Silver Grail Resources Ltd. — Audit Report / Information 2023

Aug 1, 2023

Financial Statements Years Ended March 31, 2023 and 2022 (Expressed in Canadian dollars)

INDEPENDENT AUDITOR'S REPORT

To the Shareholders of: Silver Grail Resources Ltd.

Opinion

We have audited the financial statements of Silver Grail Resources Ltd. (the "Company"), which comprise the statement of financial position as at March 31, 2023 and the statements of loss and comprehensive loss, changes in shareholders' equity and cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as at March 31, 2023, and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards ("IFRS").

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 Financial Statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained 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 financial statements, which indicates that the Company incurred a net loss of $65,702 during the year ended March 31, 2023 and, as of that date, the Company's total deficit was $7,719,448. As stated in Note 1, these events or conditions, along with other matters as set forth in Note 1, indicate 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 Matters

The financial statements of Silver Grail Resources Ltd. for the year ended March 31, 2022 were audited by another auditor who expressed an unmodified opinion on those statements on July 27, 2022.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements for the year ended March 31, 2023. These matters were addressed in the context of our audit of the financial statements as a whole, prepared under the conditions mentioned above, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

In addition to the matter described in the Material Uncertainty Related to Going Concern section, we have determined the matters described below to be the key audit matters to be communicated in our auditor's report.

Assessment of Impairment of Exploration and Evaluation Assets

As described in Note 4 of the financial statements, the carrying amount of the Company's exploration and evaluation assets is $635,880 as at March 31, 2023 and includes $17,377 of impairment. As more fully described in Note 2 to the financial statements, management assesses for indicators of impairment at each statement of financial position date.

The assessment of impairment indicators of exploration and evaluation assets is identified as a key audit matter due to significant judgment made by management, which in turn led to additional auditor judgment, subjectivity, and effort in performing procedures to evaluate audit evidence relating to the judgments made by management in this area that

could give rise to the requirement to prepare an estimate of the recoverable amount of the exploration and evaluation assets.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the financial statements. Our audit procedures included, among others:

• Evaluating management's assessment of impairment indicators.
• Evaluating the intent for the exploration and evaluation assets through discussion and communication with management.
• Assessing compliance with agreements and expenditure requirements including reviewing option agreements.
• Obtaining, on a test basis through government websites, confirmation of title to ensure mineral rights underlying the exploration and evaluation assets are in good standing.

Other Information

Management is responsible for the other information. The other information comprises the Management Discussion and Analysis. Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

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

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

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

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

Auditor's Responsibilities for the Audit of the Financial Statements

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

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

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
• Conclude on the appropriateness of management's use of the going concern basis of accounting and, based

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

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

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

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

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

CHARTERED PROFESSIONAL ACCOUNTANTS Vancouver, BC July 31, 2023

Statements of Financial Position (Expressed in Canadian dollars)

	March 31,	March 31,
	2023	2022
	$	$
Assets
Current assets
CashMarketable securities (Note 3)AmountsreceivablePrepaid expenses	144,72839,0188933,195	65,73149,02316,5024,073
Total current assets	187,834	135,329
Non-current assets
Reclamation deposits (Note 4(d))Exploration and evaluation assets (Notes4and5)	2,500635,880	2,500699,767
Total non-current assets	638,380	702,267
Total assets	826,214	837,596
Liabilities
Current liabilities
Accounts payable and accrued liabilitiesDue to related parties (Note 5)	17,76025,501	14,4269,515
Total liabilities	43,261	23,941
Shareholders' equity
Share capital(Note 6)Share-based payment reserve(Notes 6 and7)Deficit	7,553,051949,350(7,719,448)	7,488,304979,097(7,653,746)
Total shareholders' equity	782,953	813,655
Total liabilities and shareholders' equity	826,214	837,596

Nature of operations and going concern (Note 1)

Approved and authorized for issuance on behalf of the Board on July 31, 2023:

/s/ "Dino Cremonese" /s/ "Robert Smiley"

Dino Cremonese, Director Robert Smiley, Director

Statements of Loss and Comprehensive Loss

(Expressed in Canadian dollars)

	Year ended	Year ended
	March 31,	March 31,
	2023	2022
	$	$
Expenses
Depreciation	–	198
Investor relations	–	1,321
Officeand miscellaneous	710	176
Professional fees	24,100	24,067
Share-based compensation (Note 7)	–	101,895
Transfer agent and regulatory fees	13,510	11,343
Total expenses	38,320	139,000
Loss before other expenses	(38,320)	(139,000)
Other expenses
Impairment of exploration and evaluation assets (Note 4)	(17,377)	(682,944)
Unrealized loss on marketable securities (Note 3)	(10,005)	(7,384)
Total other expenses	(27,382)	(690,328)
Net loss and comprehensive loss for the year	(65,702)	(829,328)
Loss per share, basic and diluted	–	(0.03)
Weighted average number of common shares outstanding	33,405,581	32,976,228

Statements of Changes in Shareholders' Equity

(Expressed in Canadian dollars)

	Share capital		Share-basedpayment		Totalshareholders'
	Numberofshares	Amount$	reserve$	Deficit$	equity$
Balance, March 31, 2021	32,674,622	7,425,304	877,202	(6,824,418)	1,478,088
Shares issued pursuant toexercise of share purchasewarrants	420,000	63,000	–	–	63,000
Fair value of stock optionsgranted	–	–	101,895	–	101,895
Net lossfor the year	–	–	–	(829,328)	(829,328)
Balance, March 31, 2022	33,094,622	7,488,304	979,097	(7,653,746)	813,655
Shares issued pursuant toexercise of stock options	500,000	64,747	(29,747)	–	35,000
Net loss for the year	–	–	–	(65,702)	(65,702)
Balance, March 31, 2023	33,594,622	7,553,051	949,350	(7,719,448)	782,953

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

Statements of Cash Flows

(Expressed in Canadian dollars)

	Year endedMarch 31,	Year endedMarch 31,
	2023	2022
	$	$
Operating activities
Netloss for the year	(65,702)	(829,328)
Items not involving cash:
Depreciation	–	198
Impairment of exploration and evaluation assets	17,377	682,944
Share-based compensation	–	101,895
Unrealized loss on marketable securities	10,005	7,384
Changes in non-cash operating working capitalitems:
Amounts receivable	10,060	(11,533)
Prepaid expenses	878	927
Accounts payable and accrued liabilities	3,334	(4,993)
Due to related parties	4,140	553
Net cash used in operating activities	(19,908)	(51,953)
Investing activities
Exploration and evaluation asset expenditures	(5,459)	(264,932)
Mineral property option payment proceeds / cost recoveries	69,364	32,761
Net cash provided by (used in)investing activities	63,905	(232,171)
Financing activities
Proceeds from issuance of shares	35,000	63,000
Net cash provided by financing activities	35,000	63,000
Changein cash	78,997	(221,124)
Cash, beginning of year	65,731	286,855
Cash, end of year	144,728	65,731

Supplemental cash flow information (Note 13)

Notes to the Financial Statements Years Ended March 31, 2023 and 2022 (Expressed in Canadian dollars)

1. Nature of Operations and Going Concern

Silver Grail Resources Ltd. (the "Company") was incorporated on April 18, 1980 under the Business Corporations Act of British Columbia. 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, V8S 2HS.

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. During the year ended March 31, 2023, the Company incurred a loss of $65,702 (2022 - $829,328), has no source of revenue and generated negative cash flows from operating activities. As at March 31, 2023 the Company has an accumulated deficit of $7,719,448 (2022 - $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 has not been significant, 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 ("IASB") and interpretations of the International Financial Reporting Interpretations Committee ("IFRIC") on a going concern basis.

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

(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.

Notes to the Financial Statements Years Ended March 31, 2023 and 2022 (Expressed in Canadian dollars)

2. Significant Accounting Policies (continued)

(b) Use of Estimates and Judgments (continued)

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 and share-based compensation. 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 loss 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 loss and comprehensive loss.

(e) 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 the statement of loss.

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.

Notes to the Financial Statements Years Ended March 31, 2023 and 2022 (Expressed in Canadian dollars)

2. Significant Accounting Policies (continued)

(e) Exploration and Evaluation Expenditures (continued)

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 loss and comprehensive loss.

(f) 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.

(g) 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 loss.

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 loss and comprehensive loss.

Notes to the Financial Statements Years Ended March 31, 2023 and 2022 (Expressed in Canadian dollars)

2. Significant Accounting Policies (continued)

(h) 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.

(i) 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 loss.

Fair value estimates are made at the statement of financial position date based on relevant market information and information about the financial instrument. All financial instruments are classified into either: FVTPL or amortized cost.

The Company has made the following classifications:

Cash	FVTPL
Marketable securities	FVTPL
Accounts payableand accrued liabilities	Amortized cost
Due to related parties	Amortized cost

Notes to the Financial Statements Years Ended March 31, 2023 and 2022 (Expressed in Canadian dollars)

2. Significant Accounting Policies (continued)

(i) Financial Instruments (continued)

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.

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 statement of loss. Loss allowances are based on the lifetime expected credit losses 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 statement of loss 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.

Notes to the Financial Statements Years Ended March 31, 2023 and 2022 (Expressed in Canadian dollars)

2. Significant Accounting Policies (continued)

(i) Financial Instruments (continued)

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.

(j) 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 loss 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.

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.

Notes to the Financial Statements Years Ended March 31, 2023 and 2022 (Expressed in Canadian dollars)

2. Significant Accounting Policies (continued)

(k) 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 loss and comprehensive loss with a pro-rata portion of the deferred premium.

(l) 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 loss and comprehensive loss.

(m) 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 Black-Scholes 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.

(n) 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, 2023, the Company had 877,000 (2022 – 2,527,000) potential dilutive shares outstanding.

Notes to the Financial Statements Years Ended March 31, 2023 and 2022 (Expressed in Canadian dollars)

2. Significant Accounting Policies (continued)

(o) 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, 2023, 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

	2022Fair value$	Additions$	Unrealizedgain(loss)$	2023Fair value$
Marketable securities	49,023	–	(10,005)	39,018
	2021		Unrealized	2022
	Fair value$	Additions$	gain(loss)$	Fair value$
Marketable securities	56,407	–	(7,384)	49,023

The Company holds equity securities in publicly traded companies. During the year ended March 31, 2023, the Company recorded an unrealized loss of $10,005 (2022 – $7,384) on marketable securities.

4. Exploration and Evaluation Assets

Exploration and evaluation assets consist of:

	Year endedMarch 31,2023$	Year endedMarch 31,2022$
Balance, beginning of year	699,767	1,067,650
Acquisitions	–	1,000
Assays	718	8,850
Drilling	4,791	95,813
Engineering	3,007	–
Geological and geophysical	8,443	20,839
Helicopters	1,752	154,046
Supplies and miscellaneous	1,296	41,091
Staking and filing fees	367	2,207
Travel and accommodations	2,480	23,976
	22,854	347,822
B.C. mineral exploration tax credit refund	(69,364)	(32,761)
Impairment of exploration and evaluation asset	(17,377)	(682,944)
Balance, end of year	635,880	699,767

Notes to the Financial Statements Years Ended March 31, 2023 and 2022 (Expressed in Canadian dollars)

4. Exploration and Evaluation Assets (continued)

(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 had 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 a 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 had the right to earn the Company and Teuton's 50% beneficial interest in the Clone Property. To earn this interest, Sky was required 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.

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 elected not to pursue the option agreement to earn the 50% interest. As at March 31, 2023, the Company owns 25% (2022 – 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.

(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 to earn its 50% interest, the Company issued 50,000 common shares with a fair value of $13,750 and paid $10,000 to the vendor. The vendor retains a 2% net smelter royalty ("NSR"), one-half of which can be purchased for $1,000,000 until 18 months following the commencement of commercial production.

Notes to the Financial Statements Years Ended March 31, 2023 and 2022 (Expressed in Canadian dollars)

4. Exploration and Evaluation Assets (continued)

• (a) Skeena Mining Division, British Columbia (continued)
  • (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 had the right to earn an undivided 100% ownership in the property. To earn this interest, Auramex issued 100,000 of its shares and paid 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).

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).

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

Upon the exercise of the option, the Company and Teuton retained a 2% 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.

(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 had 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 paid a total of $1,800,000 to Teuton over four years of which 3% was received by the Company.

Notes to the Financial Statements Years Ended March 31, 2023 and 2022 (Expressed in Canadian dollars)

4. Exploration and Evaluation Assets (continued)

• (a) Skeena Mining Division, British Columbia (continued)
  • (iv) Silver Crown West Claims (continued)

Teuton retains an NSR of 2% on the property.

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 were 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.

(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 had the right to earn an undivided 100% ownership in the property. To earn this interest, Auramex issued a total of 100,000 common shares and paid a total of $120,000 which was issued and paid equally to the Company and Teuton. During the year ended March 31, 2021, Auramex exercised the option and earned the 100% interest.

Upon the exercise of the option, the Company and Teuton will retain a 2% 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 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.

(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.

(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% NSR which may be purchased for $1,000,000 until 18 months following the commencement of commercial production.

Notes to the Financial Statements Years Ended March 31, 2023 and 2022 (Expressed in Canadian dollars)

4. Exploration and Evaluation Assets (continued)

(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. During the year ended March 31, 2023, a total of $17,377 (2022 - $nil) of the capitalized acquisition costs and exploration costs was written off.

(d) Reclamation Deposits

Guaranteed investment certificates (the "GICs") with principal amounts totalling $2,500 (2022 - $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

• (a) As at March 31, 2023, the amount of $22,498 was owed to (2022 $8,716) Teuton which is unsecured, non-interest bearing, secured by certain mineral properties owned jointly with the Company, and due on demand. During the year ended March 31, 2023, the Company incurred exploration and evaluation expenditures of $11,123 (2022 - $314,578) to Teuton.
• (b) As at March 31, 2023, the amount of $3,003 (2022 $799) was owed to the President of the Company, which is unsecured, 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, 2023:

On August 16, 2022, the Company issued 500,000 common shares for proceeds of $35,000 pursuant to the exercise of stock options. The fair value of $29,747 for the stock options exercised was transferred from share-based payment reserve to share capital.

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.

7. Stock Options

Effective June 10, 2022, the Company adopted a new fixed stock option plan to replace its old one which follows the TSX Venture Exchange ("TSX-V") policy under which it is authorized to grant options to officers, directors, and employees to acquire up to 3,309,462 stock options, which represents 10% of the total shares outstanding as of March 31, 2022. The stock option plan limits the number of incentive stock options which may be granted to any one individual to not more than 5% of the total issued shares of the Company in any 12-month period.

Notes to the Financial Statements Years Ended March 31, 2023 and 2022 (Expressed in Canadian dollars)

7. Stock Options (continued)

The number of incentive stock options granted to any one consultant or a person employed to provide investor relations activities in any 12-month period must not exceed 2% of the total issued shares of the Company. Under the plan, the exercise price of each stock option shall be fixed by the Board of Directors, but shall be not less than the minimum price permitted by the TSX-V. The stock options can be granted for a maximum term of 10 years and vest as determined by the Board of Directors.

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

	Numberof options	Weightedaverageexerciseprice$
Outstanding, March 31, 2021	1,650,000	0.07
Granted	877,000	0.15
Outstanding, March 31, 2022	2,527,000	0.10
ExercisedExpired	(500,000)(1,150,000)	0.070.07
Outstanding, March 31, 2023	877,000	0.15

Additional information regarding stock options outstanding as at March 31, 2023 is as follows:

	Outstanding and exercisable
	Weighted
Range of		Weighted average	average
exercise		remaining	exercise
prices	Number of	contractual life	price
$	options	(years)	$
0.15	877,000	3.29	0.15

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:

	2023	2022
Risk-free interest rate	–	0.98%
Expected life (in years)	–	5
Expected volatility	–	107%

The estimated fair value of the stock options granted during the year ended March 31, 2023 was $nil (2022 - $101,895) which was recorded as share-based compensation associated with related parties. The weighted average grant date fair value of stock options granted during the year ended March 31, 2022 was $0.12 per share.

Notes to the Financial Statements Years Ended March 31, 2023 and 2022 (Expressed in Canadian dollars)

8. Share Purchase Warrants

The following table summarizes the continuity of share purchase warrants:

	Number ofwarrants	Weightedaverageexerciseprice$
Balance, March 31, 2021	1,950,000	0.15
ExercisedExpired	(420,000)(1,530,000)	0.150.15
Balance, March 31, 2022and 2023	–	–

9. Financial Instruments and Risk Management

(a) Fair Values

Financial instruments that are measured subsequent to initial recognition at fair value are grouped in Levels 1 to 3 based on the degree to which the fair value is observable.

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, 2023 and 2022 as follows:

	Fair Value Measurements Using
	Quoted prices
	in active
	markets for	Significant other	Significant
	identical	observable	unobservable	Balance,
	instruments	inputs	inputs	March 31,
	(Level 1)	(Level 2)	(Level 3)	2023
	$	$	$	$
Cash	144,728	–	–	144,728
Marketable securities	39,018	–	–	39,018

	Fair Value Measurements Using
	Quoted prices
	in active
	markets for	Significant other	Significant
	identical	observable	unobservable	Balance,
	instruments	inputs	inputs	March 31,
	(Level 1)	(Level 2)	(Level 3)	2022
	$	$	$	$
Cash	65,731	–	–	65,731
Marketable securities	49,023	–	–	49,023

The fair values of other financial instruments, which include accounts payable and accrued liabilities, and amounts due to related parties, approximate their carrying values due to the nature and relatively short-term maturity of these instruments.

Notes to the Financial Statements Years Ended March 31, 2023 and 2022 (Expressed in Canadian dollars)

9. Financial Instruments and Risk Management (continued)

(b) Credit Risk

Credit risk is the risk of potential loss to the Company if the counterparty to a financial instrument fails to meet its contractual obligations. 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 Risk

Foreign exchange risk is the risk that the Company's financial instruments will fluctuate in value as a result of movements in foreign exchange rates. Foreign exchange risk arises from purchase transactions. The Company is not exposed to significant currency risk.

(d) Interest Rate Risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is not exposed to significant interest rate risk as it does not have any liabilities with variable rates.

(e) 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. The carrying values of the Company's accounts payables and accrued liabilities and due to related parties on the statement of financial position equal their contractual cash flows.

(f) 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, 2023.

11. Segmented Information

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

Notes to the Financial Statements Years Ended March 31, 2023 and 2022 (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:

$	2022$
(65,702)	(829,328)
(17,740)	(223,919)
1,71616,024	28,509195,410
–	–
2023$	2022$
427,790517,3654,61348,4021,946	483,327446,3974,61347,0512,704
1,000,116	984,092
(1,000,116)	(984,092)
–	–
	$
	54,081148,726210,195156,990192,073220,869213,326113,78646,34524,96716,51639,74836,16335,39736,90738,320
	2023The significant components of deferred income tax assets and liabilities are as follows:

The Company also has available mineral resource related expenditure pools totalling $2,552,047 (2022 – 2,598,557) which may be deducted against future taxable income.

1,584,409

Tax attributes are subject to review, and potential adjustment, by tax authorities.

Notes to the Financial Statements Years Ended March 31, 2023 and 2022 (Expressed in Canadian dollars)

13. Supplemental Cash Flow Information

Investing and financing activities that do not have a direct impact on current cash flows are excluded from the statement of cash flows.

For the year ended March 31, 2023:

• $29,747 was transferred from share-based payment reserve to share capital pursuant to the exercise of stock options.
• $5,549 was transferred from amounts receivable to exploration and evaluation assets.
• The Company had $11,846 in due to related parties relating to exploration and evaluation expenditures incurred during the year.

For the year ended March 31, 2022:

• $74,174 was transferred from due from related party to pay for exploration and evaluation expenditures incurred during the year.
• The Company had $8,716 in due to related parties relating to exploration and evaluation expenditures.