Silver Dollar Resources Inc. — Annual Report 2023

Dec 29, 2023

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Silver Dollar Resources Inc.

(An exploration stage company)

Consolidated Financial Statements

(Expressed in Canadian Dollars)

August 31, 2023 and 2022

Contents

Independent Auditor’s Report ....................................................................................... 3 Consolidated Statements of Financial Position ............................................................ 6 Consolidated Statements of Comprehensive Loss ....................................................... 7 Consolidated Statements of Changes in Shareholders’ Equity .................................... 8 Consolidated Statements of Cash Flows ...................................................................... 9 Notes to the Consolidated Financial Statements ........................................................ 10 Consolidated Schedules of Exploration and Evaluation Assets ................................. 29

2

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Crowe MacKay LLP

1100 - 1177 West Hastings Street Vancouver, BC V6E 4T5 Main +1 (604) 687-4511 Fax +1 (604) 687-5805 www.crowemackay.ca

Independent Auditor's Report

To the Shareholders of Silver Dollar Resources Inc.

Opinion

We have audited the consolidated financial statements of Silver Dollar Resources Inc. (the "Group"), which comprise the consolidated statements of financial position as at August 31, 2023 and August 31, 2022 and the consolidated statements of comprehensive loss, changes in shareholders' equity and cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at August 31, 2023 and August 31, 2022, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with International Financial Reporting Standards.

Basis for Opinion

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

Material Uncertainty Related to Going Concern

We draw attention to Note 1 to the consolidated financial statements which describes the material uncertainty that may cast significant doubt on the Group's ability to continue as a going concern. Our opinion is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Other than the matter described in the Material Uncertainty Related to Going Concern section, we have determined there are no key audit matters to be communicated in our report.

Other Information

Management is responsible for the other information. The other information comprises:

• Management's Discussion and Analysis

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

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

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

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

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

In preparing the consolidated financial statements, management is responsible for assessing the Group’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 Group or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Group’s financial reporting process.

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

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

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

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

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’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 Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our

opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Group to cease to continue as a going concern.

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

• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partner on the audit resulting in this independent auditor's report is Diana Huang.

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Chartered Professional Accountants Vancouver, Canada December 28, 2023

Silver Dollar Resources Inc.

(An exploration stage company)

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Consolidated Statements of Financial Position

(Expressed in Canadian Dollars)

		August 31		August 31
		2023		2022
ASSETS
Current
Cash and cash equivalents	$	4,502,151	$	7,155,593
Accounts receivable		41,385		244,126
Marketable securities (note 5)		179,211		-
Prepaid expenses		37,341		97,444
		4,760,088		7,497,163
Equipment		5,647		7,059
Exploration and evaluation assets (note6)		11,266,068		9,053,112
	$	16,031,803	$	16,557,334
LIABILITIES
Current
Accountspayable and accrued liabilities(note8)	$	138,051	$	194,785
SHAREHOLDERS' EQUITY
Share capital(note 7)		19,926,114		19,165,348
Share-based payment reserve(note 7)		2,709,352		2,709,352
Accumulated other comprehensive income		658,395		49,899
Deficit		(7,400,109)		(5,562,050)
		15,893,752		16,362,549
	$	16,031,803	$	16,557,334

Approved on behalf of the board on December 28, 2023

	"Michael Romanik" Michael Romanik	"Jeff Smulders"
		Jeff Smulders

The accompanying Notes to the Consolidated Financial Statements are an integral part of these financial statements

6

Silver Dollar Resources Inc.

(An exploration stage company)

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Consolidated Statements of Comprehensive Loss

(Expressed in Canadian Dollars)

Years ended August 31, 2023 and 2022

		2023		2022
Expenses
Consulting	$	257,809	$	296,767
Depreciation		1,412		1,764
Foreign exchange loss (gain)		212		(4,717)
Insurance		26,160		20,673
Interest and bank charges		3,137		2,693
Listing and filing fees		41,176		62,022
Management and administration fees (note 8)		96,000		92,000
Office		12,439		10,838
Professional fees		257,601		93,827
Site investigation fees		38,456		4,901
Transfer agent		12,042		13,177
Traveland promotion		107,590		527,119
Operating loss		(854,034)		(1,121,064)
Other income
Interest income		68,800		66,833
Unrealized gain on securities		51,752		-
Loss on settlement of loan (note 5)		(72,541)		-
Writedownofexplorationand evaluationassets (note 6)		(1,032,036)		-
		(984,025)		66,833
Loss for the year		(1,838,059)		(1,054,231)
Other comprehensive income
Exchange difference on translatingforeignoperations		608,496		49,899
Total comprehensive loss	$	(1,229,563)	$	(1,004,332)
Loss per share - basic and diluted	$	(0.04)	$	(0.03)
Weighted average number of shares outstanding		42,495,337		41,877,648

The accompanying Notes to the Consolidated Financial Statements are an integral part of these financial statements

7

Silver Dollar Resources Inc.

(An exploration stage company)

Consolidated Statements of Changes in Shareholders' Equity

(Expressed in Canadian Dollars)

Years ended August 31, 2023 and 2022

							Accumulated Other	Accumulated Other
	Issued	Share	Capital		Share-based		Comprehensive
	Number		Amount	Payment Reserve			Income			Deficit		Total
Balances, August 31, 2021	41,847,237	$	19,156,098	$	3,178,055	$	-		$	(4,974,772)	$	17,359,381
Shares and warrants issued for cash	50,000		9,250		(1,750)		-			-		7,500
Transfer upon option expiration	-		-		(466,953)		-			466,953		-
Loss for the year	-		-		-		-			(1,054,231)		(1,054,231)
Exchange difference on translatingforeign operations	-		-		-		49,899			-		49,899
Balances, August 31, 2022	41,897,237		19,165,348		2,709,352		49,899			(5,562,050)		16,362,549
Shares issued for acquisition (note 12)	2,205,118		760,766		-		-			-		760,766
Loss for the year	-		-		-		-			(1,838,059)		(1,838,059)
Exchange difference on translatingforeign operations	-		-		-		608,496			-		608,496
Balances, August 31, 2023	44,102,355	$	19,926,114	$	2,709,352	$	658,395		$	(7,400,109)	$	15,893,752

The accompanying Notes to the Consolidated Financial Statements are an integral part of these financial statements

8

Silver Dollar Resources Inc.

(An exploration stage company)

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Consolidated Statements of Cash Flows

(Expressed in Canadian Dollars)

Years ended August 31, 2023 and 2022

		2023		2022
Operating activities
Loss for the year	$	(1,838,059)	$	(1,054,231)
Adjustment for items not involving cash:
Depreciation		1,412		1,764
Foreign exchange loss (gain)		212		(4,717)
Unrealized gain on securities		(51,752)		-
Loss on settlement of loan		72,541		-
Writedownofexplorationand evaluationassets		1,032,036		-
		(783,610)		(1,057,184)
Changes in non-cash working capital:
Accounts receivable		287,521		(239,930)
Prepaid expenses		60,103		393,453
Accounts payable and accruedliabilities		(137,679)		32,271
		(573,665)		(871,390)
Investing activities
Purchase of equipment		-		(2,798)
Advance of loan receivable		(200,000)		-
Investments in exploration and evaluation assets		(1,869,118)		(2,234,367)
Cash received from acquisition of SVL Minerals Ltd.		160,046		-
Cost incurredforacquisitionofSVL MineralsLtd.		(180,500)		-
		(2,089,572)		(2,237,165)
Financing activity
Proceedsfrom issuance ofshares		-		7,500
Net change in cash and cash equivalents		(2,663,237)		(3,101,055)
Effect of foreign exchange on cash and cash equivalents		9,795		(10,639)
**Cash and cash equivalents, beginning of year **		7,155,593		10,267,287
Cash and cash equivalents, end of year	$	4,502,151	$	7,155,593
Supplemental cash flow information
Interest received	$	62,225	$	66,833
Income taxes paid		-		-
Non-cash financing and investing transactions (note 10)

The accompanying Notes to the Consolidated Financial Statements are an integral part of these financial statements

9

Silver Dollar Resources Inc.

(An exploration stage company)

Notes to the Consolidated Financial Statements

(Expressed in Canadian Dollars)

August 31, 2023 and 2022

1. Nature and Continuance of Operations

The Company was incorporated on November 19, 2018 under the laws of the Province of British Columbia, Canada.

The Company is in the business of exploring its mineral exploration assets and has not yet determined whether these properties contain ore reserves that are economically recoverable. As of August 31, 2023, the Company was in the exploration stage and had interests in properties in Durango, Mexico and Ontario, Canada.

These consolidated financial statements have been prepared on a going concern basis, which presumes the realization of assets and discharge of liabilities in the normal course of business for the foreseeable future. The ability of the Company to continue as a going concern and the recoverability of the amounts shown for exploration and evaluation assets are dependent upon the existence of economically recoverable reserves, the ability of the Company to obtain necessary financing to complete the development, and upon future profitable production or proceeds from the disposition thereof.

The Company has sustained losses from operations and has an ongoing requirement for capital investment to explore its exploration and evaluation assets. As of August 31, 2023, the Company had working capital of $4,622,037 (2022 – $7,302,378). Based on its current plans, budgeted expenditures and cash requirements, the Company does not have sufficient cash to finance its current plans and will need to raise substantial additional capital to accomplish its plans over the next several years. The Company intends to seek additional financing through equity financing, though there can be no assurance as to the availability or terms upon which such financing might be available.

The Company’s business may be affected by changes in political and market conditions, such as interest rates, availability of credit, inflation rates, changes in laws, and national and international circumstances. Recent geopolitical events and potential economic global challenges, such as the risk of higher inflation and energy crises, may create further uncertainty and risk with respect to the prospects of the Company’s business.

These material uncertainties may cast significant doubt upon the Company’s ability to continue as a going concern. These consolidated financial statements do not include any adjustments to the amounts and classification of assets and liabilities that might be necessary should the Company be unable to continue in business.

The address of the Company is 179 - 2945 Jacklin Road, Suite 416, Victoria, British Columbia, V9B 6J9, Canada.

10

Silver Dollar Resources Inc.

(An exploration stage company)

Notes to the Consolidated Financial Statements

(Expressed in Canadian Dollars)

August 31, 2023 and 2022

2. Significant Accounting Policies

Basis of Presentation

These financial statements, including comparatives, have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board and the interpretations of the IFRS Interpretations Committee. The policies applied in these consolidated financial statements are based on IFRS issued and outstanding as of the date the Board of Directors approved these consolidated financial statements.

These consolidated financial statements are presented in the Company’s presentation currency – the Canadian dollar – on a historical cost basis except for certain items that are measured at fair value. The accounting policies described herein have been applied consistently to all periods presented in these consolidated financial statements.

These consolidated financial statements incorporate the financial statements of the Company and the following subsidiaries:

following subsidiaries:
			Control
Subsidiary	Country	2023		2022
Meta Victoria, S.A. de C.V.	Mexico	100%		100%
SVL Minerals Ltd.	Canada	100%		-
Silvercrest de Mexico, S.A. de C.V.	Mexico	100%		-

Control exists when the Company has the power, directly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The consolidated financial statements include the accounts of the Company and its subsidiaries. Intercompany balances, transactions, income and expenses are eliminated on consolidation.

Financial Instruments

The Company recognizes a financial asset or financial liability in the Consolidated Statements of Financial Position when it becomes party to the contractual provisions of the financial instrument. Financial assets are initially measured at fair value and are derecognized either when the Company has transferred substantially all the risks and rewards of ownership of the financial asset or when cash flows expire. Financial liabilities are initially measured at fair value and are derecognized when the obligation specified in the contract is discharged, cancelled or expired.

A write-off of a financial asset (or a portion thereof) constitutes a derecognition event. Write-off occurs when the Company has no reasonable expectations of recovering the contractual cash flows on a financial asset.

11

Silver Dollar Resources Inc.

(An exploration stage company)

Notes to the Consolidated Financial Statements

(Expressed in Canadian Dollars)

August 31, 2023 and 2022

2. Significant Accounting Policies (continued)

Financial Instruments (continued)

Classification and Measurement

The Company determines the classification of its financial instruments at initial recognition. Financial assets and financial liabilities are classified according to the following measurement categories:

• a) those to be measured subsequently at fair value, either through profit or loss (“FVTPL”) or through other comprehensive income (“FVTOCI”); and

• b) those to be measured subsequently at amortized cost.

The classification and measurement of financial assets after initial recognition at fair value depends on the business model for managing the financial asset and the contractual terms of the cash flows. Financial assets that are held within a business model whose objective is to collect the contractual cash flows, and that have contractual cash flows that are solely payments of principal and interest on the principal outstanding, are generally measured at amortized cost at each subsequent reporting period. All other financial assets are measured at their fair values at each subsequent reporting period, with any changes recorded through profit or loss or through other comprehensive income (which designation is made as an irrevocable election at the time of recognition).

After initial recognition at fair value, financial liabilities are classified and measured at either:

• a) amortized cost;

• b) FVTPL if the Company has made an irrevocable election at the time of recognition, or when required (for items such as instruments held for trading or derivatives); or

• c) FVTOCI when the change in fair value is attributable to changes in the Company’s credit risk.

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

Transaction costs that are directly attributable to the acquisition or issuance of a financial asset or financial liability classified as subsequently measured at FVTOCI or amortized cost are included in the fair value of the instrument on initial recognition. Transaction costs for financial assets and financial liabilities classified at FVTPL are expensed in profit or loss.

The Company’s financial assets consist of cash and cash equivalents and marketable securities which are classified and measured at FVTPL with realized and unrealized gains or losses related to changes in fair value reported in profit or loss. The Company’s financial liabilities consist of accounts payable and accrued liabilities, which are classified and measured at amortized cost using the effective interest method. Interest expense is reported in profit or loss.

The effective interest method is a method of calculating the amortized cost of a financial asset or liability and of allocating interest income or expense over the relevant period. The effective interest rate is the rate that discounts estimated future cash payments through the expected life of the financial asset or liability or, where appropriate, a shorter period.

12

Silver Dollar Resources Inc.

(An exploration stage company)

Notes to the Consolidated Financial Statements

(Expressed in Canadian Dollars)

August 31, 2023 and 2022

2. Significant Accounting Policies (continued)

Financial Instruments (continued)

Impairment

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

Cash and Cash Equivalents

For purposes of reporting cash flows, the Company considers cash and cash equivalents to include amounts held in banks and cashable highly liquid investments with limited interest and credit risk. The Company places its cash and cash equivalents with institutions of high creditworthiness.

Equipment

Equipment is carried at cost less accumulated depreciation and accumulated impairment losses. Cost comprises the fair value of consideration given to acquire or construct an asset and includes the direct charges associated with bringing the asset to the location and condition necessary for putting it into use, along with the future cost of dismantling and removing the asset. Equipment is amortized using the declining-balance method at a rate of 20% per year.

Exploration and Evaluation Assets

Once the legal right to explore a property has been acquired, costs directly related to exploration and evaluation expenditures are recognized and capitalized in addition to the acquisition costs. These direct expenditures include such costs as materials used, surveying costs, drilling costs, payments made to contractors and depreciation on plant and equipment during the exploration phase. Costs not directly attributable to exploration and evaluation activities, including general administrative overhead costs and pre-exploration expenses, are expensed in the year in which they occur.

The Company may occasionally enter into option arrangements whereby the Company will transfer part of a mineral interest as consideration for an agreement by the optionee to meet certain exploration and evaluation expenditures, which would otherwise be undertaken by the Company. The Company does not record any expenditures made by the optionee on its behalf. Any consideration received from the agreement is credited against the costs previously capitalized to the exploration and evaluation asset given up by the Company with any excess consideration accounted for as a gain on disposal.

When a project is deemed to no longer have commercially viable prospects to the Company, exploration and evaluation expenditures in respect of that project are deemed to be impaired. As a result, those exploration and evaluation costs in excess of estimated recoveries are written off to profit or loss.

13

Silver Dollar Resources Inc.

(An exploration stage company)

Notes to the Consolidated Financial Statements

(Expressed in Canadian Dollars)

August 31, 2023 and 2022

2. Significant Accounting Policies (continued)

Exploration and Evaluation Assets (continued)

The Company assesses exploration and evaluation assets for impairment at each reporting date and when indicators and circumstances suggest that the carrying amount of an asset may exceed its recoverable amount. Industry-specific indicators for an impairment review arise typically when one or more of the following circumstances applies:

• Substantive expenditure or further exploration and evaluation activities is neither budgeted nor planned;

• Title to the asset is compromised, has expired or is expected to expire;

• Adverse changes in the taxation, regulatory or political environment; and

• Adverse changes in variables in commodity prices and markets making the project unviable.

Once the technical feasibility and commercial viability of extracting the mineral resource has been determined, the property is considered to be a mine under development and is classified as “mines under construction.” Exploration and evaluation assets are tested for impairment before the assets are transferred to development properties.

As the Company currently has no operational income, any incidental revenues earned in connection with exploration activities are applied as a reduction to capitalized exploration costs.

Exploration and evaluation assets are classified as intangible assets. Cash which is subject to contractual restrictions on use is classified separately as reclamation deposits.

Decommissioning Provision

The Company records a liability based on the best estimate of costs for site closure and reclamation activities that the Company is legally or constructively required to remediate and the liability is recognized at the time environmental disturbance occurs. The resulting costs are capitalized to the corresponding asset. The provision for closure and reclamation liabilities is estimated using expected cash flows based on internal estimates discounted at a pre-tax rate specific to the liability. The capitalized amount is amortized on the same basis as the related asset. The liability is adjusted for the accretion of the discounted obligation and any changes in the amount or timing of the underlying future cash flows. Significant judgements and estimates are involved in forming expectations of the amounts and timing of future closure and reclamation cash flows.

Changes in closure and reclamation estimates are accounted for as a change in the corresponding capitalized cost.

Costs of reclamation projects for which a provision has been recorded are recorded directly against the provision as incurred, most of which are incurred upon cessation of exploration and evaluation or at the end of the life of a mine.

14

Silver Dollar Resources Inc.

(An exploration stage company)

Notes to the Consolidated Financial Statements

(Expressed in Canadian Dollars)

August 31, 2023 and 2022

2. Significant Accounting Policies (continued)

Loss per Share

The Company uses the treasury stock method of calculating diluted per share amounts whereby any proceeds from the exercise of stock options or other dilutive instruments are assumed to be used to purchase common shares at the average market price during the year. The assumed conversion of outstanding common share options and warrants had an anti-dilutive impact in 2023 and 2022. There were 2,750,000 outstanding options as of August 31, 2023 (2022 – 2,750,000) that were not included in the calculation of diluted per share amounts.

Basic loss per share is calculated using the weighted-average number of shares outstanding during the year.

Share Capital

The proceeds from the exercise of stock options and warrants are recorded as share capital in the amount for which the option or warrant enabled the holder to purchase a share in the Company.

Commissions and finders’ fees paid to underwriters, agents and finders and other related share issue costs, such as legal, auditing and printing, on the issue of the Company’s shares are charged directly to share capital.

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 fair value of the common shares issued in private placements is determined to be the more easily measurable component and are valued at their fair value, as determined by the closing trade price on the announcement date. The residual balance, if any, is allocated to attached warrants. Any fair value attributed to the warrants is recorded in share-based payment reserve.

Income Taxes

The Company uses the liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases.

Deferred tax assets and liabilities are measured using substantively enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax assets also result from unused loss carry forwards, resource related pools and other deductions. A deferred tax asset is recognized for unused tax losses, tax credits and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

15

Silver Dollar Resources Inc.

(An exploration stage company)

Notes to the Consolidated Financial Statements

(Expressed in Canadian Dollars)

August 31, 2023 and 2022

2. Significant Accounting Policies (continued)

Borrowing Costs

Borrowing costs directly attributable to the acquisition, construction or production of assets requiring a substantial period to get ready for their intended use or sale are capitalized as part of the cost of that asset. Other borrowing costs are recognized as an expense.

Share-based Compensation

Where equity-settled share options are awarded to employees, the fair value of the options at the date of grant is charged to profit or loss over the vesting period. Performance vesting conditions are considered by adjusting the number of equity instruments expected to vest at each reporting date so that, ultimately, the cumulative amount recognized over the vesting period is based on the number of options that eventually vest. Non-vesting conditions and market vesting conditions are factored into the fair value of the options granted. As long as all other vesting conditions are satisfied, a charge is made irrespective of whether these vesting conditions are satisfied. The cumulative expense is not adjusted for failure to achieve a market vesting condition or where a non-vesting condition is not satisfied.

Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to profit or loss over the remaining vesting period.

Where equity instruments are granted to non-employees, they are recorded at the fair value of the goods or services received in profit or loss, unless they are related to the issuance of shares. Amounts related to the issuance of shares are recorded as a reduction of share capital. When the value of goods or services received in exchange for the share-based payment cannot be reliably estimated, the fair value is measured by use of a valuation model. The expected life used in the model is adjusted, based on management’s best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations.

All equity-settled share-based payments are reflected in share-based payment reserve, until exercised. Upon exercise, shares are issued from treasury and the amount reflected in share-based payment reserve is credited to share capital, adjusted for any consideration paid. When stock options expire or are forfeited, the applicable amounts of reserves are transferred to deficit.

Where a grant of options is cancelled or settled during the vesting period, excluding forfeitures when vesting conditions are not satisfied, the Company immediately accounts for the cancellation as an acceleration of vesting and recognizes the amount that otherwise would have been recognized for services received over the remainder of the vesting period. Any payment made to the employee on the cancellation is accounted for as the repurchase of an equity interest except to the extent the payment exceeds the fair value of the equity instrument granted, measured at the repurchase date. Any such excess is recognized as an expense.

16

Silver Dollar Resources Inc.

(An exploration stage company)

Notes to the Consolidated Financial Statements

(Expressed in Canadian Dollars)

August 31, 2023 and 2022

2. Significant Accounting Policies (continued)

Foreign Currency Translation

The functional currency of the Company is the Canadian dollar. The functional currency of the Company’s subsidiaries, Meta Victoria, S.A. de C.V. and Silvercrest de Mexico, S.A. de C.V., is the Mexican peso, while the functional currency of SVL Minerals Ltd. is the Canadian dollar. The functional currency is the currency of the primary economic environment in which the component operates. The Company’s consolidated financial statements are presented in Canadian dollars.

Transactions in foreign currencies are translated to the functional currency of each entity at a rate of exchange approximating the prevailing rate at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the foreign exchange rate in effect at that date. Nonmonetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Realized and unrealized exchange gains and losses are recognized in profit or loss.

On consolidation, the assets and liabilities of foreign operations are translated into Canadian dollars at the rate of exchange prevailing at the reporting date and their statements of income (loss) are translated at the average exchange rates for the reporting period. The exchange differences arising on consolidation are recognized in other comprehensive income or loss. On disposal of a foreign operation, the component of other comprehensive income or loss relating to that particular foreign operation is reclassified to profit or loss.

Flow-Through Shares

The Company may, from time to time, issue flow-through common shares to finance its exploration programs. Pursuant to the terms of the flow-through share agreements, these shares transfer the tax deductibility of qualifying resource expenditures to investors. Upon issuance, the Company bifurcates the flow-through share into: (i) share capital; and (ii) a flow-through share premium equal to the estimated premium, if any, investors pay for the flow-through feature, which is recognized as a liability. Upon expenses being renounced, the Company derecognizes the liability and recognizes a deferred tax liability for the amount of tax reduction renounced to the investors. The premium is recognized as other income and the related deferred tax is recognized as a tax provision.

Proceeds received from the issuance of flow-through shares are restricted to be used only for Canadian resource property exploration expenditures within a two-year period.

The Company may also be subject to a Part XII.6 tax on flow-through proceeds renounced under the Look-back Rule in accordance with Government of Canada flow-through regulations. When applicable, this tax is accrued as a financial expense until paid.

17

Silver Dollar Resources Inc.

(An exploration stage company)

Notes to the Consolidated Financial Statements

(Expressed in Canadian Dollars)

August 31, 2023 and 2022

2. Significant Accounting Policies (continued)

Impairment of Long-Lived Assets

Management evaluates non-current assets at each reporting period 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 level of a cash generating unit (CGU), 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, where 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.

Significant Accounting Estimates and Judgements

The preparation of these consolidated financial statements requires management to make certain estimates, judgements and assumptions that affect the reported amounts of assets and liabilities at the financial statement date and reported amounts of expenses during the reporting period. Actual outcomes could differ from these estimates.

These consolidated financial statements include estimates which, by their nature, are uncertain. The impact of such estimates is pervasive throughout the consolidated financial statements and may require accounting adjustments based on future occurrences. Revisions to accounting estimates are recognized in the year in which the estimate is revised and future years if the revision affects both current and future periods.

These estimates are based on historical experience, current and future economic conditions and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Critical Accounting Estimates

There are no significant assumptions about the future and other sources of estimation uncertainty that management has made at the end of the reporting period, which could result in a material adjustment to the carrying amounts of assets and liabilities, in the event that actual results differ from assumptions made.

Critical Accounting Judgements

Critical accounting judgements are accounting policies that have been identified as being complex or involving subjective judgements or assessments. The Company made the following critical accounting judgements:

Going concern

The preparation of these consolidated financial statements requires management to make judgements regarding the ability of the Company to continue as a going concern as discussed in Note 1.

18

Silver Dollar Resources Inc.

(An exploration stage company)

Notes to the Consolidated Financial Statements

(Expressed in Canadian Dollars)

August 31, 2023 and 2022

2. Significant Accounting Policies (continued)

Significant Accounting Estimates and Judgements (continued)

Critical Accounting Judgements (continued)

Exploration and evaluation expenditures

The application of the Company’s accounting policy for exploration and evaluation expenditures requires judgement in determining whether it is likely that future economic benefits will flow to the Company, which may be based on assumptions about future events or circumstances. If, after an expenditure is capitalized, information becomes available suggesting that the recovery of the expenditure is unlikely, the amount capitalized is written off to profit or loss in the year the new information becomes available.

Asset acquisition

Management had to apply judgement with respect to whether the acquisition of SVL Minerals Ltd. (as described in Note 12) was an asset acquisition or business combination. The determination required management to assess the inputs, processes, and outputs of SVL Minerals Ltd. at the time of acquisition. Acquisitions that do not meet the definition of a business combination are accounted for as asset acquisitions. Pursuant to this assessment, the acquisition of SVL Minerals Ltd. was considered to be an asset acquisition.

New Accounting Standards and Interpretations Recently Adopted

There were certain standards and amendments adopted by the Company that had no material impact on these consolidated financial statements.

New Accounting Standards and Interpretations Not Yet Adopted

Amendments to IAS 8: Definition of Accounting Estimates

These amendments clarify how companies distinguish changes in accounting policies from changes in accounting estimates, with a primary focus on the definition of and clarifications on accounting estimates. The distinction between the two is important because changes in accounting policies are applied retrospectively, whereas changes in accounting estimates are applied prospectively. Further, the amendments clarify that accounting estimates are monetary amounts in the financial statements subject to measurement uncertainty. The amendments also clarify the relationship between accounting policies and accounting estimates by specifying that a company develops an accounting estimate to achieve the objective set out by an accounting policy. These amendments are effective for reporting periods beginning on or after January 1, 2023. The Company does not expect there will be a material impact on the future consolidated financial statements.

19

Silver Dollar Resources Inc.

(An exploration stage company)

Notes to the Consolidated Financial Statements

(Expressed in Canadian Dollars)

August 31, 2023 and 2022

2. Significant Accounting Policies (continued)

New Accounting Standards and Interpretations Not Yet Adopted (continued)

Amendments to IAS 1 and IFRS Practice Statement 2: Disclosure of Accounting Policies These amendments continue the IASB's clarifications regarding applying the concept of materiality. These amendments help companies provide useful accounting policy disclosures, and they include: requiring companies to disclose their material accounting policies instead of their significant accounting policies; clarifying that accounting policies related to immaterial transactions, other events or conditions are themselves immaterial and do not need to be disclosed; and clarifying that not all accounting policies that relate to material transactions, other events or conditions are themselves material. The IASB also amended IFRS Practice Statement 2 to include guidance and examples on applying materiality to accounting policy disclosures. These amendments are effective for reporting periods beginning on or after January 1, 2023. The Company expects there will be fewer significant accounting policies to be disclosed in the future consolidated financial statements.

Amendment to IAS 1: Presentation of Financial Statements

Amendments to IAS 1 clarify the requirements for classifying liabilities as current or non current. The amendments provide a more general approach to the classification of liabilities based on the contractual arrangements in place at the reporting date. These amendments are effective for reporting periods beginning on or after January 1, 2024. The Company does not expect there will be a material impact on the future consolidated financial statements.

3. Capital Management

The Company manages its capital to continue as a going concern largely through issuances of shares. These share issues depend on several factors, including a positive mineral exploration environment, positive stock market conditions, a company’s track record and the experience of management. The capital structure of the Company consists of shareholders’ equity, comprising share capital, sharebased payment reserve and deficit. The Company is not subject to any external capital requirements. There were no changes to the Company’s approach to capital management during the year ended August 31, 2023.

4. Financial Instruments

The fair value of the Company’s accounts payable and accrued liabilities approximates their carrying value due to the short-term nature of these instruments unless otherwise noted. It is management’s opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments.

The Company monitors and manages the risks relating to its financial instruments through analysis of exposures by degree and magnitude of risks. These risks include credit risk, liquidity risk and market risk.

20

Silver Dollar Resources Inc.

(An exploration stage company)

Notes to the Consolidated Financial Statements

(Expressed in Canadian Dollars)

August 31, 2023 and 2022

4. Financial Instruments (continued)

Credit risk

Credit risk refers to the risk that another entity will default on its contractual obligations resulting in financial loss to the Company. As of August 31, 2023, such contractual obligations comprised cash and cash equivalents held with high creditworthy financial institutions in the amount of $4,502,151 (2022 – $7,155,593). Management considers this risk to be negligible.

Liquidity risk

Liquidity risk refers to the risk that the Company will not be able to meet its financial obligations when they become due or can only do so at excessive cost. As of August 31, 2023, the Company had working capital of $4,622,037 (2022 – $7,302,378). Management anticipates that the Company will be able to meet its obligations as they become due.

Market risk

Market risk is the risk that the fair value of a financial instrument will fluctuate because of currency risk, interest rate risk and other price risk. Management considers this risk to be negligible.

Currency risk

Currency risk is the risk that the fair value or future cash flows will fluctuate as a result of changes in foreign exchange rates. The Company has operations in Canada and Mexico and incurs operating and exploration expenditures in Canadian dollars, Mexican pesos and United States dollars. The fluctuation of the Canadian dollar in relation to other currencies will have an impact upon the results of the Company. The Company does not hold substantial funds in foreign currencies, but a large proportion of its accounts payable and accrued liabilities are denominated in foreign currencies. A fluctuation in the exchanges rates between Canadian dollars and Mexican pesos of 10% would result in a $10,400 change in the Company’s cash and a $1,136,000 change in net assets. The Company does not use any techniques to mitigate currency risk.

Interest rate risk

Interest rate risk is the risk that future cash flows will fluctuate as a result of changes in market interest rates. Interest earned on cash is at nominal interest rates, and therefore, the Company does not consider interest rate risk to be significant. The Company has no interest-bearing financial liabilities.

Other price risk

Other price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market prices, other than those arising from interest rate risk. Management considers this risk to be negligible.

21

Silver Dollar Resources Inc.

(An exploration stage company)

Notes to the Consolidated Financial Statements

(Expressed in Canadian Dollars)

August 31, 2023 and 2022

4. Financial Instruments (continued)

Fair Value Hierarchy

Financial instruments recorded at fair value in the Consolidated Statements of Financial Position are classified using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy has the following levels:

• Level 1 – valuation based on quoted prices (unadjusted) in active markets for identical assets or liabilities;

• Level 2 – valuation techniques based on inputs other than quoted prices included in level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and

• Level 3 – valuation techniques using inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The fair value hierarchy requires the use of observable market inputs whenever such inputs exist. A financial instrument is classified to the lowest level of the hierarchy for which a significant input has been considered in measuring fair value.

The following tables present the financial instruments recorded at fair value in the Consolidated Statements of Financial Position, classified using the fair value hierarchy described above:

Assets as at August 31, 2023	Level 1	Level 2	Level 2	Level 3
Cash and cash equivalents	$4,502,151	$	-	$ -
Marketable securities – shares	133,333		-	-
Marketable securities – warrants	-		-	45,878
Assets as at August 31, 2022	Level 1	Level 2		Level 3
Cash and cash equivalents	$7,155,593	$	-	$ -

5. Marketable Securities

Marketable securities comprised the following:

			Accumulated
	Number of		Unrealized	Fair	Value
	Securities	Cost	Gain	2023	2022
Canasil Resources Inc. shares	6,666,667	$100,000	$33,333	$133,333	$	-
Canasil Resources Inc. warrants	6,666,667	27,459	18,419	45,878		-
Total		$127,459	$51,752	$179,211	$	-

22

Silver Dollar Resources Inc.

(An exploration stage company)

Notes to the Consolidated Financial Statements

(Expressed in Canadian Dollars)

August 31, 2023 and 2022

5. Marketable Securities (continued)

In April 2023, the Company advanced an unsecured, non-interest-bearing loan of $200,000 to Canasil Resources Inc. (“Canasil”), an arm’s length TSX Venture Exchange-listed company, pursuant to an agreement to evaluate a potential merger. The Company terminated the agreement in June 2023 and the loan was repaid in August 2023 by the issuance of 6,6667,667 Canasil shares and warrants. The Company recorded a $72,541 loss upon the settlement of the loan.

The warrants entitle the Company to acquire up to 6,666,667 additional shares in the capital of Canasil at a price of $0.05 per share until August 14, 2025. The cost and fair value of the warrants was estimated using the Black-Scholes option valuation model.

6. Exploration and Evaluation Assets

La Joya Project, Durango, Mexico

In August 2020, the Company acquired an option to purchase an initial 80% interest in SVL Minerals Ltd. and, if exercised, a second option to acquire the remaining 20% interest. SVL Minerals Ltd. indirectly owns the La Joya Project, a group of 15 mineral concessions located approximately 75 kilometres southeast of Durango in the State of Durango, Mexico.

The Company exercised the first option in May 2023 and acquired an 80% interest in SVL Minerals Ltd. by (i) paying $700,000 plus annual holding costs over the preceding three years, (ii) issuing 5,146,401 shares of the Company in August 2020 with a fair value of $0.99 per share, and (iii) incurring exploration expenditures on the property over the preceding three years of not less than $1,000,000.

Concurrently, the Company exercised the second option and acquired the remaining 20% interest in SVL Minerals Ltd. by issuing an additional 2,205,118 shares of the Company in May 2023 with a fair value of $0.345 per share. The optionor reserved for itself a 2% net smelter returns royalty.

Upon closing the transaction, SVL Minerals Ltd. and its subsidiary, Silvercrest de Mexico, S.A. de C.V., became wholly owned subsidiaries of the Company (Note 12).

Nora Project, Durango, Mexico

In April 2023, the Company entered into an option to purchase the Nora Project comprising four mineral concessions located approximately 200 kilometres northwest of Durango in the State of Durango, Mexico. To earn a 100% interest in the project, the Company must pay the optionor $375,000 and incur exploration expenditures of $3,000,000 over five years, and grant to the optionor a 3% net smelter returns royalty, of which the Company may buy back one-third for $3,000,000. In addition, after granting the royalty, the Company must pay an annual royalty of $25,000 which will be offset against the royalty buyback.

23

Silver Dollar Resources Inc.

(An exploration stage company)

Notes to the Consolidated Financial Statements

(Expressed in Canadian Dollars)

August 31, 2023 and 2022

6. Exploration and Evaluation Assets (continued)

Nora Project, Durango, Mexico (continued)

Subsequent to the end of the year, the Company cancelled its planned exploration work on the Nora Project, determined that the asset was impaired and as of August 31, 2023 wrote down the carrying amount to zero.

Longlegged Lake Property, Red Lake, Ontario, Canada

In April 2022, the Company exercised its option to purchase 100% of the Longlegged Lake Property comprising eight cell claims located in the Red Lake Mining Division of northwestern Ontario, Canada. To exercise the option, the Company paid the optionor $85,000 and granted a 1.5% net smelter returns royalty. The Company may repurchase half of the royalty for $500,000.

As the Company had budgeted no exploration work for the project, in August 2023 management determined that the asset was impaired and wrote down the carrying amount to zero.

Pakwash Lake Property, Red Lake, Ontario, Canada

In April 2022, the Company exercised its option to purchase a 100% interest in the Pakwash Lake Property comprising 18 cell claims located in the Red Lake Mining Division of northwestern Ontario, Canada. To exercise the option, the Company paid the optionor $131,000 and granted a 1.5% net smelter returns royalty. The Company may repurchase half of the royalty for $500,000.

As the Company had budgeted no exploration work for the project, in August 2023 management determined that the asset was impaired and wrote down the carrying amount to zero.

7. Share Capital

Authorized

An unlimited number of common shares without par value.

Escrow Shares

The Company was party to an escrow agreement with four directors, officers and former directors pursuant to which as of August 31, 2023 no common shares were held in escrow (2022 – 600,001). The shares were released in six equal instalments over a period of three years.

Common Shares

In January 2022, the Company issued 50,000 shares at a price of $0.15 per share upon the exercise of incentive stock options. The Company’s common shares were trading at an average price of $0.72 per share when the stock options were exercised.

24

Silver Dollar Resources Inc.

(An exploration stage company)

Notes to the Consolidated Financial Statements

(Expressed in Canadian Dollars)

August 31, 2023 and 2022

7. Share Capital (continued)

Common Shares (continued)

In May 2023, the Company issued 2,205,118 common shares at a price of $0.345 per share pursuant to an acquisition (Note 12).

Warrants

As of August 31, 2023 and 2022, the Company had no outstanding warrants to purchase common shares.

Stock Options

The Company adopted a stock option plan whereby up to a maximum of 10% of the outstanding shares of the Company as of the date of grant are reserved for the grant and issuance of incentive stock options. Under the plan, the exercise price of an option may not be set at less than the market price of the Company’s common shares on the grant date and the options may be exercisable for up to 10 years. The aggregate number of options granted to any one individual during any twelve-month period may not exceed 5% of the issued shares of the Company. Furthermore, the aggregate number of options granted to all investor relations representatives during any twelve-month period may not exceed 1% of the issued shares of the Company.

The Company granted no stock options during the years ended August 31, 2023 or 2022.

A summary of the Company’s stock options as of August 31, 2023 and 2022, and the changes for the years ending on those dates is as follows:

				Weighted Average
	Number Outstanding	Weighted Average		Remaining Life
	and Exercisable		Exercise Price	(Years)
Balances, August 31, 2021	3,200,000	$	1.48	4.2
Options granted	-		-
Options exercised	(50,000)		0.15
Options forfeited	(400,000)		1.75
Balances, August 31, 2022	2,750,000		1.46	3.2
Options granted	-		-
Options exercised	-		-
Options forfeited	-		-
Balances, August 31, 2023	2,750,000	$	1.46	2.2

25

Silver Dollar Resources Inc.

(An exploration stage company)

Notes to the Consolidated Financial Statements

(Expressed in Canadian Dollars)

August 31, 2023 and 2022

7. Share Capital (continued)

Stock Options (continued)

A summary of stock options outstanding as of August 31, 2023 and 2022 is as follows:

		Number of Stock Options	Number of Stock Options
		Outstanding and Exercisable
Exercise Price Per Share	Expiry Date	2023	2022
$0.15	October 23, 2024	200,000	200,000
$0.59	June 26, 2025	400,000	400,000
$1.75	December 14, 2025	1,850,000	1,850,000
$1.75	March 9, 2026	300,000	300,000
		2,750,000	2,750,000

8. Related Party Transactions

The following transactions with related parties have been valued in these consolidated financial statements at the exchange amount, which is the amount of consideration established and agreed to by the parties:

Key Management Compensation

During the year ended August 31, 2023, the Company paid management and administration fees of $60,000 (2022 – $60,000) to a corporation controlled by the Company’s Chief Executive Officer.

As of August 31, 2023, the Company owed $5,250 (2022 – nil) to directors and officers of the Company in the ordinary course of business. Amounts due to related parties are without interest, unsecured and without stated terms of repayment.

9. Income Taxes

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

		2023		2022	2022
Net loss	$	(1,838,059)	$	(1,054,231)
Income tax recovery at statutory rates of 27% (2022 – 27%)		(496,276)		(284,642)
Adjustments to benefit resulting from:
Non-deductible items for tax purposes		3,072		152
Difference in tax rate in other jurisdictions		(5,590)		(324)
Tax benefits not recognized		498,794		284,814
Deferred income tax recovery	$	-	$	-

26

Silver Dollar Resources Inc.

(An exploration stage company)

Notes to the Consolidated Financial Statements

(Expressed in Canadian Dollars)

August 31, 2023 and 2022

9. Income Taxes (continued)

The Company’s unrecognized deductible temporary differences consist of the following amounts for the years ended August 31:

	2023	2023		2022
	Amount	Expiry	Amount	Expiry
Canadian non-capital losses	$ 4,440,000	2039 - 2043	$ 2,851,000	2039 - 2042
Canadian capital losses	100,000	No expiry	-	-
Foreign operating losses	212,000	2032 – 2033	11,000	2032
Share issuance costs	49,000	2024 – 2025	89,000	2023 – 2025
Capital assets	5,000	No expiry	3,000	No expiry
Total	$4,806,000		$2,954,000

Due to the uncertainty of realization of these deductible temporary differences, the tax benefit is not reflected in the financial statements.

The following is the analysis of recognized deferred tax liabilities and deferred tax assets for the years ended August 31:

	2023	2022
Deferred tax liabilities
Exploration and evaluation assets	$ (108,000)	$ (30,000)
Marketable securities	(11,000)	-
Deferred tax assets
Non-capital losses	119,000	30,000
Net deferred tax assets(liabilities)	$-	$-

The Company has unrecognized deferred tax liabilities of approximately $245,000 as a result of the acquisition of SVL Minerals Ltd. during the year ended August 31, 2023.

10. Non-Cash Financing and Investing Transactions

During the year ended August 31, 2023, the Company issued 2,205,118 common shares with a fair value of $760,766 pursuant to an acquisition (Note 12). In addition, the Company received shares and warrants with a fair value of $127,459 in settlement of a $200,000 loan receivable (Note 5).

As of August 31, 2023, there was $45,540 of accounts payable related to the Company’s exploration and evaluation assets (2022 – $121,581).

Cash and cash equivalents consist of bank balances and cashable short-term deposits with banks. Cash and cash equivalents included in the Statements of Cash Flows comprise the following:

27

Silver Dollar Resources Inc.

(An exploration stage company)

Notes to the Consolidated Financial Statements

(Expressed in Canadian Dollars)

August 31, 2023 and 2022

10. Non-Cash Financing and Investing Transactions (continued)

		2023		2022
Cash	$	495,580	$	461,139
Cash equivalents		4,006,571		6,694,454
Balance,end ofyear	$	4,502,151	$	7,155,593

11. Segmented Disclosure

The Company has one operating segment: mineral exploration and development. The Company’s reportable segments are summarized as follows:

Geographical Information

Geographical Information
Non-current assets	Canada	Mexico	Total
August 31, 2023	$ 5,647	$11,266,068	$11,271,715
August 31, 2022	$911,084	$ 8,149,087	$ 9,060,171

12. Acquisition of SVL Minerals Ltd.

In May 2023, the Company acquired 100% of the issued and outstanding shares of SVL Minerals Ltd. and its wholly owned subsidiary, Silvercrest de Mexico, S.A. de C.V.

The transaction does not constitute a business combination as SVL Minerals Ltd. does not meet the definition of a business under IFRS 3: Business Combinations. As a result, the acquisition of SVL Minerals Ltd. has been accounted for as an asset acquisition, whereby all of the assets acquired and liabilities assumed are assigned a carrying amount based on their relative fair values. Upon closing the transaction, SVL Minerals Ltd. and Silvercrest de Mexico, S.A. de C.V. became subsidiaries of the Company.

Net Assets Acquired
Cash	$ 160,046
Accounts receivable	13,402
Accounts payable and accrued liabilities	(137,038)
Other taxes and contributions payable	(1,078)
Exploration and evaluation assets	905,934
Total	$941,266
Purchase Price
Issuance of 2,205,118 common shares	$ 760,766
Acquisition cost–cash	180,500
Total	$941,266

28

Silver Dollar Resources Inc.

(An exploration stage company)

Consolidated Schedule of Exploration and Evaluation Assets

(Expressed in Canadian Dollars)

Year ended August 31, 2023

		La Joya		Nora	Longlegged Lake	Longlegged Lake		Pakwash Lake		Totals
Acquisition costs
Option payments, shares	$	905,934	$	-	$	-	$	-	$	905,934
Staking, renewal and other		143,061		-		-	.			143,061
Foreign exchange		96,015		-		-		-		96,015
		1,145,010		-		-		-		1,145,010
Openingbalance		6,003,468		-		85,000		131,000		6,219,468
		7,148,478		-		85,000		131,000		7,364,478
Deferred exploration expenditures
Access rights		27,348		-		-		-		27,348
Assays		132,296		-		-		-		132,296
Camp costs		5,047		-		-		-		5,047
Drill planning and due diligence		-		127,691		-		-		127,691
Drilling		881,229		-		-		-		881,229
Environmental consulting		430		-		-		-		430
Field costs		43,467		-		-		-		43,467
Geological consulting		51,696		-		-		-		51,696
Geology		1,760		-		-		-		1,760
Line cutting and geophysics		11,840		-		-		-		11,840
Meals and lodging		71,984		-		-		-		71,984
Reporting and analysis		77,834		-		160		160		78,154
Roads		16,878		-		-		-		16,878
Transport		200,196		-		-		-		200,196
Foreign exchange		449,966		-		-		-		449,966
		1,971,971		127,691		160		160		2,099,982
Openingbalance		2,145,619		-		592,735		95,290		2,833,644
		4,117,590		127,691		592,895		95,450		4,933,626
Writedown of exploration and evaluation assets		-		(127,691)		(677,895)		(226,450)		(1,032,036)
Balance, August 31, 2023	$	11,266,068	$	-	$	-	$	-	$	11,266,068

The accompanying Notes to the Consolidated Financial Statements are an integral part of these financial statements

29

Silver Dollar Resources Inc.

(An exploration stage company)

==> picture [95 x 34] intentionally omitted <==

Consolidated Schedule of Exploration and Evaluation Assets

(Expressed in Canadian Dollars)

Year ended August 31, 2022

		La Joya	LongleggedLake	LongleggedLake		Pakwash Lake		Totals
Acquisition costs
Option payments, cash	$	200,000	$	45,000	$	95,000	$	340,000
Staking,renewaland other		114,284		-		-		114,284
		314,284		45,000		95,000		454,284
Opening balance		5,689,184		40,000		36,000		5,765,184
		6,003,468		85,000		131,000		6,219,468
Deferred exploration expenditures
Access rights		16,375		-		-		16,375
Assays		114,738		-		-		114,738
Camp costs		3,961		-		-		3,961
Drilling		1,258,962		-		-		1,258,962
Environmental consulting		13,800		-		-		13,800
Field costs		37,606		-		-		37,606
Geological consulting		126,972		-		-		126,972
Geology		20,750		-		-		20,750
Line cutting and geophysics		7,456		-		69,387		76,843
Meals and lodging		28,238		-		-		28,238
Reporting and analysis		28,116		8,159		8,159		44,434
Roads		33,216		-		-		33,216
Transport		125,769		-		-		125,769
Foreignexchange		65,255		-		-		65,255
		1,881,214		8,159		77,546		1,966,919
Opening balance		264,405		584,576		17,744		866,725
		2,145,619		592,735		95,290		2,833,644
Balance, August 31, 2022	$	8,149,087	$	677,735	$	226,290	$	9,053,112

The accompanying Notes to the Consolidated Financial Statements are an integral part of these financial statements

30