at December 31, 2020, the Company’s capital structure is comprised of shareholders’ equity of $39,970,555 (December 31, 2019 - $36,348,011).

The Company currently has no source of revenues. In order to fund future projects and pay for administrative costs, the Company will spend its existing working capital and raise additional funds as needed. The Company's ability to continue as a going concern on a long-term basis and realize its assets and discharge its liabilities in the normal course of business rather than through a process of forced liquidation is primarily dependent upon its ability to sell or option its mineral properties and its ability to borrow or raise additional financing from equity markets.

Financial instruments - fair value

The Company’s financial instruments consist of cash and cash equivalents, marketable securities, accounts payable and accrued liabilities, and accounts payable to related parties.

The carrying value of accounts payable and accrued liabilities and accounts payable to related parties approximates their fair value because of the short-term nature of these instruments.

Financial instruments measured at fair value on the statements of financial position are summarized into the following fair value hierarchy levels:

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

	Level 1	Level 2		Level 3		Total
	$	$		$		$
December 31, 2020
Cash and cash equivalents	5,112,734		-		-	5,112,734
Marketable securities	99,600		-		-	99,600
	5,212,334		-		-	5,212,334
December 31, 2019
Cash and cash equivalents	2,829,887		-		-	2,829,887
Marketable securities	47,033		-		-	47,033
	2,876,920		-		-	2,876,920

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Rockhaven Resources Ltd. Notes to the Financial Statements

For the years ended December 31, 2020 and December 31, 2019

12. Financial risk management (continued)

Financial instruments - risk

The Company’s financial instruments are exposed to certain financial risks, including credit risk, interest rate risk, market risk, and liquidity risk.

a) Credit risk

The Company is exposed to credit risk by holding cash and cash equivalents and receivables. This risk is minimized by holding the funds in a Canadian bank. The Company has minimal receivables exposure as its refundable credits are due from the Canadian government.

b) Interest rate risk

The Company is exposed to interest rate risk because of fluctuating interest rates. Fluctuations in market rates do not have a significant impact on the Company’s operations due to the short term to maturity and no penalty cashable feature of its cash equivalents. For the year ended December 31, 2020 every 1% fluctuation in interest rates up or down would have impacted loss during the year, up or down, by approximately $30,500 (2019 - $16,500) before income taxes.

c) Market risk

The Company is exposed to market risk because of the fluctuating values of its publicly traded marketable securities. The Company has no control over these fluctuations and does not hedge its investments. Based on the December 31, 2020 value of marketable securities every 10% increase or decrease in the share prices of these companies would have impacted loss during the year, up or down, by approximately $10,000 (2019 - $4,700) before income taxes.

d) Liquidity risk

Liquidity risk is the risk that the Company is unable to meet its financial obligations as they come due. The Company manages this risk by careful management of its working capital to ensure its expenditures will not exceed available resources.

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Rockhaven Resources Ltd. Notes to the Financial Statements

For the years ended December 31, 2020 and December 31, 2019

13. Commitments

Exploration Benefits Agreement:

The Company has an Exploration Benefits Agreement with the Little Salmon Carmacks First Nation (“LSCFN”), which establishes a framework between the parties for the ongoing exploration of the Company’s Klaza project. Under the Agreement the Company is required to pay LSCFN an annual fee equal to 2% of specified on-site exploration activities on the Klaza project during each calendar year, payable by March 31 of the following year. The fee accruals each period are included in deferred exploration expenditures and in accrued liabilities.

Under the Agreement, the Company issued LSCFN 500,000 share purchase warrants exercisable at $0.17 each until August 5, 2025. The value of the share purchase warrants was determined to be $51,300 (note 7). The warrants were issued to replace the previously issued warrants under the Agreement, which expired on August 5, 2020.

During the year ended December 31, 2020, the Company paid its annual fee relating to the 2019 year of $23,805 (2019 - $583).

Flow-through premium liability:

On August 30, 2019, the Company completed a private placement of flow-through units for gross proceeds of $2,989,308. The Company was required to spend the funds on qualified exploration programs no later than December 31, 2020. The Company renounced the expenditures and available income tax benefits to the flow-through shareholders effective December 31, 2019. As at December 31, 2020, all of the funds had been spent.

On November 12, 2019, the Company completed a private placement of flow-through units for gross proceeds of $500,000. The Company is required to spend the funds on qualified exploration programs no later than December 31, 2020. The Company renounced the expenditures and available income tax benefits to the flow-through shareholders effective December 31, 2019. As at December 31, 2020, all of the funds had been spent.

On August 20, 2020, the Company completed a private placement of flow-through units for gross proceeds of $5,101,750. The Company is required to spend the funds on qualified exploration programs no later than December 31, 2021. The Company renounced the expenditures and available income tax benefits to the flow-through shareholders effective December 31, 2020. As at December 31, 2020, approximately $411,000 of the funds had been spent.

In July 2020, the Canadian Government provided relief with respect to COVID-19 by providing companies with an additional 12 months in which they can spend eligible flow-through expenditures and provided interest relief on unspent funds.

Under the Income Tax Act flow-through look-back rules, the Company now has until December 31, 2022 to spend the remaining amount of flow-through funds. Amounts spent after February 1, 2021, continue to be subject to a floating rate interest tax of 2% per annum.

A summary of the Company’s flow-through premium liability as at December 31, 2020 and December 31, 2019, and changes during the years then ended is as follows:

	December 31,	December 31,
	2020	2019
	$	$
Balance, beginning of year	481,598	-
Addition - August 2019 private placement	-	879,208
Addition - November 2019 private placement	-	83,333
Addition - August 2020 private placement	1,521,575	-
Reduction -prorata based oneligible expenditures	(604,210)	(480,943)
Balance, end ofyear	1,398,963	481,598

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