Silver Grail Resources Ltd. — Audit Report / Information 2022

Jul 28, 2022

SILVER GRAIL RESOURCES LTD.

Financial Statements

Years Ended March 31, 2022 and 2021 (Expressed in Canadian dollars)

==> picture [469 x 85] intentionally omitted <==

INDEPENDENT AUDITORS’ REPORT

To the Shareholders and Directors of Silver Grail Resources Ltd.

Opinion

We have audited the financial statements of Silver Grail Resources Ltd. (the “Company”) which comprise the statements of financial position as at March 31, 2022 and 2021, and the statements of operations and comprehensive loss, changes in shareholders’ equity and cash flows for the years then ended, and the related notes comprising a summary of significant accounting policies and other explanatory information.

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as at March 31, 2022 and 2021, and its financial performance and its cash flows for the years then ended in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board.

Basis for Opinion

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

Material Uncertainty Related to Going Concern

We draw attention to Note 1 of the accompanying financial statements, which indicates that a material uncertainty exists that may cast significant doubt on the Company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.

Other Information

Management is responsible for the other information, which comprises the information included in the Company’s Management Discussion & Analysis to be filed with the relevant Canadian securities commissions.

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

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

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. We have nothing to report in this regard.

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

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

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

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

Auditors’ Responsibilities for the Audit of the Financial Statements

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

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

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

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

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

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

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

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

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

The engagement partner on the audit resulting in this independent auditors’ report is Michael Ryan Ayre.

==> picture [165 x 28] intentionally omitted <==

CHARTERED PROFESSIONAL ACCOUNTANTS Vancouver, Canada July 27, 2022

SILVER GRAIL RESOURCES LTD. Statements of Financial Position (Expressed in Canadian dollars)

	March 31,	March 31,
	2022	2021
	$	$
Assets
Current assets
Cash	65,731	286,855
Marketable securities (Note 3)	49,023	56,407
Amounts receivable	16,502	4,969
Due from related party (Note 5)	–	74,174
Prepaid expenses	4,073	5,000
Totalcurrent assets	135,329	427,405
Non-current assets
Reclamation deposits (Note 4(d))	2,500	2,500
Property and equipment	–	198
Explorationand evaluationassets (Note4)	699,767	1,067,650
Total non-current assets	702,267	1,070,348
Total assets	837,596	1,497,753
Liabilities
Current liabilities
Accounts payable and accrued liabilities	14,426	19,419
Due torelated parties (Note 5)	9,515	246
Total liabilities	23,941	19,665
Shareholders’ equity
Share capital (Note 6)	7,488,304	7,425,304
Share-based payment reserve	979,097	877,202
Deficit	(7,653,746)	(6,824,418)
Totalshareholders’equity	813,655	1,478,088
Total liabilities and shareholders’ equity	837,596	1,497,753

Going concern (Note 1)

Approved and authorized for issuance on behalf of the Board on July 27, 2022:

/s/ “Dino Cremonese” /s/ “Robert Smiley”

Dino Cremonese, Director

Robert Smiley, Director

(The accompany notes are an integral part of these financial statements)

3

SILVER GRAIL RESOURCES LTD. Statements of Operations and Comprehensive Loss (Expressed in Canadian dollars)

	Year ended	Year ended
	March 31,	March 31,
	2022	2021
	$	$
Expenses
Depreciation	198	66
Investor relations	1,321	2,500
Office and miscellaneous	176	1,989
Professional fees	24,067	17,500
Share-based compensation (Note 7)	101,895	–
Transfer agent and regulatory fees	11,343	14,870
Totalexpenses	139,000	36,925
Loss before other income (expense)	(139,000)	(36,925)
Other income (expense)
Impairment of exploration and evaluation assets (Note 4)	(682,944)	–
Option proceeds in excess of capitalized costs (Note 4)	–	108,800
Unrealized gain(loss) on marketable securities (Note 3)	(7,384)	13,495
Total other income (expense)	(690,328)	122,295
Net income(loss)and comprehensive income(loss)for theyear	(829,328)	85,370
Earnings(loss) per share,basic and diluted	(0.03)	–
Weighted average number of common shares outstanding	32,976,228	31,315,444

(The accompany notes are an integral part of these financial statements)

4

SILVER GRAIL RESOURCES LTD.

Statements of Changes in Shareholders’ Equity (Expressed in Canadian dollars)

	Share capital Share-based payment reserve $ Deficit $ Total shareholders’ equity $ Number of shares Amount $
Balance, March 31, 2020 Shares issued pursuant to private placement Shares issued pursuant to exercise of stock options Shares issued pursuant to exercise of warrants Netincomeforthe year	28,374,622 6,985,431 892,075 (6,909,788) 967,718 4,000,000 400,000 – – 400,000 250,000 32,373 (14,873) – 17,500 50,000 7,500 – – 7,500 – – – 85,370 85,370
Balance, March 31, 2021 Shares issued pursuant to exercise of warrants Fair value of stock options granted Netlossforthe year	32,674,622 7,425,304 877,202 (6,824,418) 1,478,088 420,000 63,000 – – 63,000 – – 101,895 – 101,895 – – – (829,328) (829,328)
Balance,March 31,2022	33,094,622 7,488,304 979,097 (7,653,746) 813,655

(The accompany notes are an integral part of these financial statements)

5

SILVER GRAIL RESOURCES LTD. Statements of Cash Flows

(Expressed in Canadian dollars)

	Year ended	Year ended
	March 31,	March 31,
	2022	2021
	$	$
Operating activities
Net income (loss) for the year	(829,328)	85,370
Items not involving cash:
Depreciation	198	66
Option proceeds in excess of capitalized costs	–	(108,800)
Impairment of exploration and evaluation assets (Note 4)	682,944	–
Share-based compensation	101,895	–
Unrealized loss (gain) on marketable securities	7,384	(13,495)
Changes in non-cash operating working capital:
Amounts receivable	(11,533)	1,898
Prepaid expenses	927	(5,000)
Accounts payable and accrued liabilities	(4,993)	3,280
Due to relatedparties	(224,459)	(106,654)
Net cash used in operatingactivities	(276,965)	(143,335)
Investing activities
Exploration and evaluation asset expenditures	(39,920)	(65,796)
Mineralpropertyoptionpaymentproceeds / cost recoveries	32,761	10,000
Net cash used in investingactivities	(7,159)	(55,796)
Financing activities
Proceeds from issuance of shares	63,000	425,000
Net cashprovided byfinancingactivities	63,000	425,000
Change in cash	(221,124)	225,869
Cash, beginningofyear	286,855	60,986
Cash, end ofyear	65,731	286,855
Non-cash investing and financing activities:
Exploration and evaluation asset expenditures included in amounts due
to related parties	307,902	–
Exploration and evaluation asset mineral property option payment
proceeds included in amounts due from/to related parties	–	85,000
Fair value of marketable securities received as mineral property option
payments	–	13,800

(The accompany notes are an integral part of these financial statements)

6

SILVER GRAIL RESOURCES LTD. Notes to the Financial Statements Years Ended March 31, 2022 and 2021 (Expressed in Canadian dollars)

1. Nature of Operations and Going Concern

Silver Grail Resources Ltd. (the “Company”) is an exploration stage company and is in the business of acquiring, exploring and dealing in mineral properties in the province of British Columbia, Canada. There has been no determination whether properties held contain economically recoverable ore reserves. The Company jointly conducts business and exploration activities with another publicly listed company, Teuton Resources Corp. (“Teuton”). Teuton shares office premises and consultants and has common officers and directors. The Company’s head office and principal place of business is located at 2130 Crescent Road, Victoria, BC.

In the ordinary course of business, the Company sells or options property interests to third parties, accepting as consideration cash and/or securities of the acquiring party. The Company attempts to realize upon the value of securities as opportunities present themselves. The recoverability of valuations assigned to mineral properties is dependent upon the discovery of economically recoverable reserves, confirmation of the Company's interest in the properties, the ability to obtain necessary financing to complete development, and future profitable production or proceeds from disposition.

These financial statements have been prepared on a going concern basis, which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business. As at March 31, 2022, the Company has no source of revenue, and during the years ended March 31, 2022 and 2021 generated negative cash flows from operating activities, and as at March 31, 2022 has an accumulated deficit of $7,653,746. These factors indicate the existence of a material uncertainty that may raise significant doubt about the Company’s ability to continue as a going concern. The continued operations of the Company are dependent on its ability to generate future cash flows or obtain additional financing. Management is of the opinion that sufficient working capital will be obtained from external financing to meet the Company’s liabilities and commitments as they become due over the next 12 months, although there is a risk that additional financing will not be available on a timely basis or on terms acceptable to the Company. These financial statements do not reflect any adjustments that may be necessary if the Company is unable to continue as a going concern, in which case such adjustments could be material.

On March 11, 2020, the World Health Organization declared COVID-19 a global pandemic. This contagious disease outbreak and any related adverse public health developments, has adversely affected workforces, economies, and financial markets globally, leading to an economic downturn. The impact on the Company is not currently determinable but management continues to monitor the situation.

2. Significant Accounting Policies

• (a) Basis of Preparation and Statement of Compliance

The accompanying financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board on a going concern basis.

The financial statements have been prepared on a historical cost basis financial instruments which are measured at fair value. The financial statements are presented in Canadian dollars, which is the Company’s functional currency.

7

SILVER GRAIL RESOURCES LTD. Notes to the Financial Statements Years Ended March 31, 2022 and 2021 (Expressed in Canadian dollars)

2. Significant Accounting Policies (continued)

• (b) Use of Estimates and Judgments

The preparation of the financial statements in conformity with IFRS requires the Company’s management to make judgments, estimates, and assumptions that affect the application of accounting policies and reported amounts of assets, liabilities, revenues, and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised and in any future periods affected. Significant areas requiring the use of estimates include the valuation of deferred income tax assets. Significant areas requiring judgments include the Company’s ability to continue as a going concern, the impairment of exploration and evaluation assets, and recognition of deferred income tax assets.

The Company’s ability to continue as a going concern involves judgment regarding future funding available for its exploration projects and working capital requirements.

The application of the Company’s accounting policy for exploration and evaluation expenditures requires judgment in determining whether it is likely that future economic benefits are likely either from future exploitation or sale or where activities have not reached a stage which permits a reasonable assessment of the existence of reserves. The deferral policy requires management to make certain estimates and assumptions about future events or circumstances, in particular whether an economically viable extraction operation can be established. Estimates and assumptions made may change if new information becomes available. If information becomes available suggesting that the recovery of expenditure is unlikely, the amount capitalized is written off in the statement of operations in the period when the new information becomes available.

The carrying amount of deferred income tax assets and liabilities is reviewed at the end of each reporting period and recognized only to the extent that it is probable that sufficient taxable income will be available to allow all or part of the deferred income tax asset to be utilized. Changes in estimates of future taxable income can materially affect the amount of deferred income tax assets and liabilities recognized from period to period.

• (c) Cash and Cash Equivalents

The Company considers all highly liquid instruments with a maturity of three months or less at the time of issuance or which are readily redeemed into known amounts of cash without significant penalties to be cash equivalents.

• (d) Marketable Securities

The Company reports investments in marketable equity securities at fair value based on quoted market prices. All investment securities are designated at fair value through profit or loss with any gains and losses included in the statement of operations and comprehensive loss.

• (e) Property and Equipment

The Company depreciates the cost of property and equipment over their estimated useful lives at the following annual rates:

wing annual rates:
Furniture and equipment	20%	declining balance basis
Vehicle	30%	declining balance basis

8

SILVER GRAIL RESOURCES LTD. Notes to the Financial Statements Years Ended March 31, 2022 and 2021 (Expressed in Canadian dollars)

2. Significant Accounting Policies (continued)

• (f) Exploration and Evaluation Expenditures

Exploration and evaluation expenditures include the costs of acquiring licenses, costs associated with exploration and evaluation activity, and the fair value (at acquisition date) of exploration and evaluation assets acquired in a business combination. Exploration and evaluation expenditures are capitalized. Costs incurred before the Company has obtained the legal rights to explore an area are charged to operations.

Exploration and evaluation assets are assessed for impairment if: (i) sufficient data exists to determine technical feasibility and commercial viability, and (ii) facts and circumstances suggest that the carrying amount exceeds the recoverable amount.

Once the technical feasibility and commercial viability of the extraction of mineral resources in an area of interest are demonstrable, exploration and evaluation assets attributable to that area of interest are first tested for impairment and then reclassified to mining property and development assets within property, plant and equipment.

Recoverability of the carrying amount of any exploration and evaluation assets is dependent on successful development and commercial exploitation, or alternatively, sale of the respective areas of interest.

Some of the Company’s exploration activities are conducted jointly with others and, accordingly, the financial statements reflect only the Company’s proportionate interest in such activities.

Mineral Property Options

The Company does not record any expenditures made by the optionee in its accounts. Upon sale of a mineral property option, the Company re-designates any costs previously capitalized in relation to the whole interest as relating to the partial interest retained and any consideration received directly from the optionee is credited against costs previously capitalized. Any consideration received in excess of costs previously capitalized is recognized in the statement of operations and comprehensive loss.

Sales of Ore Samples

Sales of ore samples incidental to the exploration of mineral properties are recorded net of production costs as a reduction of capitalized exploration and evaluation costs.

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue and costs to sell can be reliably measured. Revenue is measured at the fair value of the consideration received, excluding discounts, rebates, and other sales tax or duty.

Revenue from the sale of ore samples is recognized upon delivery when the risks and rewards of ownership are transferred to the customer and neither continuing managerial involvement nor effective control remains over the goods sold. Revenue is based on quoted market prices of the London Bullion Market Association during the quotation period less treatment, refining and smelting charges, and penalties.

• (g) Joint Arrangements

Substantially all of the Company’s exploration activities are conducted under joint operation arrangements with others and, accordingly, the financial statements reflect only the Company’s proportionate interest in such activities.

9

SILVER GRAIL RESOURCES LTD. Notes to the Financial Statements Years Ended March 31, 2022 and 2021 (Expressed in Canadian dollars)

2. Significant Accounting Policies (continued)

• (h) Impairment of Non-Current Assets

At each reporting date, the Company reviews the carrying amounts of its tangible assets to determine whether there are any indications of impairment. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment, if any.

Where the asset does not generate cash flows that are independent from other assets, the Company estimates the recoverable amount of the cash generating unit (“CGU”) to which the asset belongs. The recoverable amount is determined as the higher of fair value less direct costs to sell and the asset’s value in use. In assessing value in use, the estimated future cash flows are discounted to their present value. Estimated future cash flows are calculated using estimated recoverable reserves, estimated future commodity prices and the expected future operating and capital costs. The pre-tax discount rate applied to the estimated future cash flows reflects current market assessments of the time value of money and the risks specific to the asset for which the future cash flow estimates have not been adjusted.

If the carrying amount of an asset or CGU exceeds its recoverable amount, the carrying amount of the asset or CGU is reduced to its recoverable amount through an impairment charge to the statement of operations.

Assets that have been impaired are tested for possible reversal of the impairment whenever events or changes in circumstance indicate that the impairment may have reversed. When an impairment subsequently reverses, the carrying amount of the asset or CGU is increased to the revised estimate of its recoverable amount, but only so that the increased carrying amount does not exceed the carrying amount that would have been determined (net of depreciation, depletion and amortization) had no impairment loss been recognized for the asset or CGU in prior periods. A reversal of impairment is recognized as a gain in the statement of operations and comprehensive loss.

• (i) Reclamation and Remediation Provisions

The Company recognizes a provision for statutory, contractual, constructive or legal obligations associated with decommissioning of mining operations and reclamation and rehabilitation costs arising when environmental disturbance is caused by the exploration or development of mineral properties and equipment. Provisions for site closure and reclamation are recognized in the period in which the obligation is incurred or acquired, and are measured based on expected future cash flows to settle the obligation, discounted to their present value. The discount rate used is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability including risks specific to the countries in which the related operation is located.

When an obligation is initially recognized, the corresponding cost is capitalized to the carrying amount of the related asset in mineral properties and equipment. These costs are depreciated using either the unit of production or straight-line method depending on the asset to which the obligation relates.

Due to uncertainties concerning environmental remediation, the ultimate cost to the Company of future site restoration could differ from the amounts provided. The estimate of the total provision for future site closure and reclamation costs is subject to change based on amendments to laws and regulations, changes in technology, price increases and changes in interest rates, and as new information concerning the Company’s closure and reclamation obligations becomes available.

10

SILVER GRAIL RESOURCES LTD. Notes to the Financial Statements Years Ended March 31, 2022 and 2021 (Expressed in Canadian dollars)

2. Significant Accounting Policies (continued)

• (j) Financial Instruments

Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the respective instrument.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss (“FVTPL”)) are included in the initial carrying value of the related instrument and are amortized using the effective interest method. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at FVTPL are recognized immediately in the statement of operations.

Fair value estimates are made at the consolidated statement of financial position date based on relevant market information and information about the financial instrument. All financial instruments are classified into either: fair value through profit or loss (“FVTPL”) or amortized cost.

The Company has made the following classifications:

Cash FVTPL Marketable securities FVTPL Accounts payable Amortized cost Due to/from related parties Amortized cost

Financial Assets

The classification of financial assets depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.

Financial assets at FVTPL

Financial assets are classified as FVTPL when the financial asset is either held for trading or it is designated as FVTPL. A financial asset is classified as held for trading if:

• it has been acquired principally for the purpose of selling it in the near term; or

• on initial recognition it is part of a portfolio of identified financial instruments that the Company manages together and has a recent actual pattern of short-term profit-taking; or

• it is a derivative that is not designated and effective as a hedging instrument.

Financial assets at amortized cost

Financial assets at amortized cost are non-derivative financial assets which are held within a business model whose objective is to hold assets to collect contractual cash flows and its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. A financial asset (unless it is a trade receivable without a significant financing component that is initially measured at the transaction price) is initially measured at fair value plus, for an item not at FVTPL, transaction costs that are directly attributable to its acquisition. Subsequent to initial recognition, financial assets are measured at amortized cost using the effective interest method, less any impairment.

Impairment of financial assets

Financial assets, other than those classified as FVTPL, are assessed for indicators of impairment at the end of each reporting period. Financial assets are considered to be impaired when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been decreased.

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables, where the carrying amount is reduced through the use of an allowance account.

11

SILVER GRAIL RESOURCES LTD. Notes to the Financial Statements Years Ended March 31, 2022 and 2021 (Expressed in Canadian dollars)

2. Significant Accounting Policies (continued)

• (j) Financial Instruments

Financial Assets (continued)

Impairment of financial assets (continued)

When a trade receivable is considered uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are offset against the allowance account. Changes in the carrying amount of the allowance account are recognized in the consolidated statement of operations. Loss allowances are based on the lifetime ECL’s that result from all possible default events over the expected life of the trade receivable, using the simplified approach.

For financial assets measured at amortized cost, if, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognized, the previously recognized impairment loss is reversed through the consolidated statement of operations to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortized cost would have been had the impairment not been recognized.

Financial Liabilities and Equity Instruments

Classification as debt or equity

Debt and equity instruments issued by the Company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Company are recognized as the proceeds received, net of direct issue costs.

Other financial liabilities

Other financial liabilities (including loans and borrowings and trade payables and other liabilities) are initially measured at fair value, net of transaction costs. Subsequently, other financial liabilities are measured at amortized cost using the effective interest method.

The effective interest method is a method of calculating the amortized cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.

• (k) Income Taxes

Current income tax

Current income tax assets and liabilities for the current period are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date. Current income tax relating to items recognized directly in other comprehensive income or equity is recognized in other comprehensive income or equity and not in the statement of operations and comprehensive loss. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

12

SILVER GRAIL RESOURCES LTD. Notes to the Financial Statements Years Ended March 31, 2022 and 2021 (Expressed in Canadian dollars)

2. Significant Accounting Policies (continued)

• (k) Income Taxes (continued)

Deferred income tax

Deferred income tax is provided based on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. The carrying amount of deferred income tax assets is reviewed at the end of each reporting period and recognized only to the extent that it is probable that sufficient taxable income will be available to allow all or part of the deferred income tax asset to be utilized. Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. Deferred income tax assets and deferred income tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current income tax liabilities and the deferred income taxes relate to the same taxable entity and the same taxation authority.

• (l) Flow-through Shares

The resource expenditure deductions for income tax purposes related to exploration and development activities funded by flow-through share arrangements are renounced to investors in accordance with Canadian tax legislation. On issuance, the premium recorded on the flow-through share, being the difference in price over a common share with no tax attributes, is recognized as a liability. As expenditures are incurred, the deferred income tax liability associated with the renounced tax deductions is recognized through the statement of operations and comprehensive loss with a pro-rata portion of the deferred premium.

(m) Foreign Currency Translation

The functional and reporting currency is the Canadian dollar. Transactions denominated in foreign currencies are translated using the exchange rate in effect on the transaction date which is approximated by an average rate. Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange in effect at the statement of financial position date. Non-monetary items are translated using the historical rate on the date of the transaction. Foreign exchange gains and losses are included in the statement of operations and comprehensive loss.

• (n) Share-based Compensation

The grant date fair value of share-based payment awards granted to employees is recognized as an expense, with a corresponding increase in equity, over the period that the employees unconditionally become entitled to the awards. For awards with graded vesting, the fair value of each tranche is recognized over its respective vesting period. The amount recognized as an expense is adjusted to reflect the number of awards for which the related service and non-market vesting conditions are expected to be met, such that the amount ultimately recognized as an expense is based on the number of awards that meet the related service and non-market performance conditions at the vesting date. For share-based payment awards with non-vesting conditions, the grant date fair value is measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes.

Share-based payment arrangements in which the Company receives goods or services as consideration for its own equity instruments are accounted for as equity-settled, share-based payment transactions, regardless of how the equity instruments are obtained by the Company. When the value of goods or services received in exchange for the share-based payment cannot be reliably estimated, the fair value of the share-based payment is measured by use of a BlackScholes valuation model.

When the options are exercised, any proceeds received are credited to share capital along with the amount reflected in share-based payment reserve.

13

SILVER GRAIL RESOURCES LTD. Notes to the Financial Statements Years Ended March 31, 2022 and 2021 (Expressed in Canadian dollars)

2. Significant Accounting Policies (continued)

(o) Loss Per Share

Basic loss per share is computed using the weighted average number of common shares outstanding during the period. The treasury stock method is used for the calculation of diluted loss per share, whereby all “in-the-money” stock options and share purchase warrants are assumed to have been exercised at the beginning of the period and the proceeds from their exercise are assumed to have been used to purchase common shares at the average market price during the period. When a loss is incurred during the period, basic and diluted loss per share are the same as the exercise of stock options and share purchase warrants is considered to be anti-dilutive. As at March 31, 2022, the Company had 2,527,000 (2021 – 3,600,000) potential dilutive shares outstanding.

(p) Accounting Standards Issued but Not Yet Effective

A number of new standards, and amendments to standards and interpretations, are not yet effective for the year ended March 31, 2022, and have not been early adopted in preparing these financial statements.

Other accounting standards or amendments to existing accounting standards that have been issued but have future effective dates are either not applicable or are not expected to have a significant impact on the Company’s financial statements.

3. Marketable Securities

	2021		Unrealized	2022
	Fair value	Additions	gain(loss)	Fair value
	$	$	$	$
Marketable securities	56,407	–	(7,384)	49,023
	2020		Unrealized	2021
	Fair value	Additions	gain(loss)	Fair value
	$	$	$	$
Marketable securities	29,112	13,800	13,495	56,407

The Company holds equity securities in publicly traded companies. During the year ended March 31, 2022, the Company recorded an unrealized loss of $7,384 (2021 unrealized gain – $13,495) on marketable securities.

14

SILVER GRAIL RESOURCES LTD. Notes to the Financial Statements Years Ended March 31, 2022 and 2021 (Expressed in Canadian dollars)

4. Exploration and Evaluation Assets

Exploration and evaluation assets consist of:

Exploration and evaluation assets consist of:
	Year ended	Year ended
	March 31,	March 31,
	2022	2021
	$	$
Balance, beginning of year	1,067,650	1,001,854
Acquisitions	1,000	–
Assays	8,850	–
Drilling	95,813	–
Engineering	–	–
Field work	–	15,806
Geological and geophysical	20,839	43,340
Helicopters	154,046	2,308
Supplies and miscellaneous	41,091	1,244
Staking and filing fees	2,207	–
Traveland accommodations	23,976	3,098
	347,822	65,796
Property option proceeds received	–	(108,800)
Option proceeds in excess of capitalized costs recorded as other
income	–	108,800
B.C. mineral exploration tax credit refund	(32,761)	–
Impairment ofexplorationand evaluationasset	(682,944)	–
Balance,end ofyear	699,767	1,067,650

• (a) Skeena Mining Division, British Columbia

The Company jointly owns or originally jointly owned the following properties in the Skeena Mining Division with Teuton.

• (i) Clone Property

On November 28, 2005, the Company and Teuton entered into an option agreement with Makena Resources Inc. ("Makena") whereby Makena has the right to earn a 50% interest in Teuton and the Company’s jointly owned Clone property, then comprised of 9 claims. An additional 10 claims were added to the property by staking in 2006.

Under the terms of the option agreement, Makena earned 50% interest in the properties by paying a total of $120,000 cash consideration and incurring exploration expenditures on the Clone property aggregating $1,800,000.

On September 27, 2017 (as amended on October 3, 2018), the Company and Teuton entered into an option agreement with Sky Gold Corp. (formerly Sunvest Minerals Corporation) (“Sky”), whereby Sky has the right to earn the Company and Teuton’s 50% beneficial interest in the Clone Property. To earn this interest, Sky is to issue a total of 5,000,000 of its shares, pay a total of $200,000, and incur exploration expenditures on the property aggregating $1,950,000.

15

SILVER GRAIL RESOURCES LTD. Notes to the Financial Statements Years Ended March 31, 2022 and 2021 (Expressed in Canadian dollars)

4. Exploration and Evaluation Assets (continued)

• (a) Skeena Mining Division, British Columbia (continued)

• (i) Clone Property (continued)

Cash consideration to be paid equally to the Company and Teuton:

• $25,000 to be paid on execution of the agreement (received);

• a further $75,000 ($50,000 in cash and issuance of 500,000 shares in lieu of the remaining balance) to be paid on or before September 27, 2018 (received); and

• a further $100,000 to be paid on or before September 27, 2019 (not incurred, see below);

Shares in the common stock of Sky to be issued equally to the Company and Teuton:

• 1,500,000 shares to be issued within five business days of September 27, 2017 (received);

• a further 1,500,000 shares to be issued on or before September 27, 2018 (received); and

• a further 2,000,000 shares to be issued on or before September 27, 2019 (not incurred, see below).

Exploration expenditures to be incurred by Sky:

• $350,000 on or before September 27, 2018 (incurred);

• $600,000 on or before September 30, 2019 (not incurred, see below); and

• $1,000,000 on or before September 30, 2020 (not incurred, see below).

As of November 6, 2019, Sky will no longer pursue the option agreement to earn in interest in the Clone project entered with Teuton and the Company. The Company now owns 25% of the Clone property with the remaining 75% owned by Teuton. A total of $682,944 of the capitalized acquisition costs and exploration costs was written off during the year ended March 31, 2022. The recoverable amount of the property was estimated to be $100,000 based on its fair value less costs of disposal.

• (ii) Konkin Silver Property

On April 20, 2004, the Company and Teuton acquired a 100% interest in two claims representing eight units situated within the boundaries of the Konkin Silver property. In fiscal 2004, the Company issued 50,000 of its shares at a fair value of $13,750 and paid $10,000 to the vendor for its 50% share of the claims. The vendor retains a 2% net smelter royalty, onehalf of which can be purchased for $1,000,000 until 18 months following the commencement of commercial production.

• (iii) Bay Silver Claims

The Company owns a 50% interest in the Bay Silver property located in the Skeena Mining Division. Teuton owns the remaining 50% interest.

On August 16, 2018, the Company and Teuton entered into an agreement to option out their Bay Silver Property to AUX Resources Corporation (formerly Auramex Resources Corp). (“Auramex”), whereby Auramex has the right to earn an undivided 100% ownership in the property. To earn this interest, Auramex is to issue 100,000 of its shares (Auramex effected a 1-for-5 share consolidation on June 30, 2020) and pay a total of $120,000 as follows: Cash consideration to be paid equally to Company and Teuton:

• $10,000 to be paid on execution of the agreement (received);

• a further $15,000 to be paid on or before July 28, 2019 (received);

• a further $20,000 to be paid on or before July 28, 2020(received);

• a further $25,000 to be paid on or before July 28, 2021(received); and

• a further $50,000 to be paid on or before July 28, 2022 (received).

16

SILVER GRAIL RESOURCES LTD. Notes to the Financial Statements Years Ended March 31, 2022 and 2021 (Expressed in Canadian dollars)

4. Exploration and Evaluation Assets (continued)

• (a) Skeena Mining Division, British Columbia (continued)

• (iii) Bay Silver Claims (continued)

Common shares of Auramex to be issued equally to the Company and Teuton:

• 20,000 shares to be issued within three business days of regulatory approval for this agreement (received);

• a further 20,000 shares to be issued on or before July 28, 2019 (received);

• a further 20,000 shares to be issued on or before July 28, 2020 (received);

• a further 20,000 shares to be issued on or before July 28, 2021 (received); and

• a further 20,000 shares to be issued on or before July 28, 2022 (received).

Upon the exercise of the option, the Company and Teuton will retain a 2% Net Smelter Royalty (“NSR”) with an advance royalty payment of $50,000 plus an additional increment payable according to inflation between 2018 and 2025 as measured by the Canadian Consumer Price Index (“CPI”) first due from Auramex on June 28, 2025. The advance royalty will thereafter be payable yearly on July 28, as adjusted by the CPI. Auramex will have the right to purchase one-half of the Company’s and Teuton’s NSR at any time up to including ninety days after the commencement of commercial production on the property by paying $1,000,000.

During the year ended March 31, 2021, Auramex exercised the option.

• (iv) Silver Crown West Claims

On July 14, 2015, and as amended on April 21, 2016, Teuton entered into an option agreement with Pretium Resources Inc. ("Pretium") whereby Pretium has the right to earn a 100% interest in Teuton's King Tut and Tuck properties, and Teuton's and the Company's jointly owned Silver Crown West property located in the Skeena Mining Division. The King Tut and Tuck properties consist of 17 claims and the Silver Crown West property consists of one claim. To earn the 100% interest, Pretium must pay a total of $1,800,000 to Teuton over four years as follows of which approximately 3% is expected to be received by the Company:

Cash consideration to be paid:

• $100,000 to be paid upon signing of the agreement (received);

• a further $150,000 to be paid on or before August 15, 2015, after Pretium has obtained the approval of its Board of Directors to the agreement (received);

• a further $250,000 to be paid on or before January 14, 2016 (received);

• a further $250,000 to be paid on or before July 14, 2016 (received);

• a further $250,000 to be paid on or before July 14, 2017 (received);

• a further $400,000 to be paid on or before July 14, 2018 (received); and

• a further $400,000 to be paid on or before July 14, 2019 (received).

Teuton retains an NSR of 2%.

Concurrently, the Company and Teuton entered into a letter agreement with regards to the option agreement between Pretium and Teuton. As the Silver Crown West property is jointly owned by the Company and Teuton, as consideration, $50,000 of the total option proceeds are to be applied against any outstanding debt owed from the Company to Teuton (the "Debt"). The Company retains one-half of any NSR payable by Pretium to Teuton in regards to mineral production from the Silver Crown West property. If during this process the debt has been repaid, then the Company is entitled to its share of the option proceeds and NSR in cash payments.

17

SILVER GRAIL RESOURCES LTD. Notes to the Financial Statements Years Ended March 31, 2022 and 2021 (Expressed in Canadian dollars)

4. Exploration and Evaluation Assets (continued)

• (a) Skeena Mining Division, British Columbia (continued)

• (v) Silver Crown Property

On March 15, 2019, the Company and Teuton entered into an agreement to option out their Silver Crown Property to Auramex, whereby Auramex has the right to earn an undivided 100% ownership in the property. To earn this interest, Auramex is to issue 100,000 of its shares and pay a total of $120,000 as follows:

Cash consideration to be paid equally to the Company and Teuton:

• $10,000 to be paid upon signing of the agreement (received);

• a further $15,000 to be paid on or before March 15, 2020 (received);

• a further $20,000 to be paid on or before March 15, 2021 (received);

• a further $25,000 to be paid on or before March 15, 2022 (received); and

• a further $50,000 to be paid on or before March 15, 2023 (received).

• Shares in the common stock of Auramex to be issued equally to the Company and Teuton:

• 20,000 shares to be issued within five business days after receipt of regulatory approval for the agreement (received);

• a further 20,000 shares to be issued on or before March 15, 2020 (received);

• a further 20,000 shares to be issued on or before and March 15, 2021 (received);

• a further 20,000 shares to be issued on or before and March 15, 2022 (received); and

• a further 20,000 shares to be issued on or before and March 15, 2023 (received).

Upon the exercise of the option, the Company and Teuton will retain a 2% Net Smelter Royalty (“NSR”) with an advance royalty payment of $50,000 plus an additional increment payable according to inflation between 2019 and 2026 as measured by the Canadian Consumer Price Index (“CPI”) first due from Auramex on February 28, 2026. The advance royalty will thereafter be payable yearly on February 28, as adjusted by the CPI. Auramex will have the right to purchase one-half of the Company’s and Teuton’s NSR at any time up to including ninety days after the commencement of commercial production on the property by paying $1,000,000.

During the year ended March 31, 2021, Auramex exercised the option.

• (vi) Midas Property

On September 28, 2005, the Company participated in a multi-party agreement (the “Sabina Agreement”) whereby the Midas property was optioned to Sabina Gold & Silver Corp. (formerly Sabina Resources Limited) (“Sabina”). The Midas property consists of 4 claims and a 50% interest in the property was earned pursuant to the multi-party agreement by Sabina.

On July 16, 2014, Teuton purchased Sabina’s 50% interest in the Del Norte-Midas property. The Company now owns a 25% interest in the Midas property with Teuton owning the other 75%.

(vii)Tonga-Fiji Property

The Company and Teuton jointly own the Tonga-Fiji property situated 24 kilometres north of Alice Arm, British Columbia.

18

SILVER GRAIL RESOURCES LTD. Notes to the Financial Statements Years Ended March 31, 2022 and 2021 (Expressed in Canadian dollars)

4. Exploration and Evaluation Assets (continued)

• (a) Skeena Mining Division, British Columbia (continued)

The Company originally owned a 100% interest in the following properties:

(viii) Mountain Boy Claims, Skeena Mining Division, British Columbia

The Company originally owned a 100% interest in the Mountain Boy Claims, Skeena Mining Division, British Columbia consisting of seven claims comprising 41 units. The property was optioned to Mountain Boy Minerals Ltd. (“Mountain Boy”) on terms whereby it could earn a 50% interest in the property. Subsequently, Mountain Boy purchased the Company’s remaining 50% interest in the property. The Company retains a 2% Net Smelter Royalty which may be purchased for $1,000,000 until 18 months following the commencement of commercial production.

• (b) Roman Property, New Westminster Mining Division, British Columbia

The Company owns a 50% interest in eight claims located in the New Westminster Mining Division. The remaining 50% interest is owned by Teuton.

• (c) Various other properties

The Company also has joint ownership with Teuton on various other properties.

• (d) Reclamation Deposits

Guaranteed investment certificates (the “GICs”) with principal amounts totalling $2,500 (2021 - $2,500) held by a major Canadian financial institution under a safekeeping agreement have been pledged to the province of British Columbia for property reclamation. The GICs mature and roll over each year until the Company is released from its obligations.

5. Related Party Transactions and Balances

• (a) As at March 31, 2022, the amount of $8,716 was owed to (2021 - $74,174 owed from) Teuton which is non-interest bearing, secured by certain mineral properties owned jointly with the Company, and due on demand.

• (b) As at March 31, 2022, the amount of $799 (2021 - $246) was owed to the President of the Company, which is non-interest bearing, and due on demand.

6. Share Capital

Authorized: 100,000,000 common shares without par value

Share transactions for the year ended March 31, 2022:

During the year ended March 31, 2022, the Company issued 420,000 common shares for proceeds of $63,000 pursuant to the exercise of share purchase warrants.

Share transactions for the year ended March 31, 2021:

On July 13, 2020, the Company issued 4,000,000 units at $0.10 per unit for proceeds of $400,000. Each unit consisted of one common share and one-half a share purchase warrant. Each whole share purchase warrant is exercisable at $0.15 per common share expiring on July 13, 2021. The share purchase warrants are subject to acceleration at the Company’s discretion in the event the Company’s common shares traded on a volume-weighted average price basis of $0.20 or more for a period of ten consecutive days.

19

SILVER GRAIL RESOURCES LTD. Notes to the Financial Statements Years Ended March 31, 2022 and 2021 (Expressed in Canadian dollars)

6. Share Capital (continued)

Share transactions for the year ended March 31, 2021: (continued)

On November 13, 2020, the Company issued 100,000 common shares for proceeds of $7,000 pursuant to the exercise of stock options. The fair value of stock options exercised of $5,949 was reallocated from the share-based payment reserve to share capital.

On January 12, 2021, the Company issued 150,000 common shares for proceeds of $10,500 pursuant to the exercise of stock options. The fair value of stock options exercised of $8,924 was reallocated from the share-based payment reserve to share capital.

On January 12, 2021, the Company issued 50,000 common shares for proceeds of $7,500 pursuant to the exercise of share purchase warrants.

7. Stock Options

The Company has adopted a stock option plan pursuant to which options may be granted to directors, officers, employees and consultants of the Company to a maximum of 10% of the issued and outstanding common shares at the time of the grant. The exercise price of each option is equal to the market price on the date of the grant.

The following table summarizes the continuity of the Company’s stock options:

				Weighted
				average
			Number	exercise price
			of options	$
Outstanding, March	31,	2020	1,900,000	0.07
Exercised			(250,000)	0.07
Outstanding, March	31,	2021	1,650,000	0.07
Granted			877,000	0.15
Outstanding,March	31,	2022	2,527,000	0.10

Additional information regarding stock options outstanding as at March 31, 2022 is as follows:

Range of exercise prices $	Outstanding and exercisable
	Number of options Weighted average remaining contractual life (years) Weighted average exercise price $
0.07 0.15	1,650,000 0.5 0.07 877,000 4.3 0.15
	2,527,000 1.8 0.10

The fair values for stock options granted have been estimated using the Black-Scholes option pricing model assuming no expected dividends or forfeitures, and the following weighted average assumptions:

assumptions:
	2022	2021
Risk-free interest rate	0.98%	–
Expected life (in years)	5	–
Expected volatility	107%	–

20

SILVER GRAIL RESOURCES LTD. Notes to the Financial Statements Years Ended March 31, 2022 and 2021 (Expressed in Canadian dollars)

7. Stock Options (continued)

The estimated fair value of the stock options granted during the year ended March 31, 2022 was $101,895 which was recorded as share-based compensation. The weighted average grant date fair value of stock options granted during the year ended March 31, 2022 was $0.12 per share.

8. Share Purchase Warrants

The following table summarizes the continuity of share purchase warrants:

		Weighted
		average
		exercise
	Number of	price
	warrants	$
Balance, March 31, 2020	–	–
Issued	2,000,000	0.15
Exercised	(50,000)	0.15
Balance, March 31, 2021	1,950,000	0.15
Exercised	(420,000)	0.15
Expired	(1,530,000)	0.15
Balance,March 31,2022	–	–

9. Financial Instruments and Risk Management

• (a) Fair Values

Assets and liabilities measured at fair value on a recurring basis are presented on the Company’s statement of financial position as at March 31, 2022 as follows:

statement of financial position as at	March 31, 2022 as follows:
	Fair ValueMeasurements Using Quoted prices in active markets for identical instruments (Level 1) $ Significant other observable inputs (Level 2) $ Significant unobservable inputs (Level 3) $ Balance as at March 31, 2022 $
Cash Marketable securities	65,731 – – 65,731 49,023 – – 49,023

The fair values of other financial instruments, which include accounts payable, and amounts due to/from related parties, approximate their carrying values due to the nature and relatively shortterm maturity of these instruments.

• (b) Credit Risk

Financial instruments that potentially subject the Company to a concentration of credit risk consist primarily of cash and marketable securities. The Company limits its exposure to credit loss by placing its cash and marketable securities with high credit quality financial institutions. The carrying amount of these financial assets represents the maximum credit exposure.

• (c) Foreign Exchange Rate and Interest Rate Risk

The Company is not exposed to any significant foreign exchange rate or interest rate risk.

21

SILVER GRAIL RESOURCES LTD. Notes to the Financial Statements Years Ended March 31, 2022 and 2021 (Expressed in Canadian dollars)

9. Financial Instruments and Risk Management (continued)

(d) Liquidity Risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company currently settles its financial obligations using cash. The ability to do this relies on the Company raising equity financing in a timely manner and by maintaining sufficient cash in excess of anticipated needs.

All of the Company’s financial liabilities have maturities of one year or less:

	Carrying	Contractual	Within	Within		Within
	Amount	Cash Flows	1 year	2 years		3 years
	$	$	$	$		$
As at March 31, 2022
Accounts payable	2,426	2,426	2,426		–		–
Due torelated parties	9,515	9,515	9,515		–		–
Total	11,941	11,941	11,941		–		–
As at March 31, 2021
Accounts payable	5,420	5,420	5,420		–		–
Due torelated parties	246	246	246		–		–
Total	5,666	5,666	5,666		–		–

(e) Price Risk

The Company is exposed to price risk with respect to commodity prices. The Company’s ability to raise capital to fund exploration and development activities is subject to risks associated with fluctuations in the market price of commodities.

10. Capital Management

The Company manages its capital to maintain its ability to continue as a going concern and to provide returns to shareholders and benefits to other stakeholders. The capital structure of the Company consists of all components of shareholders’ equity.

The Company manages its capital structure and makes adjustments to it in light of economic conditions. The Company, upon approval from its Board of Directors, will balance its overall capital structure through new share issues or by undertaking other activities as deemed appropriate under the specific circumstances.

The Company is not subject to externally imposed capital requirements and the Company’s overall strategy with respect to capital risk management remains unchanged from the year ended March 31, 2021.

11. Segmented Information

The Company operates in one industry and geographic segment, the mineral resource industry with all current exploration activities conducted in Canada.

22

SILVER GRAIL RESOURCES LTD. Notes to the Financial Statements Years Ended March 31, 2022 and 2021 (Expressed in Canadian dollars)

12. Income Taxes

The tax effect (computed by applying the Canadian federal and provincial statutory rate) of the significant temporary differences, which comprise deferred income tax assets and liabilities, are as follows:

follows:
	2022	2021
	$	$
Canadian andprovincial statutoryincome tax rate	27%	27%
Income tax provision (recovery) at statutory rate	(223,919)	23,050
Tax effect of:
Permanent differences and other	28,509	(1,822)
Change in unrecognized deferred income tax assets	195,410	(21,228)
Income taxprovision	–	–

The significant components of deferred income tax assets and liabilities are as follows:

	2022	2021
	$	$
Deferred income tax assets
Non-capital losses carried forward	483,327	473,362
Resource pools	446,397	262,003
Capital losses carried forward	4,613	4,613
Marketable securities	47,051	46,054
Property and equipment	2,704	2,650
Total gross deferred income tax assets	984,092	788,682
Unrecognized deferredincome taxassets	(984,092)	(788,682)
Net deferred income tax assets	–	–

As at March 31, 2022, the Company has non-capital losses carried forward of approximately $1,790,099 which are available to offset future years’ taxable income. These losses expire as follows:

	$
2026	98,003
2027	163,229
2028	148,726
2029	210,195
2030	156,990
2031	192,073
2032	220,869
2033	213,326
2034	113,786
2035	46,345
2036	24,967
2037	16,516
2038	39,748
2039	36,163
2040	35,397
2041	36,859
2042	36,907
	1,790,099

23

SILVER GRAIL RESOURCES LTD. Notes to the Financial Statements Years Ended March 31, 2022 and 2021 (Expressed in Canadian dollars)

12. Income Taxes (continued)

The Company also has available mineral resource related expenditure pools totalling $2,353,091 which may be deducted against future taxable income.

24