Sable Resources — Interim / Quarterly Report 2020

Sep 1, 2020

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SABLE RESOURCES LTD.

Condensed Interim Consolidated Financial Statements As at and for the three and six months ended June 30, 2020 and 2019

NOTICE OF NO AUDITOR REVIEW OF INTERIM FINANCIAL STATEMENTS

Under National Instrument 51-102, Part 4, subsection 4.3(3)(a), if an auditor has not performed a review of the interim financial statements, they must be accompanied by a notice indicating that the financial statements have not been reviewed by an auditor.

The accompanying unaudited interim consolidated financial statements of the Company have been prepared by and are the responsibility of the Company’s management. The Company’s independent auditor has not performed a review of these financial statements in accordance with standards established by the Chartered Professional Accountants of Canada for a review of interim financial statements by the entity’s auditor.

SABLE RESOURCES LTD. Condensed Interim Consolidated Statements of Financial Position (Expressed in Canadian Dollars)

			June 30	December 31
	Note		2020	2019
Assets
Current Assets
Cash and cash equivalents	5	$	2,442,537$	4,780,176
Marketable securities	4		27,136	20,586
Receivables	6		22,688	66,115
Prepaid expenses and deposits	7		79,273	152,372
			2,571,634	5,019,249
Property and equipment	8		153,926	168,357
Mineral property interests	9		5,563,755	5,155,035
		$	8,289,315 $	10,342,641
Liabilities
Current Liabilities
Payables and accruals	10,17	$	215,841$	701,812
Current portion of lease liability	11		26,259	25,825
			242,100	727,637
Lease liability	11		131,277	144,520
Due to related party	12		846,566	846,566
			1,219,943	1,718,723
Shareholders' equity
Issued capital	13		36,561,562	36,552,562
Accumulated other comprehensive loss			63,055	(206,134)
Contributed surplus	13		3,521,774	3,391,324
Deficit			(33,077,019)	(31,113,834)
			7,069,372	8,623,918
		$	8,289,315 $	10,342,641

Nature of operations and going concern (Note 1) Subsequent events (Note 23)

APPROVED ON BEHALF OF THE BOARD:

APPROVED ON BEHALF OF THE BOARD:
Signed:“Thomas Obradovich” Thomas Obradovich Director	Signed:“Andres Tinajero”
	Andres Tinajero Director

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

Page 1

SABLE RESOURCES LTD.

Condensed Interim Consolidated Statements of Net (Loss) Income and Comprehensive (Loss) Income

(Expressed in Canadian Dollars)

				Three	months ended,		Six	months ended,
For the three and six month periods ended June 30,	Note		2020		2019	2020		2019
Property related expenses
Exploration expenditures	14	$	401,186	$	609,167$	1,378,852	$	2,024,019
Other expenses (income)
General and administrative expenses	17		198,587		281,331	489,006		486,032
Share-based expense	13		60,750		232,400	130,450		269,750
Unrealized loss on assets held for distribution			-		150,000	-		150,000
Gain on settlement of accrued liabilities			-		-	-		(41,888)
Gain on sale of mineral property interests, net			-		(4,271,370)	-		(4,271,370)
Property investigation and evaluation			3,249		-	3,249		-
Provision for value-added tax receivable	6		10,883		-	14,222		-
Interest income			(5,566)		(2,472)	(25,508)		(12,437)
Foreignexchangeloss			(40,893)		9,638	(41,663)		37,574
Net (loss) income from continuing operations		$	(628,196)	$	2,991,306$	(1,948,608)	$	1,358,320
Net loss from discontinued operations	4		-		6,793	14,577		79,754
Net(loss) income		$	(628,196)	$	2,984,513 $	(1,963,185)	$	1,278,566
Items that may be reclassified subsequently to profit and loss:
Change in fair value of marketable securities			(7,174)		-	(6,550)		-
Foreign currency translation adjustment			233,197		-	(262,639)		-
Other comprehensive loss (income)			226,023		-	(269,189)		-
Net comprehensive(loss) income		$	(854,219)	$	2,984,513 $	(1,693,996)	$	1,278,566
(Loss) income per share
Basic		$	(0.01)	$	0.02$	(0.01)	$	0.01
Diluted		$	(0.01)	$	0.02$	(0.01)	$	0.01
Weighted averagenumberofcommonshares outstanding			159,567,993		142,640,823	159,592,270		141,127,790

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

Page 2

SABLE RESOURCES LTD. Condensed Interim Consolidated Statements of Changes in Shareholders’ Equity

(Expressed in Canadian Dollars)

				Accumulated
	Note	Number of shares	Share Capital	Other Comprehensive	Contributed Surplus	Accumulated Deficit		Total
				Loss
Balance, December 31, 2018		139,663,564 $	33,589,336 $	-	$ 3,121,574 $	(29,623,042)	$	7,087,868
Comprehensive income		-	-	-	-	1,278,566		1,278,566
Shares issued from private placements	13	5,753,333	863,000	-	-	-		863,000
Shares issued in acquisition of claims	9,13	100,000	10,000	-	-	-		10,000
Share issue costs	13	-	(22,027)	-	-	-		(22,027)
Share-based expense	13,17	-	-	-	269,750	-		269,750
Balance, June 30, 2019		145,516,897 $	34,440,309 $	-	$ 3,391,324 $	(28,344,476)	$	9,487,157
Net Income		-	-	-	-	2,469,725		2,469,725
Other comprehensive loss		-	-	(206,134)	-	-		(206,134)
Shares issued from private placements	13	16,000,000	2,080,000	-	-	-		2,080,000
Shares issued in acquisition of claims	9,13	625,000	75,000	-	-	-		75,000
Share issue costs	13	-	(42,747)	-	-	-		(42,747)
Shareholder distributions	4	-	-	-	-	(5,239,083)		(5,239,083)
Balance, December 31, 2019		162,141,897 $	36,552,562 $	(206,134)	$ 3,391,324 $	(31,113,834)	$	8,623,918
Net loss		-	-	-	-	(1,963,185)		(1,963,185)
Other comprehensive income		-	-	269,189	-	-		269,189
Shares issued in acquisition of claims	9,13	100,000	9,000	-	-	-		9,000
Share-based expense	13,17	-	-	-	130,450	-		130,450
Balance, June 30, 2020		162,241,897 $	36,561,562 $	63,055	$ 3,521,774 $	(33,077,019)	$	7,069,372

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

Page 3

SABLE RESOURCES LTD. Condensed Interim Consolidated Statements of Cash Flows (Expressed in Canadian Dollars)

For the six month periods ended June 30,	Note		2020		2019
Operating Activities
Net loss		$	(1,963,185)	$	1,278,566
Items not involving cash:
Amortization			14,431		11,764
Unrealized loss on marketable securities			-		150,000
Gain on sale of exploration properties	4		-		(4,271,370)
Stock-based compensation	13,17		130,450		269,750
Provision for value-add tax receivables	6		14,222		-
Gain on settlement of accrued liabilities			-		(41,888)
Unrealized loss on foreign exchange			-		24,521
Interestincome			(25,508)		(12,437)
			(1,829,590)		(2,591,094)
Changes in non-cash working capital	21		(388,883)		(860,006)
Total cash flows used in operating activities			(2,218,473)		(3,451,100)
Financing Activities
Principle payments on lease liability	11		(12,809)		(4,357)
Proceedsfrom issuance ofcommonshares andwarrants			-		840,973
Totalcash flows usedin financing activities			(12,809)		836,615
Investing Activities
Acquisition of mineral claims	9		(131,865)		(67,191)
Proceeds from sale of BC Properties			-		500,000
Interest income			25,508		12,437
Total cash flows used in investing activities			(106,357)		445,247
Decrease in cash and cash equivalents			(2,337,639)		(2,169,238)
Cash and cash equivalents, beginning of period			4,780,176		2,807,533
Cash and cash equivalents,end ofperiod		$	2,442,537	$	638,295

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

Page 4

SABLE RESOURCES LTD. Notes to the Condensed Interim Consolidated Financial Statements For the three and six month periods ended June 30, 2020 and 2019 (Expressed in Canadian Dollars)

1. NATURE OF OPERATIONS AND GOING CONCERN

Sable Resources Ltd. (the "Company") is incorporated under the Business Corporation Act (British Columbia). The Company is primarily engaged in the acquisition, exploration and development of mineral resource properties in Mexico, Argentina, and Peru. The address of the Company's corporate office and principal place of business is Suite 900, 999 West Hastings Street, Vancouver, British Columbia, V6C 2W2. The Company’s shares are listed on the TSX Venture Exchange (“TSXV”) and on the OTC Venture Market (“OTCQB”) under the symbols SAE and SBLRF, respectively.

The Company has not yet determined whether any of its properties contain mineral deposits that are economically recoverable. The recoverability of any amounts shown as mineral property interests is 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 its properties, and future profitable production or proceeds from the disposition of its properties.

While the Company's consolidated financial statements have been prepared using International Financial Reporting Standards ("IFRS") applicable to a going concern, which contemplates the realization of assets and settlement of liabilities in the normal course of business as they come due, certain conditions and events indicate a material uncertainty that may cast significant doubt about the Company's ability to continue as a going concern. For the six month period ended June 30, 2020, the Company reported a net comprehensive loss of $1,693,996 and, as of that date, had an accumulated deficit of $33,077,019.

The Company’s continuing operations and its ability to discharge its liabilities and fulfill its commitments as they come due, is dependent upon the ability of the Company to continue to obtain debt or equity financing in the short term, the continued support of related parties, and ultimately, on locating economically recoverable ore reserves in its mineral properties. Management believes the Company will be successful at securing additional funding, however, there is no assurance that such plans will be successful.

If the Company is unable to obtain adequate additional financing and the continued support of related parties, the Company will be required to curtail exploration activities. Furthermore, failure to continue as a going concern would require restatement of assets and liabilities on a liquidation basis, which would differ significantly from the going concern basis.

During the period ended June 30, 2020, the coronavirus (“COVID-19”) outbreak was declared a pandemic by the World Health Organization (“WHO”). The situation is dynamic and the ultimate duration and magnitude of the impact on the economy and capital markets are not known at this time.

These consolidated financial statements were approved and authorized for issue by the Company’s Board of Directors on August 31, 2020.

2. BASIS OF PRESENTATION

a) Statement of Compliance

These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). These consolidated financial statements represent the Company’s presentation of its results and financial position under IFRS. These accounting policies are based on the IFRS standards and International Financial Reporting Interpretations Committee (“IFRIC”) interpretations that the Company expects to be applicable at that time. The policies set out below were consistently applied to all presented unless otherwise noted.

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SABLE RESOURCES LTD. Notes to the Condensed Interim Consolidated Financial Statements For the three and six month periods ended June 30, 2020 and 2019 (Expressed in Canadian Dollars)

2. BASIS OF PRESENTATION (continued)

b) Basis of Measurement

These consolidated financial statements were prepared on an accrual basis, are based on historical costs except for financial instruments measured at fair value and are presented in Canadian dollars, which is the functional currency of the Company’s Canadian entities. The functional currency of the Company’s foreign subsidiaries is US dollars.

c) Subsidiaries

Subsidiaries are all corporations over which the Company is able, directly or indirectly, to control financial and operating policies, which is the authority usually connected with holding majority voting rights. Subsidiaries are fully consolidated from the date on which control is acquired by the Company. They are de-consolidated from the date that control by the Company ceases.

The entities of the Company are as follows:

The entities of the Company are as follows:
				Functional
Name	Location	Ownership	Status	Currency
Sable Resources Ltd.	Canada	Parent	Consolidated	$CAD
Exploraciones Sable, S.de R.L. de C.V.	Mexico	100%	Consolidated	$USD
Exploraciones Tres Cordilleras, S.A. de C.V.	Mexico	100%	Consolidated	$USD
Exploraciones Calalinas, S.A. de C.V.	Mexico	100%	Consolidated	$USD
Exploraciones Vientos de Sur, S.A. de C.V.	Mexico	100%	Consolidated	$USD
Sable Argentina S.A.	Argentina	100%	Consolidated	$USD

d) Foreign currency translation

Functional and presentation currency

Items included in the financial statements of each of the Company's entities are measured using the currency of the primary economic environment in which the entity operates ('the functional currency'). The presentation currency is stated in Canadian dollars.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in net loss.

Statements of comprehensive loss and cash flows for entities whose functional currency is different to the presentation currency are translated into the Company's presentation currency at average exchange rates for the year while their statements of financial position are translated at the year-end exchange rates. Exchange differences arising from the translation are recorded as a component of other comprehensive income (loss). On disposal of a foreign entity, such exchange differences are transferred out of this reserve and are recognized in net income (loss) as part of the gain or loss on sale.

Page 6

SABLE RESOURCES LTD. Notes to the Condensed Interim Consolidated Financial Statements For the three and six month periods ended June 30, 2020 and 2019 (Expressed in Canadian Dollars)

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

• a) Accounting policies

These unaudited condensed interim consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2019 which includes information necessary for useful to understanding the Company’s business and financial statement presentation. Foremost, the Company’s significant accounting policies are presented as Note 3 in the audited financial statements for the year ended December 31, 2019 and have been consistently applied in the preparation of these unaudited condensed interim financial statements.

b) New Accounting Standards Issued and Effective

IAS 1 & 8, Definition of Material

The amendment clarifies the definition of material to make it easier to understand and provides guidance on how the definition should be applied. The change in the definition now ensures that the definition is consistent across all IFRS standards and the Conceptual Framework.

• Old definition (IAS 1): Omissions or misstatements of items are material if they could, individually or collectively, influence the economic decisions that users make on the basis of the financial statements;

• New definition: Information is material if omitting, misstating or obscuring it could reasonably be expected to influence the decisions that the primary users of general-purpose financial statements make on the basis of those financial statements, which provide financial information about a specific reporting entity.

The definition of material omissions or misstatements from IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors has been removed.

IAS 1 & 8 was effective for annual periods beginning on or after January 1, 2020. The adoption of IAS 1 & 8 amendments did not have a material impact on the condensed interim consolidated financial statements.

IFRS 3, Business Combinations

Amendment to IFRS 3 clarifies whether entities acquire a business or a group of assets. The amendments:

• confirm that a business must include inputs and a process, and clarified that: o the process must be substantive; and o the inputs and process must together significantly contribute to creating outputs.

• narrow the definitions of a business by focusing the definition of outputs on goods and services provided to customers and other income from ordinary activities, rather than on providing dividends or other economic benefits directly to investors or lowering costs; and

• add a test that makes it easier to conclude that a company has acquired a group of assets, rather than a business, if the value of the assets acquired is substantially all concentrated in a single asset or group of similar assets.

IFRS 3 was effective for annual periods beginning on or after January 1, 2020. The adoption of IFRS 3 amendment did not have a material impact on the consolidated financial statements.

Page 7

SABLE RESOURCES LTD. Notes to the Condensed Interim Consolidated Financial Statements For the three and six month periods ended June 30, 2020 and 2019 (Expressed in Canadian Dollars)

4. SALE OF OPERATING SEGMENT AND DISCONTINUED OPERATIONS

On April 22, 2019, the Company announced that it had completed a sale of all of the Company’s mineral resource properties and certain assets in British Columbia to Talisker Resources Ltd. (formerly Eurocontrol Technics Group Inc.) (“Talisker”). The British Columbia properties consist of the Baker-Shasta Project and underlying infrastructure, the Mets Mining Lease, the Tulox Project, the Bot Project, the WCGG Properties and the Spences Bridge Regional Program (the “BC Properties” or “exploration properties”).

The Company received total compensation of $500,000 in cash, 30,000,000 Talisker common shares, and a 1% net smelter return royalty over all of the properties. The gain on sale of the BC Properties to Talisker was calculated as follows:

Consideration received:
Fair value of common shares	$ 4,500,000
Cash consideration	500,000
Totalconsideration received	$ 5,000,000
Reclamation deposit	143,804
Equipment	72,779
Accumulated amortization	(25,473)
Mineral property interests	853,786
Asset retirement obligation	530,300
Net assets sold	1,568,455
Gain on sale of mineralproperties, net	$ 3,431,545

On June 26, 2019, at the Company’s Annual and Special Meeting of Shareholders, a special resolution was passed approving the distribution of 29,937,618 common shares of Talisker to the shareholders of the Company (“return of capital”).

On August 26, 2019, the Company agreed to indemnify Talisker for any future reclamation costs incurred on the Baker Shasta property greater than $311,266 (Note 12). The difference of $846,566 was subsequently included in the calculation of the gain on sale of mineral property interests. (Note 12)

On August 23, 2019, the Company completed the distribution of 29,937,618 common shares of Talisker at a fair value of $5,239,083.15 to its shareholders as a distribution, at $0.175 per common share.

As at June 30, 2020, the Company held 62,382 (December 31, 2019 – 62,382) Talisker common shares with a fair value of $27,136 (December 31, 2019 - $20,586).

Prior to the transaction closing, the Company classified all expenses from the BC Properties incurred from the date of the transaction announcement as loss from discontinued operations. Loss from discontinued operations for the period from the BC Properties:

operations for the period from the BC Properties:
Exploration expenditures Property maintenance	June 30, 2020 June 30, 2019
	$ - $ 56,436 14,577 16,525
Lossfromdiscontinued operations	$ 14,577 $72,961

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SABLE RESOURCES LTD. Notes to the Condensed Interim Consolidated Financial Statements For the three and six month periods ended June 30, 2020 and 2019 (Expressed in Canadian Dollars)

5. CASH AND CASH EQUIVALENTS

Cash and cash equivalents consist of cash on deposit with major Canadian and Mexican banks in general interest-bearing accounts totaling $2,442,537 (December 31, 2019 - $4,780,176).

Cash and cash equivalents include a $40,000 (December 31, 2019 - $40,000) one-year cashable guaranteed investment certificate (GIC) held with the Royal Bank of Canada with an interest rate of 0.5% and maturing on July 1, 2021.

6. RECEIVABLES

6. RECEIVABLES
Receivables Goods and services tax Value added tax Other Less: Provision for value-added tax	June 30, 2020 December 31, 2019
	$ 11,760 $ 37,524 10,928 28,591 309,134 294,201 - - (309,134) (294,201)
	$ 22,688 $66,115

The valued added tax receivables (“VAT”) consist of $309,134 (December 31, 2019 - $294,201) of “Impuesto al Valor Agregado” (“IVA”) due from the Mexican tax authorities, generated on expenditures related to the exploration of projects located in Mexico by the Company’s Mexican subsidiary. The Company assesses the recoverability of the amount’s receivable at each reporting date. The Company can recover the VAT receivables from the Mexican government if the projects are entered into production.

As at June 30, 2020, the Company has recorded a provision for the entire Mexico value added tax receivable upon consideration of the Company’s history of collection and the uncertainty that the properties in Mexico will enter into production in the future. The provision for value-added tax of $14,222 has been recognized in the condensed interim consolidated statement of net income loss and comprehensive loss.

7. PREPAID EXPENSES AND DEPOSITS

7. PREPAID EXPENSES AND DEPOSITS
Prepaid expenses Advances tovendors	June 30, 2020 December 31, 2019
	$ 29,122 $ 36,971 50,151 115,401
	$ 79,273 $152,372

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SABLE RESOURCES LTD. Notes to the Condensed Interim Consolidated Financial Statements For the three and six month periods ended June 30, 2020 and 2019

(Expressed in Canadian Dollars)

8. PROPERTY AND EQUIPMENT

	Property and
Cost	equipment
Balance at June 30,2019	$-
Addition, right of use asset	$ 187,599
Balance atDecember31,2019	$187,599
Balance at June 30,2020	$187,599
	Property and
Accumulated amortization	equipment
Balance at June 30, 2019	$-
Amortization	19,242
Balance at December 31, 2019	$ 19,242
Amortization	14,431
Balance at June 30,2020	$33,673
Net book value at:
June 30, 2020	$ 153,926
December 31,2019	$168,357

As of June 30, 2020, the net book value of the Company’s right of use asset was $153,926 (December 31, 2019 - $168,357).

9. MINERAL PROPERTY INTERESTS

	British
	Columbia		Mexico	Argentina	Peru	Total
Balance at December 31, 2018	$ 847,045		$ 4,430,842	$ 128,673	$ 13,183	$ 5,419,743
Cost of Acquisition		-	700,000	77,191	75,000	852,191
Disposal of Assets (note 4)	(847,045)		-	-	-	(847,045)
Sale of Royalty (note 20)		-	(49,241)	(2,059)	(882)	(52,182)
Currency Translation Adjustment		-	(217,672)	-	-	(217,672)
Balance at December 31, 2019		-	4,863,929	203,805	87,301	5,155,035
Cost of Acquisition		-	-	131,865	-	131,865
Currency Translation Adjustment		-	276,855	-	-	276,855
Balance at June 30, 2020	$	-	$ 5,140,784	$ 335,670	$ 87,301	$ 5,563,755

Page 10

SABLE RESOURCES LTD. Notes to the Condensed Interim Consolidated Financial Statements For the three and six month periods ended June 30, 2020 and 2019 (Expressed in Canadian Dollars)

9. MINERAL PROPERTY INTERESTS (continued)

Mexico

a) Margarita Silver Project

On May 30, 2017, the Company optioned the Margarita Silver Project located in Chihuahua State, Mexico in consideration for 200,000 common shares in capital stock of the Company and payment of $50,000 on closing and subsequent issuances of common shares in the capital stock equal to $500,000, less the initial 200,000 common shares issued, on the first anniversary, $1,000,000 worth of common shares in the capital stock in the second anniversary and $2,000,000 worth of common shares in the capital stock on the third anniversary, in each case calculated based on the closing price of the common shares on the TSXV on the date preceding the anniversary date. The share issuances did not occur due to an amendment to the agreement.

The option agreement entered into on May 30, 2017 was subsequently amended on October 17, 2017, resulting in total initial consideration of $50,000 due at execution of the agreement and payment of $30,000 prior to October 23, 2017. The first anniversary payment was amended to either a cash payment or $470,000 worth of common shares in capital stock of the Company. The first anniversary cash payment was made on May 31, 2018.

The option agreement was subsequently amended on August 27, 2019, resulting in the consideration for the second anniversary payment being modified to $500,000 and a payment of $200,000 on the second and a half anniversary date. The second anniversary payment was made on September 13, 2019.

The option agreement was subsequently amended on November 28, 2019, resulting in the consideration for the second and a half anniversary payment being modified to $200,000 and a payment of $2,300,000 on the third anniversary date. The second and a half anniversary payment was made on December 4, 2019.

The option agreement was subsequently amended on May 5, 2020, resulting in the third anniversary option payment date being modified to November 30, 2020.

b) BlueJoint Mineral Applications

On January 29, 2018, the Company acquired five mineral applications in Mexico in connection with the acquisition of BlueJoint. Each mineral application contains exploration targets consistent to the Company’s exploration methodology.

The Company has identified two initial targets, Vinata and El Escarpe On July 9, 2019, the Company announced it had received permits for Vinata to conduct its drilling campaign.

Argentina

• a) Don Julio Project

On December 6, 2017 the Company entered into an agreement to acquire up to a 100% interest in the Don Julio Project located in the San Juan Province of Argentina, subject to a 2% net smelter royalty which one half may be purchase by the Company for US$2,500,000 anytime after 12 months from which commercial production has been declared for any part of the project. This was subsequently amended on June 1, 2020, whereby the remaining 1% net smelter royalty can be purchased by the Company for US$5,000,000.

On May 31, 2018, the Company received the environmental impact assessment permit for the Don Julio Project.

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SABLE RESOURCES LTD. Notes to the Condensed Interim Consolidated Financial Statements For the three and six month periods ended June 30, 2020 and 2019 (Expressed in Canadian Dollars)

10. MINERAL PROPERTY INTERESTS (continued)

To earn the initial 50% interest of the Don Julio Project the Company must:

• Make payment of US$25,000 upon signing of the letter of intent ($31,988 or US$25,000 equivalent paid during the year ended December 31, 2017);

• Issue 200,000 common shares (issued) and make payment of US$25,000 ($32,640 or US$25,000 equivalent was paid during the year ended December 31, 2018);

• Issue 100,000 common shares and make payment of US$50,000 prior to the one-year anniversary of the receipt of an environmental impact assessment permit ($67,191 or US$50,000 equivalent was paid, and 100,000 common shares valued at $10,000 were issued during year ended December 31, 2019);

• Issue 100,000 common shares and make payment of US$60,000 prior to the second anniversary of the permit date ($82,500 or US$60,000 equivalent was paid, and 100,000 common shares valued at $9,000 were issued during period ended June 30, 2020);

• Issue 200,000 common shares and make payment of US$120,000 prior to the third anniversary of the permit date; and

• Issue 400,000 common shares and make payment of US$120,000 prior to the fourth anniversary of the permit date.

• Issue 200,000 common shares and make payment of US$200,000 prior to the fifth anniversary of the permit date.

To earn additional interest in the project up to 100%, the Company must:

• To earn an additional 10% for 60% ownership in the project; issue 500,000 common shares and make payment of US$600,000 prior to the sixth anniversary of the permit date;

• To earn an additional 10% for 70% ownership in the project; issue 800,000 common shares, make payment of US$900,000, and complete an additional US$1,500,000 of exploration work prior to the seventh anniversary of the permit date; and

• To earn an additional 30% for 100% ownership in the project; issue 1,000,000 common shares, make payment of US$1,900,000, and complete an additional US$1,500,000 of exploration work prior to the eighth anniversary of the permit date.

b) El Fierro Project

On February 25, 2020, the Company entered into option agreements to acquire 100% interest in the El Fierro project (“El Fierro”) located in the San Juan Province of Argentina. To earn 100% interest in El Fierro, the Company must:

• Make payment of US$30,000 on the signing of the agreement ($40,365 or US$30,000 equivalent paid during period ended June 30, 2020);

• Make payment of US$70,000 prior to March 1, 2021;

• Make payment of US$150,000 prior to March 1, 2022;

• Make payment of US$200,000 prior to March 1, 2023; and

• Make payment of US$1,720,000 prior to March 1, 2024.

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SABLE RESOURCES LTD. Notes to the Condensed Interim Consolidated Financial Statements For the three and six month periods ended June 30, 2020 and 2019 (Expressed in Canadian Dollars)

9. MINERAL PROPERTY INTERESTS (continued)

Peru

• a) Scorpius Project

On September 15, 2018 the Company entered into an agreement to acquire up to a 100% interest in the Scorpius Project located in central Peru, subject to a 1% net smelter royalty which may be purchased by the Company for US$1,500,000 any time after 12 months from which commercial production has been declared on any portion of the project. To earn a 100% interest of the project the Company must:

• Make payment of US$10,000 upon the signing of the letter of intent ($13,183 or US$10,000 equivalent paid during the year ended December 31, 2018);

• Make payment of US$40,000 or issue an equal value of common shares at a fixed exchange rate of CAD$1.30 for US$1.00 on the date all necessary permitting to conduct drilling on the project is received;

• Make payment of US$200,000 or issue an equal value of common shares at a fixed exchange rate of CAD$1.30 for US$1.00 on the first anniversary of the permit date;

• Make payment of US$250,000 or issue an equal value of common shares at a fixed exchange rate of CAD$1.30 for US$1.00 on the second anniversary of the permit date; and

• Make payment of US$500,000 or issue an equal value of common shares at a fixed exchange rate of CAD$1.30 for US$1.00 on the third anniversary of the permit date.

b) Kirio Project

On July 24, 2019, the Company entered into an agreement to acquire 100% interest in the Kirio Project from Teck Peru S.A. (“Teck”) located in the Miocene Gold Belt of Central Peru. To earn a 100% interest of the Kirio Project the Company must:

• Complete US$150,000 of exploration work prior to the October 22, 2020;

• Complete US$500,000 of cumulative exploration work prior to October 22, 2021;

• Complete US$1,000,000 of cumulative exploration work prior to October 22, 2022;

• Complete US$2,000,000 of cumulative exploration work prior to October 22, 2023;

• Complete a minimum of 4,000 meters of drilling and issuing 625,000 common shares; and

• In addition, if the Company does not spend the US$150,000 in exploration work prior to October 22, 2020, the Company is required to pay to Teck in cash the difference between the US$150,000 and the actual amount of exploration expenditures incurred

Teck has the option to earn back to a 65% interest in the project by incurring 2.5 times the Company’s expenditures and by making a cash payment to the Company of US$500,000. If Teck does not exercise this right, they will retain a 2% net smelter royalty on the project.

During the year ended December 31, 2019, the Company issued 625,000 common shares to Teck, valued at $75,000.

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SABLE RESOURCES LTD. Notes to the Condensed Interim Consolidated Financial Statements For the three and six month periods ended June 30, 2020 and 2019 (Expressed in Canadian Dollars)

9. MINERAL PROPERTY INTERESTS (continued)

British Columbia

The Company held a 100% interest in the Baker-Shasta project, Mets Mining Lease, Tulox project, Bot project, WCGG Properties and the Spences Bridge Project. During the year ended December 31, 2019, these properties were disposed. See Note 4.

11. PAYABLES AND ACCRUALS

11. PAYABLES AND ACCRUALS
Trade payables Accruals and other	June 30, 2020 December 31, 2019
	$ 80,661 $ 433,121 135,180 268,691
	$ 215,841 $701,812

12. LEASE LIABILITY

The Company’s lease liability relates to its lease for the office premises. The lease comprises only fixed payments over the lease term.

Opening balance New obligation under finance lease Repayments	June 30, 2020 December 31, 2019
	$ 170,345 $ - - 187,599 (12,809) (17,254)
Ending balance	157,536 170,345
Less current portion	(26,259) (25,825)
Non-current obligation	$ 131,277 $144,520
Gross lease obligation - minimum lease payments 1 year 2-3 years 4-5 years 6+years	$ 30,976 97,395 43,535 -
Future interest expense on lease obligations	(14,370)
	$ 157,536

During the six month period ended June 30, 2020, the Company recognized $2,681 in interest expense on its lease liability. During the six month period ended June 30, 2020, the Company expensed $173,180 related to leases that are classified as short-term and $3,770 for leases of low-value assets. The incremental borrowing rate applied to the lease liabilities was 3.24%.

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SABLE RESOURCES LTD. Notes to the Condensed Interim Consolidated Financial Statements For the three and six month periods ended June 30, 2020 and 2019 (Expressed in Canadian Dollars)

13. DUE TO RELATED PARTY

For the year ended December 31, 2019, the asset retirement obligation of $316,266 was assumed by Talisker in connection with the sale of Mineral Properties (Note 4). In connection with the sale of the mineral properties, the Company agreed to indemnify Talisker for any future reclamation costs incurred on the Baker Shasta property greater the associated asset retirement obligation than $311,266. As of June 30, 2020, the estimated reclamation obligation of the Baker Shasta property is $1,157,832.

The Company has estimated the indemnification obligation based on management’s estimates of costs to reclaim the Baker Shasta property as well as an estimate on the future timing of the costs to be incurred. These costs will be incurred when the associated reclamation work occurs, but this will not occur in the next 12 months (see subsequent events Note 23).

14. ISSUED CAPITAL AND CONTRIBUTED SURPLUS

a) Issued Capital

Authorized

The Company is authorized to issue an unlimited number of common shares.

Issued and outstanding:

	Number of Shares	$ Value
Balance at December 31, 2018	139,663,564 $ 33,589,336
Shares issued in private placement Shares issued in acquisition of mineral properties Share issuance costs	21,753,333 2,943,000 725,000 85,000 - (64,774)
Balance at December 31, 2019	162,141,897 $ 36,552,562
Shares issued in acquisition of mineral properties	100,000 9,000
Balance at June 30, 2020	162,241,897 $ 36,561,562

During the period ended June 30, 2020:

• On May 31, 2020, the Company issued 100,000 common shares at a price of $0.09 per common share, the fair value of the common shares on grant date, for a gross value of $9,000 in connection with the Don Julio Project.

During the year ended December 31, 2019:

• On May 15, 2019, the Company completed a private placement of 5,753,333 units at a price of $0.15 per unit for gross proceeds of $863,000. Each unit was comprised of one common share and one half of one common share purchase warrant entitling the holder thereof to purchase a common share at a price of $0.25 until May 15, 2021.

• On May 28, 2019, the Company issued 100,000 common shares at a price of $0.10 per common share, the fair value of the common shares on grant date, for a gross value of $10,000 in connection with the Don Julio Project.

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SABLE RESOURCES LTD. Notes to the Condensed Interim Consolidated Financial Statements For the three and six month periods ended June 30, 2020 and 2019 (Expressed in Canadian Dollars)

14. ISSUED CAPITAL AND CONTRIBUTED SURPLUS (continued)

• On May 28, 2019, the Company issued 100,000 common shares at a price of $0.10 per common share, the fair value of the common shares on grant date, for a gross value of $10,000 in connection with the Don Julio Project.

• On August 13, 2019, the Company issued 625,000 common shares at a price of $0.12 per common share, the fair value of the common shares on grant date, for a gross value of $75,000 in connection with the Kirio Project.

• On August 29, 2019 the Company entered into an investment agreement with Osisko Gold Royalties Ltd (“Osisko”). Pursuant to that agreement, Osisko subscribed for 16,000,000 units at a price of $0.13 per unit for gross proceeds of $2,080,000. Each unit was comprised of one common share and one half of one common share purchase warrant entitling the holder thereof to purchase a common share at a price of $0.21 until August 29, 2022. As part of the investment agreement, Osisko has an equity participation right to maintain pro-rata ownership interest so long as Osisko owns more than 5% of the outstanding common shares. As of December 31, 2019, Osisko owned more than 5% of the Company’s outstanding common shares.

b) Stock options

The Company has a share option plan whereby officers, directors and certain employees and consultants may be granted options to purchase unissued common shares of the Company. The option exercise price is decided by the Board of Directors but may not be less than the discounted market price of the Company’s shares as defined in the Rules and Policies of the TSXV. The share option plan permits the granting of options up to a maximum of 10% of outstanding shares of the Company.

up to a maximum of 10% of outstanding shares of the	Company.
		Weighted
	Number of stock	average
	options	exercise price
Balance at December 31, 2018	10,450,000	$ 0.20
Options issued during the year	3,250,000	0.16
Options cancelled during the year	(1,200,000)	(0.13)
Balance at December 31, 2019	12,500,000	$ 0.19
Options issued during the period	3,050,000	0.10
Options cancelled during the period	(1,150,000)	(0.24)
Balance at June 30, 2020	14,400,000	$ 0.17

During the period ended June 30, 2020:

• On March 11, 2020, the Company granted an aggregate of 1,700,000 options to purchase common shares of the Company exercisable at a price of $0.10 per common share for a period of five years to certain directors, officers, and consultants.

The fair value of the 1,700,000 options was estimated at $69,700 using the Black Sholes pricing model with the following assumptions: dividend yield 0%, risk free interest 0.44%; volatility 93% and an expected life of five years.

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SABLE RESOURCES LTD. Notes to the Condensed Interim Consolidated Financial Statements For the three and six month periods ended June 30, 2020 and 2019 (Expressed in Canadian Dollars)

14. ISSUED CAPITAL AND CONTRIBUTED SURPLUS (continued)

• On May 13, 2020, the Company granted an aggregate of 1,350,000 options to purchase common shares of the Company exercisable at a price of $0.10 per common share for a period of five years to certain directors and officers.

The fair value of the 1,350,000 options was estimated at $60,750 using the Black Sholes pricing model with the following assumptions: dividend yield 0%, risk free interest 0.29%; volatility 93% and an expected life of five years.

During the year ended December 31, 2019:

• On February 26, 2019, the Company granted an aggregate of 450,000 options to purchase common shares of the Company exercisable at a price of $0.25 per common share for a period of five years to certain directors, officers, and consultants.

The fair value of the 450,000 options was estimated at $37,350 using the Black Sholes pricing model with the following assumptions: dividend yield 0%, risk free interest 1.77%; volatility 84% and an expected life of five years.

• On June 27, 2019, the Company granted an aggregate of 2,800,000 options to purchase common shares of the Company exercisable at a price of $0.15 per common share for a period of five years to certain directors, officers, and consultants.

The fair value of the of the 2,800,000 options was estimated at $232,400 using the Black Sholes pricing model with the following assumptions: dividend yield 0%, risk free interest 1.68%; volatility 84% and an expected life of five years. Compensation expense was recognized as general and administration expense during the year.

The Company has the following stock options outstanding and exercisable:

	Number of		Weighted	Weighted average
	options	Number of stock	average	number of years
Expiry date	outstanding	options vested	Exercise Price	to expiry
October 24, 2021	400,000	400,000	$ 0.10	1.32
May 3, 2022	2,300,000	2,300,000	0.15	1.84
November 9, 2022	1,800,000	1,800,000	0.17	2.36
March 31, 2023	2,800,000	2,800,000	0.25	2.74
October 26, 2023	800,000	800,000	0.30	3.32
February 26, 2024	450,000	450,000	0.25	3.66
June 27, 2024	2,800,000	2,800,000	0.15	3.99
March 11, 2025	1,700,000	1,700,000	0.10	4.70
May13,2025	1,350,000	1,350,000	0.10	4.87
Balance at June 30, 2020	14,400,000	14,400,000	$ 0.17	2.23

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SABLE RESOURCES LTD. Notes to the Condensed Interim Consolidated Financial Statements For the three and six month periods ended June 30, 2020 and 2019 (Expressed in Canadian Dollars)

14. ISSUED CAPITAL AND CONTRIBUTED SURPLUS (continued)

c) Share Purchase Warrants

Share purchase warrants enable the holders to acquire common shares of the Company upon exercise. Continuity of share purchase warrants issued and outstanding:

		Weighted
		average
	# of warrants	exercise price
Balance at December 31, 2018	29,697,165	$ 0.28
Share warrants issued	10,876,667	0.22
Share warrants expired	(19,955,215)	(0.24)
Balance at December 31, 2019	20,618,617	$ 0.28
Balance at June 30, 2020	20,618,617	$ 0.28

The Company has the following share purchase warrants outstanding and exercisable:

	Number of	Weighted
	warrants	average
Expiry date	outstanding	exercise price
October 11, 2020	600,000	$ 0.25
October 11, 2020	5,000,000	0.35
May 15, 2021	2,876,667	0.25
September 12, 2021	4,141,950	0.35
August29,2022	8,000,000	0.21
Balance at June 30, 2020	20,618,617	$ 0.28

During the year ended December 31, 2019:

• On May 15, 2019, the Company granted 2,876,667 warrants to purchase common shares of the Company exercisable at a price of $0.25 per common share for a period of two years.

• On August 29, 2019 the Company granted 8,000,000 warrants to purchase common shares of the Company exercisable at a price of $0.21 per common share for a period of three years.

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SABLE RESOURCES LTD. Notes to the Condensed Interim Consolidated Financial Statements For the three and six month periods ended June 30, 2020 and 2019

(Expressed in Canadian Dollars)

15. PROPERTY RELATED EXPENSES

	Three months	ended June 30,	Six months	ended June 30,
	2020	2019	2020	2019
Exploration expenditures
Employee compensation	$ 79,550	$ 26,606	$ 99,550	$ 26,606
Travel	22,550	44,165	152,998	146,696
Labour and technical fees	181,715	295,505	686,044	954,184
Drilling	-	99,826	29,322	400,768
Maintenance	-	1,298	4,316	6,258
Fuels and lubes	689	3,521	23,862	28,588
Freight	-	27,120	-	56,673
Operating supplies	33,072	1,047	76,980	1,047
Lease and rentals	6,087	24,322	47,419	139,779
Office and general and administrative	59,094	47,263	160,267	129,915
Insurance, bank fees and taxes (non-income)	18,429	44,691	98,094	196,138
Less amounts from discontinued operations (note 4)	-	(6,197)	-	(62,633)
Total exploration expenditures	$ 401,186	$ 609,167	$ 1,378,852	$2,024,019

	Three months	ended June 30,	Six months	ended June 30,
	2020	2019	2020	2019
Property Maintenance
Employee related	$ -	$ -	$ -	$ 392
Contractors	-	-	14,577	11,500
Office and general and administrative	-	596	-	5,229
Less amounts from discontinued operations (note 4)	-	(596)	(14,577)	(17,121)
Totalproperty maintenance	$ -	$ -	$ -	$-

16. FINANCIAL INSTRUMENTS

Financial assets and liabilities as at June 30, 2020 and December 31, 2019 are as follows:

	Assets at fair
	value
	through
	profit and		Other financial
	loss	Amortized cost	liabilities	Total
As at June 30, 2020
Cash and cash equivalents	$ -	$ 2,442,537	$ -	$ 2,442,537
Marketable securities	27,136	-	-	27,136
Receivables	-	11,760	-	11,760
Payables and accruals	-	-	215,841	215,841
As at December 31, 2019
Cash and cash equivalents	$ -	$ 4,780,176	$ -	$ 4,780,176
Marketable securities	20,586	-	-	20,586
Receivables	-	37,524	-	37,524
Payables and accruals	-	-	701,812	701,812

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SABLE RESOURCES LTD. Notes to the Condensed Interim Consolidated Financial Statements For the three and six month periods ended June 30, 2020 and 2019 (Expressed in Canadian Dollars)

16. FINANCIAL INSTRUMENTS (continued)

The Company classifies its financial instruments carried at fair value according to a three level hierarchy that reflects the significance of the inputs used in making the fair value measurements. The three levels of fair value hierarchy are as follows:

• Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities;

• Level 2 - Inputs other than quoted prices that are observable for assets and liabilities, either directly or indirectly;

• Level 3 – Inputs for assets or liabilities that are not based on observable market data

As at June 30, 2020 and December 31, 2019, cash and cash equivalents were recorded at fair value under level 1 within the fair value hierarchy.

The carrying value of cash and cash equivalents, marketable securities, amounts receivable, and accounts payable and accrued liabilities approximate fair value because of the limited terms of these instruments.

17. SEGMENTED INFORMATION

The Company considers itself to operate in a single operating segment, being resource exploration and development. It holds mineral interests in Mexico, Argentina and Peru.

Period ended June 30, 2020	Canada	Mexico	Argentina	Peru	Total
Exploration expenditures General and administrative expenses As at June 30, 2020 Total assets $ Total liabilities Period ended June 30, 2019 Exploration expenditures General and administrative expenses As at December 31, 2019 Total assets $ Total liabilities	- 466,214 3,094,335 $ 1,197,916 Canada - 755,782 3,311,969 $ 1,423,150	323,159 22,792 4,903,874 $ 22,027 Mexico 935,566 - 6,739,566 $ 241,686	976,846 - 203,805 $ - Argentina 1,015,153 - 203,805 $ 53,887	78,847 - 87,301 $ - Peru 73,300 - 87,301 $ -	1,378,852 489,006 8,289,315 1,219,943 Total
					2,024,019 755,782 10,342,641 1,718,723

18. RELATED PARTY TRANSACTIONS

The following is a summary of the Company’s related party transactions during the period ended June 30, 2020 and 2019:

• The Company incurred exploration costs in the amount of $32,864 (June 30, 2019 - $51,437) paid to a Company with shared directors and officers. Included in payables and accruals at June 30, 2020 are $2,845 (December 31, 2019 - $3,781).

• The Company was remunerated for shared exploration and general and administrative costs of $39,480 (June 30, 2020 - $22,656) by companies with shared directors and officers. Included in receivables at June 30, 2020 are $10,523 (December 31, 2019 - $36,007).

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SABLE RESOURCES LTD. Notes to the Condensed Interim Consolidated Financial Statements For the three and six month periods ended June 30, 2020 and 2019 (Expressed in Canadian Dollars)

18. RELATED PARTY TRANSACTIONS (continued)

• As of June 30, 2020, the Company has a indemnification agreement for a reclamation obligation relating to a disposed mineral property with a company that shares directors and officers. The estimated liability is $846,566 (December 31, 2019 - $846,566) (Note 12).

Compensation of key management personnel of the Company

In accordance with IAS 24, key management personnel, including companies controlled by them, are those persons having authority and responsibility for planning, directing and controlling the activities of the Company directly or indirectly, including any directors (executive and non-executive) of the Company.

The remuneration of directors and key executives is determined by the compensation committee.

The remuneration of directors and other members of key management personnel during the three and six month periods ended June 30, 2020 and 2019 were as follows:

		Three months ended June 30,	Three months ended June 30,	Six months	ended June 30,
		2020	2019	2020	2019
Short	term employee benefits	$ 153,751	$ 138,000	$ 396,085	$ 297,000
Share	based payments	60,750	203,350	99,700	240,700
		$ 214,501	$341,350	$ 495,785	$537,700

As at June 30, 2020, an amount of $12,775 (December 31, 2019 - $60,131) due to key management personnel, was included in accounts payable and accrued liabilities. This amount is unsecured, non-interest bearing and without fixed terms of repayment.

Transactions with related parties are recorded at fair value.

19. CAPITAL MANAGEMENT

The Company's capital management objectives are to raise the necessary equity financing to fund its exploration projects and mining activities and to manage the equity funds raised to best optimize its exploration and mining programs in the interests of its shareholders and other stakeholders at an acceptable risk.

In management of capital, the Company includes shareholders' equity and cash and cash equivalents in the definition of capital.

The Company manages its capital structure and adjusts it in the light of changes in economic conditions and the risk characteristics of its underlying assets. To maintain or adjust the capital structure, the Company may raise additional equity funds and acquire new exploration properties as circumstances dictate.

The Company’s capital consists of the following:

Working capital surplus Share capital Share-based payment reserve (included in contributed surplus) Accumulated deficit	June 30, 2020 December 31, 2019
	$ 2,329,534 $ 4,291,612 36,561,562 36,552,562 2,695,559 2,565,809 (33,077,019) (31,113,834)
	$ 8,509,636 $12,296,149

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SABLE RESOURCES LTD. Notes to the Condensed Interim Consolidated Financial Statements For the three and six month periods ended June 30, 2020 and 2019 (Expressed in Canadian Dollars)

20. FINANCIAL RISK FACTORS

The Company’s risk exposure and the impact on the Company’s financial instruments are summarized below. There have been no material changes in the risks, objectives, policies and procedures from the previous period.

Credit risk

The Company's credit risk is primarily attributable to cash and cash equivalents. Management believes that the credit risk concentration with respect to the cash and cash equivalents is minimal.

Liquidity risk

Liquidity risk is the risk that the Company will not have sufficient cash resources to meet its financial obligations as they come due. The Company’s liquidity and operating results may be adversely affected if the Company’s access to capital markets is hindered, whether as a result of a downturn in stock market conditions generally or related to matters specific to the Company. As at June 30, 2020, the Company had a cash and cash equivalents balance of $2,442,537 (December 31, 2019 - $4,780,176) as well as marketable securities of $27,136 (December 31, 2019 - $20,586) to settle current liabilities of $242,100 (December 31, 2019 - $727,637). Working capital for the Company as at June 30, 2020 was $2,329,534 (December 31, 2019 - $4,291,612).

Market risk

(a) Foreign currency risk

The Company’s reporting currency is the Canadian dollar. The functional currency of the Company is the Canadian dollar.

Based on the foreign currency balances at June 30, 2020, a 10% change in foreign exchange rates between the Canadian dollar and these foreign currencies over the next year would affect net income by approximately $5,052. This analysis only addresses the impact on financial instruments with respect to currency movement and excludes other economic or geo-political implications of such currency fluctuation. In practice, actual results will likely differ from this analysis and the difference may be material.

(b) Commodities price risk

The Company is exposed to price risk with respect to commodity prices. Commodity price risk is defined as the potential adverse impact on earnings and economic value due to commodity price movements and volatilities. The Company closely monitors commodity prices, particularly as they relate to gold and silver to determine the appropriate course of action to be taken by the Company.

21. SALE OF NET SMELTER ROYALTY

On September 27, 2019, the Company entered into an agreement with Osisko Gold Royalties Ltd (“Osisko”), pursuant to which Osisko purchased a 1% net smelter return royalty (“Royalty”) on all the Company’s current mineral property interests and any future mineral properties acquired within four years of the closing date. Consideration received was $5,000,000 in cash.

The Company has allocated the proceeds of the royalty to its mineral property interests based on the sale of 1% of its carrying value at the date of grant. As a result, the Company has decreased the carrying value of mineral properties by $52,181 and recognized a gain on sale of net smelter royalty of $4,947,819. The gain on sale of net smelter royalty was calculated as follows:

Consideration received	$ 5,000,000
Less: 1% of previously capitalized acquisition costs	(52,181)
	$ 4,947,819

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SABLE RESOURCES LTD. Notes to the Condensed Interim Consolidated Financial Statements For the three and six month periods ended June 30, 2020 and 2019 (Expressed in Canadian Dollars)

22. SUPPLEMENTAL CASH FLOW INFORMATION

Changes in non-cash working capital items during the three and six month period ended June 30, 2020 and 2019 are as follows:

Receivables Prepaids and deposits Payables and accruals	June 30, 2020 June 30, 2019
	$ 29,205 $ (114,607) 73,099 (116,210) (491,187) (629,189)
	$(388,883) $ (860,006)

23. COMMITMENTS AND CONTINGENCIES

As of June 30, 2020, the Company is committed to spending approximately $171,906 over the next five years on its Toronto office lease (Note 11).

As of June 30, 2020, the Company has agreed to indemnify Talisker for any reclamation costs incurred relating to the Baker Shasta property above $311,266, which is estimated to be $846,566 (Note 12).

Due to the size, complexity and nature of the Company’s operations, various legal, tax, environmental and regulatory matters are outstanding from time to time. By their nature, contingencies will only be resolved when one or more future events occur or fail to occur. The assessment of contingencies inherently involves the exercise of significant judgment and estimates of the outcome of future events.

24. SUBSEQUENT EVENTS

On July 8, 2020, Talisker Resources Ltd. (“Talisker”) entered into an agreement with TDG Gold Corp. (“TDG Gold”) for TDG Gold to acquire several of Talisker’s mineral resource properties, including the Baker Shasta project. As part of the agreement, TDG Gold will assume all liabilities related to the project, including the reclamation obligation. Subject to completion of the transaction, Sable will be released from its indemnification liability with Talisker relating to the Baker Shasta reclamation obligation (Note 12).

On July 9, 2020, the Kirio project option agreement was terminated, with Teck agreeing to waive the owed difference between the actual amount of exploration expenditures incurred and US$150,000.

On August 13, 2020, the Company entered into an agreement with Sprott Capital Partners LP as lead agent, in connection with a "best efforts" private placement financing of up to 33,333,334 units of the Company ("Units") at a price of $0.15 per Unit (the "Unit Price") for aggregate gross proceeds of up to $5 million, with an over-allotment option of 20% (the "Offering"). On August 17, 2020, the private placement financing was increased to 60,000,000 Units for aggregate gross proceeds of up to $9 million, with an over-allotment option of 11% to $10 million in aggregate proceeds. Each Unit will consist of one common share of the Company and one half of one common share purchase warrant (each whole common share purchase warrant, a "warrant"). Each whole warrant will entitle the holder thereof to purchase one common share at an exercise price of $0.20 for a period of 36 months from the date of issuance thereof. In connection with the private placement, the Company has also agreed to pay cash commissions of 6% of the gross proceeds from the private placement and to issue non-transferable warrants (“Compensation Warrants”) exercisable into Units at a price of $0.15 for a period of 24 months from the date of closing. The private placement is expected to close on September 10, 2020 and proceeds from the sale of Units will be used by the Company for exploration and general corporate and working capital purposes.

Page 23