Silver Grail Resources Ltd. — Interim / Quarterly Report 2021

Nov 30, 2021

SILVER GRAIL RESOURCES LTD.

Condensed Financial Statements Six Months Ended September 30, 2021 (Expressed in Canadian dollars) (unaudited)

NOTICE OF NO AUDITOR REVIEW OF INTERIM FINANCIAL STATEMENTS

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

The Company’s external auditors, Manning Elliott LLP, have not performed a review of these condensed financial statements.

1

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

	September 30,	March 31,
	2021	2021
	$	$
	(unaudited)
Assets
Current assets
Cash	342,408	286,855
Marketable securities (Note 3)	43,934	56,407
Amounts receivable	16,131	4,969
Due from related party (Note 5)	–	74,174
Prepaid expenses	5,000	5,000
Total current assets	407,473	427,405
Non-current assets
Reclamation deposits (Note 4(d))	2,500	2,500
Property and equipment	130	198
Exploration and evaluation assets (Note 4)	1,385,421	1,067,650
Total non-current assets	1,388,051	1,070,348
Total assets	1,795,524	1,497,753
Liabilities
Current liabilities
Accounts payable and accrued liabilities	17,345	19,419
Due to related parties (Note 5)	254,829	246
Total liabilities	272,174	19,665
Shareholders’ equity
Share capital (Note 6)	7,488,304	7,425,304
Share-based payment reserve	979,097	877,202
Deficit	(6,944,051)	(6,824,418)
Total shareholders’equity	1,523,350	1,478,088
Total liabilities and shareholders’ equity	1,795,524	1,497,753

Going concern (Note 1)

Approved and authorized for issuance on behalf of the Board of Directors on November 29, 2021:

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

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

2

SILVER GRAIL RESOURCES LTD.

Condensed Statements of Operations and Comprehensive Income (Expressed in Canadian dollars) (unaudited)

	Three months	Three months	Six months	Six months
	ended	ended	ended	ended
	September 30,	September 30,	September 30,	September 30,
	2021	2020	2021	2020
	$	$	$	$
Expenses
Depreciation	18	16	67	33
Office and miscellaneous	1,457	172	1,496	182
Professional fees	–	6,000	–	6,000
Share-based compensation (Note 7)	101,895	–	101,895	–
Transfer agent and regulatory fees	3,057	7,049	3,701	8,590
Total expenses	106,427	13,237	107,159	14,805
Loss before other income (expense)	(106,427)	(13,237)	(107,159)	(14,805)
Other income (expense)
Option proceeds in excess of capitalized
costs (Note 5)	–	13,800	–	13,800
Unrealized gain (loss) on marketable
securities (Note 3)	(18,010)	13,447	(12,473)	29,804
Total other income (expense)	(18,010)	27,247	(12,473)	43,604
Net income (loss) and comprehensive
income(loss)for theperiod	(124,437)	14,010	(119,632)	28,799
Earning (loss) per share,basic and diluted	–	–	–	–
Weighted average number of common
shares outstanding	33,050,818	31,809,405	32,864,950	30,101,398

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

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SILVER GRAIL RESOURCES LTD.

Condensed Statements of Changes in Equity (Expressed in Canadian dollars) (unaudited)

	Share capital Share-based payment reserve $ Deficit $ Total shareholders’ equity $ Number of shares Amount $
Balance, March 31, 2021 Shares issued pursuant to exercise of share purchase warrants Fair value of stock options granted Netlossforthe period	32,674,622 7,425,304 877,202 (6,824,418) 1,478,088 420,000 63,000 – – 63,000 – – 101,895 – 101,895 – – – (119,632) (119,632)
Balance,September 30,2021	33,094,622 7,488,304 979,097 (6,944,051) 1,523,350
Balance, March 31, 2020 Shares issued for private placement Net income for the period	28,374,622 6,985,431 892,075 (6,909,788) 967,718 4,000,000 400,000 – – 400,000 – – – 28,799 28,799
Balance,September 30,2020	32,374,622 7,385,431 892,075 (6,880,989) 1,396,517

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

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SILVER GRAIL RESOURCES LTD. Condensed Statements of Cash Flows (Expressed in Canadian dollars) (unaudited)

	Six months	Six months
	ended	ended
	September 30,	September 30,
	2021	2020
	$	$
Operating activities
Net income (loss) for the period	(119,632)	28,799
Items not involving cash:
Depreciation	68	33
Option proceeds in excess of capitalized costs	–	(13,800)
Share-based compensation	101,895	–
Unrealized gain on marketable securities	12,473	(29,804)
Changes in non-cash operating working capital:
Amounts receivable	(11,162)	2,803
Prepaid expenses	–	(3,000)
Accounts payable and accrued liabilities	(2,074)	4,927
Due to/from relatedparties	6,282	(112,685)
Net cash used in operatingactivities	(12,150)	(122,727)
Investing activities
Exploration and evaluation asset expenditures	(14,899)	(60,398)
Mineral exploration tax credits received	19,602	10,000
Net cashprovided by (used in)investingactivities	4,703	(50,398)
Financing activities
Proceeds from issuance of shares	63,000	400,000
Net cashprovided byfinancingactivities	63,000	400,000
Change in cash	55,553	226,875
Cash,beginningofperiod	286,855	60,986
Cash, end ofperiod	342,408	287,861
Non-cash investing activities:
Fair value of marketable securities received as mineral property option
payments	–	3,800
Exploration and evaluation asset expenditures included in amount due to
relatedparty	320,937	–

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

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SILVER GRAIL RESOURCES LTD. Notes to the Condensed Financial Statements Six Months Ended September 30, 2021 (Expressed in Canadian dollars) (unaudited)

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 condensed 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 period ended September 30, 2021, has not generated any revenues and has negative cash flows from operating activities. As at September 30, 2021, the Company has an accumulated deficit of $6,944,051. 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 condensed 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

These condensed financial statements have been prepared in accordance with International Financial Reporting Standards applicable to interim financial information, as outlined in International Accounting Standard (“IAS”) 34, “Interim Financial Reporting” and using the accounting policies consistent with those in the audited financial statements as at and for the year ended March 31, 2021.

These interim condensed financial statements do not include all disclosures normally provided in annual financial statements and should be read in conjunction with the annual financial statements as at and for the year ended March 31, 2021. Interim results are not necessarily indicative of the results expected for the fiscal year.

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SILVER GRAIL RESOURCES LTD. Notes to the Condensed Financial Statements Six Months Ended September 30, 2021 (Expressed in Canadian dollars) (unaudited)

2. Significant Accounting Policies (continued)

• (b) Accounting Standards Issued But Not Yet Effective

A number of new standards, and amendments to standards and interpretations, are not yet effective for the period ended September 30, 2021, and have not been early adopted in preparing these condensed 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

	March 31,			September 30,
	2021		Unrealized	2021
	Fair value	Additions	loss	Fair value
	$	$	$	$
Marketable securities	56,407	–	12,473	43,934

The Company holds equity securities in publicly traded companies. During the six months ended September 30, 2021, the Company recorded an unrealized loss of $12,473 (2020 – unrealized gain of $29,804) on marketable securities.

4. Exploration and Evaluation Assets

Exploration and evaluation assets consist of:

Exploration and evaluation assets consist of:
	Six months
	ended	Year ended
	September 30,	March 31,
	2021	2021
	$	$
Balance, beginning of period	1,067,650	1,001,854
Acquisitions	4,750	–
Assays	2,375	–
Field work	95,813	15,806
Geological and geophysical	15,891	43,340
Helicopters	154,046	2,308
Prospecting, staking and filing fees	1,840	–
Supplies and miscellaneous	37,676	1,244
Travel and accommodations	24,982	3,098
	337,373	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	(19,602)	–
Balance,end ofperiod	1,385,421	1,067,650

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SILVER GRAIL RESOURCES LTD. Notes to the Condensed Financial Statements Six Months Ended September 30, 2021 (Expressed in Canadian dollars) (unaudited)

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 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.

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.

• (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.

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SILVER GRAIL RESOURCES LTD. Notes to the Condensed Financial Statements Six Months Ended September 30, 2021 (Expressed in Canadian dollars) (unaudited)

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 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).

(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:

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SILVER GRAIL RESOURCES LTD. Notes to the Condensed Financial Statements Six Months Ended September 30, 2021 (Expressed in Canadian dollars) (unaudited)

4. Exploration and Evaluation Assets (continued)

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

• (iv) Silver Crown West Claims (continued)

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.

• (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).

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SILVER GRAIL RESOURCES LTD. Notes to the Condensed Financial Statements Six Months Ended September 30, 2021 (Expressed in Canadian dollars) (unaudited)

4. Exploration and Evaluation Assets (continued)

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

• (v) Silver Crown Property (continued)

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.

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 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.

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SILVER GRAIL RESOURCES LTD. Notes to the Condensed Financial Statements Six Months Ended September 30, 2021 (Expressed in Canadian dollars) (unaudited)

5. Related Party Transactions

• (a) As at September 30, 2021, the amount of $248,585 was owed to (March 31, 2021 - $74,174 was 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 September 30, 2021, the amount of $6,244 (March 31, 2021 - $246) was owed to the President of the Company, which is non-interest bearing, unsecured, and due on demand.

6. Share Capital

During the period ended September 30, 2021, the Company issued 420,000 common shares for proceeds of $63,000 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, 2021	1,650,000	0.07
Granted	877,000	0.15
Outstanding,September 30,2021	2,527,000	0.10

Additional information regarding stock options outstanding as at June 30, 2021 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 1.0 0.07 877,000 4.8 0.15
	2,527,000 2.3 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:
	Six months	Six months
	ended	ended
	September 30,	September 30,
	2021	2020
Risk-free interest rate	0.98%	–
Expected life (in years)	5	–
Expected volatility	107%	–

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SILVER GRAIL RESOURCES LTD. Notes to the Condensed Financial Statements Six Months Ended September 30, 2021 (Expressed in Canadian dollars) (unaudited)

7. Stock Options (continued)

The total fair value of the stock options granted during the six months ended September 30, 2021 was $101,895 (2020 – $nil), which was recorded as share-based payment reserve and charged to operations.

8. Share Purchase Warrants

The following table summarizes the continuity of share purchase warrants:

		Weighted
		average
		exercise
	Number of	price
	warrants	$
Balance, March 31, 2021	1,950,000	0.15
Expired	(1,530,000)	0.15
Exercised	(420,000)	0.15
Balance,September 30,2021	–	–

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