A copy of this amended and restated preliminary prospectus has been filed with the securities regulatory authorities in each of the provinces of Canada other than Québec, but has not yet become final for the purpose of the sale of securities. Information contained in this amended and restated preliminary prospectus may not be complete and may have to be amended. The securities may not be sold until a receipt for the prospectus is obtained from the securities regulatory authorities.

No securities regulatory authority has expressed an opinion about these securities and it is an offence to claim otherwise. This amended and restated prospectus constitutes a public offering of these securities only in those jurisdictions where they may be lawfully offered for sale and therein only by persons permitted to sell such securities. The securities offered hereunder have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the " U.S. Securities Act "), or any state securities laws. Accordingly, these securities may not be offered or sold in the United States or to, or for the account or benefit of, U.S. Persons, as such term is defined in Regulation S under the U.S. Securities Act, unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration requirements is available. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any of these securities within the United States. See "Plan of Distribution".

AMENDED AND RESTATED PRELIMINARY PROSPECTUS

(amending and restating the amended and restated preliminary prospectus dated November 18, 2021 and the preliminary prospectus dated October 18, 2021)

Initial Public Offering

January 7, 2022

==> picture [182 x 182] intentionally omitted <==

SILVER MOUNTAIN RESOURCES INC.

$15,000,000

⚫ Units

Silver Mountain Resources Inc. (" SMR " or the " Company ") is hereby qualifying for distribution (the " Offering ") ⚫ units (" Units ") at a price of $⚫ per Unit (the " Offering Price "). It is anticipated that the Offering Price will be between $0.50 and $0.55 per Unit, and that between 27,272,727 and 30,000,000 Units will be sold by the Company pursuant to the Offering. The Offering is being underwritten by Eight Capital (" Eight Capital "), Sprott Capital Partners LP (" Sprott " and together with Eight Capital, the " CoLead Underwriters ") and Research Capital Corporation (collectively with the Co-Lead Underwriters, the " Underwriters " and each, an " Underwriter "), pursuant to an underwriting agreement between the Company and the Underwriters dated ⚫, 2022 (the " Underwriting Agreement ").

Each Unit is comprised of one Common Share (as defined herein) of the Company (a " Unit Share ") and one half of one Common Share purchase warrant of the Company (each whole Common Share purchase

ii -

warrant, a " Warrant "). Each Warrant will be exercisable into one Common Share (each, a " Warrant Share ") at a price of $⚫ per Warrant Share at any time prior to 5:00 p.m. (Toronto time) on the date that is ⚫ following the Closing (as defined herein) (the " Warrant Expiry Date "), subject to adjustments in certain events. It is anticipated that the exercise price of the Warrants will be between $0.65 and $0.70 per Warrant Share. The Warrants will be governed by a Warrant Indenture (as defined herein) to be entered into on the Closing Date (as defined herein) between the Company and Marrelli Trust Company Limited, as warrant agent. The Units will immediately separate into Unit Shares and Warrants upon issuance. See " Description of Securities Being Distributed ".

There is currently no market through which the Unit Shares or Warrants may be sold, and purchasers may not be able to resell Unit Shares or Warrants purchased under this prospectus. This may affect the pricing of the Unit Shares and Warrants in the secondary market, the transparency and availability of trading prices, the liquidity of the Unit Shares and Warrants, and the extent of issuer regulation. See "Risk Factors".

As of the date of this prospectus, the Company does not have any of its securities listed or quoted, has not applied to list or quote any of its securities, and does not intend to apply to list or quote any of its securities on the Toronto Stock Exchange, Aequitas NEO Exchange Inc., a U.S. marketplace or a marketplace outside Canada and the United States (other than the Alternative Investment Market of the London Stock Exchange or the PLUS markets operated by PLUS Markets Group plc.).

The Company has applied to list the Common Shares (including the Unit Shares and Warrant Shares) on the TSX Venture Exchange (the " TSXV "). Listing will be subject to the Company fulfilling all of the initial listing requirements and conditions of the TSXV, including prescribed distribution and financial requirements and there is no assurance such a listing will be obtained. Closing of the Offering (" Closing ") is conditional upon the Common Shares being approved for listing on the TSXV. See " Plan of Distribution ."

In connection with the Offering, subject to applicable laws, the Underwriters may over-allot or effect transactions that stabilize or maintain the market price of the Common Shares at levels other than those which otherwise might prevail on the open market. Such transactions, if commenced, may be discontinued at any time. See "Plan of Distribution".

⚫ per Unit

Per Unit Total(4)	Price to the Public(1) $⚫ $⚫	Underwriters' Fee(2) $⚫ $⚫	Net Proceeds to the Company(3)
			$⚫ $⚫

Notes:

(1) The Offering Price will be determined by arm's length negotiation between the Company and the Underwriters. (2) After deducting the Underwriters' fee equal to 6.0% of the gross proceeds of the Offering (the "Underwriters' Fee"), assuming no sales are made under the President's List Allocation (as defined herein). See "Plan of Distribution". (3) Before deducting expenses of the Offering, estimated to be $0.8 million, which the Company will pay from the proceeds of the Offering.

(4) The Underwriters have been granted an over-allotment option, exercisable, in whole or in part, at the sole discretion of the Underwriters, for a period of 30 days from and including the Closing Date, to purchase an additional number of Units (the "Underwriters' Option Units"), Common Shares (the "Underwriters' Option Shares") and/or Warrants (the "Underwriters' Option Warrants") as is equal to 15% of the Units sold pursuant to the Offering to cover the Underwriters' over-allocation position, if any, and for market stabilization purposes (the "Over-Allotment Option"). The Over-Allotment Option may be exercised by the Underwriters in respect of: (i) additional Underwriters' Option Units at the Offering Price; (ii) Underwriters' Option Shares at a price of $⚫ per Underwriters' Option Share; (iii) Underwriters' Option

iii -

Warrants at a price of $⚫ per Underwriters' Option Warrant; or (iv) any combination of Underwriters' Option Shares and/or Underwriters' Option Warrants, provided, in each case, that the aggregate number of Underwriters' Option Shares and Underwriters' Option Warrants that may be issued under the Over-Allotment Option does not exceed 15% of the number of Units issued under the Offering. If the Over-Allotment Option is exercised in Units in full, the total " Price to the Public ", " Underwriters' Fee " and " Net Proceeds to the Company " will be $⚫, $⚫ and $⚫, respectively (assuming no sales are made under the President's List Allocation). This prospectus qualifies the distribution of the Over-Allotment Option and the Underwriters' Option Units, Underwriters' Option Shares and/or Underwriters' Option Warrants, if any, issued upon exercise thereof. A purchaser who acquires Underwriters' Option Units, Underwriters' Options Shares and/or Underwriters' Option Warrants forming part of the Underwriters' over-allotment position acquires those Underwriters' Option Units, Underwriters' Option Shares and/or Underwriters' Option Warrants, as applicable, under this prospectus, regardless of whether the over-allotment position is ultimately filled through the exercise of the " Over-Allotment Option or secondary market purchases. See " Plan of Distribution .

Unless the context otherwise requires, references to "Units", "Unit Shares", "Warrants" and "Warrant Shares" in this prospectus include the Underwriters' Option Units, Underwriters' Option Shares, Underwriters' Option Warrants and Underwriters' Option Warrant Shares.

The Company is a mineral exploration and development focused company and its principal property, the Castrovirreyna Project (as defined herein), is in the mineral exploration or development stage only. The degree of risk increases substantially where an issuer's properties are in the mineral exploration or development stages as opposed to the operational stage. An investment in the Units is speculative and involves a high degree of risk and should only be made by persons who can afford the total loss of their investment. Prospective investors should consider certain risk factors in connection with an investment in the Company. See "Statement Regarding Forward-Looking Information" and "Risk Factors".

The following table sets out the number of Units, Unit Shares and Warrants that may be sold by the Company pursuant to the Over-Allotment Option.

Underwriters' Position Over-Allotment Option	Maximum Size ⚫ Underwriters' Option Units or ⚫ Underwriters' Option Shares or⚫ Underwriters' Option Warrants	Exercise Period Up to 30 days from and including the Closing Date	Exercise Price
			$⚫ per Underwriters' Option Unit $⚫ per Underwriters' Option Share $⚫ per Underwriters' Option Warrant

The Underwriters, as principals, hereby conditionally offer the Units, subject to prior sale, if, as and when issued by the Company and accepted by the Underwriters in accordance with the conditions contained in the Underwriting Agreement referred to under "Plan of Distribution" and subject to the approval of certain legal and tax matters on behalf of the Company by Dentons Canada LLP and on behalf of the Underwriters by Bennett Jones LLP. The Underwriters may offer the Units at a lower price than stated above. Such reduced price sales will not affect the net proceeds to be received by the Company under the Offering. See "Plan of Distribution".

Subscriptions for the Units to be sold pursuant to the Offering will be received subject to rejection or allotment in whole or in part and the right is reserved to close the subscription books at any time without notice. It is expected that Closing will take place on or about ⚫, 2022, or such later date as the Company and the Underwriters may agree, but in any event, on or before a date that is not later than 42 days after the date of the receipt for the (final) prospectus (the date on which Closing occurs being the " Closing Date ").

iv -

It is anticipated that the Company will arrange for one or more instant deposits of the Unit Shares and Warrants issued hereunder to or for the account of the Underwriters with CDS Clearing and Depository Services Inc. (" CDS ") or its nominee through the non-certificated inventory system administered by CDS on the Closing Date. A purchaser of Units will receive only a customer confirmation from a registered dealer that is a CDS participant and from or through which the Units are purchased. No certificates will be issued to purchasers except in limited circumstances. See "Plan of Distribution".

Julio Jose Arce-Ortiz, Alfredo Plenge Thorne and Alfredo Bazo, each a director of the Company, reside outside of Canada and have appointed Dentons Canada LLP, 77 King Street West, Suite 400, Toronto, Ontario M5K 0A1, as their agent for service of process in Canada. Purchasers are advised that it may not be possible for investors to enforce judgments obtained in Canada against any person or company that is incorporated, continued or otherwise organized under the laws of a foreign jurisdiction or resides outside of Canada, even if the party has appointed an agent for service of process. Although Victoria Vargas and Bryan Coates have been conditionally elected to the Board (as defined herein), as such individuals are not directors of the Company as of the date hereof, such individuals will not be liable for the disclosure contained in this prospectus.

The Company's head and registered office is located at 82 Richmond Street East, Toronto, Ontario M5C 1P1.

PAGE

GLOSSARY ................................................................................................................................ 1 ABOUT THIS PROSPECTUS ..................................................................................................... 7 MEANING OF CERTAIN REFERENCES ................................................................................... 7 STATEMENT REGARDING FORWARD-LOOKING INFORMATION ......................................... 8 EXCHANGE RATE INFORMATION ......................................................................................... 10 SCIENTIFIC AND TECHNICAL INFORMATION ....................................................................... 11 LIST OF ABBREVIATIONS....................................................................................................... 12 ELIGIBILITY FOR INVESTMENT ............................................................................................. 12 MARKETING MATERIALS ....................................................................................................... 13 PROSPECTUS SUMMARY ...................................................................................................... 15 CORPORATE STRUCTURE .................................................................................................... 23 GENERAL DEVELOPMENT AND BUSINESS OF THE COMPANY ......................................... 23 CASTROVIRREYNA PROJECT ............................................................................................... 27 DOING BUSINESS IN PERU .................................................................................................... 49 USE OF PROCEEDS ............................................................................................................... 59 PLAN OF DISTRIBUTION ........................................................................................................ 62 SELECTED FINANCIAL INFORMATION.................................................................................. 65 MANAGEMENT'S DISCUSSION AND ANALYSIS ................................................................... 66 DESCRIPTION OF SECURITIES BEING DISTRIBUTED ......................................................... 82 DIVIDEND POLICY .................................................................................................................. 84 CAPITALIZATION ..................................................................................................................... 84 OPTIONS TO PURCHASE SECURITIES ................................................................................. 84 PRIOR SALES .......................................................................................................................... 87 ESCROWED SECURITIES AND SECURITIES SUBJECT TO CONTRACTUAL RESTRICTION ON TRANSFER ........................................................................................................................ 87 PRINCIPAL HOLDERS OF SECURITIES ................................................................................. 89 DIRECTORS AND EXECUTIVE OFFICERS ............................................................................ 89 DIRECTOR AND EXECUTIVE COMPENSATION .................................................................... 95 AUDIT COMMITTEE................................................................................................................. 99 STATEMENT ON CORPORATE GOVERNANCE .................................................................. 101 RISK FACTORS ..................................................................................................................... 107 CERTAIN CANADIAN FEDERAL INCOME TAX CONSIDERATIONS .................................... 126 LEGAL PROCEEDINGS AND REGULATORY ACTIONS ...................................................... 130

vi -

INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS .................. 130 AUDITORS, TRANSFER AGENT AND REGISTRAR ............................................................. 131 MATERIAL CONTRACTS ....................................................................................................... 131 EXPERTS ............................................................................................................................... 131 PROMOTER ........................................................................................................................... 132 PURCHASERS' STATUTORY RIGHTS OF RESCISSION ..................................................... 132 APPENDIX "A" AUDIT COMMITTEE CHARTER ................................................................... A-1 FINANCIAL STATEMENTS .................................................................................................... F-1 CERTIFICATE OF THE COMPANY ....................................................................................... C-1 CERTIFICATE OF THE PROMOTER ..................................................................................... C-2 CERTIFICATE OF THE UNDERWRITERS ............................................................................ C-3

GLOSSARY

In this prospectus, the following capitalized terms have the following meanings, in addition to other terms defined elsewhere in this prospectus.

" " AAS " has the meaning ascribed to such term under the heading " Castrovirreyna Project .

" allowable capital loss " has the meaning ascribed to such term under the heading "Certain Canadian Federal Income Tax Considerations – Capital Gains and Capital Losses" .

" Available Funds " has the meaning ascribed to such term under the heading "Use of Proceeds".

" Board " means the board of directors of the Company.

" CBCA " means the Canada Business Corporations Act .

" Castrovirreyna Project " means the mineral project of SMR Peru located near the town of Castrovirreyna, department of Huancavelica, province of Castrovirreyna, Peru.

" Castrovirreyna Technical Report " means the technical report entitled "National Instrument 43-101 Technical Report – Castrovirreyna Project, Peru", dated October 6, 2021 and amended November 18, 2021 with an effective date of August 17, 2021, prepared by Antonio Cruz Bermudez.

" CDS " has the meaning ascribed to such term on the cover page of this prospectus.

" " Certimin Lima " has the meaning ascribed to such term under the heading " Castrovirreyna Project .

" Change of Control " has the meaning ascribed to such term under the heading "Options to Purchase Securities – Stock Option Plan" .

" CIM Definition Standards " means the Canadian Institute of Mining, Metallurgy and Petroleum Definition Standards for Mineral Resources and Mineral Reserves adopted by CIM Council on May 10, 2014, which are incorporated by reference in NI 43-101.

" Closing " has the meaning ascribed to such term on the cover page of this prospectus.

" Closing Date " has the meaning ascribed to such term on the cover page of this prospectus.

" Co-Lead Underwriters " has the meaning ascribed to such term on the cover page of this prospectus.

" CMC " has the meaning ascribed to such term under the heading " Management's Discussion and Analysis ".

" Code " means the Code of Ethical Business Conduct of the Company.

" Common Shares " means the class A common shares in the capital of the Company.

" Corporación Minera Castrovirreyna " was a mining and metals corporation in Peru, which previously operated the mine infrastructure of the Castrovirreyna Project from 2005-2015.

" CRA " has the meaning ascribed to such term under the heading "Certain Canadian Federal Income Tax Considerations" .

" Deep Sounding Geophysics " refers to the company Deep Sounding E.I.R.L.

" DDH " means diamond drill hole.

" EIA " has the meaning ascribed to such term under the heading " Castrovirreyna Project ".

" Eight Capital " has the meaning ascribed to such term on the cover page of this prospectus.

" Eligible Person " has the meaning ascribed to such term under the heading "Options to Purchase Securities – Stock Option Plan" .

" Equity Financing " has the meaning ascribed to such term under the heading "General Development and Business of the Company — Project Acquisition and Financing".

" Escrow Agent " means Marrelli Trust Company Ltd.

" Escrow Agreement " has the meaning ascribed to such term under the heading "Escrowed Securities and Securities Subject to Contractual Restriction on Transfer" .

" Escrow Policy " has the meaning ascribed to such term under the heading "Escrowed Securities and Securities Subject to Contractual Restriction on Transfer" .

" Escrowed Securities " has the meaning ascribed to such term under the heading "Escrowed Securities and Securities Subject to Contractual Restriction on Transfer" .

" General Mining Law " has the meaning ascribed to such term under the heading " Doing Business in Peru – Peruvian Mining Regulations ".

" Holder " has the meaning ascribed to such term under the heading "Certain Canadian Federal Income Tax Considerations" .

" IFRS " means the International Financial Reporting Standards as issued by the International Accounting Standards Board and interpretations of the International Financial Reporting Interpretations Committee and the former Standing Interpretations Committee.

" INGEMMET " has the meaning ascribed to such term under the heading " Doing Business in Peru – Foreign Investments in Mining ".

" Interim MD&A " has the meaning ascribed to such term under the heading " Management's Discussion and Analysis "

" IP " has the meaning ascribed to such term under the heading " Castrovirreyna Project ".

" IT " has the meaning ascribed to such term under the heading " Doing Business in Peru – Main Taxation Provisions and Foreign Exchange Controls ".

" ITAN " has the meaning ascribed to such term under the heading " Doing Business in Peru – Main Taxation Provisions and Foreign Exchange Controls ".

" Listing Date " means the date on which the Common Shares are listed for trading on the TSXV.

" MD&A " means management's discussion and analysis of the Company contained in this prospectus.

" Meeting " has the meaning ascribed to such term under the heading " General Development and Business of the Company – Special Shareholder Meeting and Share Split ".

" MINEM " has the meaning ascribed to such term under the heading " Castrovirreyna Project ".

" Mining Stability Agreements " has the meaning ascribed to such term under the heading " Doing Business in Peru – Sectorial Stability Agreements – Mining Stability Agreements ".

" NEO " means "named executive officer", as such term is defined in National Instrument 51-102 — Continuous Disclosure Obligations.

" NGOs " has the meaning ascribed to such term under the heading "Risk Factors – Social and environmental activism can negatively impact exploration, development and mining activities" .

" Non-Resident Holders " has the meaning ascribed to such term under the heading "Certain Canadian Federal Income Tax Considerations – Non-Residents of Canada" .

" Non-Voting Shares " has the meaning ascribed to such term under the heading "Description of Securities Being Distributed" .

" NI 43-101 " means National Instrument 43-101 — Standards of Disclosure for Mineral Projects.

" NI 52-110 " means National Instrument 52-110 — Audit Committees.

" NP 46-201 " means National Policy 46-201 – Escrow for Initial Public Offerings .

" NP 58-201 " means National Policy 58-201 – Corporate Governance Guidelines .

" OEFA " has the meaning ascribed to such term under the heading " Doing Business in Peru – Environmental Regulations ".

" Offering " has the meaning ascribed to such term on the cover page of this prospectus.

" Offering Price " has the meaning ascribed to such term on the cover page of this prospectus.

" Offtake Agreement " has the meaning ascribed to such term under the heading "General Development and Business of the Company – Offtake Agreement" .

" Option " means an option issued pursuant to the Stock Option Plan.

" Order " has the meaning ascribed to such term under the heading "Directors and Officers – Cease Trade Orders, Bankruptcies, Penalties or Sanctions" .

" Over-Allotment Option " has the meaning ascribed to such term on the cover page of this prospectus.

" PAD " has the meaning ascribed to such term under the heading " Castrovirreyna Project ".

" President's List Allocation " has the meaning ascribed to such term under the heading "Plan of Distribution" .

" Qualified Institutional Buyer " has the meaning ascribed to such term under the heading "Plan of Distribution" .

" Qualified Person " means Antonio Cruz Bermudez, MAIG 7065.

" RDSP " has the meaning ascribed to such term under the heading "Eligibility for Investment" .

" Real Eagle Explorations " refers to the company Real Eagle Explorations E.I.R.L.

" Registered Plan " has the meaning ascribed to such term under the heading "Eligibility for Investment" .

" Reliquias mine " refers to an underground mine that consists of ventilation system, water pumping system, explosives magazine, and mining equipment, operated under a portion of the Castrovirreyna Project.

" Resident Holder " has the meaning ascribed to such term under the heading "Certain Canadian Federal Income Tax Considerations – Residents of Canada" .

" RESP " has the meaning ascribed to such term under the heading "Eligibility for Investment" .

" RRIF " has the meaning ascribed to such term under the heading "Eligibility for Investment" .

" RRSP " has the meaning ascribed to such term under the heading "Eligibility for Investment" .

" SEDAR " means the System for Electronic Document Analysis and Retrieval, which may be accessed at www.sedar.com.

" Share Exchange Agreement " has the meaning ascribed to such term under the heading "Corporate Structure" .

" Share Split " has the meaning ascribed to such term under the heading " General Development and Business of the Company – Special Shareholder Meeting and Share Split ".

" Shareholders' Agreement " has the meaning ascribed to such term under the heading "Corporate Structure" .

" Shares " has the meaning ascribed to such term under the heading "Certain Canadian Federal Income Tax Considerations" .

" SMR " or the " Company " means Silver Mountain Resources Inc.

" SMR Peru " has the meaning ascribed to such term under the heading "Prospectus Summary" .

" SMR Peru Acquisition " has the meaning ascribed to such term under the heading "General Development and Business of the Company – Project Acquisition and Financing" .

" Sprott " has the meaning ascribed to such term on the cover page of this prospectus.

" Stability Agreements " has the meaning ascribed to such term under the heading " Doing Business in Peru – General Stability Agreements ".

" Stock Option Plan " means the stock option plan adopted by the Board on September 17, 2021, as amended from time to time.

" SUNAT " has the meaning ascribed to such term under the heading " Doing Business in Peru – Main Taxation Provisions and Foreign Exchange Controls ".

" Tax Act " means the Income Tax Act (Canada), as amended, together with the regulations thereunder.

" Tax Proposal " has the meaning ascribed to such term under the heading "Certain Canadian Federal Income Tax Considerations" .

" taxable capital gain " has the meaning ascribed to such term under the heading "Certain Canadian Federal Income Tax Considerations – Capital Gains and Capital Losses" .

" TFSA " has the meaning ascribed to such term under the heading "Eligibility for Investment" .

" Trafigura " refers to Trafigura Beheer BV.

" Trafigura Peru " has the meaning ascribed to such term under the heading "General Development and Business of the Company – Offtake Agreement" .

" Canada-U.S. Treaty " has the meaning ascribed to such term under the heading "Certain Canadian Federal Income Tax Considerations – Non-Residents of Canada" .

"TSF" has the meaning ascribed to such term under the heading "Castrovirreyna Project" .

" TSXV " means the TSX Venture Exchange.

" Underwriters " or " Underwriter " has the meaning ascribed to such term on the cover page of this prospectus.

" Underwriters' Fee " has the meaning ascribed to such term on the cover page of this prospectus.

" Underwriters' Option Shares " has the meaning ascribed to such term on the cover page of this prospectus.

" Underwriters' Option Units " has the meaning ascribed to such term on the cover page of this prospectus.

" Underwriters' Option Warrants " has the meaning ascribed to such term on the cover page of this prospectus.

" Underwriters' Option Warrant Shares " has the meaning ascribed to such term on the cover page of this prospectus.

" Underwriting Agreement " has the meaning ascribed to such term on the cover page of this prospectus. " Unit Share " has the meaning ascribed to such term on the cover page of this prospectus.

" Units " has the meaning ascribed to such term on the cover page of this prospectus.

" US Dollars " or " US$ " means the currency of the United States of America.

" U.S. Accredited Investor " has the meaning ascribed to such term under the heading "Plan of Distribution" .

" U.S. Holder " has the meaning ascribed to such term under the heading "Certain Canadian Federal Income Tax Considerations – Non-Residents of Canada" .

" U.S. Person " has the same meaning as ascribed to such term in Regulation S under the U.S. Securities Act.

" U.S. Securities Act " has the meaning ascribed to such term on the cover page of this prospectus.

" VAT " means value added tax.

" Warrant " has the meaning ascribed to such term on the cover page of this prospectus.

" Warrant Agent " has the meaning ascribed to such term under the heading "Description of Securities Being Distributed – Warrants" .

" Warrant Expiry Date " has the meaning ascribed to such term on the cover page of this prospectus.

" Warrant Indenture " has the meaning ascribed to such term under the heading "Description of Securities Being Distributed – Warrants" .

" Warrant Share " has the meaning ascribed to such term on the cover page of this prospectus.

ABOUT THIS PROSPECTUS

An investor should rely only on the information contained in this prospectus and is not entitled to rely on parts of the information contained in this prospectus to the exclusion of others. The Company has not, and the Underwriters have not, authorized anyone to provide investors with additional or different information.

Unless otherwise indicated, the information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or any sale of the Units. The Company's business, financial condition, operating results and prospects may have changed since the date of this prospectus.

The Company is not, and the Underwriters are not, offering to sell the Units in any jurisdiction where the offer or sale of such securities is not permitted. For investors outside Canada, none of the Company or any of the Underwriters has done anything that would permit the Offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in Canada. Investors are required to inform themselves about, and to observe, any restrictions relating to the Offering and the possession or distribution of this prospectus.

Any graphs, tables, pictures or other information demonstrating the historical performance or current or historical attributes of the Company or any other entity contained in this prospectus are intended only to illustrate past performance or current or historical attributes of such entities and are not necessarily indicative of future performance of the Company or such entities.

Unless otherwise indicated, all information in this prospectus assumes that the Over-Allotment Option has not been exercised and that no sales are made under the President's List Allocation.

Unless otherwise indicated, references to "this prospectus" refer to this amended and restated preliminary prospectus.

MEANING OF CERTAIN REFERENCES

Unless otherwise noted or the context otherwise indicates, "SMR" or the "Company" refers to Silver Mountain Resources Inc. and its subsidiary as constituted on the date of this prospectus. Unless the context otherwise requires, references to "Units", "Unit Shares", "Warrants" and "Warrant Shares" in this prospectus include the Underwriters' Option Units, Underwriters' Option Shares, Underwriters' Option Warrants and Underwriters' Option Warrant Shares issuable on exercise of the Over-Allotment Option.

All dollar amounts in this prospectus are expressed in Canadian dollars, except as otherwise indicated. References to "$" or "dollars" are to Canadian dollars and references to "US$" are to United States dollars.

Unless otherwise noted or the context otherwise indicates, all references to a Common Share or Common Shares throughout this prospectus are references to such Common Shares on a post-Share Split basis after giving effect to the Share Split.

STATEMENT REGARDING FORWARD-LOOKING INFORMATION

This prospectus contains "forward-looking information" within the meaning of applicable Canadian securities laws. Forward-looking information includes statements that use forward-looking terminology such as "may", "could", "would", "will", "intend", "plan", "expect", "budget", "estimate", "forecast", "schedule", "anticipate", "believe", "continue", "potential" or the negative or grammatical variation thereof or other variations thereof or comparable terminology. Such forward-looking information includes, without limitation, statements with respect to targeting Mineral Resources and expansion of deposits; the Company's expectations, strategies and plans for the Castrovirreyna Project, including the Company's planned exploration and development activities; the results of future exploration and drilling and estimated completion dates for certain milestones; successfully adding or upgrading Mineral Resources and successfully developing new deposits; the costs and timing of future exploration and development; commencement of production at the Castrovirreyna Project, the timing and amount of future production at the Castrovirreyna Project, and the capacity of the Castrovirreyna Project to process production; the timing, receipt and maintenance of approvals, licences and permits from the national government, from Peruvian government agencies and from any other applicable government, regulator or administrative body; future financial or operating performance and condition of the Company and its business, operations and properties; the intended use of the net proceeds of the Offering; and any other statement that may predict, forecast, indicate or imply future plans, intentions, levels of activity, results, performance or achievements.

Forward-looking information is not a guarantee of future performance and is based upon a number of estimates and assumptions of management, in light of management's experience and perception of trends, current conditions and expected developments, as well as other factors that management believes to be relevant and reasonable in the circumstances, as of the date of this prospectus including, without limitation, assumptions about: favourable equity and debt capital markets; the ability to raise any necessary additional capital on reasonable terms to advance the development of the Castrovirreyna Project and pursue planned exploration; future prices of silver and other metal prices; the success of proposed diamond drill hole and other exploration programs; the timing and results of exploration and drilling programs; the timely receipt of required environmental and social permits related to exploration, plant refurbishment, the preparation of the tailings dam for expansion; the accuracy of any Mineral Resource estimates; the geology of the Castrovirreyna Project being as described in the Castrovirreyna Technical Report; the metallurgical characteristics of the Castrovirreyna Project being suitable for mineral production; the successful operation of the Castrovirreyna Project; the timely delivery of required equipment and supplies; production costs; the accuracy of budgeted exploration and development costs and expenditures, including to complete development of the infrastructure at the Castrovirreyna Project; the price of other commodities such as fuel; future currency exchange rates and interest rates; operating conditions being favourable, including whereby the Company is able to operate in a safe, efficient and effective manner; political and regulatory stability; the receipt of governmental and third party approvals, licences and permits on favourable terms; obtaining required renewals for existing approvals, licences, and permits and obtaining all other required approvals, licences and permits on favourable terms; sustained labour stability; stability in financial and capital goods markets; availability of equipment; and good working relationships with local communities. While the Company considers these assumptions to be reasonable, the assumptions are inherently subject to significant business, social, economic, political, regulatory, competitive and other risks and uncertainties, contingencies and other factors that could cause actual actions, events, conditions, results, performance or achievements to be materially different from those projected in the forward-looking information. Many assumptions are based on factors and events that are not within the control of the Company and there is no assurance they will prove to be correct.

Furthermore, such forward-looking information involves a variety of known and unknown risks, uncertainties and other factors which may cause the actual plans, intentions, activities, results, performance or achievements of the Company to be materially different from any future plans, intentions, activities, results, performance or achievements expressed or implied by such forward-looking information. Such risks include, without limitation: general business, social, economic, political, regulatory and competitive uncertainties; grant of permits to allow the proposed drill programs may take longer than envisaged, and may delay the start of the proposed drill programs; there may be as-yet unrecognized environmental or compliance issues relating to the previous operations; differences in size, grade, continuity, geometry or location of mineralization from that predicted by geological modelling and the subjective and interpretative nature of the geological modelling process; the speculative nature of mineral exploration and development, including the risk of diminishing quantities or grades of mineralization; a material decline in the price of silver; a failure to achieve commercial viability, despite an acceptable silver price, or the presence of cost overruns which render the Castrovirreyna Project uneconomic; the Company's dependence on a single mineral property; potential civil unrest in Peru affecting the Company's operations; changes in government regulations and shift in political attitudes in exploration and development activities regulated by the Peruvian government; exposure to adverse legal requirements under the Peruvian legal system with respect to licenses and agreements for business; potential implications of ILO Convention 169 mandate on the Company's operations; geological, hydrological and climactic events which may adversely affect infrastructure, operations and development plans, and the inability to effectively mitigate or predict with certainty the occurrence of such events; credit and liquidity risks associated with the Company's financing activities, including constraints on the Company's ability to raise and expend funds as a result of operational and reporting covenants associated with the Castrovirreyna Project; the Company's inability to raise sufficient funds to develop the Castrovirreyna Project into commercial production; delays in construction or development of the Castrovirreyna Project resulting from delays in the performance of the obligations of the Company's contractors and consultants, the receipt of governmental and third party approvals, licences and permits in a timely manner or to complete and successfully operate mining and processing components; the Company's failure to accurately model and budget future capital and operating costs associated with the development and operation of the Castrovirreyna Project; the Company's failure to develop or supply adequate infrastructure to sustain the development and operation of the Castrovirreyna Project, including the provision of reliable sources of electrical power, water, and transportation; adverse fluctuations in the market prices and availability of commodities and equipment affecting the Company's business and operations; the Company's management being unable to successfully apply their skills and experience and attract and retain highly skilled personnel; material adverse effects resulting from adverse changes in factors, hazards and risks on the Company's business, financial condition, results of operations, cash flow and prospects; the cyclical nature of the mining industry and increasing prices and competition for resources and personnel during mining cycle peaks; failure by the Company to secure surface rights necessary to operate and develop the Castrovirreyna Project; the Company's failure to comply with laws and regulations or other regulatory requirements; the Company's failure to comply with existing approvals, licences and permits, and the Company's inability to renew existing approvals, licences and permits or obtain required new approvals, licences and permits on timelines required to support development plans; the Company's failure to comply with environmental regulations, the tendency of such regulations to become more strict over time, and the costs associated with maintaining and monitoring compliance with such regulations; the adverse influence of third party stakeholders including social and environmental non-governmental organizations; the adverse impact of competitive conditions in the mineral exploration and mining business; the Company's failure to maintain satisfactory labour relations and the risk of labour disruptions or changes in legislation relating to labour; the Company's lack of operating history and no history of earnings; failure by the Company to use the proceeds of the Offering in the manner specified in this prospectus; limits of insurance coverage and uninsurable risk; the adverse

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effect of currency fluctuations on the Company's financial performance; difficulties associated with enforcing judgements against directors residing outside of Canada; conflicts of interest; the dilutive effect of future acquisitions or financing activities and the failure of future acquisitions to deliver the benefits anticipated; failure of the Company's information technology systems or the security measures protecting such systems; the costs associated with legal proceedings should the Company become the subject of litigation or regulatory proceedings; costs associated with complying with public company regulatory reporting requirements; costs associated with dealing with the pandemic caused by COVID-19; the negative impact of future social and environmental activism by local communities; and other risks involved in the exploration, development and mining business generally, including, without limitation, environmental risks and hazards, cave-ins, flooding, rock bursts and other acts of God or natural disasters or unfavourable operating conditions. Although the Company has attempted to identify important factors that could cause actual actions, events, conditions, results, performance or achievements to differ materially from those described in forward-looking information, there may be other factors that cause actions, events, conditions, results, performance or achievements to differ from those anticipated, estimated or intended. See "Risk Factors" for a discussion of certain factors investors should carefully consider before deciding to invest in the Units.

The Company cautions that the foregoing lists of important assumptions and factors are not exhaustive. Other events or circumstances could cause actual results to differ materially from those estimated or projected and expressed in, or implied by, the forward-looking information contained herein. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, investors should not place undue reliance on forward-looking information.

Forward-looking information contained herein is made as of the date of this prospectus and the Company disclaims any obligation to update or revise any forward-looking information, whether as a result of new information, future events or results or otherwise, except as and to the extent required by applicable securities laws.

EXCHANGE RATE INFORMATION

The following table sets out, for the period indicated, certain exchange rates based upon the exchange rates published by the Bank of Canada during the respective periods. The rates are set out as United States dollars per $1.00.


	Nine Months Ended September 30, 2021	Fiscal Year Ended December 31, 2020	Fiscal Year Ended December 31, 2019
Low	$0.7778	$0.6898	$0.7353
High	$0.8306	$0.7863	$0.7699
Average	$0.7994	$0.7461	$0.7537
End	$0.7849	$0.7854	$0.7699

On January 6, 2022, the exchange rate for United States dollars in terms of Canadian dollars, as quoted by the Bank of Canada, was $1.00 = US$0.7849.

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SCIENTIFIC AND TECHNICAL INFORMATION

Scientific and technical information relating to the Castrovirreyna Project contained in this prospectus is derived from, and in some instances is a direct extract from, and based on the assumptions, qualifications and procedures set out in, the Castrovirreyna Technical Report. Reference should be made to the full text of the Castrovirreyna Technical Report, which is available for review under the Company's profile on SEDAR at www.sedar.com.

CIM Definition Standards

The following definitions are reproduced from the CIM Definition Standards:

" Indicated Mineral Resource " means that part of a Mineral Resource for which quantity, grade or quality, densities, shape and physical characteristics are estimated with sufficient confidence to allow the application of Modifying Factors as described below in sufficient detail to support mine planning and evaluation of the economic viability of the deposit. Geological evidence is derived from adequately detailed and reliable exploration, sampling and testing and is sufficient to assume geological and grade or quality continuity between points of observation. An Indicated Mineral Resource has a lower level of confidence than that applying to a Measured Mineral Resource and may only be converted to a Probable Mineral Reserve.

" Inferred Mineral Resource " means that part of a Mineral Resource for which quantity and grade or quality are estimated on the basis of limited geological evidence and sampling. Geological evidence is sufficient to imply but not verify geological and grade or quality continuity. An Inferred Mineral Resource has a lower level of confidence than that applying to an Indicated Mineral Resource and must not be converted to a Mineral Reserve. It is reasonably expected that the majority of Inferred Mineral Resources could be upgraded to Indicated Mineral Resources with continued exploration.

" Measured Mineral Resource " means that part of a Mineral Resource for which quantity, grade or quality, densities, shape, and physical characteristics are estimated with confidence sufficient to allow the application of Modifying Factors to support detailed mine planning and final evaluation of the economic viability of the deposit. Geological evidence is derived from detailed and reliable exploration, sampling and testing and is sufficient to confirm geological and grade or quality continuity between points of observation. A Measured Mineral Resource has a higher level of confidence than that applying to either an Indicated Mineral Resource or an Inferred Mineral Resource. It may be converted to a Proven Mineral Reserve or to a Probable Mineral Reserve.

"Mineral Reserve" means the economically mineable part of a Measured and/or Indicated Mineral Resource. It includes diluting materials and allowances for losses, which may occur when the material is mined or extracted and is defined by studies at pre-feasibility or feasibility level as appropriate that include application of Modifying Factors. Such studies demonstrate that, at the time of reporting, extraction could reasonably be justified. The reference point at which Mineral Reserves are defined, usually the point where the ore is delivered to the processing plant, must be stated. It is important that, in all situations where the reference point is different, such as for a saleable product, a clarifying statement is included to ensure that the reader is fully informed as to what is being reported. The public disclosure of a Mineral Reserve must be demonstrated by a pre-feasibility study or feasibility study.

" Mineral Resource " means a concentration or occurrence of solid material of economic interest in or on the Earth's crust in such form, grade or quality and quantity that there are reasonable prospects for eventual economic extraction. The location, quantity, grade or quality, continuity and other geological

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characteristics of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge, including sampling.

" Probable Mineral Reserve " means the economically mineable part of an Indicated, and in some circumstances, a Measured Mineral Resource. The confidence in the Modifying Factors applying to a Probable Mineral Reserve is lower than that applying to a Proven Mineral Reserve.

" Proven Mineral Reserve " means the economically mineable part of a Measured Mineral Resource. A Proven Mineral Reserve implies a high degree of confidence in the Modifying Factors.

For the purposes of the CIM Definition Standards, " Modifying Factors " are considerations used to convert Mineral Resources to Mineral Reserves. These include, but are not restricted to, mining, processing, metallurgical, infrastructure, economic, marketing, legal, environmental, social and governmental factors.

LIST OF ABBREVIATIONS

In this prospectus, the following abbreviations have the meanings set forth below:

Ag	silver	mm	millimetre
Pb	lead	Zn	zinc
Cu	copper	NSR	Net smelter return
g	gram	cm	centimetre
kg	kilogram	MW	megawatt
ha	hectare	MWh/yr	megawatt hours per year
km	kilometre	oz	Troy ounce (31.1035 g)
DMT	dry metric tonnes	t	metric tonne
m	metre	µm	micrometre
masl	metres above sea level	oz/t	ounce per tonne
tpd	tonnes per day	US$/t	U.S dollar per tonne

ELIGIBILITY FOR INVESTMENT

In the opinion of Dentons Canada LLP, counsel to the Company, and Bennett Jones LLP, counsel to the Underwriters, based on the current provisions of the Tax Act, provided that, at the time of acquisition,

i. in the case of the Unit Shares and Warrant Shares, the Common Shares are listed on a "designated stock exchange" for the purposes of the Tax Act (which currently includes the TSXV) or the Company qualifies as a "public corporation" other than a "mortgage investment corporation" for purposes of the Tax Act, and
ii. in the case of the Warrants, the Common Shares are qualified investments as described in (i) above, and the Company is not an annuitant, a beneficiary, an employer or a subscriber under or a holder of the particular Registered Plan (as defined below) and deals at arm's length (within the meaning of the Tax Act) with each person who is an annuitant, a beneficiary, an employer or a subscriber under or a holder of such Registered Plan,

the Unit Shares, Warrants and Warrant Shares, if issued on the date hereof, would at the time of acquisition be "qualified investments" under the Tax Act for a trust governed by a "registered retirement savings plan" (" RRSP "), "registered retirement income fund" (" RRIF "), "tax-free savings account"

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(" TFSA "), "registered education savings plan" (" RESP "), "deferred profit sharing plan" or "registered disability savings plan" (" RDSP ") (as those terms are defined in the Tax Act) (each, a " Registered Plan ").

THE COMMON SHARES ARE NOT CURRENTLY LISTED ON A "DESIGNATED STOCK EXCHANGE" AND THE COMPANY IS NOT CURRENTLY A "PUBLIC CORPORATION", AS THOSE TERMS ARE DEFINED IN THE TAX ACT.

The Company has applied to the TSXV to have the Common Shares listed on the TSXV as of the day before the Closing Date - which, if required by the TSXV, may be followed by an immediate halt in trading of the Common Shares in order to allow the Company to satisfy the conditions of the TSXV - and to have the Common Shares listed and posted for trading at the time of the issuance of the Units on the Closing. The Company must rely on the TSXV to list the Common Shares on the TSXV and to have them posted for trading prior to the issuance of the Units on the Closing and to otherwise proceed in such manner as may be required to result in the Unit Shares and Warrant Shares being listed on the TSXV at the time the Units are issued on the Closing, and no tax ruling or legal opinion has been sought or obtained in this regard. There can be no guarantee that TSXV approval of a listing will be granted or will be in a form that is, or is acceptable to the CRA as, a full and unconditional listing sufficient for "qualified investment" status under the Tax Act for purposes of a Registered Plan at a relevant time. If the Unit Shares and Warrant Shares are not listed on the TSXV at the time the Units are issued on the Closing and the Company is not a "public corporation" at that time, the Unit Shares, Warrants and Warrant Shares may not be qualified investments for a Registered Plan at that time.

Even if the Unit Shares, Warrants, and Warrant Shares may be a "qualified investment" for a trust governed by a Registered Plan, the annuitant under an RRSP or RRIF, the subscriber under a RESP or the holder of a TFSA or RDSP, as the case may be (each, a " Registered Holder "), will be subject to a penalty tax if the Unit Shares, Warrants or Warrant Shares are a "prohibited investment" within the meaning of the Tax Act for such Registered Plan. The Unit Shares, Warrants and Warrant Shares will generally not be a "prohibited investment" for a trust governed by a Registered Plan provided that the Registered Holder: (i) deals at arm's length with the Company for the purposes of the Tax Act, and (ii) does not have a "significant interest" (as defined in subsection 207.01(4) of the Tax Act) in the Company. In addition, the Unit Shares and Warrant Shares will generally not be a prohibited investment if such securities are "excluded property" (as defined in subsection 207.01(1) of the Tax Act) for trusts governed by a Registered Plan.

PROSPECTIVE PURCHASERS OF UNITS WHO INTEND TO HOLD UNIT SHARES, WARRANT SHARES, AND/OR WARRANTS IN A REGISTERED PLAN SHOULD CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE APPLICATION OF THESE RULES IN THEIR PARTICULAR CIRCUMSTANCES.

MARKETING MATERIALS

Any template version of any marketing materials that are utilized by the Underwriters in connection with the Offering are not part of this prospectus to the extent that the contents of the template version of the marketing materials have been modified or superseded by a statement contained in this prospectus.

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In addition, any template version of any other marketing materials filed with the securities commission or similar authority in each of the provinces of Canada except Quebec in connection with the Offering after the date of this prospectus, but prior to the termination of the distribution of Units under this prospectus (including any amendments to, or an amended version of, any template version of any marketing materials), is deemed to be incorporated by reference herein.

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PROSPECTUS SUMMARY

The following is a summary of the principal features of the Offering and is qualified in its entirety by, and should be read together with, the more detailed information, financial statements and MD&A contained elsewhere in this prospectus. This summary does not contain all of the information a potential investor should consider before investing in Units. Please refer to the "Glossary" for a list of defined terms used herein.

THE COMPANY

Silver Mountain Resources Inc. was incorporated under the CBCA on January 28, 2021 as "Roxy Mining Corp." On March 5, 2021, the Company changed its name to "Silver Mountain Resources Inc.". The Company's principal asset is a 99.99% interest in Sociedad Minera Reliquias S.A.C. (" SMR Peru "), which it acquired in April 2021. The Company owns all but one share in SMR Peru, as the Peruvian General Corporate Law requires that SMR Peru have more than one shareholder. The one share of SMR Peru that is not owned by the Company is owned by Mula Mining Corp., which is a shareholder of the Company. See " Corporate Structure ."

Since SMR's incorporation, it has focused on the exploration and development of the Castrovirreyna Project and the raising of equity capital to fund the exploration and development of such project. SMR has a Board with depth of experience and market credibility and an exploration and development team with an extensive track record of developing high-grade, profitable underground mines.

INVESTMENT HIGHLIGHTS

Existing Infrastructure at the Castrovirreyna Project

SMR owns the Castrovirreyna Project which includes a fully developed underground mine, a 2,000tpd concentrator plant and a tailings dam with 2 years of capacity at full operation. The Company expects to re-commence production at the Castrovirreyna Project in the second quarter of 2023, with full production to resume by the end of fiscal 2023, however, such timeline is dependent on a number of assumptions and estimates, including, without limitation, the success of the proposed diamond drill program and other exploration programs; the timely receipt of environmental and social permits related to exploration, plant refurbishment, the preparation of the tailings dam for expansion; the timely delivery of required equipment and supplies and the geology and metallurgical characteristics of the Castrovirreyna Project being as described in the Castrovirreyna Technical Report. See " Statement Regarding Forward-Looking Information " and " Risk Factors ".

Exploration Potential

In addition to the underground mine at the Castrovirreyna Project, SMR owns other brownfield and greenfield projects such as:

Dorita and Huancarpusca zones that show high-sulfidation epithermal targets with Ag, Au and polymetallic concentrations in silicified-oxidized structures. Further, the Company believes that these zones have potential for conventional low-cost open pit mining / heap leach operation and low stripping.
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Poetas and Carmela zones which are large high sulphidation epithermal alteration footprints with high gold and silver ratio concentrations in sheeted veining outcrops with bulk-tonnage potential and located at a distance of 4km from the processing plant with convenient road access.

The Company intends to use a portion of the funds allocated to resource upgrades and exploration to commence exploration of such brownfield and greenfield projects, including developing plans for such projects, exploration of additional areas, defining of resources, defining of additional targets or the acquisition of additional mining concessions. See " Use of Proceeds – Business Objectives and Milestones ".

Location of the Project

The Castrovirreyna Project is located in the historic mining district of Castrovirreyna, in Huancavelica, Peru.

The Castrovirreyna Project can be accessed from Lima, Peru by driving south on the Panamerican Highway for 230 km to the town of San Clemente, then turning inland, and taking route PE-28A east to the town of Castrovirreyna, the capital of the province of Castrovirreyna, a distance of 221 km. The route is paved. See " Castrovirreyna Project ".

In addition, experienced labour can be sourced from the city of Huancavelica.

Proven Management Team and Board

SMR is led by an executive management team and Board that has a long-standing track record of creating significant shareholder value through exploration success, project development, and the profitable operation of developed mines. See " Directors and Executive Officers ".

Why Silver?[ 1]

Silver is a valuable & practical industrial commodity and appealing precious metal:

annual global silver consumption of approximately 1Boz Ag;
the industry has been in physical deficit recently;
silver is the best thermal and electrical conductor of all metals;
growing demand for use in photovoltaic solar panels and 5G networks;
growing demand from automotive sector as it electrifies; and
demand as a safe haven investment is rising along with gold.

1 The Silver Institute – World Silver Survey 2020.

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THE OFFERING

Offering:	Between 27,272,727 Units and 30,000,000 Units (31,363,636 Units and
	34,500,000 Units assuming the Over-Allotment Option is exercised in full).
Offering Price:	It is anticipated that the Offering Price will be between $0.50 and $0.55 per Unit.
Units:	Each Unit will consist of one Unit Share and one half of one Warrant. Each
	Warrant will be exercisable into one Warrant Share at a price of $⚫per Warrant
	Share at any time prior to the Warrant Expiry Date, subject to adjustment in
	certain events. It is anticipated that the exercise price of the Warrants will be
	between $0.65 and $0.70 per Warrant Share. The Warrants will be governed by
	a Warrant Indenture to be entered into on the Closing Date between the
	Company and the Warrant Agent.
Amount:	$15,000,000 ($17,250,000 assuming the Over-Allotment Option is exercised in
	full).
Over-Allotment	The Company has granted the Underwriters an option to purchase that number
Option:	of Underwriters' Option Units, Underwriters' Option Shares and/or Underwriters'
	Option Warrants equal to 15% of the Units sold pursuant to the Offering. The
	Over-Allotment Option may be exercised by the Underwriters in respect of: (i)
	additional Underwriters' Option Units at the Offering Price; (ii) Underwriters'
	Option Shares at a price of $⚫per Underwriters' Option Share; (iii) Underwriters'
	Option Warrants at a price of $⚫per Underwriters' Option Warrant; or (iv) any
	combination of Underwriters' Option Shares and/or Underwriters' Option
	Warrants, provided, in each case, that the aggregate number of Underwriters'
	Option Shares and Underwriters' Option Warrants that may be issued under the
	Over-Allotment Option does not exceed 15% of the number of Units issued under
	the Offering. The Over-Allotment Option is exercisable for a period of 30 days
	following Closing at the Offering Price. This prospectus qualifies the grant of the
	Over-Allotment Option and the distribution of any Underwriters' Option Units,
	Underwriters' Option Shares and/or Underwriters' Option Warrants, as
	applicable, issued pursuant to the exercise of the Over-Allotment Option. See
	"Plan of Distribution".
Underwriters'	The Company has agreed to pay the Underwriters' Fee equal to 6.0% of the
Fee:	gross proceeds of the Offering (including in respect of any exercise of the Over-
	Allotment Option), subject to reduction to 3.0% of the gross proceeds from
	subscriptions by the President's List Allocation (including in respect of any
	exercise of the Over-Allotment Option). See "Plan of Distribution".
Use of Proceeds:	Prior to giving effect to the exercise of the Over-Allotment Option, and after
	deducting the Underwriters' Fee (assuming no sales are made under the
	President's List Allocation) and the estimated expenses of the Offering of $0.8
	million, the Company's estimated net proceeds from the Offering will be $13.3
	million. In addition, the Company has $9.7 million of cash and cash equivalents
	available and remaining from the closing of the Equity Financing, which, together

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with the estimated net proceeds from the Offering, will be approximately $23 million.

The Company intends to use the Available Funds to advance the Castrovirreyna Project, as detailed under "Use of Proceeds", which includes using the Available Funds as indicated in the following table:

Principal Purpose		Estimated Amount to be Expended ($ million)(1) 12.2 3.1 0.6 0.5 0.2 3.0 3.3 0.1
Resource Upgrade and Exploration Plant Refurbishment Tailings Dam Mine Concession Rights Permits and Studies Working Capital Trafigura Loan Communities Total
		23

Notes:

(1) Assuming that the Over-Allotment Option is exercised in full, the Company would receive additional net proceeds of approximately $2.115 million, after deducting the Underwriters' Fee (assuming no sales are made under the President's List Allocation). The Company anticipates that these additional proceeds will be allocated for general corporate purposes.

Unutilized proceeds of the Offering will be invested by the Company in an interest bearing account with a major Canadian or United States bank.

While the Company intends to spend the available funds as stated above, there may be circumstances where, for sound business reasons, funds may be reallocated at the discretion of the Board or management. See "Use of Proceeds".

These funds are expected to be sufficient to continue to advance the Castrovirreyna Project for the 2022 calendar year.

Risk Factors

An investment in a mineral exploration and development focused company is speculative and involves a high degree of risk. See "Risk Factors" for a discussion of certain factors investors should carefully consider before deciding to invest in the Units.

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Risks related to the Company include, without limitation:

general business, social, economic, political, regulatory and competitive uncertainties;
grant of permits to allow the proposed drill programs may take longer than envisaged, and may delay the start of proposed drill programs
there may be as-yet unrecognized environmental or compliance issues relating to the previous operations;
differences in size, grade, continuity, geometry or location of mineralization from that predicted by geological modelling and the subjective and interpretative nature of the geological modelling process;
the speculative nature of mineral exploration and development, including the risk of diminishing quantities or grades of mineralization and the inherent riskiness of Inferred Mineral Resources;
the future price of silver is uncertain and may be lower than expected;
a failure to achieve commercial viability, despite an acceptable silver price, or the presence of cost overruns which render the Castrovirreyna Project uneconomic;
the Company depends on a single mineral property;
potential civil unrest in Peru affecting the Company's operations;
changes in government regulations and shift in political attitudes in exploration and development activities regulated by the Peruvian government;
exposure to adverse legal requirements under the Peruvian legal system with respect to licenses and agreements for business;
implications of ILO Convention 169 mandate on the Company's operations;
geological, hydrological and climactic events which may adversely affect infrastructure, operations and development plans, and the inability to effectively mitigate or predict with certainty the occurrence of such events;
credit and liquidity risks associated with the Company's financing activities;
the Company's inability to raise sufficient funds to develop the Castrovirreyna Project into commercial production;
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delays in construction or development of the Castrovirreyna Project resulting from delays in the performance of the obligations of the Company's contractors and consultants, the receipt of governmental and third party approvals, licences and permits in a timely manner or to complete and successfully operate mining and processing components;
the Company's failure to accurately model and budget future capital and operating costs associated with the development and operation of the Castrovirreyna Project;
the Company's failure to develop or supply adequate infrastructure to sustain the development and operation of the Castrovirreyna Project, including the provision of reliable sources of electrical power, water, and transportation;
adverse fluctuations in the market prices and availability of commodities and equipment affecting the Company's business and operations;
the Company's management being unable to successfully apply their skills and experience and attract and retain highly skilled personnel;
material adverse effects resulting from adverse changes in factors, hazards and risks on the Company's business, financial condition, results of operations, cash flow and prospects;
the cyclical nature of the mining industry and increasing prices and competition for resources and personnel during mining cycle peaks;
failure by the Company to secure surface rights necessary to operate and develop the Castrovirreyna Project;
the Company's failure to comply with laws and regulations or other regulatory requirements;
the Company's failure to comply with existing approvals, licences and permits, and the Company's inability to renew existing approvals, licences and permits or obtain required new approvals, licences and permits on timelines required to support development plans;
the Company's failure to comply with environmental regulations, the tendency of such regulations to become more strict over time, and the costs associated with maintaining and monitoring compliance with such regulations;
the adverse influence of third party stakeholders including social and environmental nongovernmental organizations;
the adverse impact of competitive conditions in the mineral exploration and mining business;
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the Company's failure to maintain satisfactory labour relations and the risk of labour disruptions or changes in legislation relating to labour;
the Company's lack of operating history and no history of earnings;
failure by the Company to use the proceeds of the Offering in the manner specified in this prospectus;
limits of insurance coverage and uninsurable risk;
the adverse effect of currency fluctuations on the Company's financial performance;
difficulties associated with enforcing judgements against directors residing outside of Canada;
conflicts of interest;
the dilutive effect of future acquisitions or financing activities and the failure of future acquisitions to deliver the benefits anticipated;
failure of the Company's information technology systems or the security measures protecting such systems;
the costs associated with legal proceedings should the Company become the subject of litigation or regulatory proceedings;
the costs associated with complying with public company regulatory reporting requirements;
the impact of COVID-19 and potential travel restrictions, including additional costs incurred by the Company as a result thereof; and
other risks involved in the exploration, development and mining business generally, including, without limitation, environmental risks and hazards, cave-ins, flooding, rock bursts and other acts of God or natural disasters or unfavourable operating conditions.
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SELECTED FINANCIAL INFORMATION

The following table sets out selected financial information of the Company for the periods and as at the dates indicated and is derived from the audited and unaudited financial statements and related notes thereto which appear elsewhere in this prospectus, and should be read in conjunction with those financial statements and related notes thereto, along with the associated MD&A.

General and administrative expenses Other (income) expenses Net loss and comprehensive loss for the period Basic and diluted net loss per Common Share At end of period: Cash and cash equivalents Other current assets Non-current assets Current liabilities Non-current liabilities Shareholders' equity	As at and for the nine month period ended September 30, 2021 (US$000s)	As at and for the year ended December 31, 2020 (US$000s)	As at and for the year ended December 31, 2019 (US$000s)
	805.3 423.5 1,228.8 (0.01) 8,374.0 0.9 8,845.6 1,386.7 1,254.3 14,579.5	717.5 100.9 818.5 (0.40) 203.6 1.8 8,262.0 557.0 2,038.4 5,872.0	1,080.9 (94.6) 986.4 (0.05) 1,057.3 7.4 7,686.2 606.9 2,037.1 6,107.0

See "Selected Financial Information" elsewhere in this prospectus.

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CORPORATE STRUCTURE

The Company was incorporated under the CBCA on January 28, 2021 under the name "Roxy Mining Corp." On March 5, 2021, the Company changed its name to "Silver Mountain Resources Inc.". On November 15, 2021, the Company filed articles of amendment to effect the Share Split, to remove certain transfer restrictions and to empower the directors to appoint additional directors between meetings. The Company's head and registered office is located at 82 Richmond Street East, Toronto, Ontario, Canada M5C 1P1.

The Company's only subsidiary is SMR Peru, a closed stock company incorporated under the law of the Republic of Peru, which the Company acquired pursuant to a share exchange agreement dated April 8, 2021 by and among the Company and the previous shareholders of SMR Peru (the " Share Exchange Agreement "). SMR Peru owns the Castrovirreyna Project. The Company owns a 99.99% interest in SMR Peru. The Company owns all but one share in SMR Peru, as the Peruvian General Corporate Law requires that SMR Peru have more than one shareholder. The one share of SMR Peru that is not owned by the Company is owned by Mula Mining Corp., which is a shareholder of the Company.

The Company has provided an undertaking to the Canadian securities regulators that: (i) in complying with its reporting issuer obligations, the Company will treat each of its operating entities (within the meaning of National Policy 41-201 – Income Trusts and Other Indirect Offerings ) as a subsidiary of the Company; however, if the generally accepted accounting principles used by the Company prohibit the consolidation of financial information of the operating entity and the Company, then for as long as the operating entity (including any of its significant business interests) represents a significant asset of the Company, the Company will provide its shareholders with separate audited annual financial statements and interim financial reports, prepared in accordance with the same generally accepted accounting principles as the Company's financial statements, and related management's discussion and analysis, prepared in accordance with National Instrument 51-102 – Continuous Disclosure Obligations or its successor, for the operating entity (including information about any of its significant business interests); and (ii) the Company will annually certify that it has complied with this undertaking, and file the certificate on SEDAR concurrently with the filing of its annual financial statements.

The Company is subject to a unanimous shareholders' agreement dated April 8, 2021 by and among the shareholders of the Company (the " Shareholders' Agreement "). The Shareholders' Agreement provides certain shareholders of the Company with board nomination rights. The Shareholders' Agreement shall automatically terminate concurrently with Closing.

GENERAL DEVELOPMENT AND BUSINESS OF THE COMPANY

Business Objectives

The Company's principal business objectives are the acquisition, exploration and development of precious metal resource properties. The Company's principal asset is a 99.99% interest in SMR Peru, a closed stock company incorporated under the laws of the Republic of Peru which the Company acquired through a share exchange in April 2021. The Company owns all but one share in SMR Peru, as the Peruvian General Corporate Law requires that SMR Peru have more than one shareholder. The one share of SMR Peru that is not owned by the Company is owned by Mula Mining Corp., which is a shareholder of the Company. For further details concerning the Castrovirreyna Project, see "General Development and Business of the Company – Project Overview".

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Since the Company's incorporation, it has focused on the exploration and development of the Castrovirreyna Project and the raising of equity capital to fund the exploration and development of such project. The Company has a Board with depth of experience and market credibility and an exploration and development team with an extensive track record of developing high-grade, profitable underground mines.

Three Year History

The Company was incorporated under the CBCA on January 28, 2021. Prior to April 8, 2021, the Company carried on no active business, other than the evaluation and negotiation, as applicable, of the SMR Peru Acquisition (as defined herein) and related definitive documentation.

Project Acquisition and Financing

On April 8, 2021, the Company entered into the Share Exchange Agreement with the shareholders of SMR Peru for the acquisition of SMR Peru. The acquisition was completed on April 8, 2021 (the " SMR Peru Acquisition "). As consideration for the acquisition of SMR Peru, the Company issued 7,499,989 Common Shares (on a pre-Share Split basis) to the shareholders of SMR Peru. On closing of the SMR Peru Acquisition, and immediately prior to a private placement, the shareholders of SMR Peru held approximately 73.52% of the total issued and outstanding Common Shares, with management holding the balance. See "General Development and Business of the Company" and "Management's Discussion and Analysis" for further details.

Following the SMR Peru Acquisition, the Company completed a private placement of 3,333,333 units (on a pre-Share Split basis) at a price of US$3.00 per unit, for aggregate gross proceeds of US$9,999,999 (the " Equity Financing "). Each unit was comprised of one Common Share in the capital of the Company and one half of one Common Share purchase warrant. Each such warrant entitles the holder to acquire one Common Share at an exercise price of US$9.00 for a period of three (3) years. The proceeds of the private placement were used to re-commence exploration activities at the Castrovirreyna Project and for general and administrative expenses. To date, the Company has not re-commenced development or production activities at the Castrovirreyna Project.

As of the date hereof, the Company has spent approximately US$2.3 million of the proceeds from the Equity Financing and has approximately US$7.7 million remaining. The funds spent to date have been spent as follows: (i) working capital (approximately US$0.3 million), (ii) general and administrative expenses (approximately US$0.5 million), (iii) operating expenses (approximately US$0.6 million), (iv) mine concession rights (approximately US$0.4 million), and (v) repayment of the loan to Trafigura (approximately US$0.5 million).

Offtake Agreement

On November 2, 2019, SMR Peru and Trafigura Peru S.A.C. (" Trafigura Peru "), signed a framework contract for the sale of concentrates pursuant to which SMR Peru undertakes to sell and deliver and, Trafigura Peru undertakes to take and pay for certain concentrates (the " Offtake Agreement ").

Pursuant to the Offtake Agreement, SMR Peru will sell to Trafigura Peru 100% of production of zinc, lead, copper, silver concentrates and other quantities produced at the Reliquias mine and treated at the Jose Picasso Perata processing plant, during the life of the mine and based on a mineral treatment capacity in plant of approximately 2,000 tpd for a silver ore or 1,600 tpd for polymetallic ore. For excess

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production over this capacity, Trafigura Peru will be entitled to "first and last refusal" for 100% of this excess.

For concentrates produced from mines other than the Reliquias mine, Traifgura Peru will have the right to purchase 100% of the production of concentrates produced at the Jose Picasso Perata processing plant during the toll campaign and for the life of the plant's operation.

In the event that SMR wishes any concessions comprising the Castrovirreyna Project to expire, SMR Peru must obtain the prior consent of Trifugura Peru. In addition, if certain concessions are transferred, SMR Peru is required to pay Trafigura Peru 10% of the net proceeds of such transfer(s), up to an aggregate maximum of US$500,000. Further, SMR Peru may not transfer under any title, the concessions of the Reliquias block, unless Trafigura Peru, in its sole discretion, previously authorizes such transfer.

Specialized Skills and Knowledge

The nature of the Company's business requires specialized skills and knowledge. The Company plans to operate a large underground mining operation at the Castrovirreyna Project, with potential further mining operations, all of which requires technical expertise in the areas of geology, engineering, mine planning, metallurgical processing, project management, mine operations, risk management and socioenvironmental compliance.

In order to attract and retain personnel with the specialized skills and knowledge required for the Company's operations, the Company maintains competitive remuneration and compensation packages. To date, the Company has been able to meet its staffing requirements.

Competitive Conditions

The precious metal mineral exploration and mining business is competitive. The Company competes with numerous other companies, including many large established mining companies having substantial capabilities and greater financial and technical resources than the Company. Such competition may result in the Company being disadvantaged in the acquisition of attractive mineral properties. The ability of the Company to acquire mineral properties in the future will also depend on its ability to successfully construct and develop the Castrovirreyna Project and upon the terms and conditions from time to time of arrangements with third parties, such as the Company's creditors.

The Company also competes with other mining companies and other third parties over sourcing raw materials and supplies in connection with its construction, development and exploration operations, as well as for skilled experienced personnel and transportation capacity. See "Risk Factors — Risks Related to the Company and to Mineral Exploration and Development — Competition with other mining companies is intense".

Cycles

Year round operations in a high-altitude Andean site present certain challenges. While the Company believes it has adequately accounted for such challenges in its business and operational plans, there are nevertheless risks associated with such operations. See "Risk Factors — Risks Related to the Company and to Mineral Exploration and Development".

Demand for and the price of silver is volatile and affected by numerous factors beyond the Company's control. See " Risk Factors — Risks Related to the Company and to Mineral Exploration and

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Development — The future price of silver is uncertain and may be lower than expected " and " Management's Discussion and Analysis — Financial Instruments — Commodity Price Risk ".

Employees

The Company employs nine full-time employees and one contractor as at the date of this prospectus. The Company is committed to, where possible, providing employment opportunities to members of local communities.

Restructuring Transactions

Other than the SMR Peru Acquisition, the Company has not effected any material restructuring transaction since incorporation, nor is any material restructuring transaction proposed for the current financial year.

Special Shareholder Meeting and Share Split

On November 12, 2021, the Company held a special meeting of its shareholders (the " Meeting "). At the Meeting, the shareholders of the Company approved: (i) the conditional election of Victoria Vargas and Bryan Coates to the Board, to become effective concurrently with Closing; (ii) one or more splits of the issued and outstanding Common Shares on the basis of ratio(s) to be selected by the Board within a range between two post-share split Common Shares for one pre-share split Common Share and 20 postshare split Common Shares for one pre-share split Common Share; (iii) an advance notice by-law; and (iv) an amendment to the articles of the Company to remove certain transfer restrictions and to empower the directors to appoint additional directors between meetings.

Following the Meeting, on November 15, 2021, the Company filed articles of amendment to: (i) effect an initial share split on the basis of 10 post-share split Common Shares for one pre-share split Common Share (the " Share Split "); and (ii) remove certain transfer restrictions and empower the directors to appoint additional directors between meetings.

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CASTROVIRREYNA PROJECT

The scientific and technical information in this section relating to the Castrovirreyna Project is derived from, and in some instances is a direct extract from, and based on the assumptions, qualifications and procedures set out in, the Castrovirreyna Technical Report. Such assumptions, qualifications and procedures are not fully described in this prospectus and the following summary does not purport to be a complete summary of the Castrovirreyna Technical Report. Reference should be made to the full text of the Castrovirreyna Technical Report, which is available for review under the Company's profile on SEDAR at www.sedar.com.

Project Overview, Location and Access

The Castrovirreyna Project can be accessed from Lima, Peru by driving south on the Panamerican Highway for 230 km to the town of San Clemente, then turning inland, and taking route PE28A east to the town of Castrovirreyna, the capital of the province of Castrovirreyna, a distance of 221 km. The route is paved and shown in the figure below.

==> picture [476 x 337] intentionally omitted <==

The nearest port for shipping that could potentially be used for concentrates is at Pisco, however it is common business practice to use Callao port.

The climate in the Castrovirreyna district is cold and mostly cloudy. Any future mining operations would be expected to be conducted year-round. Exploration activities are conducted year-round.

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The Castrovirreyna Project area is characterized by gently rolling topography that is at altitudes between 4,690–4,860 masl. The main existing buildings are located at an altitude of approximately 4,650 masl. Hillsides can be barren of vegetation or populated by short grasses and bushes. Valley bottoms are typically more densely vegetated. There are several lakes in the Castrovirreyna Project vicinity. Transient grazing is the only recognized agricultural activity in the Castrovirreyna Project area.

The city of Huancavelica is 114 km east of the Castrovirreyna Project, at an altitude of 3,676 m. The city is a regional source of services for the mining industry including supplies and fuel. Experienced labour can also be sourced from the city and environs. The closest settlements to the Castrovirreyna Project are Santa Ana and Pacococha. These settlements can provide accommodation and non-technical manpower.

The Castrovirreyna Project includes mine infrastructure that supported the Reliquias underground operations, which were operated by CMC from 2005–2015. When SMR Peru acquired the Castrovirreyna Project, the project included the following infrastructure:

Underground mine : consisting of ventilation system, water pumping system, explosives magazine, and mining equipment;
Concentrator : a 2,000 tpd conventional concentrator to produce lead, zinc, and copper concentrates;
Tailings Storage Facility (" TSF ");
Infrastructure : power supply line, water supply system, fuel storage, a 370-person camp, warehouses, maintenance shops and paved roads .

Mineral Tenure, Surface Rights, Water Rights, Royalties and Agreements

As of August 1, 2021, the Castrovirreyna Project had a total area of 27,450 ha in 287 concessions, of which the Reliquias block, consisting of 219 concessions, comprised 12,972 ha, and the Dorita block, consisting of 68 concessions, covered an approximate area of 14,478 ha.

Surface rights are not included in mineral rights, and permission must be obtained from owners and two-thirds majority of community members when surface rights are owned by local communities.

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The surface rights ownership in the Reliquias and Dorita blocks are shown below.

Communities Holding Surface Rights, Reliquias Block

==> picture [398 x 282] intentionally omitted <==

Communities Holding Surface Rights, Dorita Block

==> picture [401 x 284] intentionally omitted <==

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The Qualified Person had access to a letter dated March 21, 2021 issued by one representative of the Castrovirreyna Peasant Community and one representative of the Pacococha Annex. In that letter the community communicates its authorization for right-of-way transit, and allows prospecting and exploration activities, including construction of platforms for underground core drilling. As of the date of the Castrovirreyna Technical Report, the area of the Caudalosa Grande Annex, within the Community of Sallca Santa Ana, which is used by the mining contractor, and is where the office and warehouse facilities, and TSFs are located, is not subject to any current agreements. Such agreements will need to be negotiated prior to any re-commencement of concentrator operations.

On July 1, 2019, SMR Peru obtained a licence for the use of 535,272 m3/year of surface water from the Lopezcocha and Orccococha lakes, located in the Santa Ana district, Castrovirreyna province, Department of Huancavelica.

As of 2018, metal production in Peru is subject to a royalty, payable to the Peruvian government. This royalty is based on a percentage of the sale value of the minerals being exploited, ranging from 1– 3%. There are no other production royalties.

SMR Peru was granted energy and water rights (535,272 m3/year) to operate a future mine. SMR Peru has a valid authorization for the start of mining exploitation for Reliquias Mine granted on September 16, 2010. On December 30, 2019, a detailed environmental plan, known as Plan Ambiental Detallado, in Spanish (" PAD ") was filed by the previous owner.

The PAD is currently under evaluation by the Directorate of Environmental Affairs of the Peruvian Ministry of Energy and Mines (" MINEM "), the National Water Authority and the General Directorate of Environmental Affairs of Hydrocarbons of the MINEM. On August 2020, closure plans were submitted and are still pending approval for both the Reliquias and Caudalosa Grande. To start the planned drilling program, SMR Peru will prepare and present an environmental impact assessment (Declaración de Impacto Ambiental, in Spanish).

CMC, the previous owner, obtained an Environmental Impact Assessment (" EIA ") in 2009 that includes the restart of mining activity, and an expansion of the concentrator capacity from 500 to 2,000 tpd. In December 2014, another EIA was approved that included the construction of a waste rock storage facility. Caudalosa 1 and 2 TSFs were included in the 2014 EIA, to include the required dam raises of the TSF.

History

The deposits within the Castrovirreyna district were discovered at the end of the 16[th] century, and have been intermittently mined in the Castrovirreyna Project area since.

Companies that have held interests in the Castrovirreyna Project area since 1962 include Banco Minero del Peru, Mario Arenas & Asociados Geólogos Consultores S.C.R.L., Castrovirreyna Compañía Minera S.A., CMC, ASC Peru LDC, Consultora Minera Anglo Peruana S.A., Absolut Resources Corp., and Volcan Compañía Minera S.A. Work completed by these companies, referred to as legacy, consisted of geological mapping, rock chip and grab sampling, bulk-leach extractable gold sampling, evaluation of underground workings, mineral resource estimates, and active mining operations at the Reliquias mine that continued until 2015.

SMR Peru obtained its Castrovirreyna Project interest in 2018, through the acquisition from Trafigura of the concessions and infrastructure formerly owned and operated by CMC. Since acquisition,

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SMR Peru has conducted geological and reconnaissance mapping, reconnaissance and detailed rock chip, channel, and soil geochemical sampling, ASD Terraspec near-infrared analysis of selected samples, drone-mounted magnetometer and induced polarization (" IP ")/resistivity geophysical surveys, and a commencement of a data assessment program on drill core campaigns completed by CMC.

The location of historical mining operations is shown in the figure below:

==> picture [499 x 460] intentionally omitted <==

A summary of the exploration and development activity since 1962, where known, is provided in the table below.

Date	Company	Note
1962, April	Banco Minero del Peru	Surface geological evaluation at 1:10,000 scale. Collected 51 rock chip samples of the veins exposed at the Dorita zone.

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		- 32 -
Date	Company	Note
1966, May	Universidad Nacional de Ingenieria	Mine engineer bachelor thesis with geological and structural analysis, mining and costs projections and recommendations for a variation in cut & fill mining method.
1981, March	Mario Arenas & Asociados Geólogos Consultores S.C.R.L.	Geological evaluation and rock sampling from underground galleries and outcrops at the surface of the Caudalosa Grande mine and nearby areas at 1:2,000 scale for 3,260 hectares. Includes petrographic section analysis. Samples were assayed by silver, lead, copper and zinc at the mine laboratory.
1981, April	Castrovirreyna Compañía Minera S.A.	Surface geological evaluation of the Dorita mine. Geological potential assessment of 11 veins exposed at Dorita mine; including surface geological mapping at 1:2,000, 1:5,000 and 1:10,000 scales, topographic survey and rock chip sampling of veins at the surface.
1984, June	CMC	Underground and surface geological mapping and interpretation of veins of the Mina Novedad, Mina Candelaria, Mina Dorita de Bonanza zones. Recommendations of new underground exploration developments.
1997, March	ASC Peru LDC	Geological evaluation of the Dorita-Venus and Huancarpusca epithermal alteration zones. Systematic rock chip sampling along veins.
1990, September	CMC	Geological assessment of several areas including the Caudalosa mine, Bonanza mine, Reliquias mine, Dollar mine, Carmen-Lira-Ensueño mines, Seguridad mine, Ruperto mine, Itanayoc mine, Lolita mine, and Cesar Vallejo prospect. Proposal of exploration program through underground galleries. Seven referential rock samples were collected.
1994, January	CMC	Mineral inventories to January 1, 1994 for Caudalosa mine.
1997, March, June	ASC Peru LDC	Geological evaluation of the Dorita–Venus and Huancarpusca epithermal alteration zones with 1:5,000 scale geological mapping. Includes systematic rock chip sampling in grids along veins and assays with eight chemical elements.
1998, December	CMC	Geological assessment of the Candelaria-Caudalosa, Reliquias, Madona and Dorita zones. Geological potential estimation of 17 veins at both Caudalosa and Reliquias zones.
1999, October	Consultora Minera Anglo Peruana S.A.	Geological and geochemical exploration of the Los Poetas alteration zone at 1:5,000 scale. Rock chip sampling of a 500 x 500 m grid, for 102 samples taken. Reconnaissance rock chip sampling totalling 261 chip samples.
2000, January	Consultora Minera Anglo Peruana S.A.	Geological exploration work includes photogrammetric restitution 1:5,000 scale, geological mapping at 1:5,000 scale covering 800 hectares. Geochemical rock sampling at the surface with 89 samples in grid, 144 systematic samplings in veins and 16 samples for petrographic analysis. Samples were analyzed in an external CIMM laboratory.
2000, November	CMC (Z. Puma)	Geological evaluation of the northern extension of the Los Poetas (Coricama) zone at 1:5,000 scale. Evaluation of the Cerro Puncuyllo (Carmelas) and Cuyoc Orjo zones (Yahuarcocha) at 1:25,000 scale. 30 rock chip samples taken of veins and altered rocks.
2006, February	Consultora Minera Anglo Peruana S.A.	Geological assessment of the Dorita, Huancarpusca and Llacuntay-Orjo high sulphidation epithermal zones.
2006, June	CMC	Geological assessment of the Reliquias mine below the 440 level. Mineral resource estimate for 17 veins, classified as Inferred. Recommendation of mine rehabilitation at 440 level.
2006, September	Absolut Resources Corp. (Minera Calipuy S.A.C.)	Geological assessment of the Dorita zone. Included 1:25,000 and 1:2,500 scale geological mapping covering an area of 7,000 hectares, 348 surface rock chip samples, 31 bulk-leach extractable gold (BLEG) sampling.

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		- 33 -
Date	Company	Note
2007, June	Castrovirreyna Compañía Minera S.A.	Geological evaluation of the Dorita mine, Pucasora alteration zone, Huancarpusca mine and Huancarpusca epithermal alteration zone. Definition and geological characterization of 25 veins.
2007, August	Castrovirreyna Compañía Minera S.A.	Geological assessment for Carmela epithermal alteration zone. These activities include 52 rock channel sampling across the vein structures and assayed at the mine laboratory.
2009, October	Castrovirreyna Compañía Minera S.A.	Geological assessment at 1:1,000 scale of the Dorita mine and northern extension. 455 rock chip samples of outcrops. Multi-element geochemical analysis at San Genaro mine and ACME chemical laboratory, includes a summary of the historical mineral resources to Dec 31st, 1984 reported by CMC.
2009, December	CMC	Summary mineral resource estimate in Excel spreadsheet format.
2010, December	CMC	Updated mineral resource estimate
2011, December	CMC	Updated mineral resource estimate
2012, December	Consultor Carlos Angeles	Geological mapping at 1:5,000 scale of the Castrovirreyna mining district. Included Los Poetas, Yahuarcocha, El Palomo, and Huancarpusca zones.
2013, December	CMC	Updated mineral resource estimate in Excel spreadsheet format.
2014, March	CMC	Evaluation of the geological potential of the Carmela prospect based on field inspection and historical exploration results.
2014, May	CMC	Mine geological assessment of the 390 to 290 underground levels at the Reliquias mine. It included the construction of longitudinal sections displaying metal zonation and metal distribution.
2014, August	Volcan Compañía Minera S.A.	Geological characterization of Reliquias, Caudalosa and San Genaro vein systems. 10,000 m drill program proposed to test mineralization at depth. The drilling program was not executed.
2014, December	CMC	Updated mineral resource estimate
2015, March	CMC	Geological assessment of the Los Poetas epithermal alteration zone. Included 22 surface channel rock samples and re-evaluation of 175 samples that were collected in 2000. Definition of nine main 'vein-type structures and several other minor splits totalling 49 veins.

A summary of the known production during the CMC operations is included in the table below.

Year	Product Type	Concentrates	Concentrates					Fines Content	Fines Content
		DMT	Ag (oz/t)	Au (oz/t)	Pb (%)	Zn (%)	Cu (%)	Ag (oz)	Au (oz)	Pb	Zn	Cu (t)
										(t)	(t)
2009	Bulk	7,847	124.92	0.21	10.21	9.72		980,248	1,646
	Zinc	407	13.94	0.04	1.03	35.72
2010	Bulk	9,404	135.49	0.3	7.05	9.61		1,274,170	2,785
2011	Bulk	10,163	136.2	0.41	8.59	8.25		1,384,181	4,176
2012	Bulk	10,895	127.51	0.36	11.3			1,389,186	3,973
2013	Lead	6,645	118.73	0.35	18.4	10.73		788,994	2,354	1,222
	Zinc	821	15.34	0.09	1.3	48.86		12,604	41		401
2014	Lead	6,237	82.24	8.28	29.58	10.77	2.07	555,032	2,505	1,936	1,767	166
	Zinc	3,586	13.25	2.38	2.06	44.09	1.53
	Copper	696	124.94	67.92	10.5	10.38	23.91

Source: Annual reports by CMC, from 2010 to 2014. DMT = dry metric tonnes.

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Historical Mineral Resource[(1)]


Category	Tonnes (000)	Ag (oz/t)	Pb (%)	Zn (%)	Cu (%)
RELIQUIAS MINE
Measured	337	8.49	2.68	3.55	0.57
Indicated	401	9.69	2.25	3.42	0.52
Inferred	737	11.19	2.57	3.59	0.77
CAUDALOSA MINE
Inferred	1,549	14.43	2.79	2.80	2.12
TOTAL MEASURED + INDICATED
Measured + Indicated	737	9.14	2.44	3.48	0.54
TOTAL INFERRED
Inferred +	2,286	13.39	2.72	3.05	1.68

Notes:

(1) (i) Historical resource estimates have been classified in accordance with the CIM Definition Standards; (ii) Historical resource estimates are not Mineral Reserves or Mineral Resources and do not have demonstrated economic viability. All figures are rounded to reflect the relative accuracy of the estimates; (iii) Information is as of July, 2019 Source: Sociedad Minera Reliquias SA, the information is based on RM-Master Pro Quality, C. Rodriguez, Abr19; RM-Master Pro Quality, C. Rodriguez, Jul19; (iv) the Qualified Person considers that the historical resource estimates are relevant for the proper understanding of the Castrovirreyna Project and additional exploration, including drilling, could be needed to verify the historical estimate as current Mineral Resources; (v) A qualified person has not done sufficient work to classify the historical estimate as current Mineral Resources or Mineral Reserves; and (vi) The Company is not treating the historical estimate as current Mineral Resources or Mineral Reserves.

Geology and Mineralization

Three deposit models are considered applicable to the Castrovirreyna mining district in which the Castrovirreyna Project is located. These are:

High sulphidation epithermal;
Intermediate-sulphidation epithermal;
Porphyry copper.

Geological mapping, and underground exposures, together with the mining history of the Castrovirreyna district suggests that high- and intermediate-sulphidation models are immediately applicable to the Castrovirreyna Project area. Mineralization identified to date is lithologically, mineralogically, and structurally controlled. The geological setting of the Castrovirreyna district also suggests that porphyry copper-style mineralization is a reasonable exploration model.

The Tertiary volcanic belt of central–southern Peru forms a northwest–southeast-trending syncline that is as wide as 30 km east–west. Volcanic, volcaniclastic and sedimentary units of the Sacsaquero, Castrovirreyna and Caudalosa Formations within the belt range in age from Eocene to Quaternary. The northwest–southeast-trending Chonta fault divides the syncline into two areas. The volcanic and sedimentary rocks are intruded by penecontemporaneous dome complexes.

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The Castrovirreyna mining district consists of polymetallic, typically silver-rich, veins that are hosted in the Tertiary volcanic belt rocks. Dome complexes in the area appear to be related to highsulfidation litho-caps and polymetallic vein systems. There is some evidence of porphyry-style mineralization associated with deeper levels of these intrusions.

The Castrovirreyna Project, is divided into two separate geographical blocks, Reliquias and Dorita.

Primary lithologies in the Reliquias block are volcanic and intrusive rocks of the Caudalosa and Castrovirreyna Formations. Rocktypes include andesite lavas and tuffs, and andesitic and dacitic domes. These rocks are overlain by alluvial and colluvial deposits, and wetlands. Three mineralizing events are interpreted for the Reliquias block:

Emplacement felsic dome complexes : generated epithermal alteration in the volcanic sequences (lithocaps), with a nucleus of siliceous alteration, transitioning outward to advanced argillic, argillic and propylitic alteration zones. The intensity and spatial distribution of the epithermal alteration is controlled by the dimensions of each felsic dome occurrence;
Intermediate sulphidation polymetallic veins : occur peripheral to, or occasionally within, the epithermal alteration lithocaps. Primary controls on location are fault and fracture zones (e.g., Reliquias and Caudalosa areas). Can form in spatial association with the edges of dacite dikes (Yahuarcocha area);
Mineralized breccias : can be either quartz–tourmaline (Yahuarcocha area) or quartz– enargite–tetrahedrite (Guanajuato area).

The primary lithologies in the Dorita block are volcanic and intrusive rocks of the Sacsaquero, Castrovirreyna and Caudalosa Formations. Rock types include andesites and tuffs, and felsic and intermediate dome and flow dome complexes. These rocks are overlain by alluvial and colluvial deposits, and wetlands. Two mineralizing events are interpreted for the Dorita block:

High-sulphidation epithermal : vein systems hosted in rocks of the Caudalosa Formation. Veins are massive/granular grayish silica with crustiform banded textures. Examples are the Dorita, Huancarpusca and Amanda areas;
Polymetallic veins : associated with east–west and northwest–southeast-trending fault zones. Veins show banded and brecciated crustiform quartz textures and appear to transition from high- to intermediate-sulphidation.

Regional mapping identified several vein systems and alteration zones. These are indicative of high- to intermediate-sulphidation systems. In exposures in historical underground workings, the veins are shown to host silver-rich galena, silver-lead sulfosalts and associated sulphide mineralization that also supports an interpretation of high- to intermediate-sulphidation systems. The mapping and geological understanding supports additional exploration and provides areas that can support drill testing.

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Exploration

Geological Mapping

Legacy surface geological mapping was conducted at 1:50,000, 1:25,000, 1:10,000, 1:5,000, 1:2,000 and 1:1,000 scales, for both regional reconnaissance and prospect delineation purposes. CMC mapped all horizontal workings in the Reliquias and Caudalosa underground mines at a 1: 500 scale during operations.

SMR Peru has surface mapped the Reliquias and Dorita blocks at 1:10,000 scale. The Dorita, Poetas, Carmelas, Yahuarcocha, and Pampa Huamán and Bonanza areas were mapped at either 1:1,000 or 1:2,000 scale. SMR Peru has commenced reviewing, validating and, where applicable updating, the geological mapping of the lower levels of the Reliquias mine, with emphasis on the Sacasipuedes and Matacaballo veins.

Mapping was used to identify areas of alteration, vein outcrop, and structural dislocations.

Geochemical Sampling

A two-phase rock chip geochemical sampling program was completed by SMR Peru personnel from October 2018 to February 2020. A total of 739 samples were collected in the Reliquias block and 1,034 in the Dorita block in the first phase, and 1,278 surface channel samples were collected from the Poetas, Carmelas and Yahuarcocha sectors in the second phase.

A total of 443 soil samples were systematically collected by SMR Peru personnel from a 100 x 200 m spaced grid in the Poetas–Carmelas area and a total of 999 samples were collected from the Dorita, Huancarpusca and Amanda areas.

Anomalous gold–silver values were returned from quartz–tourmaline breccias in the Yahuarcocha sector and from silicified breccias in the Poetas-Carmelas and Dorita areas. Vein systems with anomalous gold–silver values were noted from the Huancarpusca area (Yanajara veins).

Geophysical Surveys

Drone-borne magnetic surveys were conducted over the Reliquias and Dorita blocks by Deep Sounding Geophysics (April 2019 to January 2020) and Valdor Sudamerica SAC (November to December 2019) on behalf of SMR Peru. Overall, low magnetic intensity anomalies demarcate the high sulphidation-type altered zones in the Poetas, Carmelas and Yahuarcocha areas, and the tuff sequences of the Caudalosa Formation. By way of contrast, high magnetic intensity anomalies delineate outcrops of andesitic units, and potential magnetite-bearing igneous intrusions at depth.

Real Eagle Explorations completed IP/resistivity geophysical surveys on behalf of SMR Peru over the Reliquias block from December 2018 to March 2019, and the Dorita block from April to May 2019. In the Reliquias mine sector, a zone of high chargeability and low resistivity (-100 m) outlined a north– northwesterly-trending corridor interpreted to be related to the subvolcanic dacite, disseminated pyrite mineralization and the western extension of the Reliquias vein system. In the Poetas–Carmelas area, the IP anomalies outlined an east–northeast trending high sulphidation epithermal zone. In the Dorita block, high magnetic susceptibilities were associated with andesitic sequences and dioritic bodies. Lowmagnetic susceptibility zones were related to high-sulphidation alteration zones best developed in tuffaceous and volcaniclastic units. One concentric high-magnetic anomaly, approximately 500 m deep, appears to be related to silicified brecciated structures and quartz veining at the core of the advanced

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argillic alteration zone (Pucasora zone). A second anomaly is located to the immediate south of Pucasora, and appears to be coincident with outcrops of propylitic dioritic porphyry.

Petrology

A total of 11 petrographic samples were examined, three from the Reliquias block and eight from the Dorita block. The petrographic descriptions helped refine interpretations of alteration and mineralization. They provided suggestions as to where in the epithermal–porphyry environment such samples could be placed to assess the best potential for mineralization vectoring.

Exploration Potential

The Castrovirreyna Project has exploration potential for the following:

Silver-enriched polymetallic veins and breccias;
Gold and silver mineralization associated with silicified breccia bodies and ‘ledges' located in high sulphidation alteration areas;
Copper–gold–silver porphyry-related mineralization exposed within and on the lateral edges of the areas of high sulphidation alteration zones.

The former Reliquias and Caudalosa mines have exploration potential at depth for extensions of veins that were mined during operations, and lateral vein extensions. Mineralization that is exposed in the Sacasipuedes (SN 290) and Matacaballo (SN 735-1) veins is a particularly attractive underground exploration prospect, as both veins remain open laterally and at depth. There is depth and lateral potential for extensions of veins that were mined in the former Dorita and Huancarpusca underground operations. A number of areas warrant exploration as potentially prospective for surface mining methods, particularly in the Matacaballo and Candelaria, and Yahuarcocha sectors. These include:

The Reliquias Alta area, where the veins mined underground at the former Reliquias mine extend to surface;
The intersection of the Sacasipuedes and Matacaballo vein corridors;
Spatial proximity of veins in specific sectors, such as the surface exposures in the Candelaria area;
Disseminated mineralization between vein corridors that was noted during prospecting activities, such as in the Matacaballo-Perseguida corridor.

Regional prospects that warrant additional exploration focus include:

Reliquias block : Yahuarcocha, Poetas, Carmela, Dollar, Itanayoc, Bonanza, Pampa Huaman;
Dorita block : Pucasora (Dorita HS), San Francisco, Yanajara, Huancarpusca HS and Huancarpusca veins, and Amanda.
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The below table summarizes the prospects that warrant additional investigation in the Reliquias area and the figure that follows shows the locations of those prospects.

Zone/Sector	Approximate Prospect Area	Notes
Former Reliquias mine	3 km (NW) x 2 km (E–W)	Intermediate sulfidation vein systems with Ag-rich polymetallic mineral shoots. 3 km x 2 km vein system extending to 300 m depth identified through drilling and underground galleries. Continuity of strike-length and depth extension of veins are based on geological mapping, geochemical sampling and drill holes. Upward-splaying vein systems and disseminations at the intersection of NW and E–W trending structures crop out at surface representing the potential to define bulk tonnage mineralization. Several veins are mapped at surface with no underground or drill evaluations, including Perseguida Norte, Matilde, Grima, Esperanza, Odilea.
Former Caudalosa mine	4 km (NW) x 0.5 km (NE–SW)	High to intermediate sulfidation vein systems with Ag-rich polymetallic mineralization distributed in a NW–SW trending structural corridor. 4 km long mineralized vein system tested to 250 m depth identified through underground galleries. Vein systems form horse-tail distributions at the far NW and SE extents of the mineralized corridor. Continuity of strike-length and depth extension of veins are based on surface and underground geological mapping and drillholes.
Poetas– Carmelas	6 km (E–W) x 0.8 Km (N–S)	High-sulfidation epithermal area with dominant E–W-trending brecciated structures composed of rounded or milled clasts of vuggy silica cemented by a matrix of quartz–alunite–dickite–kaolinite–smectite assemblage and outer argillic alteration. Alteration related to felsic porphyry intrusive cutting interlayered tuff and andesite flows. Sampling by SMR Peru identified elevated silver and gold geochemical values associated with hydrothermal breccias and vein systems.
Yahuarcocha	3 km (NW) x 0.5 km (NE–SW)	High to intermediate sulfidation NW-trending vein system and quartz– tourmaline breccia with local "shingle-type" * texture. Ag-rich polymetallic high-sulfidation to intermediate veining crosscutting the hydrothermal clast- supported quartz–tourmaline breccias with phyllic alteration in porphyritic texture clasts. Sampling by SMR Peru identified elevated silver and gold geochemical values associated with hydrothermal breccias and vein systems.
Bonanza	1 km x 0.2 km	Silicified structures with polymetallic silver-rich veins and quartz–enargite– tetrahedrite hydrothermal breccias developed along a NE–SW to E–W- trending structural corridor. Historical mine working with several silver-rich waste dump locations. Sampling by SMR Peru identified elevated silver and gold geochemical values associated with silicified structures.
Dollar	1,000 m (strike) x 250 m (depth)	Several E–W and NW–SE-trending epithermal vein systems located within two main subparallel structures. Narrow veins are exposed in underground galleries with strike lengths ranging from 100–300 m. Alteration and vein mineralization fringes range from 3–to 15 m. Mineralization consists of tetrahedrite–tennantite–enargite and ruby and native silver with gradual variation to a galena–sphalerite and chalcopyrite assemblage.
Itanayoc	300 m (strike) x 100 m (depth)	NW–SE-trending vein system that forms the southeast extent of the Pampa Huaman–Itanayoc structural corridor. High-grade polymetallic Ag-Au rich veins identified over about 300 m strike length and 100 m depth through underground galleries, chimneys and drill holes.
Pampa Huaman	5 km (NW) x 3 km (NE–SW)	Polymetallic vein showings along a NW–SE-trending fault system; related to a felsic dike emplacement. Narrow veins between 0.1–0.2 m are oriented W–NW with local E–W strikes. Veins hostquartz–galena–pyrite with oxides

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		- 39 -
Zone/Sector	Approximate Prospect Area	Notes
		as open-space infill. Sampling by SMR Peru identified elevated silver and lead geochemical values.
Uchuputu Norte	700 m x 600 m	Silicified structures and ledges with vuggy silica and advanced argillic halo alteration. 1–2 m wide, NW–SE oriented structures hosted in andesitic volcanic rocks that are intruded by quartz–alunite–dickite-altered felsic dikes. Sampling by SMR Peru identified elevated silver geochemical values.
Uchuputu	700 m x 300 m	Several 1-2 m wide silicified structures with vuggy silica and alunite–clay alteration. Main E–W-trending structures are associated with felsic dykes that cut the Caudalosa andesite/tuff volcanic rocks. Sampling by SMR Peru identified elevated silver geochemical values.
Tres Paisanas	400 m x 200 m	Dacitic dome with crackle-breccia zones showing argillic (illite–smectite– sericite) alteration. Narrow sparse veins are associated with vuggy silica structures and ledges. Veins are <0.10 m in width, have a quartz– polymetallic assemblage, and are hosted within felsic dikes. Sampling by SMR Peru identified elevated silver geochemical values.
Rechazo	600 m x 250 m	E–W oriented dacitic dome and dikes intruding tuffs and andesitic lava flows. Pervasive argillic alteration (illite–muscovite) with disseminated pyrite in fractures. Moderate to intense leaching, with goethite/jarosite infill fractures and vugs. Sampling by SMR Peru identified elevated silver a geochemical values.
Yahuarcocha Norte	200 m x 200 m	Dacitic dike and sill oriented to the NW. Fault-related 1–10 m wide structures that may extend for 50 m strike length are hosted within Caudalosa volcanic units that have undergone with argillic alteration (illite–smectite–sericite). Sampling by SMR Peru identified elevated silver geochemical values.

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==> picture [517 x 366] intentionally omitted <==

The below table summarizes certain drill data based on drill programs conducted by CMC:

Structure	DDH	Intercept From (m)	Intercept To (m)	Drilled Interval (m)	Ag (g/t)	Au (g/t)	Pb (%)	Cu (%)	Zn (%)	Fe (%)
Sacasipuedes	DDH-SP-02-07	139.05	139.3	0.25	346.2		4.09	1.23	2.74
	DDH-SP-02-07	143.45	144.1	0.65	280.9		4.34	2.64	4.48
	DDH-SP-05-07	180.75	181.85	1.1	258.5		1.94	0.97	4.35
	DDH-SP-06-07	118.4	118.7	0.3	301.1		1.61	0.15	2.67
	DDH-SP-08C-07	29.45	30.00	0.55	2,035.7	0.01	4.84	1.96	5.41
	DDH-SP-08C-07	30.00	30.40	0.4	1,574.8	0.01	0.91	1.23	3.76
	DDH-SP-10-07	164.5	164.8	0.3	320.7		6.57	1.05	4.98
Matacaballo/Sacasipuedes	DDH-MTC-SSP-03-11	63.20	63.78	0.58	1,034.5		0.19	0.01	0.14	2.91
	DDH-MTC-SSP-06-11	32.95	33.50	0.55	939.9		0.61	0.04	0.58	4.90
	DDH-MTC-SSP-06-11	33.50	34.05	0.55	1,029.2		5.70	0.24	0.95	2.25
	DDH-MTC-SSP-08-11	67.95	68.75	0.8	486.1		0.69	0.29	2.29	0.99
Escondida	DDH-ES-01-16	95.85	96.15	0.3	1,338.1
	DDH-ES-01-16	134.2	134.5	0.3	1,005.3
	DDH-ES-01-16	135.7	136.3	0.6	1,418.9
	DDH-ES-04-16	183.4	183.6	0.2	1,167.6		0.10	0.04	0.11	3.19

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Structure	DDH	Intercept From (m)	Intercept To (m)	Drilled Interval (m)	Ag (g/t)	Au (g/t)	Pb (%)	Cu (%)	Zn (%)	Fe (%)
	DDH-ES-04-16	193.7	193.95	0.25	1,013.0		0.04	0.01	0.07	2.56
	DDH-ES-05-16	89.15	89.85	0.7	850.7		0.75	0.05	1.27	6.92
	DDH-ES-03-16	51.45	52.4	0.95	602.2		0.70	0.05	1.88	7.86
	DDH-ES-12-16	82.7	82.85	0.15	1,162.6		0.21	0.02	0.38	2.92
	DDH-ES-12-16	100.9	101.05	0.15	1,093.6		1.30	0.02	2.43	5.40
Perseguida	DDH-PE-01-13	53.70	54.40	0.7	1,174.8		0.62	0.09	1.14	4.88
	DDH-PE-01-13	108.20	109.10	0.9	1,123.5		0.96	0.06	1.64	5.31
	DDH-PE-01-13	110.05	110.30	0.25	1,223.3		2.90	0.54	6.57	4.68
	DDH-PE-01-13	110.30	111.05	0.75	1,114.4		1.16	0.12	1.61	4.62
	DDH-PE-01-13	111.05	111.70	0.65	1,610.9		2.70	0.03	4.83	4.21
	DDH-PE-01-13	111.70	112.35	0.65	1,110.4		2.88	0.22	4.92	4.32
	DDH-PE-01-13	112.35	112.80	0.45	1,145.5		1.43	0.15	2.98	4.27
	DDH-PE-01-13	113.80	114.50	0.7	1,038.5		0.90	0.11	1.16	2.95
	DDH-PE-04-13	31.55	32.15	0.6	1,080.5		3.79	0.14	5.30	4.20
	DDH-PE-04-13	105.50	105.75	0.25	1,159.5		2.06	0.08	3.95	5.33
	DDH-PE-07-13	2.90	3.20	0.3	1,188.5		0.60	0.09	1.54	2.98
	DDH-TM-04-12	97.05	98.70	1.65	367.0		7.46	0.10	1.48	3.68
	DDH-TM-04-12	99.90	100.70	0.8	569.2		7.11	0.21	6.27	5.67
	DDH-TM-04-12	100.70	101.40	0.7	538.4		6.89	0.55	3.62	10.00
	DDH-TM-06-12	82.20	83.00	0.8	474.0	1.40	0.85	2.13	1.61	4.51
	DDH-TM-07-12	66.20	66.75	0.55	965.1	1.00	1.26	4.49	3.28	9.84
	DDH-TM-07-12	66.75	67.30	0.55	1,651.6	0.32	2.58	1.57	0.58	7.03
Vulcano	DDH-VU-01-12	11.25	11.55	0.3	1,938.7		4.63	0.42	0.74	4.17
	DDH-VU01-500-12	18.1	18.75	0.65	811.8	1.62	0.98	0.11	1.97
	DDH-VU02-260-12	164.1	164.4	0.3	979.8	1.17	6.97	0.48	6.77	5.34
	DDH-VU03-280-12	119.95	120.6	0.65	2,437.6	5.44	1.13	0.15	0.89	9.42
	DDH-VU03-280-12	120.6	121.65	1.05	2,784.7	4.26	0.37	0.07	0.48	6.39
	DDH-VU-04-12	29.45	30.15	0.7	939.6		1.14	1.05	1.12	1.83
	DDH-VU-10-12	149	150	1	1,384.1		0.77	0.17	1.34	2.11
	DDH-VU-10-12	219.45	219.65	0.2	573.2		2.64	0	2.47	1.88
	DDH-VU-23-12	93.3	93.5	0.2	962.7		6.27	1.17	4.26	3.25

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An example isometric section view through the Reliquias underground mine is provided below:

==> picture [495 x 290] intentionally omitted <==

The below table summarizes drill intercepts by prospect area:

Structure	DDH	Intercept From (m)	Intercept To (m)	Drilled Interval (m)	Ag (g/t)	Au (g/t)	Pb (%)	Cu (%)	Zn (%)	Fe (%)
Sacasipuedes	DDH-SP-02-07	139.05	139.3	0.25	346.2		4.09	1.23	2.74
	DDH-SP-02-07	143.45	144.1	0.65	280.9		4.34	2.64	4.48
	DDH-SP-05-07	180.75	181.85	1.1	258.5		1.94	0.97	4.35
	DDH-SP-06-07	118.4	118.7	0.3	301.1		1.61	0.15	2.67
	DDH-SP-08C-07	29.45	30.00	0.55	2,035.7	0.01	4.84	1.96	5.41
	DDH-SP-08C-07	30.00	30.40	0.4	1,574.8	0.01	0.91	1.23	3.76
	DDH-SP-10-07	164.5	164.8	0.3	320.7		6.57	1.05	4.98
Matacaballo / Sacasipuedes	DDH-MTC-SSP-03-11	63.20	63.78	0.58	1,034.5		0.19	0.01	0.14	2.91
	DDH-MTC-SSP-06-11	32.95	33.50	0.55	939.9		0.61	0.04	0.58	4.90
	DDH-MTC-SSP-06-11	33.50	34.05	0.55	1,029.2		5.70	0.24	0.95	2.25
	DDH-MTC-SSP-08-11	67.95	68.75	0.8	486.1		0.69	0.29	2.29	0.99
Escondida	DDH-ES-01-16	95.85	96.15	0.3	1,338.1
	DDH-ES-01-16	134.2	134.5	0.3	1,005.3
	DDH-ES-01-16	135.7	136.3	0.6	1,418.9
	DDH-ES-04-16	183.4	183.6	0.2	1,167.6		0.10	0.04	0.11	3.19
	DDH-ES-04-16	193.7	193.95	0.25	1,013.0		0.04	0.01	0.07	2.56
	DDH-ES-05-16	89.15	89.85	0.7	850.7		0.75	0.05	1.27	6.92
	DDH-ES-03-16	51.45	52.4	0.95	602.2		0.70	0.05	1.88	7.86
	DDH-ES-12-16	82.7	82.85	0.15	1,162.6		0.21	0.02	0.38	2.92

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			- 43 -
Structure	DDH	Intercept From (m)	Intercept To (m)	Drilled Interval (m)	Ag (g/t)	Au (g/t)	Pb (%)	Cu (%)	Zn (%)	Fe (%)
	DDH-ES-12-16	100.9	101.05	0.15	1,093.6		1.30	0.02	2.43	5.40
Perseguida	DDH-PE-01-13	53.70	54.40	0.7	1,174.8		0.62	0.09	1.14	4.88
	DDH-PE-01-13	108.20	109.10	0.9	1,123.5		0.96	0.06	1.64	5.31
	DDH-PE-01-13	110.05	110.30	0.25	1,223.3		2.90	0.54	6.57	4.68
	DDH-PE-01-13	110.30	111.05	0.75	1,114.4		1.16	0.12	1.61	4.62
	DDH-PE-01-13	111.05	111.70	0.65	1,610.9		2.70	0.03	4.83	4.21
	DDH-PE-01-13	111.70	112.35	0.65	1,110.4		2.88	0.22	4.92	4.32
	DDH-PE-01-13	112.35	112.80	0.45	1,145.5		1.43	0.15	2.98	4.27
	DDH-PE-01-13	113.80	114.50	0.7	1,038.5		0.90	0.11	1.16	2.95
	DDH-PE-04-13	31.55	32.15	0.6	1,080.5		3.79	0.14	5.30	4.20
	DDH-PE-04-13	105.50	105.75	0.25	1,159.5		2.06	0.08	3.95	5.33
	DDH-PE-07-13	2.90	3.20	0.3	1,188.5		0.60	0.09	1.54	2.98
	DDH-TM-04-12	97.05	98.70	1.65	367.0		7.46	0.10	1.48	3.68
	DDH-TM-04-12	99.90	100.70	0.8	569.2		7.11	0.21	6.27	5.67
	DDH-TM-04-12	100.70	101.40	0.7	538.4		6.89	0.55	3.62	10.00
	DDH-TM-06-12	82.20	83.00	0.8	474.0	1.40	0.85	2.13	1.61	4.51
	DDH-TM-07-12	66.20	66.75	0.55	965.1	1.00	1.26	4.49	3.28	9.84
	DDH-TM-07-12	66.75	67.30	0.55	1,651.6	0.32	2.58	1.57	0.58	7.03
Vulcano	DDH-VU-01-12	11.25	11.55	0.3	1,938.7		4.63	0.42	0.74	4.17
	DDH-VU01-500-12	18.1	18.75	0.65	811.8	1.62	0.98	0.11	1.97
	DDH-VU02-260-12	164.1	164.4	0.3	979.8	1.17	6.97	0.48	6.77	5.34
	DDH-VU03-280-12	119.95	120.6	0.65	2,437.6	5.44	1.13	0.15	0.89	9.42
	DDH-VU03-280-12	120.6	121.65	1.05	2,784.7	4.26	0.37	0.07	0.48	6.39
	DDH-VU-04-12	29.45	30.15	0.7	939.6		1.14	1.05	1.12	1.83
	DDH-VU-10-12	149	150	1	1,384.1		0.77	0.17	1.34	2.11
	DDH-VU-10-12	219.45	219.65	0.2	573.2		2.64	0	2.47	1.88
	DDH-VU-23-12	93.3	93.5	0.2	962.7		6.27	1.17	4.26	3.25

The below table summarizes the prospects that warrant additional investigation in the Dorita area and the figure that follows shows the locations of those prospects.

Zone/Sector	Approximate Prospect Area	Notes
Pucasora (Dorita high-sulfidation)	3.5 km x 1.5 km	High sulfidation epithermal system related to felsic porphyry intrusions with brecciated silicified ribs and ledges. Ag-Au geochemical anomalies associated with the brecciated structures as feeders. Several structural corridors identified in about 3.5 km x 1.5 km area and multiple strike length orientations with preferential E-W trend. Porphyry-related alteration and veining identified associated to a discrete dioritic intrusion at the southeast edge of the advanced argillic alteration area. Sampling by SMR Peru identified elevated silver, gold, and lead geochemical values.
Huancarpusca high- sulfidation	2.5 km x 1.5 km	Epithermal high-sulfidation alteration related to felsic porphyry intrusions, silicified breccias and advanced argillic haloes. Ag–Au geochemical concentrations in oxides. Main brecciated structural corridors are NW–SE oriented and transition to several ther

44 -

		- 44 -
Zone/Sector	Approximate Prospect Area	Notes
		polymetallic vein systems at the periphery of the advanced argillic alteration. Sampling by SMR Peru identified elevated silver, gold, and lead geochemical values.
Amanda high- sulfidation	3 km x 1 km	Several silicified brecciated structures in dominantly NW–SE oriented corridors are located within a high-sulfidation alteration area. Sampling by SMR Peru identified elevated silver, and gold geochemical values.
Dorita veins	2 km x 2 km	The Dorita underground mine was mined between 1962–1985 through four main underground levels. The operations apparently averaged 15 oz/t Ag (Yacila, 2009). Mineralization was treated through a 150 tpd concentrator. Main NE–SW-trending structural corridors have a 1 km strike length. The corridors have 11 known high- grade polymetallic vein structures that were exploited by the mining operations. The deepest mineralization is at about 250 m, based on the underground galleries.
Huancarpusca veins	5 km x 5 km	Several Ag-rich polymetallic veins identified within E–W- and NW–SE-trending structural corridors. Banded and brecciated quartz vein-hosted mineralization consists of argentite, tetrahedrite and enargite with quartz, barite, calcite, pyrite and stibnite gangue minerals. At least 14 veins identified at the edges of the Huancarpusca high- sulfidation alteration area and between the Huancarpusca and Dorita alteration zones.

==> picture [504 x 355] intentionally omitted <==

45 -

The figure below shows geochemical sample locations for the samples collected for the Dorita block:

==> picture [499 x 355] intentionally omitted <==

Drilling

No drilling has been performed by SMR Peru on the Castrovirreyna Project. The discussion that follows on available drill data is based on drill programs conducted by CMC, who completed 156 core holes (22,610.71 m) in the period 2007–2016. Core drill holes were drilled at HQ size (63.3 mm core diameter), NQ size (47.6 mm), and BQ size (36.5 mm). Rig types used consisted in Diamec 262, LM-75, Long Year 38, and Long Year 44 for both surface and underground. Logging collected data such as lithology, alteration, mineralization, structure type and grades. General drill hole information in the log header included mine location, surface or underground level location, starting date and termination of drilling, collar coordinates and elevation, dip, azimuth, and logger reference. A total of 68 drill holes with logging sheets were reconstructed by SMR Peru. Surveying of collar locations completed by CMC was done using total station instrument. No information as to down-hole surveys was available to SMR Peru. The drilling is summarized, where known, in the table below.

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Year	Operator	Drilling Type	N° Holes	Metreage	Assay Laboratory	Area	Target Vein/Structure
2007	CMC	Core	29	5,138.25	Unknown	Reliquias mine	Sacasipuedes, Meteysaca, Ayayay, Itanayoc
2009	CMC	Core	13	1,668.40	Unknown	Reliquias mine	Matacaballo
2010	CMC	Core	32	3,843.87	Actlabs	Reliquias & Caudalosa mines	Matacaballo, Candelaria and Dollar
2011	CMC	Core	24	3,615.10	Unknown	Reliquias mine	Sacasipuedes and Matacaballo
2012	CMC	Core	39	5,053.09	Actlabs/MinLabs	Reliquias & Caudalosa mines	Sacasipuedes, Temerarios, Vulcano and Perseguida
2013	CMC	Core	8	1,287.60	Unknown	Reliquias mine	Perseguida
2016	CMC	Core	11	2,004.40	MinLabs	Reliquias mine	Escondida and Grima
		*Total*	*156*	*22,610.71*

Notes : CMC

SMR Peru has commenced a re-logging program of the available CMC drill core, with a focus on the drill holes that intersected vein systems within the deeper areas of the Reliquias mine.

Prior to conducting re-logging activities, the drill core was placed sequentially in plastic core boxes by SMR Peru staff. Depth markers and core box numbers were checked, and the core was cleaned and reconstructed. After that, the sampling interval carried out by CMC was identified and the CMC-reported historical sample number was written on the box with a permanent ink marker. Finally, core photos were taken with a digital camera.

SMR Peru manually relogged all geological information on paper logging sheets. Those data were hand-entered into formatted Microsoft Excel sheets by the logging geologist. Lithology, alteration, mineralization, structures, mineralization, fractures and faults were recorded in logging sheets as text fields. The percentage of sulphides (e.g., sphalerite, galena, chalcopyrite, and pyrite) were also recorded. Other observations were noted where relevant.

Digital logging sheets were imported into the database management program Strater 5. As of the date of the Castrovirreyna Technical Report, a total of 29 core holes had been relogged. Summary digital log sheets were generated for each drill hole.

SMR Peru is actively attempting to locate the original laboratory assay certificates from the laboratories used during the CMC drill campaigns. At the Castrovirreyna Technical Report effective date, however, none of the original laboratory assay certificates had been located.

Drill data from the CMC campaigns are currently used only to support exploration vectoring, as data verification is ongoing. The author of the Castrovirreyna Technical Report considers the legacy data and the interpretations generated from those data to be acceptable to support grass-roots exploration but cautions that the data are likely not adequate to support more advanced evaluations without due verification.

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Sampling, Analysis and Data Verification

Soil samples were collected from small pits, of approximately 50 x 50 x 50 cm dimensions, targeting the B soil horizon. Soil samples were approximately 3–5 kg in weight. Soil samples, once collected by SMR Peru personnel, were dried at 30°C and sieved to minus 20 mesh on site. A minimum 1 kg sample was collected and sent for analysis. This procedure was performed on site, before samples were dispatched to SGS Lima for final sample preparation and analysis.

Rock chip and grab samples were taken as required. Channel samples, typically 10–20 cm wide, 5–10 cm deep, and a maximum of 2 m long, were excavated in outcrops. The excavated material was collected as the sample. Samples in areas covered by alluvium were taken from test pits that were as deep as 1.5 m.

SGS Lima is the primary laboratory for preparation and analysis of the SMR Peru geochemical samples. The laboratory is independent of SMR Peru and holds ISO 9001:2015 for quality management and NTP-ISO/IEC 17025:2006 accreditations for selected sample preparation and analytical techniques.

Sample preparation for rock chip, grab and channel samples consisted of drying, crushing to 2 mm, and pulverizing to 95% passing minus 0.106 mm. Soil samples were dried, crushed, and pulverized to 95% passing minus 0.106 mm.

Rock chip and soil samples were analyzed by aqua regia digestion with an inductively-coupled plasma atomic emission spectroscopy finish. Gold was analyzed by fire assay using a 30 g charge with an atomic absorption spectroscopy ("AAS") finish (SGS method FAA313).

A quality assurance and quality control program was in place for the geochemical sampling programs. This included insertion of certified reference material (standards), blanks and field duplicates into the sample stream prior to submission to the analytical laboratory.

The assessment of quality control for rock chips concluded that:

Blanks consisted of quartz with low concentrations of metals. The data suggest that they were not totally blank which is a potential problem; however, blanks did not indicate the presence of significant contamination during the preparation of samples at SGS Lima, but do suggest that there was some contamination;
Standards demonstrate reasonable accuracy, with biases of generally <5%;
Insertion rates are close to 4% of each type of control. Protocols appeared to be adequate.

The assessment of quality control for soils concluded that:

Blank results do not indicate the presence of significant contamination during the preparation of samples at SGS Lima;
The five standards used demonstrate reasonable accuracy, with bias of generally <5%;
Field duplicates show good precision;
Insertion rates are close to 4% of each type of control sample which is acceptable.
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Internal Data Verification

Data are subject to software checks as part of database upload procedures.

Verification by Qualified Person

The Qualified Person visited the Castrovirreyna Project on September 13 and 14, 2021. During this site visit the Qualified Person had access to the underground infrastructure that correspond to Matacaballo and Sacasipuedes veins and the Qualified Person verified the existence and continuity of those structures. The Qualified Person also verified the correspondence of the historical samples against samples obtained by SMR Peru and against the samples obtained at site. The Qualified Person declared that no significant issue was noted.

Mineral samples were taken from selected outcrops to confirm the presence of silver, lead, zinc, copper and gold. The intention of these processes was to verify the presence or absence of mineralization and general grades, and not to replicate the results obtained by SMR Peru.

The samples consisted of 19 surface samples, 22 samples from underground, and two drill core samples. The samples were delivered to the Certimin Peru laboratory in Lima (" Certimin Lima ") on March 19, 2021. Certimin Lima is independent from SGS Lima and SMR Peru and holds ISO9001:2008 accreditation and ISO17025 for selected sample preparation and analytical techniques. The samples were prepared and analyzed as close to the method used at SGS Lima as possible. The samples were crushed to 90% passing 2 mm, split to 250 g and pulverized to 85% passing 75 μm screen (200 mesh; Certimin Code G0640). Analysis was conducted with a 0.2 g aliquot, aqua regia digestion, and ICP-OES finish (Certimin Code G0145). For gold, a 30 g sample was fused by fire assay and finished with atomic absorption (Certimin Code G0108). Silver, copper, lead, zinc, manganese and antimony overlimits resulted in analysis of a 0.25 g sample digested in aqua regia and finished by AAS.

The cores are under cover, accessible, and individual cores were able to be located. Mineral sampling supports the interpretation of anomalous lead–zinc–copper–gold–silver mineralization within selected sectors in the Castrovirreyna Project area:

Silver, lead, zinc, copper mineralization occurs at level 290 and sublevel 795 - 1 of the Matacaballo and Sacasipuedes veins within the Reliquias mine. Gold mineralization is more restricted, and occurs in some veinlets and silicified sulphide-bearing veinlets;
Silver mineralization occurs in the Reliquias Alta area, in veins and veinlets filled with semimassive sulphides and silicified host rocks. Gold mineralization appears to only occur in veins and veinlets that host semi-massive sulphides;
The Juan vein (1 m wide) in the Dorita area contains silver mineralization with minor lead and zinc. The Estibina vein (2.5 m wide) contains low-grade silver and gold mineralization with significant antimony values. The Dorita vein (0.2 m wide) contains silver and gold mineralization;
Anomalous gold and silver occur in the silicified breccias within the Poetas area;
Low-grade gold and silver mineralization occur in tourmaline quartz breccia Yahuarcocha area;
Silver, low-grade gold, lead and zinc values were returned from the Yanajara vein system within the Huancarpusca area, with elevated of antimony, and locally, arsenic values;
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Results of the two quarter-core samples taken from drill hole DDH-SP-05-07 support that there is silver, lead and zinc mineralization in the Sorpresa vein. The Sacasipuedes vein analytical results support that the vein contains silver, lead, zinc and copper mineralization. Repeatability between the original and witness samples is acceptable, given the known poor correlations of quarter-core sampling of vein systems.

The Qualified Person has reviewed the historical data and information regarding past exploration, development work, and historical mining on the Castrovirreyna Project as provided by SMR. SMR was entirely cooperative in supplying the Qualified Person with all the information and data requested and there were no limitations or failures to conduct the verification.

DOING BUSINESS IN PERU

Government Organization

Peru is a democratic republic governed by an elected government which is headed by a president who serves a five-year term. Pedro Castillo Terrones is the current president of Peru. Mr. Terrones Castillo took office on July 28, 2021. At the same time, new members of Congress were elected. The majority of the elected members of Congress do not belong to Mr. Castillo's political party.

Peruvian Mining Regulations

The Peruvian General Mining Law (the " General Mining Law ") which Single Revised Text was approved through Supreme Decree No. 014-92-EM, as amended, is the key legislation governing mining activities in Peru. Mining activities involve the exploration and exploitation of metallic and non-metallic mineral resources, excluding oil and gas. Various other laws and regulations govern specific matters such as regulatory proceedings, land titles, occupational health and safety, environmental protection, mining operations and taxation.

According to the Peruvian Constitution of 1993, natural resources, including minerals, are the patrimony of the Nation. Private parties can exploit mineral resources under a concession system. The development of any mining activity requires the obtention of a concession. Types of concessions are mining concession (which includes exploration and development activities), processing concession, general services concession, transportation concession, with the exception of prospection, storage and commercialization activities.

Concessions are the main title required to perform exploration and mining activities in a specific area and may be privately owned. No minimum state-ownership or participation is required. The rights vested in a concession are: protected against third parties, transferable, chargeable and, in general, may be the subject of any transaction or contract not specifically forbidden by law. Buildings and other permanent structures used in a mining operation are considered real property accessories to the concession on which they are located.

A mining concession provides its holder with the exclusive right to undertake exploration, development and mining activities within a specific geographical area, provided the holder of the concession: (i) complies with regulatory obligations to maintain such mining rights, i.e. the annual payment of the license fee ( derecho de vigencia ) and mining penalties ( penalidades mineras ); and (ii) obtains the corresponding environmental permit and the authorization to commence the activities, as well as other required licenses and permits as required for the activities to be performed.

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Foreign Investments in Mining

Pursuant to the General Mining Law, under the current legal framework, mining concessions are granted after filing a mining application ( petitorio minero ) to the Geological, Mining, and Metallurgic Institute of the Republic of Peru (" INGEMMET " in its Spanish acronym). Except for the case described in the following paragraph, companies wholly-owned by foreign investors or branches of foreign companies that are established in Peru to carry out mining activities are entitled to file such mining applications ( petitorios mineros ).

Under Article 71 of the Peruvian Constitution of 1993, foreign individuals (including Peruviandomiciled companies ultimately owned by overseas investors) must file an authorization request in order to hold any type of property or possession, including any type of concession, located within 50 km of the national borders. Such authorization shall be granted through a Supreme Decree (i.e. signed by the President of Republic).

Terms

Mining concessions, under the legal framework currently in force, are granted for an unlimited period of time, provided that the holders fulfill their regulatory obligations, over areas consisting of a minimum of 100 ha and a maximum of 1,000 ha (though concessions located at sea may have an area of up to 10,000 ha). There is no limit to the number of mining concessions that one individual company may hold.

Mining concessions are irrevocable, except in the following circumstances:

failure to pay the license fee (derecho de vigencia) for two consecutive years;
failure to pay the mining penalty (penalidad minera) for two consecutive years when such is due when the minimum annual production target (producción mínima anual) has not been met, and,
failure to reach the annual production target (producción mínima anual) after the expiration of the 30th year, counted as from December 31st of the year when the mining concession was granted.

Main Regulatory Obligations of the Mining Holder

The holder of a concession must annually pay a license fee ( derecho de vigencia ) of US$3.00 per each hectare that has been granted or applied for.[2]

Additionally, holders of mining concessions are required to put their concessions to work. Therefore, they are required by the General Mining Law to meet a minimum annual production target (producción mínima anual). Currently, the minimum annual production target is ruled by Legislative Decrees No. 1010 and No. 1054 published on May 9 and June 27 of 2008, respectively, and by Legislative Decree No. 1320 published on January 05, 2017 (which is known as the "new regime"). The

2 This amount is the applicable rate for the general mining category. There is a US$0.50 and US$1.00 license fee per hectare per year for those who are qualified as Artisanal Miners and Small Miners, respectively.

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mechanism to calculate the mining penalty (penalidad minera) is stated in article 40 of the General Mining Law, and described below:

(i) if the required annual production target is not met until the end of the 10th year counted as from December 31st of the year when the mining concession was granted, holders shall pay a mining penalty equal to 2% of the required annual production target per hectare;
(ii) if the required annual production target is not met until the end of the 15th year counted as from December 31st of the year when the mining concession was granted, holders shall pay a mining penalty equal to 5% of the required annual production target per hectare; and,
(iii) if the required annual production target is not met until the end of the 20th year counted as from December 31st of the year when the mining concession was granted, holders shall pay a mining penalty equal to 10% of the required annual production target per hectare.

The abovementioned mining penalty ( penalidad minera ) is not applicable when the holder of the mining concession can evidence that during the previous year it has invested no less than ten times the amount of the mining penalty that would correspond.

Failure to pay this mining penalty for two consecutive years will result in the termination of the mining concession.

In the case of mining concessions granted before the new regime was approved, Supreme Decree No. 054-2008-EM provides that the 10 year term for meeting the new minimum annual production target ( producción mínima anual ) shall be counted as from the first business day of 2009.

Surface Rights

Mining concessions are property-related rights that are distinct and independent from the surface land in which they are located. Therefore, in order to carry out mining activities, the holders of mining concessions must obtain a right to use the corresponding surface land from the landowner.

Privately owned lands: if the land is privately owned, its use for mining activities requires the prior agreement with the landowner. If such approval is not granted, the holders of mining concessions are entitled to apply to MINEM for a legal mining easement over the surface land. However, to date, the awarding of mining easements by the MINEM has been rare.
State-owned lands: if the surface land is state-owned property, the titleholder of a mining concession must execute an agreement with the government. The types of agreements that could be executed are regulated in Law No. 29151, General Law of the National System of State-owned Assets, and its regulation, as well as Legislative Decree No. 1439, Legislative Decree of the National Supply System, and its regulation.
Community property:
for agricultural communities ( comunidades campesinas ) located in coastal areas, a favorable vote of no less than 50% of members attending the assembly is required for the approval of the land access agreement with the mining company; and,
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for agricultural communities and native communities ( comunidades nativas ) located in the highlands and Amazon areas, a favorable vote of no less two-thirds (2/3) of all members of the community is required for the approval of the land access agreement with the mining company.

Indigenous Peoples Considerations

Peru has ratified International Labor Organization Convention No. 169, regarding Indigenous and Tribal Peoples, through Legislative Resolution No. 26253. This treaty has been implemented by the Prior Consultation Law (Law No. 29785), passed by Congress on September 7, 2011, and its regulations. This law acknowledges the right of indigenous and tribal peoples to be consulted on any legislative or administrative measure that may directly affect their collective rights. However, the right is merely one of consultation, not veto. This law sets out certain criteria for identifying which populations are considered indigenous or tribal. They must be groups of people directly descended from indigenous populations with their own customs and lifestyle, different from other sectors of the national population, and they must have an indigenous identity, which includes self-identification.

With respect to mining projects located in areas inhabited by indigenous and tribal peoples, the MINEM must organize and carry out the "Prior Consultation" ( Consulta Previa ) procedure both before granting the authorization to commence or re-commence mining activities and before granting any processing, transportation or general services concession.

In accordance with the current criteria of the INGEMMET, the "Prior Consultation" ( Consulta Previa ) does not need to be conducted as part of the procedure to grant mining concessions because concession titles do not authorize per se the commencement of any type of mining activity.

Environmental Regulations

The Peruvian General Environmental Law, Law No. 28611 approved on October 15, 2005, provides that mining companies are responsible for the emissions, effluents, discharges and other negative impacts generated on the environment, health or natural resources as a consequence of their activities. Supreme Decree No. 040-2014-EM, which approved the Regulations for Environmental Protection in the Mining Sector, and Supreme Decree No. 042-2017-EM, which approved the Environmental Regulation for Mining Exploration Activities, are the main environmental regulations that establish the responsibility of the government agencies to supervise mining activities and compliance with the law.

In compliance with the Environmental Regulations for Mining Exploration Activities, the development of mining exploration activities requires an authorization from the General Mining Environmental Matters Bureau of the MINEM. Under this Regulation, mining exploration activities are classified into two categories (Category I and II). Category I consists of exploration activities with a small impact on the environment and which require an Environmental Impact Statement (DIA, in its Spanish acronym), and Category II consists of exploration activities with a moderate impact on the environment and which require a Semi-detailed EIA. Additionally, the Regulations contain provisions on the Environmental Technical Form (FTA, in its Spanish acronym), which is an environmental management instrument for projects that, due to their location and/or characteristics, are expected to generate nonsignificant negative environmental impacts.

Pursuant to the Regulations for Environmental Protection in the Mining Sector, the holders of mining activities who have completed the exploration stage and are about to carry out mining

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development activities, mining production activities, general services, transport, storage and/or beneficiation activities shall obtain a Semi-Detailed EIA or a Detailed EIA, depending on the level of impact on the environment. Pursuant to Law No. 29968, the National Service of Environmental Certification for Sustainable Investments (SENACE, in its Spanish acronym) is the entity responsible for reviewing and approving the Detailed EIA for activities, construction works and other commercial and service activities that may have a significant environmental impact, including mining activities that have that characteristic.

Furthermore, under the Mine Closure Law, approved by Law No. 28090, all the holders of mining activities who intend to start production activities shall prepare and submit within no more than one year following the approval of the pertinent environmental management instrument, a Mine Closure Plan. This plan must contain the measures to be taken in order to remediate the areas, works and premises of each mining operation unit and requires the establishment of guarantees by the holder of the mining activities to secure performance of such closure activities.

Non-compliance with Peruvian environmental laws or regulations can result in the imposition of administrative sanctions, such as fines or closure orders. Additionally, environmental pollution is subject to criminal penalties. The Peruvian authority with jurisdiction to supervise compliance with environmental obligations is the Ministry of the Environment, through the Environmental Supervision and Enforcement Agency (" OEFA ", in its Spanish acronym).

Finally, the current government has published a new guideline introducing the concept of "social profitability". Pursuant to the guidelines, the concept would entail that, besides economic profitability, a project must produce "social profits" for the project area. For such purposes, the guidelines provide seven criteria, including, for example, economic dynamization, local and national infrastructure, technology, ecosystems and culture; and 35 questions to be answered and used as reference to determine whether a private project is socially profitable pursuant to such concept. Nonetheless, there is no law or regulation that further addresses this guideline or gives more content to the criteria introduced by it.

Workers Participation

Under Peruvian law, every company that generates income and has more than 20 workers on its payroll is obligated to grant a share of its profits to its workers. For mining companies, the percentage of this profit-sharing benefit is 8% of pre-tax income. Cooperative, self-managed companies, civil partnerships non-profit-making and companies that do not have more than 20 workers are exempt from this profit-sharing obligation. Both permanent and fixed term employees must be considered in the calculation for the purpose of applying this law; the only legal requirement is that such workers must be registered in the company's payroll.

The profit-sharing amount made available to each worker is limited to 18 times the worker's monthly salary, based upon their salary at the close of the previous tax year. In case there is a remnant between 8% of a company's pre-tax income and the limit of the workers profit sharing benefit, it must be contributed to a public fund (FONDOEMPLEO) for the purpose of workers training and job promotion, as well as public investment projects.

Main Taxation Provisions and Foreign Exchange Controls

Regarding income tax (" IT ", in its Spanish acronym), as from 2017, the corporate net income is taxed at a rate of 29.5% of the annual net income. Dividends, or other distributions of profit, agreed to be distributed or paid to non-domiciled shareholders (individuals or legal entities) or domiciled individual

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shareholders, are subject to income tax withholding, which must be paid by the entity that distributes the dividends. The IT rate applicable to dividends agreed to be distributed or paid with respect of profits generated as of such fiscal year, amounts to a 5%.[3] Advance monthly IT payments are required on a percentage of taxable income, subject to a final settlement in March of the following business year (January 1 through December 31).

Peruvian VAT ( Impuesto General a las Ventas ) levies the following operations: (i) sale of goods within the Peruvian territory; (ii) render or use of services within the Peruvian territory; (iii) the execution of construction agreements; (iv) the first sale of real state property performed by the constructor; (v) use of services in Peru provided by non-domicile companies or individuals and (vi) the import of goods. Transactions subject to the VAT are currently levied at an 18% rate including the municipal tax ( Impuesto de Promoción Municipal) .[4] The VAT charged on previous operations can be used as credit against the VAT generated when performing the above-mentioned operations.

A Temporary Net Assets Tax ( Impuesto Temporal a los Activos Netos – " ITAN " ) levies the book value of a company's net assets at December 31 of the immediately previous year, provided that the value of such assets is greater than S/ 1'000,000.00 (approximately US$248,760).[5] The ITAN rate is 0.4% on the value of net assets exceeding S/ 1'000,000.00. The ITAN paid may be used as a credit to set off corporate IT. If at the end of the fiscal year the amount of the ITAN paid exceeds the annual IT, taxpayers may request the refund of such excess. Companies which have not started productive operations or those that are in their first year of operation are exempt from such tax.

The National Tax Administration Superintendence (" SUNAT ", in its Spanish acronym) is the entity empowered under the Peruvian tax code to regulate central government taxes. The SUNAT can enforce tax sanctions, which can result in fines, the confiscation of goods and vehicles, and the closing of a taxpayer's offices.

There are currently no restrictions on the ability of a company operating in Peru to transfer foreign currency to or from Peru or to convert Peruvian currency into foreign currency.

Relevant Mining Taxes

Depreciation: in general terms, the maximum annual depreciation rates for income tax purposes are 5% for buildings, 20% for vehicles, 20% for new machinery and equipment used in the mining, oil and construction industries, 25% for hardware, and 10% for other fixed assets.

The value of acquisition of the mining concessions is amortized as from the fiscal year in which the mining company has to comply with its annual production target, within the term to be determined by the mining company based upon the probable life of the mining deposit, and calculated in accordance with the proven and probable reserves and annual production target. Such value of acquisition will include the purchase price paid or the expenses related to the petition, depending on the case, as well as the prospecting and exploration investments until the date on which the company is obliged to comply with

3 Dividends generated up to December 31, 2014 will be subject to a withholding tax rate of 4.1%. Meanwhile, dividends generated from January 1, 2015 up to December 31, 2016, will be subject to a withholding tax rate of 6.8%. Finally, dividends generated as from January 1, 2017 onwards will be subject to a tax rate of 5%, which is the rate that is currently in force.

4 The municipal tax ( Impuesto de Promoción Municipal) is levied on transactions subject to VAT at a rate of 2%, while the VAT rate is 16%. VAT rules are also applicable to this municipal tax.

5 Based on an Exchange rate of one U.S. dollar (US$1.00) equivalent to S/ 4.02.

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the annual production target, except when the mining company chooses to deduct such investments in the fiscal year in which they were incurred.

Once the holder of mining concessions has complied with the annual production target, exploration expenses may be entirely deducted in the relevant fiscal year or amortized as from such year, according to a yearly rate that shall be calculated on the basis of the probable life of the mine which shall be estimated on the basis of proven and probable reserves and annual production target.

The development and preparation expenses that allow the exploitation of the deposit may be either entirely deducted in the year in which they were incurred or amortized in such year and subsequent years (up to a maximum of two additional years).

Regulatory Contributions: the titleholders of medium- and large-scale mining activities shall pay contributions to the Supervising Agency for Energy and Mining and OEFA to fund their supervisory activities. The sum of both contributions cannot exceed 1% of the company's annual billing after deducting the VAT and the municipal promotion tax.
Mining royalties: a mining royalty is a payment requirement set by law under which the holders of mining concessions are required to fulfill a payment to the government for the exploitation of metallic and non-metallic minerals. As of 2004, the holders of mining concessions are required to pay mining royalties. Payment of mining royalties shall be completed on a quarterly basis and is calculated based on the greater of either: (a) an amount determined in accordance with a statutory scale of tax rates based on a company's operating profit margin and applied to the company's operating profit; and (b) 1% of the company's net sales, in each case during the applicable quarter. The royalty rate applicable to the company's profit is based on its operating profit margin according to the following statutory scale of rates that range between 1% and 12%. Mining royalty payments are deductible as expenses for income tax purposes in the fiscal year in which such payments are made.
Special Mining Tax: In addition to the payment of mining royalties, since October 1, 2011, the holders of mining concessions are required to pay a special mining tax ( Impuesto Especial a la Minería ) to the Peruvian government for the sale of metallic resources, regardless of the state in which they are sold. The special mining tax is payable on a quarterly basis and is calculated in accordance with the operating profit derived exclusively from the sale of metallic resources. The applicable special mining tax (which is between 2% and 8.4%) is determined by the quarterly operating profit margin of the company and such rate is applied to the operating profit derived from the sale of metallic resources. special mining tax payments are deductible as expenses for income tax purposes in the fiscal year in which such payments are made.
Special Mining Charge ( aporte voluntario ): the aforementioned mining royalties and special mining tax regimes are not applicable to holders of mining concessions who have entered into Mining Stability Agreements before the mining royalty regime and special mining tax regimes were established. Therefore, effective as from October 1, 2011, they are expected to enter into agreements with the Peruvian government in order to pay, as a voluntary contribution, a special mining charge ( Gravamen Especial a la Minería ) to the Peruvian government for the exploitation of non-renewable natural resources. This regime is very similar to the aforementioned mining royalty regime. The special mining charge is payable on a quarterly basis and is calculated in accordance with the operating profit derived exclusively from the sale of metallic resources. The special mining charge (which is between 4% and 13.12%) is determined by the quarterly operating profit margin of the
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company and such rate is applied to the operating profit derived from the sale of metallic resources, according to a statutory scale of rates.

VAT Reimbursement: According to the provisions of Law No. 27623, by which the Regime of Final Return of VAT was approved, and its regulations, approved by Supreme Decree No. 082-2002-EF, holders of mining concessions, which are exclusively carrying out exploration activities, are entitled to a refund of VAT transferred to them or paid by them for the execution of their activities during the exploration phase, as long as they comply with the following conditions:
production operations have not yet been commenced;
the exploration of mineral resources has been conducted in Peru; and
an Investment in Exploration Agreement ( Contrato de Inversión en Exploración ) has been entered into with the state, by which an investment of at least US$500,000 is committed.

It must be noted that the beneficiary of this regime may only claim back the VAT paid for the acquisition of goods and services that are included in a list previously approved by the government. This regime is in force until December 31, 2022.

General Stability Agreements

Investors and the entities in which they invest may request the execution of stability agreements ( Convenios de Estabilidad ) (" Stability Agreements ") with the Peruvian government. The Stability Agreements are civil contracts that have the force of a law and guarantees continued application of certain laws and regulations in force at the execution date and can regulate the stability of varied legal aspects, such as tax regimes, availability of foreign currency, applicable exchange rates, nondiscriminatory treatment, among others.

In order to execute a Stability Agreement, investors are required, mainly, to guarantee an investment of no less than US$5 million in any sector, except in mining and hydrocarbons. For these two specific sectors, the minimum investment required is US$10 million.

Sectorial Stability Agreements – Mining Stability Agreements

In addition to Stability Agreements, local and foreign investors in mining projects are entitled to enter into with the MINEM, on behalf of the Peruvian government, Guarantee Agreements and Investment Promotional Measures (" Mining Stability Agreements "). With regards to the stabilization of Income Tax, these Mining Stability Agreements impose a higher corporate tax rate, by adding 2% to the general rate (which currently is 29.5%).

Similar to Stability Agreements, Mining Stability Agreements have the force of a law and protect investors from changes in certain laws and regulations for a 10 or 15 year term starting on the date when the execution or expansion of the investment is evidenced, as applicable:

10 year term: Companies that conduct mining activities that start or are carrying on operations above 350 tons per day and up to 5,000 tons per day and investment programs for a minimum amount of US$20,000,000 can benefit from a 10 year agreement. The companies can choose to anticipate the regime stabilized in the agreement to the stage of investment for a three year term and deduct this period from the 10 year term.
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12 year term: Companies with a starting capacity of over 5,000 tons per day or expansion projects aimed to reach a capacity of over 5,000 tons per day may enter into a Stability Agreement that also provides tax stability. In general terms, the investment programs shall amount to US$100,000,000 for the start-up of the mining activities, and US$250,000,000 for already existing mining companies with expansion projects. The companies can choose to anticipate the regime stabilized in the agreement to the stage of investment for an eight year term and deduct this period from the 12 year term.
15 year term: Companies with a starting capacity of over 15,000 tons per day or expansion projects aimed to reach a capacity of over 20,000 tons per day may enter into a Stability Agreement that also provides tax stability. In general terms, the investment programs shall amount to US$500,000,000 for the start-up of the mining activities, and US$25,000,000 for already existing mining companies with expansion projects. The companies can choose to anticipate the regime stabilized in the agreement to the stage of investment for an eight year term and deduct this period from the 15 year term.

Internal Controls

Ownership of Properties & Required Permits

To satisfy itself as to SMR Peru's ownership of the Castrovirreyna Project, the Company engaged local legal counsel as a local advisor to review the title to the mining rights held by SMR Peru pursuant to the available public information and the information provided by SMR Peru. After reviewing such information, the local firm concluded that the title of all the mining rights of SMR Peru which are referenced in Table 4-1 and Table 4-2 of the Castrovirreyna Technical Report are held by SMR Peru and that the latter is controlled by the Company through the ownership of all but one of its shares. Local legal counsel also concluded that said concessions are in good standing (except for 11 that have been cancelled due to a decision by SMR Peru) and have been granted according to the provisions of the Peruvian General Mining Law. Four mining rights correspond to applications (petitorios mineros) that are following the process for the granting of title in favor of SMR Peru. The Company also expects to have such information confirmed in a written opinion to be delivered by such firm on the closing of the Offering.

Moreover, SMR Peru has, among others and in addition to the title to the mining concessions, the relevant permits to conduct operations (i.e. the right of way transit granted by the local community, the license to use surface water from a local lake, the EIA approvals (including the corresponding amendments), which includes the expansion of the processing plant to 2,000 tpd and the tailing deposits, and the operating approval for the processing plant). Other permits such as the mining closure plan and the detailed environmental plan are in the process of being obtained. In the future, as per the relevant project schedules, regulatory mining authorizations and permits will be requested and obtained under applicable regulations and procedures by SMR Peru, as required in accordance with the activities to be performed.

Restrictions on Business

There is no restriction imposed on the Company as a shareholder of SMR Peru. Pursuant to the Peruvian National Constitution (1993) the government is entitled to expropriate under national security or public necessity reasons declared by law, which means that any such measure has to be approved by the Peruvian National Congress. See " Risk Factors " for a discussion on political instability and expropriation risks.

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Location of Management & Language

Certain of the Company's directors and officers (including the Chief Financial Officer) are domiciled in Canada, and certain of the Company's directors and officers (including the Chief Executive Officer) are domiciled in Peru. The Company expects that this structure will enable the Company to maintain effective and adequate control over the business operations located in Peru. In addition, the Company intends to maintain in-house legal counsel in Peru. The Company also has local legal and audit advisors in Peru to ensure that all differences between Canada and Peru in the taxation and legal systems are accounted for. In addition, the executive management team of the Company is largely made up of Peruvian nationals who are accustomed to the business cultures and practices in Peru.

In addition, each of the Company's directors and proposed directors, other than Bryan Coates, is fluent in Spanish. Each of Jean Pierre Fort and Torsten Danne are also fluent in Spanish.

Control Over SMR Peru

The only designated officer of SMR Peru is Alfredo Bazo, the Company's Chief Executive Officer. The Company, and therefore the Board, have effective control over SMR Peru because of the following: (i) the Company is the major shareholder of SMR Peru (100% minus one share or 99.99%) and therefore has total control over SMR Peru as decisions are taken by majority vote; (ii) as controlling shareholder, the Company approves the appointment of officers and legal representatives of SMR Peru (including the General Manager); (iii) pursuant to SMR Peru's bylaws and Peruvian Corporations Law, Mula Mining Corp. as holder of one share in SMR Peru does not have any veto right against the decisions of the Company in SMR Peru; and (iv) the Chief Executive Officer of the Company has been appointed as General Manager of SMR Peru, which not only grants control over SMR Peru's bank accounts (among others assets) but ensures that SMR Peru follows the decisions made at the Company level. The Company has registered the acquisition of the 99.99% interest in SMR Peru in the stock ledger of SMR Peru, which makes it the controlling shareholder of such Peruvian mining company (pursuant to the quorum and voting majority rules in the Peruvian Corporations Law and SMR Peru's bylaws). As the General Manager of SMR Peru is responsible for the custody of SMR Peru's corporate records, such records are kept in SMR Peru's office.

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USE OF PROCEEDS

Prior to giving effect to the exercise of the Over-Allotment Option, and after deducting the Underwriters' Fee (assuming no sales are made under the President's List Allocation) and the estimated expenses of the Offering of $0.8 million, the Company's estimated net proceeds from the Offering will be $13.3 million. In addition, the Company has $9.7 million of cash and cash equivalents available remaining from the closing of the Equity Financing, which, together with the estimated net proceeds from the Offering will be approximately $23 million (the " Available Funds ").

The Company intends to use the Available Funds to advance the Castrovirreyna Project , which includes using the Available Funds as indicated in the following table:

Principal Purpose		Estimated Amount to be Expended ($ million)(1) 12.2 3.1 0.6 0.5 0.2 3.0 3.3 0.1
Resource Upgrades & Exploration(2) Plant Refurbishment(3) Tailings Dam(4) Mine Concession Rights(5) Permits & Studies(6) Working Capital(7) Trafigura Loan(8) Communities(9) Total
		23

Notes :

(1) Assuming that the Over-Allotment Option is exercised in full, the Company would receive additional net proceeds of approximately $2.115 million, after deducting the Underwriters' Fee (assuming no sales are made under the President's List Allocation). The Company anticipates that these additional proceeds will be allocated for general corporate purposes.
(2) Resource upgrades and exploration relate primarily to the Company’s planned DDH program. The Company’s proposed DDH program plans to drill approximately 45,384 meters. As part of the Company's exploration efforts, the Company also intends to perform additional studies relating to geophysics, geochemistry, and topography at the Castrovirreyna Project and commence exploration of brownfield and greenfield projects. This amount relates to stage one and part of stage two of the Company's exploration plan. Stage one of the Company's exploration plan involves the upgrade of the Company's resource and further brownfield exploration. The Company expects to begin stage one in Q1 2022 and complete stage one in Q1 2023. The Company expects that stage one will cost approximately $10,000,000 to complete. Stage two of the Company's exploration plan involves the further exploration of greenfield properties in the Dorita block. The Company expects to begin stage two in Q4 2022 and complete stage two in Q1 2023. The Company expects that stage two will cost approximately $2,200,000 to complete. Stage two work is not required to be completed before production can re-commence at the Castrovirreyna Project.
(3) Plant refurbishment relates to costs associated with the refurbishment of the existing 2,000 tpd plant, which are necessary to bring such plant into production. The refurbishment activities relate to: modifying feeder and transmission chains; replacing conveyor belts and lining for crushers; upgrading mills support for alignment of grinders; replacing mill liners; purchasing new conveyor belts and transmission lubrication for flotation; general maintenance and updating the control board for filtration activities; general maintenance; ensuring safety equipment complies with current regulations; and various electrical work, including replacing lines and boards and updating systems to current standards. The funds allocated to plant refurbishment are expected to be sufficient to complete the work program outlined herein.
(4) The current tailings dam is able to satisfy up to two years of production at full capacity. The funds allocated to the tailings dam will be used to maintain current capacity and begin preparing the dam for expansion. The funds will also be used to ensure that the dam will continue to comply with the local environmental regulations and can be operated
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in good working condition until it is ready for expansion. The Company expects to start a periodic expansion of the tailings dam upon the commencement of production and which the Company expects will primarily be financed with cash flow from operations.

(5) Mining concession rights refers to a mandatory fee that all Peruvian mining companies must pay to maintain mining concessions.
(6) Amounts allocated to permits and studies relates to amounts to be expended by the Company in connection with permits and studies related to environmental and social issues.
(7) Working capital will primarily be used to cover on-site operational expenses, payroll and legal and accounting support services.
(8) The proceeds allocated to the repayment of the Trafigura loan will be sufficient to pay off the Company's outstanding loan to Trafigura in its entirety. On May 6, 2018, in connection with the acquisition of the Castrovirreyna Project by SMR Peru, SMR Peru became indebted to Trafigura (a creditor of the former owner of the Castrovirreyna Project) for $7,160,000. On June 1, 2021, the Company and Trafigura signed an amended repayment schedule for the $3,380,000 outstanding balance. Such amount bears interest at the rate of the London Interbank Offered Rate (LIBOR) + 3.0% and matures in June 2024. See " Management's Discussion and Analysis ".
(9) Amounts allocated to communities will primarily be used to maintain good relationships with local communities, specifically by contributing to community outreach events.

From its inception to the date of this prospectus, the Company has had negative cash flow and anticipates experiencing negative cash flow during the current financial year. The Company intends to fund its negative cash flow from the proceeds of the Offering and existing working capital as at the date of this prospectus. The Company anticipates that the proceeds of the Offering and its existing working capital, will be sufficient to fund its development and exploration programs and to meet its administrative and operating costs for at least the 2022 calendar year. See " Risk Factors — Risks Related to the Company and to Mineral Exploration and Development — The Company has limited operating history and negative cash flows ".

Unutilized proceeds of the Offering will be invested by the Company in an interest bearing account with a major Canadian or United States bank.

The Company expects to be able to continue planned operations for approximately 15 months using the Available Funds.

As of November 30, 2021, the Company's cash balance was approximately US$7.44 million and the Company's working capital balance was approximately US$6.07 million.

While the Company intends to spend the available funds as stated above, there may be circumstances where, for sound business reasons, funds may be re-allocated at the discretion of the Board or management. See "Risk Factors — Risks Related to the Company and to Mineral Exploration and Development — The Company may not use the proceeds as described in this prospectus".

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Business Objectives and Milestones

The Company expects to accomplish the following business objectives and milestones using the Available Funds:

Business Objective	Milestone(s) that must occur for Business Objective to be Accomplished	Anticipated Timing to Achieve Business Objective	Estimated Cost
Upgrade Resource	Commencement of DDH program Obtain first results from DDH program Complete DDH program Commence exploration of brownfield and greenfield projects	Q1 / 2022 Q2 – Q3 / 2022 Q1 / 2023 Q4 / 2022	$600,000 $1,500,000 $8,300,000 $1,800,000
Refurbish Plant	Begin refurbishment of processing plant Complete refurbishment of processing plant	Q1 – Q2 /2022 Q1 / 2023	$1,100,000 $2,000,000
Prepare Tailings Dam for Upgrade	Begin preparation of tailings dam for proposed upgrades	Q1 – Q4 /2022	$600,000

Notes :

(1) The DDH program will involve drilling at the Castrovirreyna Project from surface and underground to further explore the potential resource contained at the property. The completion of the DDH program by itself will not be sufficient to enable the Company to re-commence production. The timeline for the re-commencement of production at the Castrovirreyna Project is dependent on a number of assumptions and estimates, including, without limitation, the success of the proposed DDH program and other exploration programs; the timely receipt of environmental and social permits related to exploration, plant refurbishment, the preparation of the tailings dam for expansion; the timely delivery of required equipment and supplies and the geology and metallurgical characteristics of the Castrovirreyna Project being as described in the Castrovirreyna Technical Report.

The Company expects that the total cost to re-commence production at the Castrovirreyna Project in 2023 will be approximately $23 million.

While the Company believes that it has the skills and resources necessary to accomplish these business objectives, there is no certainty that the Company will be able to do so within the timelines indicated above, or at all.

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PLAN OF DISTRIBUTION

The Company has agreed to issue and sell, and the Underwriters have severally (and not jointly or jointly and severally) agreed to purchase, as principals, an aggregate of ⚫ Units at the Offering Price for aggregate gross proceeds of $⚫, payable in cash to the Company against delivery of the Units, subject to the terms and conditions contained in the Underwriting Agreement. The Offering Price will be determined by arm's length negotiation between the Company and the Underwriters based on several factors, such as prevailing market conditions; the capital structure of the Company; estimates of the Company's business potential and earnings prospects; an overall assessment of the Company's management; and the consideration of these factors in relation to market valuation of companies in related businesses, and may bear no relationship to the price that will prevail in the public market.

In consideration for their services in connection with the Offering, the Underwriting Agreement provides that the Company will pay the Underwriters' Fee to the Underwriters, which is equal to 6.0% of the gross proceeds of the Offering (including in respect of any exercise of the Over-Allotment Option), subject to the President's List Allocation.

The Underwriters agreed that up to ⚫% of the Units to be sold in the Offering shall be reserved for sale to certain ⚫ of the Company and other purchasers identified by the Company as part of the distribution of Units by the Underwriters (the " President's List Allocation "), subject to the terms and conditions of the Underwriting Agreement. Sales of Units to such persons shall be subject to a reduced fee equal to $⚫ per Unit, representing 3.0% of the aggregate gross proceeds from such sales.

The Underwriters propose to offer the Units initially at the Offering Price. After the Underwriters have made a reasonable effort to sell all of the Units offered by this prospectus at that price, the initially stated Offering Price may be decreased, and further changed from time to time, by the Underwriters to an amount not greater than the initially stated Offering Price and, in such case, the compensation realized by the Underwriters will be decreased by the amount that the aggregate price paid by the purchasers for the Units is less than the gross proceeds paid by the Underwriters to the Company. Such reduced price sales will not affect the net proceeds to be received by the Company under the Offering.

The Company has agreed to grant to the Underwriters the Over-Allotment Option to purchase that number of Underwriters' Option Units, Underwriters' Option Shares and/or Underwriters' Option Warrants as is equal to 15% of the number of Units sold pursuant to the Offering for a period of 30 days following the Closing Date, to cover the Underwriters' over-allocation position, if any, and for market stabilization purposes. The Over-Allotment Option may be exercised by the Underwriters in respect of: (i) Underwriters' Option Units at the Offering Price; (ii) Underwriters' Option Shares at a price of $⚫ per Underwriters' Option Share; (iii) Underwriters' Option Warrants at a price of $⚫ per Underwriters' Option Warrant; or (iv) any combination of Underwriters' Option Shares and/or Underwriters' Option Warrants, provided, in each case, that the aggregate number of Underwriters' Option Shares and Underwriters' Option Warrants that may be issued under the Over-Allotment Option does not exceed 15% of the number of Units issued under the Offering. This prospectus qualifies the distribution of the Over-Allotment Option and the Underwriters' Option Units, Underwriters' Option Shares and Underwriters' Option Warrants, if any, issuable upon exercise thereof. A purchaser who acquires Underwriters' Option Units, Underwriters' Option Shares or Underwriters' Option Warrants forming part of the Underwriters' overallocation position acquires those Underwriters' Option Units, Underwriters' Option Shares or Underwriters' Option Warrants under this prospectus, regardless of whether the over-allocation position is ultimately filled through the exercise of the Over-Allotment Option or secondary market purposes.

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If the Underwriters exercise the Over-Allotment Option in full, the gross proceeds raised under the Offering will be $⚫, the Underwriters' Fee will be $⚫ and the net proceeds to the Company will be $⚫ (assuming no sales are made under the President's List Allocation).

The Units are being offered for sale to the public in all of the provinces of Canada (excluding Quebec) by way of this prospectus and in the United States and internationally by way of private placement pursuant to private placement or available exemptions.

The Company has applied to list the Common Shares (including the Unit Shares and Warrant Shares) on the TSXV. Listing is subject to the Company fulfilling all of the initial listing requirements and conditions of the TSXV, including prescribed distribution and financial requirements and there is no assurance such a listing will be obtained.

The obligations of the Underwriters under the Underwriting Agreement are several (and not joint or joint and several), and are subject to certain closing conditions and may be terminated at their discretion at any time before Closing on the basis of their assessment of the state of the financial markets and upon the occurrence of certain stated events. The Underwriters are, however, severally obligated to take up and pay for all of the Units if any Units are purchased under the Underwriting Agreement. The Company has agreed in the Underwriting Agreement to indemnify each of the Underwriters and their affiliates and their respective directors, officers, partners, employees and agents against certain liabilities and expenses or to contribute to payments that the Underwriters may be required to make in respect thereof.

It is anticipated that the Company will arrange for one or more instant deposits of the Unit Shares and Warrants issued under the Offering to or for the account of the Underwriters with CDS or its nominee through the non-certificated inventory system administered by CDS on the Closing Date. A purchaser of Units will receive only a customer confirmation from a registered dealer that is a CDS participant and from or through which the Units are purchased. No certificates will be issued to purchasers except in limited circumstances.

The Units, Unit Shares, Warrants and Warrant Shares have not been and will not be registered under the U.S. Securities Act or any state securities laws, and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. Persons, except in transactions exempt from the registration requirements of the U.S. Securities Act and all applicable state securities laws. The

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Underwriters have agreed that they will not offer or sell the Units within the United States except pursuant to an exemption from the registration requirements of the U.S. Securities Act and pursuant to similar exemptions under applicable state securities laws. The Underwriting Agreement provides that the Underwriters, acting through their registered U.S. broker-dealer affiliates, (i) may offer and resell the Units to "qualified institutional buyers" (as defined in Rule 144(a)(1) under the U.S. Securities Act, " Qualified Institutional Buyers ") in the United States or to, or for the account or benefit of, U.S. Persons that are Qualified Institutional Buyers, provided such offers and sales are made in accordance with Rule 144A under the U.S. Securities Act, and (ii) may offer the Units for sale by the Corporation to persons in the United States and to, or for the account or benefit of, person that are U.S. Persons, as substituted purchasers, that are "accredited investors" within the meaning of Rule 501(a) of Regulation D under the U.S. Securities Act (" U.S. Accredited Investors "), in compliance with Rule 506(b) of Regulation D under the U.S. Securities Act, and, in each case, in compliance with similar exemptions under applicable state securities laws. Moreover, the Underwriting Agreement provides that the Underwriters will offer and sell the Units outside the United States to persons that are not U.S. Persons only in accordance with Rule 903 of Regulation S under the U.S. Securities Act. The Units that are sold in the United States or to, or for the account or benefit of, U.S. Persons will be restricted securities within the meaning of Rule 144(a)(3) of the U.S. Securities Act and may only be offered, sold or otherwise transferred pursuant to certain exemptions from the registration requirements of the U.S. Securities Act. This prospectus does not constitute an offer to sell, or a solicitation of an offer to buy, any Units in the United States. In addition, until 40 days after the commencement of the Offering, an offer or sale of the Units within the United States by a dealer (whether or not participating in the Offering) may violate the registration requirements of the U.S. Securities Act unless such offer is made pursuant to an exemption from the registration requirements of the U.S. Securities Act.

Pursuant to the rules and policy statements of certain Canadian securities regulators, the Underwriters may not, at any time during the period of distribution, bid for or purchase the Company's securities for their own account or for accounts over which they exercise control or direction. The foregoing restrictions are subject to certain exceptions on the condition that the bid or purchase not be engaged in for the purpose of creating actual or apparent active trading in or raising the price of the Common Shares. These exceptions include a bid for or purchase of the Company's securities: (i) made through the facilities of the TSXV, in accordance with the Universal Market Integrity Rules of the Investment Industry Regulatory Organization of Canada relating to market stabilization and passive market making activities; (ii) made for or on behalf of a client, provided that the client's order was not solicited during the distribution period; and (iii) to cover a short position entered into prior to the commencement of the distribution period. Subject to applicable laws and in connection with the Offering, the Underwriters may engage in market stabilization or market balancing activities on the TSXV where the bid for or purchase of the Company's securities is for the purpose of maintaining a fair and orderly market in such securities, subject to price limitations applicable to such bids or purchases. Such transactions, if commenced, may be discontinued at any time.

Pursuant to the Underwriting Agreement, the Company will be obligated for a period of 90 days following the Closing Date to not directly or indirectly, without the prior consent of Eight Capital, on behalf of the Underwriters, such consent not to be unreasonably withheld or delayed, issue, offer or grant any option, warrant or other right to purchase or agree to issue or sell, or otherwise lend, transfer, pledge or dispose of (including, without limitation, by making any short sale, engaging in any hedging, monetization or derivative transaction or entering into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of Common Shares or other equity securities of the Company or securities convertible into, exchangeable for, or otherwise exercisable into Common Shares or other equity securities of the Company, whether or not cash settled), in a public offering or by way of private placement or otherwise, any equity securities of the Company or other

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securities convertible into, exchangeable for, or otherwise exercisable into Common Shares or other equity securities of the Company, or agree to do any of the foregoing or publicly announce any intention to do any of the foregoing; provided that, such restrictions will not apply to offers, issuances and grants made pursuant to a security-based compensation plan disclosed in this prospectus (including the Stock Option Plan).

Additionally, pursuant to the Underwriting Agreement, the Company will use its best efforts to cause certain shareholders, executive officers and directors who will own an interest in the Company after Closing, to enter into undertakings to not, subject to certain exceptions, until the date that is 180 days following the Closing Date, directly or indirectly, without the prior consent of Eight Capital, on behalf of the Underwriters, such consent not to be unreasonably withheld or delayed (i) offer, sell, contract to sell, secure, pledge, grant or sell any option, right or warrant to purchase, or otherwise lend, transfer or dispose of any Common Shares or other securities of the Company beneficially owned or controlled, directly or indirectly, by them as of the date hereof or purchased by them pursuant to the Offering, or (ii) make any short sale, engage in any hedging transaction, or enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any such Common Shares and securities of the Company, whether any such transaction is to be settled by delivery of Common Shares, other securities, cash or otherwise.

SELECTED FINANCIAL INFORMATION

The following table sets out the Company's selected financial information for the periods and as at the dates indicated. This information has been derived from the Company's audited and unaudited financial statements and related notes thereto included elsewhere in this prospectus. The Company's financial statements are prepared in accordance with IFRS. Investors should read the following information in conjunction with those financial statements and related notes thereto, along with the associated MD&A.

General and administrative expenses Other (income) expenses Net loss and comprehensive loss for the period Basic and diluted net loss per Common Share At end of period: Cash and cash equivalents Other current assets Non-current assets Current liabilities Non-current liabilities Shareholders' equity	As at and for the nine month period ended September 30, 2021 (US$000s)	As at and for the year ended December 31, 2020 (US$000s)	As at and for the year ended December 31, 2019 (US$000s)
	805.3 423.5 1,228.8 (0.01) 8,374.0 0.9 8,845.6 1,386.7 1,254.3 14,579.5	717.5 100.9 818.5 (0.04) 203.6 1.8 8,262.0 557.0 2,038.4 5,872.0	1,080.9 (94.6) 986.4 (0.05) 1,057.3 7.4 7,686.2 606.9 2,037.1 6,107.0

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MANAGEMENT'S DISCUSSION AND ANALYSIS

Management's Discussion and Analysis for the Years Ended December 31, 2020 and 2019

The following management's discussion and analysis of the financial condition and results of the operations of the Company constitutes management's review of the factors that affected the Company's financial and operating performance for the years ended December 31, 2020 and 2019. This MD&A, dated October 18, 2021, is intended to supplement and complement the Company's audited financial statements prepared in accordance with IFRS and related notes for the years ended December 31, 2020 and 2019. This MD&A contains certain forward-looking statements and reference should be made to the cautionary language under the section " Statement Regarding Forward-Looking Information ". Unless otherwise noted, all amounts presented are in United States dollars.

Description of Business

The Company is a privately held silver explorer and mine developer, which is planning to re-start production at the Reliquias underground mine and undertake exploration activities at its highly prospective silver camps at the Castrovirreyna Project in Huancavelica, Peru. It is well-capitalized and owns a 100% interest in all its properties in Huancavelica. SMR owns a 2,000 tpd processing plant and a 2-year operating tailings dam. The Company targets the acquisition of mining concessions for exploration, exploitation, extraction, and processing of all types of minerals with a special focus on precious metals.

The Castrovirreyna Project includes mine infrastructure that supported the Reliquias underground operations, which were operated by Corporación Minera Castrovirreyna (" CMC ") from 2005–2015. When SMR Peru acquired the Castrovirreyna Project, it included the following infrastructure:

Reliquias underground mine: consisting of ventilation system, water pumping system, explosives magazine, and mining equipment;
Concentrator: a 2,000 tpd conventional concentrator to produce lead, zinc, and copper concentrates;
TSF: sufficient remaining capacity for two years of tailings production at 2,000 tpd process rate;
Infrastructure: power supply line, water supply system, fuel storage, a 370-person camp, warehouses, maintenance shops, and paved roads.

In 2018, SMR Peru acquired certain liquidated assets from CMC that comprised the Castrovirreyna Project. The Castrovirreyna Project is located near the town of Castrovirreyna, department of Huancavelica, province of Catrovirreyna, Peru. The Castrovirreyna Project includes mine infrastructure that supported the Reliquias and Caudalosa Grande underground operations, which were operated by CMC from 2005–2015.

In 2019, 26 mining concessions were acquired, of which 2 concessions with a total of 28 hectares are located in the province of San Genaro, 3 concessions with a total of 1,400 hectares are located in the province of Huaytara, and 21 concessions with a total of 15,060 hectares are located in the province of Castrovirreyna, all in the department of Huancavelica.

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SMR has a total area of 27,450 ha in 287 concessions of which the Reliquias block, consisting of 219 concessions, comprises 12,972 ha and the Dorita block, consisting of 68 concessions, covers an approximate area of 14,478 ha.

SMR has two sub-areas, referred to as Reliquias and Dorita and the Company holds all mineral concessions in these blocks. The Castrovirreyna Project acquired included the Reliquias and Caudalosa Grande underground mines and associated infrastructure, the Jose Picasso Perata processing plant and a tailings storage facility. SMR owns 100% of its concessions which are currently held in the name of SMR Peru.

On May 7, 2021, the SMR Peru Acquisition was completed. The shareholders of SMR Peru exchanged 100% of their issued and outstanding shares for shares of SMR, representing 56% of the issued and outstanding shares of SMR. On completion of the SMR Peru Acquisition, SMR Peru was determined to be the accounting acquirer and accordingly, the combined entity is a continuation of SMR Peru.

The foregoing assets were acquired by SMR Peru for consideration that included a cash payment and future agreed payments with a nominal value of US$7,160,000. The carrying value recorded on the acquisition date amounted to US$5,143,199 including taxes, which is equivalent to the initial payment of the debt for US$2,620,000 plus the fair value of the loan in its initial measurement of US$2,523,199. For accounting purposes, the fair value of the consideration issued totaled US$2,523,199. As of the date of this prospectus, SMR has a total area of 27,450 ha in 287 concessions, of which the Reliquias block, consisting of 219 concessions, comprised 12,972 ha, and the Dorita block, consisting of 68 concessions, covered an approximate area of 14,478 ha.

On May 6, 2018, SMR Peru and Trafigura signed a contract for the assignment of credit rights for US$7,160,000 for the acquisition of assets and mining concessions from CMC in liquidation.

On June 1, 2021, SMR Peru and Trafigura closed an agreement where the parties signed an amended repayment schedule for the US$3,380,000 outstanding balance that consisted of the following payments:

A payment of US$375,555 in equal monthly payments over a period of four months from June 2021 to September 2021, plus interest.
A payment of US$3,004,444 in equal monthly payments over a period of 36 months from October 2021 to September 2024 plus interest.

The fair value of the loan was calculated as the discounted future contractual cash payments under the loan agreement using an effective interest rate of 20% per annum. The debt component has been accreted systematically to its face value over the term of the loan by recording of additional interest. The November 2, 2019 and August 13, 2020 and amendments to the Trafigura loan arrangement were determined to be substantial modifications and therefore were accounted for as an extinguishment. The June 1, 2021 amendment was determined not to be a substantial modification and therefore was not accounted for as an extinguishment.

Corporate Highlights

On March 10, 2021, SMR issued 2,500,000 Common Shares (on a pre-Share Split basis) at a price of US$0.01 per share for gross proceeds of US$25,000.
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On April 15, 2021, SMR closed a private placement of 3,333,333 units (on a pre-Share Split basis) at a price of US$3.00 per unit for gross proceeds of US$9,999,999. Each unit is comprised of one Common Share and one half of one Common Share purchase warrant. Each warrant will be exercisable to acquire one Common Share at an exercise price of US$9.00 per share for a period of 36 months from the closing.

In connection with the private placement, the Company issued 18,664 compensation units (on a pre-Share Split basis) and incurred professional costs of US$91,784. Each compensation unit is comprised of one Common Share and one half of one Common Share purchase warrant. The warrants have the same terms as those of the private placement.

On May 7, 2021, there was the SMR Peru Acquisition between SMR Peru and SMR. In connection with the completion of the SMR Peru Acquisition, SMR acquired all the issued and outstanding shares of SMR Peru in exchange for 7,499,989 Common Shares (on a pre-Share Split basis). In substance, the transaction involves SMR Peru shareholders obtaining control of SMR; accordingly, the transaction is considered to be a reverse acquisition transaction in which SMR Peru is identified as the accounting acquirer.

At the time of the transaction, SMR was a non-operating entity and did not meet the definition of a business under IFRS 3 Business Combinations, the acquisition was accounted for as a purchase of SMR's net assets. The consideration paid was determined as an equity settled sharebased payment under IFRS 2, at the fair value of the net assets received at the date of closing. IFRS 2 requires the shares issued for the acquisition of the net assets of SMR to be measured at the fair value of the net assets, unless the fair value cannot be reliably estimated.

As SMR Peru was deemed to be the acquirer for accounting purposes, the Company's consolidated financial statements present the historical financial information of SMR Peru to the date of the SMR Peru Acquisition and, subsequent to the SMR Peru Acquisition, as a continuation of SMR Peru.

The following represent the preliminary fair value allocation to identifiable net assets acquired.

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Notes:

(1) The Common Shares issued were valued based on the fair value of net assets acquired.

On September 17, 2021, the Board approved the establishment of the Stock Option Plan relating to the Company's directors, officers, employees and consultants, and to reserve up to 10% of the Common Shares issued and outstanding from time to time for issuance thereunder.
On September 17, 2021, the Company granted Options to certain directors and officers of the Company and its subsidiary to purchase up to 590,000 Common Shares (on a pre-Share Split basis), exercisable at a price of US$3.00 per share and expiring on April 30, 2025. These Options will vest over the span of three years, with 295,000 (on a pre-Share Split basis) to be vested on
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the first anniversary of the date of grant, 147,500 (on a pre-Share Split basis) to be vested on the second anniversary of the date of grant, and the remaining 147,500 (on a pre-Share Split basis) to be vested on the third anniversary of the date of grant.

Operational Overview

Past Production Mine

SMR has two main underground mines: Reliquias and Caudalosa. Both assets have recorded historical mining activity with polymetallic production rich in silver with contained zinc, lead, gold, and copper from 1952 to 2014. Furthermore, production reached an average of over 1 million ounces of silver and close to 3,000 ounces gold between 2009 to 2014. Moreover, in 2012, an average of 1.4 million ounces of silver and around 4,000 ounces of gold were obtained within a bulk concentrate. At that time, long-hole open stope, conventional cut and fill, and open pit were the chosen mining methods.

The Reliquias underground mine is located 10 km southwest from the existing processing plant. The mine is currently accessible through a well-prepared underground road to the deepest part. Mineralization consists of silver-rich sulfides and sulfosalts towards the upper part of the mine and shows concentration of base metals at deepening. On the other hand, the Caudalosa underground mine, shows a type of ore that is mainly composed of silver-rich sulfides and sulfosalts, galena, sphalerite, and copper sulfides.

The Reliquias and Caudalosa mines have exploration potential at depth for extensions of veins that were mined during operations, and lateral vein extensions. Mineralization that is exposed in the Sacasipuedes (SN 290) and Matacaballo (SN 735-1) veins is a particularly attractive underground exploration prospect, as both veins remain open laterally and at depth. There is depth and lateral potential for extensions of veins that were mined in the former Dorita and Huancarpusca underground operations.

Historical mineral resources reported by the Company have been prepared for internal exploration planning purposes and are summarized in the table below. Historic mineral resources, although not independently calculated, are of reasonable quality for the purposes of exploration programs and mine planning particularly at the Reliquias mine.

43-101 Historical Resource Table[(1)(2)]

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Notes:

(1) 43-101 Resource Table: M&I: Kt 737; Grades: Ag: 9.1 oz/t; Zn 3.5%; Pb 2.4%; Cu 0.5%; Contained: 6.7MozAg; 56.6MlbZn; 39.8MlbPb; 8.8MlbCu | Inferred: Kt 2,286; Grades: Ag: 13.4 oz/t; Zn 3.1%; Pb 2.7%; Cu 1.7%; Contained: 30.6MozAg; 153.7MlbZn; 137.1MlbPb; 93.5MlbCu | Silver Equivalent calculation at 43-101 Price deck: US$15.50 US$/oz Ag | US$1.20 US$/lb Zn | US$0.95 US$/lb Pb | US$2.81 US$/lb Cu.
(2) (i) Historical resource estimates have been classified in accordance with the CIM Definition Standards; (ii) Historical resource estimates are not Mineral Reserves or Mineral Resources and do not have demonstrated economic viability. All figures are rounded to reflect the relative accuracy of the estimates; (iii) Information is as of July, 2019 Source: Sociedad Minera Reliquias SA, the information is based on RM-Master Pro Quality, C. Rodriguez, Abr19; RM-Master Pro Quality, C. Rodriguez, Jul19; (iv) the Qualified Person considers that the historical resource estimates are relevant for the proper understanding of the Castrovirreyna Project and additional exploration, including drilling, could be needed
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to verify the historical estimate as current Mineral Resources; (v) A qualified person has not done sufficient work to classify the historical estimate as current Mineral Resources or Mineral Reserves; and (vi) The Company is not treating the historical estimate as current Mineral Resources or Mineral Reserves.

Exploration Properties

1. Reliquias

After the acquisition of the Castrovirreyna Project, SMR Peru has conducted exploration work that consisted of geological mapping, rock chip and soil sampling, induced polarization geophysical surveys and a reconstruction of historical geological data. Geological evaluation also included preliminary noncompliant mineral resource assessments for the historic Reliquias and Caudalosa Grande underground mines.

2. Dorita

At the Dorita block of properties, exploration work consisted of geological mapping, rock and soil sampling, induced polarization and magnetic geophysical surveys. The Dorita block of properties includes mining concessions that contain historic small scale underground operations in veins with polymetallic ore. These concessions were previously exploited when they were under the ownership of CMC however, these operations were suspended when CMC entered its liquidation process.

Selected Annual Financial Information

Revenue Net loss Net loss per share – basic and diluted Total assets Total long-term liabilities	Year ended December 31, 2020 (US$) nil (818,469) (0.03) As at December 31, 2020 (US$) 8,467,429 2,038,415	Year ended December 31, 2019 (US$)
		nil (986,381) (0.05) As at December 31, 2019 (US$) 8,751,012 2,037,082

Results of Operations

Year ended December 31, 2020, compared with the year ended December 31, 2019

The Company's net loss for the year ended December 31, 2020, of US$818,469 (year ended December 31, 2019 - US$986,381) was US$167,912 lower than in 2019.
For the year ended December 31, 2019, the Company recognized a gain on extinguishment of financial liability for US$653,598 (US$1,160,000 at face value). This represented debt forgiveness in 2019 from Trafigura.
During the year ended December 31, 2020, the Company recorded net financial expenses of US$100,926 compared to a net financial income of US$94,552 for the year ended December 31, 2019. The decrease in US$195,478 was primarily due to a lower gain on extinguishment of financial liability in 2020 as compared to 2019.
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A breakdown of general and administrative expenses for the year ended December 31, 2020 and 2019 is provided below.

Year Ended December 31, Administrative expenses Depreciation Contractor fees Environmental fees Equipment rental Insurance Meals and entertainment Operating on-site expenses Professional fees Travel expenses	2020 (US$) 141,531 181,853 123,968 86,624 16,312 3,791 34,062 97,270 26,589 5,543 717,543	2019 (US$)
		147,097 160,422 150,520 153,034 32,332 8,939 61,977 308,205 47,978 10,429 1,080,933

Notes:

(1) General and administrative expenses decreased in fiscal 2020 due to the reduced activity resulting from the COVID19 pandemic, which emerged in March 2020 and continued into fiscal 2021.

Liquidity and Capital Resources

The Company has no operating revenues. It finances its exploration activities through proceeds from private placements of its securities. There is no assurance that future equity capital will be available to the Company in the amounts or at the times desired by the Company or on terms that are acceptable to it, if at all.

The Company's cash and cash equivalents were US$203,610 as at December 31, 2020 compared to US$1,057,323 as at December 31, 2019. The Company had a working capital deficiency as at December 31, 2020 of US$351,636 compared to positive working capital of US$457,824 as at December 31, 2019. Working capital decreased during the year ended December 31, 2020, by US$809,460. The decrease was primarily attributed to the use of funds in the Company's day-to-day operations and due to cash used in exploration activities.

Operating Activities

Cash used in operating activities for the year ended December 31, 2020, was US$535,301. Operating activities were affected by a net loss of US$818,469, non-cash adjustments of US$349,437, and non-cash working capital items of US$66,269. Non-cash adjustments consisted of depreciation of US$182,251 and a change in the fair value of financial liabilities of US$167,186. The net change in noncash working capital balances resulted from an increase in amounts receivable of US$95,990 and an increase in accounts payable and accrued liabilities of US$29,151.

Investing Activities

Cash used in investing activities for the year ended December 31, 2020 was US$656,961. For the year ended December 31, 2020, the Company incurred US$641,023 of exploration and evaluation costs and purchased mine concessions and property, plant and equipment of US$2,938 and US$13,000, respectively.

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Financing Activities

Cash provided by financing activities for the year ended December 31, 2020 was US$338,549. For the year ended December 31, 2020, the Company received shareholder contributions of US$539,950 and made loan repayment and payment of financial obligations of US$186,686 and 14,715, respectively.

Off-Balance Sheet Arrangement

As of the date of this MD&A, the Company does not have any off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on the results of operations or financial condition of the Company, including, and without limitation, such considerations as liquidity and capital resources.

Outstanding Share Data

As at October 18, 2021, the Company had 13,351,986 Common Shares issued and outstanding (on a pre-Share Split basis).

As at October 18, 2021, the Company had 590,000 Options (on a pre-Share Split basis) issued and outstanding with an exercise price of US$3.00.

As at October 18, 2021, the Company had 1,675,987 warrants (on a pre-Share Split basis) outstanding with an exercise price of US$9.00.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with IFRS requires management to apply accounting policies and make estimates and assumptions that affect amounts reported in the audited financial statements and accompanying notes. There is full disclosure of the Company's critical accounting policies and accounting estimates in the audited financial statements for the years ended December 31, 2020 and 2019.

Management's Discussion and Analysis for the Three and Nine Months Period Ended September 30, 2021 and 2020

The following interim management's discussion and analysis (" Interim MD&A ") of the financial condition and results of the operations of the Company for the three and nine months ended September 30, 2021 and 2020 has been prepared to provide material updates to the business operations, liquidity and capital resources of the Company since its last annual management discussion and analysis, being the MD&A for the years ended December 31, 2020 and 2019. This Interim MD&A does not provide a general update to the most recent annual MD&A, or reflect any non-material events since the date of the most recent annual MD&A.

This Interim MD&A has been prepared in compliance with section 2.2.1 of Form 51-102F1, in accordance with National Instrument 51-102 – Continuous Disclosure Obligations . This discussion should be read in conjunction with the Company's MD&A, audited annual consolidated financial statements for the years ended December 31, 2020 and 2019, together with the notes thereto, and unaudited condensed interim consolidated financial statements for the three and nine months ended September 30, 2021, together with the notes thereto. This Interim MD&A contains certain forward-looking statements and reference should be made to the cautionary language under the section " Statement Regarding ForwardLooking Information ". The Company's unaudited condensed interim consolidated financial statements

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and the financial information contained in this Interim MD&A are prepared in accordance with IFRS as issued by the International Accounting Standards Board and interpretations of the IFRS Interpretations Committee. The unaudited condensed interim consolidated financial statements have been prepared in accordance with International Standard 34, Interim Financial Reporting. Accordingly, information contained herein is presented as of November 16, 2021, unless otherwise indicated. Unless otherwise noted, all amounts presented are in United States dollars.

Description of Business

Reliquias underground mine: consisting of ventilation system, water pumping system, explosives magazine, and mining equipment;
Concentrator: a 2,000 tpd conventional concentrator to produce lead, zinc, and copper concentrates;
TSF: sufficient remaining capacity for two years of tailings production at 2,000 tpd process rate;
Infrastructure: power supply line, water supply system, fuel storage, a 370-person camp, warehouses, maintenance shops, and paved roads.

In 2018, SMR Peru acquired certain liquidated assets from CMC that comprised the Castrovirreyna Project. The Castrovirreyna Project is located near the town of Castrovirreyna, department of Huancavelica, province of Castrovirreyna, Peru. The Castrovirreyna Project includes mine infrastructure that supported the Reliquias and Caudalosa Grande underground operations, which were operated by CMC from 2005–2015.

SMR has total mining concession rights consisting of 28,821 ha. The total concessions are divided among the Castrovirreyna Project mining concessions (Reliquias and Dorita Blocks) with mineralization potential (27,450 ha), the plants and tailings associated to the Castrovirreyna Project (139 ha), and other concessions with mineralization potential (1,370 ha).

SMR has two sub-areas, referred to as Reliquias (12,972 ha) and Dorita (14,478 ha), and the Company holds all mineral concessions in these blocks. The Castrovirreyna Project acquired included the Reliquias and Caudalosa Grande underground mines and associated infrastructure, the Jose Picasso

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Perata processing plant and a tailings storage facility. SMR owns 100% of its concessions which are currently held in the name of SMR Peru.

On May 6, 2018, SMR Peru and Trafigura signed a contract for the assignment of credit rights for US$7,160,000 for the acquisition of assets and mining concessions from CMC in liquidation.

On June 1, 2021, SMR Peru and Trafigura closed an agreement where the parties signed an amended repayment schedule for the US$3,380,000 outstanding balance that consisted of the following payments:

A payment of US$375,555 in equal monthly payments over a period of four months from June 2021 to September 2021, plus interest.
A payment of US$3,004,444 in equal monthly payments over a period of 36 months from October 2021 to September 2024 plus interest.

Corporate Highlights

On March 10, 2021, SMR issued 25,000,000 Common Shares (on a post-Share Split basis) at a price of US$0.001 per share for gross proceeds of US$25,000.
On April 15, 2021, SMR closed a private placement of 33,333,333 units (on a post-Share Split basis) at a price of US$0.30 for gross proceeds of US$9,999,999. Each unit is comprised of one Common Share and one-half of one Common Share purchase warrant. Each warrant will be exercisable to acquire one Common Share at an exercise price of US$0.90 per share for a period of 36 months from the closing.

In connection with the private placement, the Company issued 186,640 compensation units (on a pre-Share Split basis) and incurred professional costs of US$91,784. Each compensation unit is comprised of one Common Share and one-half of one Common Share purchase warrant. The warrants have the same terms as those of the private placement.

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On May 7, 2021, SMR Peru and SMR completed the SMR Peru Acquisition. In connection with the completion of the SMR Peru Acquisition, SMR acquired all the issued and outstanding shares of SMR Peru in exchange for 74,999,890 Common Shares (on a post-Share Split basis). In substance, the transaction involves SMR Peru shareholders obtaining control of SMR; accordingly, the transaction is considered to be a reverse acquisition transaction in which SMR Peru is identified as the accounting acquirer.

At the time of the transaction, SMR was a non-operating entity and did not meet the definition of a business under IFRS 3 - Business Combinations , the acquisition was accounted for as a purchase of SMR's net assets. The consideration paid was determined as an equity-settled sharebased payment under IFRS 2, at the fair value of the net assets received at the date of closing. IFRS 2 requires the shares issued for the acquisition of the net assets of SMR to be measured at the fair value of the net assets, unless the fair value cannot be reliably estimated.

As SMR Peru was deemed to be the acquirer for accounting purposes, the Company's consolidated financial statements, presenting the historical financial information to the date of the SMR Peru Acquisition, are those of SMR Peru presented as a continuation of SMR Peru.

The following represent the preliminary fair value allocation to identifiable net assets acquired.

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Notes:

(1) The Common Shares issued were valued based on the fair value of net assets acquired.

On September 11, 2021, one Common Share of SMR Peru was transferred to Mula Mining Corp. through a private agreement since Peruvian corporate law requires companies such as SMR Peru to have more than one shareholder (plurality of shareholders) and does not allow a single shareholder to be the sole owner of a company such as SMR Peru for more than six months, in September 2021 the Company transferred one Common Share to Mula Mining Corp (which is a Canadian entity and also shareholder in the Company), therefore complying with Peruvian law. Because this non-controlling interest in SMR Peru is not material, it has not been recorded in the Company’s condensed interim consolidated financial statements.
On September 17, 2021, the Board approved the establishment of the Stock Option Plan relating to the Company's directors, officers, employees and consultants, and to reserve up to 10% of the Common Shares issued and outstanding from time to time for issuance thereunder.
On September 17, 2021, the Company granted Options to certain directors and officers of the Company and its subsidiary to purchase up to 5,900,000 Common Shares (on a post-Share Split basis), exercisable at a price of US$0.30 per share and expiring on April 30, 2025. These Options will vest over the span of three years, with 2,950,000 to be vested on the first anniversary of the date of grant, 1,475,000 to be vested on the second anniversary of the date of grant, and the remaining 1,475,000 to be vested on the third anniversary of the date of grant.
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On October 18, 2021, the Company filed a preliminary long-form prospectus with the securities regulatory authorities in each of the provinces of Canada other than Quebec.
On November 15, 2021, the Company's Board approved the Share Split of the Company's Common Shares. Shareholders of record at the close of business on November 15, 2021 received nine additional Common Shares for every Common Share owned. All share data contained in this Interim MD&A has been adjusted to reflect this Share Split retrospectively.

Operational Overview

Past Production Mine

43-101 Historical Resource Table[(1)(2) ]

==> picture [478 x 98] intentionally omitted <==

Notes:

(1) 43-101 Resource Table: M&I: Kt 737; Grades: Ag: 9.1 oz/t; Zn 3.5%; Pb 2.4%; Cu 0.5%; Contained: 6.7MozAg; 56.6MlbZn; 39.8MlbPb; 8.8MlbCu | Inferred: Kt 2,286; Grades: Ag: 13.4 oz/t; Zn 3.1%; Pb 2.7%; Cu 1.7%; Contained: 30.6MozAg; 153.7MlbZn; 137.1MlbPb; 93.5MlbCu | Silver Equivalent calculation at 43-101 Price deck: US$15.50 US$/oz Ag | US$1.20 US$/lb Zn | US$0.95 US$/lb Pb | US$2.81 US$/lb Cu.

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(2) (i) Historical resource estimates have been classified in accordance with the CIM Definition Standards; (ii) Historical resource estimates are not Mineral Reserves or Mineral Resources and do not have demonstrated economic viability. All figures are rounded to reflect the relative accuracy of the estimates; (iii) Information as of July, 2019 Source: Sociedad Minera Reliquias SA, the information is based on RM-Master Pro Quality, C. Rodriguez, Abr19; RM-Master Pro Quality, C. Rodriguez, Jul19; (iv) the Qualified Person considers that the historical resource estimates are relevant for the proper understanding of the Castrovirreyna Project and additional exploration, including drilling, could be needed to verify the historical estimate as current Mineral Resources; (v) A qualified person has not done sufficient work to classify the historical estimate as current Mineral Resources or Mineral Reserves; and (vi) The Company is not treating the historical estimate as current Mineral Resources or Mineral Reserves.

Exploration Properties

1. Reliquias

2. Dorita

==> picture [437 x 88] intentionally omitted <==

==> picture [422 x 230] intentionally omitted <==

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Results of Operations

Nine months ended September 30, 2021, compared with nine months ended September 30, 2020.

SMR's net loss totaled US$1,228,807 for the nine months ended September 30, 2021, with basic and diluted loss per share of US$0.01. This compares with a net loss of US$527,791 with basic and diluted loss per share of US$0.001 for the nine months ended September 30, 2020. The increase of US$701,016 was principally because:

During the nine months ended September 30, 2021, the Company recorded financial expenses of US$280,161 compared to US$378,886 for the nine months ended September 30, 2020. The decrease of US$98,725 was primarily due to the decrease in accretion on Trafigura loan payable of US$125,396 and offset by an increase in interest accrued on Trafigura loan of US$27,475.
During the nine months ended September 30, 2021, the Company recorded gain on modification of Trafigura loan of US$nil compared to US$407,224 for the nine months ended September 30, 2020. The decrease is due to the Company and Trafigura entering a second addendum agreement on August 13, 2020, whereby the parties agreed to extend the start of the 36 debt payments on the loan until October 1, 2021. The August 13, 2020 amendment to the Trafigura loan arrangement was determined to be a substantial modification and therefore was accounted for as an extinguishment.
During the nine months ended September 30, 2021, the Company recorded foreign exchange loss of US$129,253 compared to US$4,259 for the nine months ended September 30, 2020.

A breakdown of general and administrative expenses for the nine months ended September 30, 2021 and 2020 is provided below.

Nine Months Ended September 30		2021 (US$)	2020 (US$)
Administrative expenses Amortization Contractor fees Environmental fees Equipment rental Insurance Meals and entertainment Operational expenses Professional fees Salaries and benefits Travel expenses
		72,935 137,985 93,431 60,528 18,206 3,490 21,023 83,374 109,838 191,329 13,140 805,279	110,831 135,856 97,508 73,286 8,389 2,559 26,803 74,599 17,779 Nil 4,260 551,870

Notes:

(1) General and administrative expenses increased by US$253,409 for the nine months ended September 30, 2021 due to an increase in salaries and benefits of US$191,329, and additional expenses incurred resulting from the SMR Peru Acquisition, which occurred on May 7, 2021.

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Three months ended September 30, 2021, compared with three months ended September 30, 2020.

SMR's net loss totaled US$561,238 for the three months ended September 30, 2021, with basic and diluted loss per share of US$0.00. This compares with a net loss of US$25,655 with basic and diluted loss per share of US$0.00 for the three months ended September 30, 2020. The increase of US$586,893 was principally because:

During the three months ended September 30, 2021, the Company recorded financial expenses of US$764 compared to US$180,080 for the three months ended September 30, 2020.
During the three months ended September 30, 2021, the Company recorded gain on modification of Trafigura loan of US$nil compared to US$407,224 for the three months ended September 30, 2020. The decrease is due to the Company and Trafigura entering a second addendum agreement on August 13, 2020, whereby the parties agree to extend the start of the 36 debt payments on the loan until October 1, 2021. The August 13, 2020 amendment to the Trafigura loan arrangement was determined to be a substantial modification and therefore was accounted for as an extinguishment.
During the three months ended September 30, 2021, the Company recorded foreign exchange loss of US$117,309 compared to US$94 for the three months ended September 30, 2020.

A breakdown of general and administrative expenses for the three months ended September 30, 2021 and 2020 is provided below.

Three Months Ended September 30, Administrative expenses Amortization Contractor fees Environmental fees Equipment rental Insurance Meals and entertainment Operational expenses Professional fees Salaries and benefits Travel expenses	2021 (US$) 15,682 47,294 35,703 16,904 2,631 2,382 7,555 44,295 80,556 166,714 9,335 429,051	2020 (US$)
		55,514 45,165 34,282 33,089 405 296 7,435 14,570 8,541 Nil 2,098 201,395

Notes:

(1) General and administrative expenses increased by US$227,656 for the three months ended September 30, 2021 due to an increase in salaries and benefits of US$166,714 and additional expenses incurred resulting from the SMR Peru Acquisition, which occurred on May 7, 2021.

Liquidity and Capital Resources

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to the Company in the amounts or at the times desired by the Company or on terms that are acceptable to it, if at all.

The Company's cash and cash equivalents were US$8,373,980 as at September 30, 2021 compared to US$203,610 as at December 31, 2020. Working capital as at September 30, 2021 was US$6,988,227 compared to a working capital deficiency of US$351,636 as at December 31, 2020. Working capital increased during the nine months ended September 30, 2021, by US$7,339,863. The increase was primarily attributed to the net assets acquired resulting from the SMR Peru Acquisition.

Operating Activities

Cash used in operating activities for the nine months ended September 30, 2021 was US$755,257. Operating activities were affected by net loss of US$1,228,807, non-cash adjustments of US$431,234, and non-cash working capital items of US$42,316. Non-cash adjustments consisted of depreciation of US$137,985, accretion on Trafigura loan of US$208,961, interest accrued on Trafigura loan of US$70,714 and share-based compensation of US$14,114. The net change in non-cash working capital balances resulted from a decrease in amounts receivable and other assets of US$21,920 and an increase in amounts payable and other liabilities of US$20,396.

Investing Activities

Cash used in investing activities for the nine months ended September 30, 2021 was US$615,652. For the nine months ended September 30, 2021, the Company incurred US$742,588 of exploration and evaluation costs with US$126,936 of this total relating to accrued capitalized exploration and evaluation costs

Financing Activities

Cash provided by financing activities for the nine months ended September 30, 2021 was US$9,541,279. For the nine months ended September 30, 2021, the Company received proceeds of US$10,023,628 in connection with the SMR Peru Acquisition, and was offset by loan repayments of US$482,349.

Related Party Transaction

Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control. Related parties include key management personnel and may be individuals or corporate entities. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties. Related party transactions are recorded at the exchange amount, being the amount agreed to between the related parties.

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Company, directly or indirectly. Key management personnel include the Company's executive officers and members of the Board.

Remuneration of key management personnel of the Company was as follows.

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	- 81 -	- 81 -
	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2021	2020	2021	2020
	(US$)	(US$)	(US$)	(US$)
Management salaries(1)	175,715	nil	203,840	nil
Share-based compensation(2)	14,114	nil	14,114	nil
	189,829	nil	217,954	nil

Notes:

(1) During the three and nine months ended September 30, 2021, US$139,535 and US$167,660, respectively (three and nine months ended September 30, 2020 - US$nil) was expensed as salaries and benefits, and US$36,180 (three and nine months ended September 30, 2020 - US$nil) was capitalized as exploration and evaluation costs. Included in accounts payable and accrued liabilities are amounts owing to management of US$13,634 as at September 30, 2021 (December 31, 2020 - US$nil).
(2) During the three and nine months ended September 30, 2021, the Company recorded share-based compensation expense of US$14,114 (three and nine months ended September 30, 2020 - US$nil) related to Options granted to certain officers and directors of the Company.

Off-Balance Sheet Arrangement

As of the date of this Interim MD&A, the Company does not have any off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on the results of operations or financial condition of the Company, including, and without limitation, such considerations as liquidity and capital resources.

Outstanding Share Data

As at November 16, 2021, the Company had 133,519,860 Common Shares (on a post-Share Split basis) issued and outstanding.

As at November 16, 2021, the Company had 5,900,000 Options (on a post-Share Split basis) issued and outstanding with an exercise price of US$0.30.

As at November 16, 2021, the Company had 16,759,870 Warrants (on a post-Share Split basis) outstanding with an exercise price of US$0.90.

Subsequent Events

On October 18, 2021, the Company filed a preliminary long-form prospectus with the securities regulatory authorities in each of the provinces of Canada other than Quebec.

On November 15, 2021, the Company's Board approved the Share Split of the Company's Common Shares. Shareholders of record at the close of business on November 15, 2021 received nine additional Common Shares for every Common Share owned. All share data contained in this Interim MD&A has been adjusted to reflect this Share Split retrospectively.

Critical Accounting Policies and Estimates

The preparation of consolidated financial statements in conformity with IFRS requires management to apply accounting policies and make estimates and assumptions that affect amounts reported in the unaudited condensed interim consolidated financial statements and accompanying notes. There is full disclosure of the Company's critical accounting policies and accounting estimates in the audited annual consolidated financial statements for the year ended December 31, 2020.

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DESCRIPTION OF SECURITIES BEING DISTRIBUTED

The Company's authorized share capital consists of an unlimited number of Common Shares without par value and an unlimited number of class B non-voting common shares (" Non-Voting Shares "), without par value, of which 133,519,860 Common Shares and no Non-Voting Shares are issued and outstanding as at the date hereof.

Offering

The Units are being offered at the Offering Price. Each Unit is comprised of one Unit Share and one half of one Warrant. Each Warrant is exercisable into one Warrant Share at an exercise price of $⚫ per Warrant Share at any time prior to the Warrant Expiry Date, subject to adjustment in certain events.

Common Shares

All of the Common Shares rank equally as to voting rights, participation in a distribution of the assets of the Company on a liquidation, dissolution or winding-up of the Company and entitlement to any dividends declared by the Company. The holders of the Common Shares are entitled to receive notice of, and to attend and vote at, all meetings of shareholders (other than meetings at which only holders of another class or series of shares are entitled to vote). Each Common Share carries the right to one vote. In the event of the liquidation, dissolution or winding-up of the Company, or any other distribution of the assets of the Company among its shareholders for the purpose of winding-up its affairs, the holders of the Common Shares will be entitled to receive, on a pro rata basis, all of the assets remaining after the payment by the Company of all of its liabilities. The holders of Common Shares are entitled to receive dividends as and when declared by the Board in respect of the Common Shares on a pro rata basis.

Any alteration of the rights, privileges, restrictions and conditions attaching to the Common Shares under the Company's articles must be approved by at least two-thirds of the Common Shares voted at a meeting of the Company's shareholders.

Warrants

The Warrants issued under the Offering will be governed by the warrant indenture (the " Warrant Indenture ") to be dated as of the Closing Date between the Company and Marrelli Trust Company Limited (the " Warrant Agent "). The following description is subject to the detailed provisions of the Warrant Indenture. Reference should be made to the Warrant Indenture for the full text of attributes of the Warrants.

The Unit Shares and Warrants will immediately separate following Closing. Each Warrant will entitle the holder to acquire one Warrant Share at an exercise price of $⚫ until 5:00 p.m. (Toronto time) on the date that is ⚫ following the Closing Date, subject to adjustment in certain events, after which time the Warrant will be void and of no value.

The Warrants and the Warrant Shares have not been and will not be registered under the U.S. Securities Act or any applicable state securities laws, and the Warrants will not be exercisable by or on behalf of a person in the United States or a US Person, nor will certificates representing the Warrant Shares be registered or delivered to an address in the United States, unless an exemption from registration under the U.S. Securities Act and any applicable state securities laws is available and the Company has received an opinion of counsel of recognized standing or other evidence to such effect in form and substance reasonably satisfactory to the Company; provided, however, that a holder who is a U.S. Accredited Investor at the time of exercise of the Warrants who purchased Units in the Offering to,

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or for the account or benefit of, persons in the United States or US Persons will not be required to deliver an opinion of counsel or such other evidence in connection with the exercise of Warrants that are a part of those Units.

The Warrants may be issued in uncertificated form. Any Warrants issued in certificated form shall be evidenced by a warrant certificate in the form attached to the Warrant Indenture. All Warrants issued in the name of CDS may be in either a certificated or uncertificated form, such uncertificated form being evidenced by a book-entry position on the register of warrantholders to be maintained by the Warrant Agent at its principal offices in Vancouver, British Columbia.

The Warrant Indenture will provide that the share ratio and exercise price of the Warrants will be subject to adjustment in the event of a subdivision or consolidation of the Common Shares. The Warrant Indenture will also provide that if there is (a) a reclassification or change of the Common Shares, (b) any consolidation, amalgamation, arrangement or other business combination of the Company resulting in any reclassification, or change of the Common Shares into other shares, or (c) any sale, lease, exchange or transfer of the Company's assets as an entity or substantially as an entirety to another entity, then each holder of a Warrant which is thereafter exercised shall receive, in lieu of Warrant Shares, the kind and number or amount of other securities or property which such holder would have been entitled to receive as a result of such event if such holder had exercised the Warrants prior to the event.

No adjustment in the exercise price or number of Warrant Shares will be required to be made unless the cumulative effect of such adjustment or adjustments would result in a change of at least 1% in the exercise price or a change in the number of Warrant Shares purchasable upon exercise by at least one one-hundredth (1/100th) of a Common Share, as the case may be.

The Warrant Indenture will also provide that, during the period in which the Warrants are exercisable, the Company will give notice to holders of Warrants of certain stated events, including events that would result in an adjustment to the exercise price for the Warrants or the number of Warrant Shares issuable upon exercise of the Warrants, at least 14 days prior to the record date or effective date, as the case may be, of such events.

From time to time, the Company and the Warrant Agent, without the consent of the holders of Warrants, may amend or supplement the Warrant Indenture for certain purposes, including curing defects or inconsistencies or making any change that does not adversely affect the rights of any holder of Warrants. Any amendment or supplement to the Warrant Indenture that adversely affects the interests of the holders of the Warrants may only be made by "extraordinary resolution", which will be defined in the Warrant Indenture as a resolution either (a) passed at a meeting of the holders of Warrants at which there are holders of Warrants present in person or represented by proxy representing at least 25% of the aggregate number of the then outstanding Warrants and passed by the affirmative vote of holders of Warrants representing not less than 66[2/3] % of the aggregate number of all the then outstanding Warrants represented at the meeting and voted on the poll upon such resolution, or (b) adopted by an instrument in writing signed by the holders of not less than 66[2/3] % of the aggregate number of all then outstanding Warrants.

No fractional Warrant Shares will be issuable upon the exercise of any Warrants, and no cash or other consideration will be paid in lieu of fractional shares. Holders of Warrants will not have any voting or preemptive rights or any other rights which a holder of Common Shares would have.

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DIVIDEND POLICY

The Company has not, since the date of its incorporation, declared or paid any dividends or other distributions on the Common Shares, and does not currently have a policy with respect to the payment of dividends or other distributions. The Company does not generate any revenues and does not expect to generate revenues in the near future and as such the Company does not pay dividends and does not intend to pay dividends in the foreseeable future. The payment of dividends in the future will, subject to the restrictions in the CBCA, depend on earnings, if any, the Company's financial condition, contractual restrictions and such other factors as its directors consider appropriate.

CAPITALIZATION

Except as provided elsewhere in this prospectus, there have been no material changes in the Company's share and loan capital since September 30, 2021, the date of its most recent interim financial statements included elsewhere in this prospectus. The Company anticipates issuing ⚫ Common Shares pursuant to the Offering (⚫ Common Shares if the Over-Allotment Option is exercised in full). On Closing, the Company will have ⚫ Common Shares issued and outstanding (⚫ Common Shares issued and outstanding if the Over-Allotment Option is exercised in full).

The following table sets forth the capitalization of the Company as at September 30, 2021 on an actual basis and on a pro forma basis as adjusted to give effect to the Offering (assuming no exercise of the Over Allotment Option). Investors should read the following information in conjunction with the Company's financial statements and related notes thereto, along with the associated MD&A, included elsewhere in this prospectus.

Long term debt Shareholders' equity Share capital Reserves Accumulated deficit Total shareholders' equity Total Capitalization	As at September 30, 2021 (unaudited) ($ million)	As at September 30 after giving effect to the Offering (unaudited) ($ million)
	1.3 18.3 - (3.7)	⚫ ⚫ ⚫ ⚫
	14.6	⚫
	15.8	⚫

OPTIONS TO PURCHASE SECURITIES

Stock Option Plan

The Board adopted the Stock Option Plan on September 17, 2021. The purpose of the Stock Option Plan is to secure for the Company and its shareholders the benefits of incentives inherent in share ownership by directors, officers, employees and consultants of the Company who, in the judgment of the Board, will be largely responsible for its future growth and success, through the granting of Options. The Stock Option Plan is summarized below.

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Under the Stock Option Plan, any officer, director, employee, management company employee, consultant, or company consultant of the Company or its subsidiaries (each as described in the Stock Option Plan and each, an " Eligible Person ") is eligible to receive Options under the Stock Option Plan.

The Stock Option Plan provides that the maximum number of Common Shares which may be reserved for issuance under Options granted under the Stock Option Plan, together with any other of the Company's previously established and outstanding stock option plans or grants, shall be 10% of the Common Shares issued and outstanding at the time of the grant (on a non-diluted basis).

The maximum number of Options which may be granted to any one Eligible Person must not exceed 5% of the issued and outstanding Common Shares, unless disinterested shareholder approval is received. Without the prior consent of the TSXV, the maximum number of Options which may be granted to any one consultant under the Stock Option Plan, together with any other of the Company's previously established and outstanding stock option plans or grants, within any 12 month period, must not exceed 2% of the issued and outstanding Common Shares, calculated at the date an Option is granted to such consultant (on a non-diluted basis). Without the prior consent of the TSXV, the maximum number of Options which may be granted to all investor relations person under the Stock Option Plan, together with any other of the Company's previously established and outstanding stock option plans or grants, within any 12 month period, must not exceed, in the aggregate, 2% of the issued and outstanding Common Shares, calculated on the date an Option is granted to any such investor relations person (on a nondiluted basis).

The exercise price of Options issued may not be less than the "discounted market price" (as defined in Policy 1.1 of the TSXV Manual) of the Common Shares at the time the Option is granted, subject to the minimum exercise price allowable by the stock exchange on which the Company's securities are listed. Subject to the provisions of the Stock Option Plan and any instrument evidencing such particular Option, an Option may be exercised, in whole or in part, by delivering a written notice of exercise to the Company along with payment in certified cheque, wire transfer or bank draft for the full amount of the purchase price of the Common Shares then being purchased plus any required withholding tax.

The period within which Options may be exercised and the number of Options which may be exercised in any such period are determined by the Board at the time of Option grant provided, however, that the maximum term of any Options granted under the Stock Option Plan is 10 years.

All Options granted pursuant to the Stock Option Plan will be subject to such vesting requirements as may be prescribed by the stock exchange on which the Company's securities are listed, if applicable, or as may be imposed by the Board. All Options granted to investor relations persons must vest in stages over not less than 12 months with no more than one-quarter of the Options vesting in any three-month period or such longer vesting period as the Board may determine.

An optionee who ceases to be an Eligible Person for any reason, other than as a result of having been dismissed for cause or as a result of the optionee's death, may exercise any vested and unexpired options held by such optionee for a period of ninety days from the date of cessation (or until the normal expiry date of the option rights of such optionee, if earlier). An optionee who was engaged in providing investor relation activities may exercise any vested and unexpired options held by such optionee for a period of ninety days from the date that the optionee ceased to provide such investor relations activities.

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In the event of a death of the optionee, the optionee's representative may exercise any vested and unexpired options held by the optionee for a period of twelve months from the optionee's death and the date of expiration of the term otherwise applicable to such options (unless such period is extended by the Board). Any extension of the exercise period by the Board is subject to the approval of the stock exchange on which the Company's securities are listed.

If an optionee ceases to be an Eligible Person as a result of having been dismissed for cause, all unexercised options of that optionee under the Stock Option Plan shall immediately terminate, whether or not vested at the date of dismissal.

Options granted under the Stock Option Plan will be non-assignable and non-transferable by an optionee other than pursuant to a will or by the laws of descent and distribution, and such Option shall be exercisable, during an optionee's lifetime, only by the optionee.

The Stock Option Plan contains provisions for the treatment of Options in relation to capital changes and with regard to a reorganization, stock split, stock dividend, combination of shares, merger, consolidation, rights offering or any other change in the corporate structure or shares of the Company. The aggregate number and kind of shares available under the Stock Option Plan shall be appropriately adjusted in the event of a reorganization, recapitalization, stock split, stock dividend, combination of shares, merger, consolidation, rights offering or any other change in the corporate structure or shares of the Company.

The Stock Option Plan sets out that in the event of a change of control (as shall be contemplated in the Stock Option Plan) (a " Change of Control "), the Options granted and outstanding, which are subject to vesting provisions, shall be deemed to have immediately vested upon the occurrence of the Change of Control, excluding Options granted to a person engaged in investor relations activities.

The Board may at any time amend or terminate the Stock Option Plan, but where amended, such amendment may be subject to regulatory or shareholder approval.

The following table sets forth the aggregate number of Common Shares issuable under Options which are anticipated, as at the date of this prospectus, to be outstanding on completion of the Offering. Following Closing and subject to the addition of Victoria Vargas and Bryan Coates to the Board, it is expected that each of Ms. Vargas and Mr. Coates will be granted 660,000 Options, with such Options exercisable at the Offering Price for a period of four years and vesting over a period of three years.

Category of Holder	Common Shares Under Options Granted	Exercise Price ($/Common Share)	Grant Date	Expiration Date
Executive officers and other officers as a group (three persons) Directors (who are not also officers) as a group (three persons) Consultants as a group (one person) Total — All Options	3,260,000 1,980,000 660,000 5,900,000	US$0.30 US$0.30 US$0.30	September 17, 2021 September 17, 2021 September 17, 2021	April 30, 2025 April 30, 2025 April 30, 2025

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PRIOR SALES

The following table summarizes issuances of Common Shares and securities that are convertible or exchangeable into Common Shares for the 12-month period prior to the date of this prospectus.

Date Issued	Type of Security	Common Shares Issued or Issuable(1)	Issuance/Exercise Price per Common Share($US)(1)	Reason for Issuance
March 10, 2021 April 8, 2021 April 15, 2021 April 15, 2021 April 16, 2021 April 16, 2021 April 19, 2021 April 19, 2021 June 15, 2021 September 17, 2021	Common Share Common Share(2) Common Shares(3) Warrant(3) Common Share(3) Warrant(3) Common Share(3) Warrant(3) Common Share(2) Options(4)	2,500,000 6,940,329 2,943,630 1,471,804 400,033 200,016 8,334 4,167 559,660 590,000	0.01 3.00 3.00 9.00 3.00 9.00 3.00 9.00 3.00 3.00	Financing Share Exchange Financing Financing Financing Financing Financing Financing Share Exchange Option Issuance

Notes:

(1) Presented on a pre-Share Split basis, without giving effect to the Share Split.

(2) Issued pursuant to the Share Exchange Agreement in connection with the SMR Peru Acquisition.

(3) Issued pursuant to the Equity Financing.

(4) Granted under the Stock Option Plan.

ESCROWED SECURITIES AND SECURITIES SUBJECT TO CONTRACTUAL RESTRICTION ON

TRANSFER

Escrowed Securities

Pursuant to NP 46-201 (the " Escrow Policy "), the securities held by principals of the Company are to be held in escrow for a predetermined period of time following the Listing Date, subject to the terms of an escrow agreement to be entered into among certain principals of the Company, the Company and the Escrow Agent (the " Escrow Agreement ").

In accordance with the Escrow Policy and pursuant to the Escrow Agreement, the following table sets out the securities that are expected to be deposited into escrow with the Escrow Agent (the " Escrowed Securities ") after giving effect to the Offering:

Class of Security Common Shares Options	Number of Escrowed Securities or securities subject to a contractual restriction on transfer(1) ⚫(3) ⚫(4)	Percentage of Class After Giving Effect to the Offering(2)
		⚫ ⚫

Notes:

(1) The contractual restriction on transfer of these Common Shares pursuant to the lock-up agreements will end on the date that is 180 days following the Closing Date. See "Principal Holders of Securities".

(2) On a non-diluted basis and assuming no exercise of the Over-Allotment Option.

(3) Comprised of ⚫.

(4) Comprised of ⚫.
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Pursuant to the Escrow Policy, the Escrowed Securities are expected to be released from escrow by the Escrow Agent in accordance with the following schedule.

On the Listing Date	1/10 of the Escrowed Securities
6 months following the Listing Date	1/6 of the remaining Escrowed Securities
12 months following the Listing Date	1/5 of the remaining Escrowed Securities
18 months following the Listing Date	1/4 of the remaining Escrowed Securities
24 months following the Listing Date	1/3 of the remaining Escrowed Securities
30 months following the Listing Date	1/2 of the remaining Escrowed Securities
36 months following the Listing Date	The remaining Escrowed Securities

The Escrowed Securities may not be transferred or otherwise dealt with during the term of the Escrow Agreement unless the transfers or dealings within escrow are: (i) to existing or, upon their appointment, incoming directors or senior officers of the Company, subject to the approval of the Board; (ii) to a person or company that before the proposed transfer holds more than 20% of the voting rights attached to the Company's outstanding securities; (iii) to a person or company that after the proposed transfer will hold more than 10% of the voting rights attached to the Company's outstanding securities, and has the right to elect or appoint one or more directors or senior officers of the Company; (iv) to a trustee in bankruptcy or another person or company entitled to Escrowed Securities on the bankruptcy of the holder; (v) to a financial institution on the realization of Escrowed Securities pledged, mortgaged or charged by the holder to the financial institution as collateral for a loan; or (vi) to or between an RRSP, RRIF or other similar registered plan or fund with a trustee, where the annuitant of the RRSP or RRIF, or the beneficiaries of the other registered plan or fund are limited to the holder and his or her spouse, children and parents or, in the case of a trustee of such registered plan or fund, to the annuitant of the RRSP or RRIF, or a beneficiary of the other registered plan or fund, as applicable, or his or her spouse, children and parents. The owner of Escrowed Securities may continue to exercise voting rights attached to such securities.

Tenders of Escrowed Securities in a business combination transaction are permitted provided that, if the tenderer is a principal (as such term is defined in the Escrow Policy) of the successor issuer upon completion of the business combination, securities received in exchange for tendered Escrowed Securities are subject to escrow on the same terms and conditions, including release dates, as applied to the escrow securities that were exchanged, subject to certain exceptions. The Escrowed Securities may also be subject to a hold period pursuant to NI 45-102.

Seed Share Resale Restrictions

Securities that are issued to "Non-Principals" (as that term is defined in the policies of the TSXV) of the Company prior to the Offering at a price which is below the Offering Price may be subject to hold periods in accordance with seed share resale restrictions under the policies of the TSXV. The purchase price of such securities, and the time of their purchase relative to the date of the receipt for the preliminary prospectus in respect of the Offering, determine which, if any, TSXV hold periods will apply. Seed share resale restrictions would be imposed on the securities by imprinting legends on the applicable certificates representing such securities or pursuant to a pooling agreement, and do not apply to persons who are subject to the Escrow Agreement.

The final determination on the number of Common Shares and securities convertible into Common Shares that will be subject to seed share resale restrictions will depend on the pricing of the Offering. If the seed share resale restrictions do apply, it is anticipated that on completion of the listing of

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the Common Shares on the TSXV, an aggregate of ⚫ Common Shares and ⚫ securities convertible into Common Shares will be subject to the following release schedule under TSXV Policy 5.4:

On the Listing Date	20% of securities subject to escrow
1 month following the Listing Date	20% of securities subject to escrow
2 months following the Listing Date	20% of securities subject to escrow
3 months following the Listing Date	20% of securities subject to escrow
4 months following the Listing Date	20% of securities subject to escrow

Voluntary Lock-Ups

In connection with the Offering, each of the Company's senior officers and directors, and, as applicable, associates and affiliates, will be required to enter into lock-up agreements in favour of the Underwriters, pursuant to which each will agree not to, directly or indirectly, offer, issue, sell, grant, secure, pledge, or otherwise transfer, dispose of or monetize, or engage in any hedging transaction, or enter into any form of agreement or arrangement the consequence of which is to alter economic exposure to, or announce any intention to do so, in any manner whatsoever, any Common Shares or securities convertible into, exchangeable for, or otherwise exercisable to acquire Common Shares or other equity securities of the Company for a period of 180 days after the Closing, without the prior written consent of Eight Capital on behalf of the Underwriters, such consent not to be unreasonably withheld, or subject to certain other limited exceptions as contained in the lock-up agreements.

PRINCIPAL HOLDERS OF SECURITIES

To the Company's knowledge, following Closing, no person or company will beneficially own, or control or direct, directly or indirectly, Common Shares carrying 10% or more of the voting rights attaching to all issued and outstanding Common Shares, except as follows:

Name Mula Mining Corp.(3) Julio José Arce Ortiz	Type of Ownership Beneficial and of Record Beneficial and of Record	Number as at the Date of this Prospectus 25,000,000 26,952,490	Number After Giving Effect to the Offering(1) 25,000,000 26,952,490	Percentage After Giving Effect to the Offering(2)
				⚫% ⚫%

Notes:

(1) Assuming that the Over-Allotment Option is not exercised.

(2) Expressed on a non-diluted basis. On a fully-diluted basis, the number and percentage of Common Shares owned, controlled or directed by Mula Mining Corp. and Mr. Ortiz are ⚫ and ⚫% and ⚫ and ⚫% respectively.

(3) Jose Vizquerra and Alfredo Bazo, each directors of the Company, are also directors and shareholders of Mula Mining Corp.

DIRECTORS AND EXECUTIVE OFFICERS

To the Company's knowledge as at the date of this prospectus, following Closing, its directors and executive officers as a group (excluding the purchase of any Common Shares by any directors and executive officers under the Offering) will beneficially own, or control or direct, directly or indirectly, ⚫ Common Shares, representing approximately ⚫% of the outstanding Common Shares on a non-diluted basis following Closing (or approximately ⚫% on a non-diluted basis, assuming the Over-Allotment Option is exercised in full).

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Directors and Executive Officers

The following table sets out, for each of the directors and executive officers of the Company, the person's name, province or state and country of residence, position with the Company, principal occupation and, if a director, the date on which the person became a director. The Company's directors are expected to hold office until the next annual general meeting of shareholders. Directors are elected annually and, unless re-elected, retire from office at the end of the next annual general meeting of shareholders.

Name, Province or State and Country of Residence Julio Jose Arce Ortiz Lima, Peru Alfredo Plenge Thorne(1)(2) Lima, Peru Alfredo Bazo Lima, Peru Jose Vizquerra Ontario, Canada Victoria Vargas(1)(2) Ontario, Canada Bryan Coates(1)(2) Quebec, Canada Jean Pierre Fort Ontario, Canada Torsten Danne Lima, Peru	Position(s) Held Director Director Director and Chief Executive Officer Director Director Director Chief Financial Officer Director of Exploration	Director/ Executive Officer Since 2021 2021 2021 2021 2021 2021 2021 2022	Principal Occupation for the 5 Preceding Years Former trader at Trafigura Former CEO at Corporacion Minera and former CFO and Minerals Marketing Manager at Sociedad Minera El Brocal General Manager at Master Drilling Peru and CFO at Administracion de Empresas SAC President, CEO, and a director of O3 Mining Inc., and Executive Vice President of Strategic Development and director at Osisko Mining Inc. Senior Investor Relations Executive. Vice-President of Investor Relations at Minera Alamos. In addition. Advisor to Wallbridge Mining. Founder of Strat-Advice. Former President of Osisko Gold Royalties and CFO of Osisko, was part of the team that developed the Canadian Malartic Mine Investment Banking Associate (Mining and Metals) at RBC Capital Markets; Investor Relations, Finance and Operations at Volcan Compañia Minera S.A.A. Exploration Manager at Southern Copper Corp.; Independent consulting geologist.	Securities of the Company Beneficially Owned, Directly or Indirectly, or over which control or direction is exercised
				26,952,490 Common Shares 660,000 Options 10,335,850 Common Shares 660,000 Options 333,340 Common Shares 166,670 Warrants 1,660,000 Options 333,340 Common Shares(3) 166,670 Warrants(3) 660,000 Options 70,000 Common Shares 35,000 Warrants nil Options(4) nil Options(4) 600,000 Options Nil Common Shares Nil Options

Notes:

(1) Conditionally elected as a director of the Company at the Meeting, to become a director of the Company concurrently with Closing.

(2) Anticipated member of the Audit Committee and Compensation Committee.

(3) Held through JJ Schwarz Properties Inc., an entity over which Jose Vizquerra has direction.

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(4) Following Closing and subject to the addition of Victoria Vargas and Bryan Coates to the Board, it is expected that each of Ms. Vargas and Mr. Coates will be granted 660,000 Options, with such Options exercisable at the Offering Price for a period of four years and vesting over a period of three years.

Biographies

The following is a brief description of each director and executive officer of the Company:

Alfredo Bazo (Age 43) — Director and Chief Executive Officer

Alfredo Bazo serves as the Chief Executive Officer and a director of the Company. Mr. Bazo will devote 100% of his time and attention to the business of the Company. Mr. Bazo has over 20 years of experience in the mining industry. Prior joining the Company, Mr. Bazo worked at Master Drilling Peru (" Master Drilling ") as the Chief Executive Officer. Prior to his role at Master Drilling, Mr. Bazo was Chief Financial Officer at Administracion de Empresas S.A.C. AESA (" AESA "). Prior to his role at AESA, Mr. Bazo held several positions in Buenaventura Ingenieros S.A. Mr. Bazo holds an MBA designation from PAD – Escuela de Direccion – University of Piura, and a Civil Engineer degree from Universidad de Ciencias Aplicadas – UPC, he is also a Certified Project Management Professional (PMP).

Julio Jose Arce Ortiz (Age 46) — Director

Julio Jose Arce Ortiz serves as a director of the Company. Mr. Arce has broad experience in the global mining industry, having worked in 6 different countries over more than 20 years. Mr. Arce managed main offices and was a global leader of non-ferrous and bulk commodities for Trafigura. Mr. Arce was previously the General Manager of SMR Peru. Mr. Arce earned a Bsc. In Economics from Universidad del Pacifico and an MBA from London Business School with a major in Finance and Strategy.

Alfredo Plenge Thorne (Age 57) — Director

Alfredo Plenge serves as a director of the Company. Mr. Plenge is an entrepreneur engaged in identifying and developing mineral prospects and mining opportunities in Peru a Director at C.H. Plenge & Cia. (Laboratorio Plenge). Mr. Plenge has corporate experience in the mining and finance sectors. Mr. Plenge served as Chief Executive Officer of the Castrovirreyna Mining group of Companies. Prior to such engagement, Mr. Plenge was Chief Financial Officer & Minerals Marketing Manager at Sociedad Minera El Brocal, brokering several contracts that facilitated the path to the company copper expansion and executing a successful multi-year financial hedge program. Mr. Plenge also worked as an executive for BCP, Peru's largest bank leading the financial restructuring of several of the bank's distressed assets in several industries. Mr. Plenge received a M.Sc. in Mineral Economics from the Colorado School of Mines, an MBA from McGill University, and a B.Sc. in Economics from the University of Utah. Mr. Plenge is also a Stanford Certified Project Manager.

Jose Vizquerra (Age 42) — Director

Jose Vizquerra serves as a director of the Company. Mr. Vizquerra is President and Chief Executive Officer, and a director of O3 Mining Inc. (" O3 Mining "), a leading consolidator and mineral explorer with a focus on gold assets in Quebec and Ontario. The Young Mining Professionals recognized Mr. Vizquerra as one of their Young Mining Professionals of the year with the 2019 Peter Munk Award. Prior to his appointment at O3 Mining, Mr. Vizquerra was Executive Vice President of Strategic Development for Osisko Mining Inc. (" Osisko Mining "). Mr. Vizquerra joined Osisko Mining from Oban Mining Corporation (" Oban "), where, as President and Chief Executive Officer, he played a leading role in the combination of Oban, Corona Gold Corporation, Eagle Hill Exploration Corporation and Ryan Gold

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Corporation to form Osisko Mining. Through ambitious drilling and prudent capital raising, Osisko Mining has become the highly valued proponent of the world class Windfall gold project. Prior to that, Mr. Vizquerra was Head of Business Development for Compañia de Minas Buenaventura. Previously, he was as a production and exploration geologist at the Red Lake gold mine in Ontario. Mr. Vizquerra also currently serves as a director of Osisko Mining and Sierra Metals Inc. and as an advisor to the boards of Discovery Metals Corp. and Palamina Resources. Mr. Vizquerra is an alumnus of the General Management Program at the Wharton School of Business. Mr. Vizquerra holds an MSc in Mineral Exploration from Queens University and a B.Sc in Civil Engineering from UPC Universidad Peruana de Ciencias Aplicadas. Mr. Vizquerra is a Qualified Person pursuant to NI 43-101.

Victoria Vargas (Age 59) — Proposed Director

Victoria Vargas is a proposed director of the Company. Ms. Vargas is a Senior Investor Relations and Communications Executive with a record of creating investor relations programs, managing complex issues including proxy solicitation, crisis communications, M&A, shareholder activism and equity offerings, including IPOs. A trusted advisor to senior executives and boards with extensive experience on all aspects of the capital markets, investor relations and reputation management. Ms. Vargas is currently a Vice-President of Investor Relations at Minera Alamos. In addition, Ms. Vargas is an advisor to Wallbridge Mining. Ms. Vargas is the founder of Strat-Advice and currently act as the Chief Financial Officer of VMS Mining, a private mining company. Prior to founding Strat-Advice she was Vice President Corporate Communications and Investor Relations for Sierra Metals. Ms. Vargas started her career at Kinross Gold Corporation and later joined Alamos Gold Inc. Ms. Vargas' experience also spans the full spectrum of ESG and corporate communications functions including media relations. During her career, Ms. Vargas has managed numerous internal and external communications programs with multiple stakeholders, including the investment community, shareholders, government, and employees, with a high level of disclosure and corporate governance. In addition, she has also worked in the clean technology industry and EV sector. Ms. Vargas earned an honors B.Sc. in Economics and an MBA in Finance.

Bryan Coates (Age 63) — Proposed Director

Bryan Coates is a proposed director of the Company. Mr. Coates has over 35 years of experience in the mining industry. Mr. Coates was President of Osisko Gold Royalties from its formation in June 2014 to December 31, 2019. Mr. Coates also acted as Vice President of Finance and Chief Financial Officer of Osisko from May 2007 to June 2014 and was part of the team that developed the Canadian Malartic Mine. Mr. Coates is a Chartered Professional Accountant (CPA) and is a graduate of the ICDRotman Directors Education Program. Mr. Coates has served on a number of publicly traded mining companies' board of directors, and is currently Chair of Falco Resources Ltd.

Jean Pierre Fort (Age 30 ) — Chief Financial Officer

Mr. Fort serves as the Chief Financial Officer of the Company. Mr. Fort will devote 75% of his time and attention to the business of the Company. Mr. Fort has over 10 years of experience in the mining industry. Prior joining the Company, Mr. Fort worked at RBC Capital Markets in the Investment Banking Mining & Metals team. Prior to RBC, Mr. Fort worked at Volcan Compañia Minera S.A.A. in Peru in several operational, financial reporting, and investor relations positions. Mr. Fort holds an MBA designation from Rotman School of Management – University of Toronto, and a bachelors degree in business from Universidad de Lima in Peru.

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Torsten Danne (Age 57) — Director of Exploration of SMR Peru

Torsten Danne serves as the Director of Exploration of SMR Peru. Mr. Danne will devote 100% of his time and attention to the business of SMR Peru. Mr. Danne joined SMR Peru in January 2022.

Mr. Danne is a geologist with over 25 years of experience in the mining industry with expertise in the technical, management, and business development aspects of base and precious metal exploration. Prior to SMR Peru, Mr. Danne worked 4 years as an independent consulting geologist, mainly for junior mining companies exploring in Peru and Argentina. Prior to his time as a consultant, Mr. Danne worked as Exploration Manager Argentina for Southern Copper Corp., and previously as Exploration Manager Peru for Votorantim Metais (now Nexa Resources). Prior roles include positions in international exploration for Rio Tinto, Hecla Mining Company, Western Mining (now part of BHP) and Barrick Gold Corp. Mr. Danne received a M.Sc. in Geology from the Technical University of Clausthal, Germany, and a M.Sc. in Mineral Exploration from the Royal School of Mines, Imperial College, London. He also completed a Quick MBA program at Gerens School of Management, Lima. Mr. Danne is a fellow of the Society of Economic Geologists.

Cease Trade Orders, Bankruptcies, Penalties or Sanctions

None of the Company's directors or executive officers is, as at the date hereof, or was within 10 years before the date hereof, a director, chief executive officer or chief financial officer of any company (including the Company) that (a) was subject to a cease trade order, an order similar to a cease trade order or an order that denied the relevant issuer access to any exemption under securities legislation, that was in effect for a period or more than 30 consecutive days (an " Order ") that was issued while the director or executive officer was acting in the capacity as director, chief executive officer or chief financial officer of such issuer, or (b) was subject to an Order that was issued after the director or executive officer ceased to be a director, chief executive officer or chief financial officer and which resulted from an event that occurred while that person was acting in the capacity as director, chief executive officer or chief financial officer.

None of the Company's directors or executive officers, nor, to its knowledge, any shareholder holding a sufficient number of its securities to affect materially the control of the Company (a) is, as at the date hereof, or has been within the 10 years before the date hereof, a director or executive officer of any company (including the Company) that, while that person was acting in that capacity, or within a year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets, or (b) has, within the 10 years before the date hereof, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or become subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of such director, executive officer or shareholder.

None of the Company's directors or executive officers, nor, to its knowledge, any shareholder holding a sufficient number of its securities to affect materially the control of the Company, has been subject to (a) any penalties or sanctions imposed by a court relating to securities legislation or by a securities regulatory authority or has entered into a settlement agreement with a securities regulatory authority, or (b) any other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable investor in making an investment decision.

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Conflicts of Interest

To the Company's knowledge, other than as disclosed below and elsewhere in this prospectus, there are no existing or potential material conflicts of interest between the Company and any of its directors or officers as of the date hereof. However, certain of the Company's directors and officers are, or may become, directors or officers of other companies with businesses which may conflict with its business.

Pursuant to the CBCA, directors and officers of the Company are required to act honestly and in good faith with a view to the best interests of the Company. Additionally, the CBCA provides that if a director or an officer is a party to a material contract or transaction or proposed material contract or transaction with the Company or is a director or an officer of, or has a material interest in, any person who is a party to a material contract or transaction or proposed material contract or transaction with the Company, the director or officer shall disclose his or her interest in such contract or transaction and, in the case of a director, shall not attend any part of a meeting of directors during which the contract or transaction is discussed and shall refrain from voting on any resolution to approve the contract or transaction unless otherwise provided by the CBCA.

Generally, as a matter of practice, directors who have disclosed a material interest in any contract or transaction that the Board is considering will not take part in any board discussion respecting that contract or transaction. If on occasion such directors do participate in the discussions, they will refrain from voting on any matters relating to matters in which they have disclosed a material interest. In appropriate cases, the Company will establish a special committee of independent directors to review a matter in which directors or officers may have a conflict.

See " Statement on Corporate Governance — Ethical Business Conduct " for the steps taken by the Company in monitoring compliance with the Code. See also " Risk Factors — Risks Related to the Company and to Mineral Exploration and Development — Conflicts of interest could result in suboptimal decisions being made by the Company ".

The following chart identifies each director and officer of the Company and their respective conflict of interest, if applicable:

Name of Director or Executive Officer Alfredo Bazo, Chief Executive Officer and Director Jean Pierre Fort, Chief Financial Officer Torsten Danne, Director of Exploration of SMR Peru Julio Jose Arce Ortiz, Director Alfredo Plenge Thorne, Director Jose Vizquerra, Director Victoria Vargas, Director Bryan Coates, Director	Description of Conflict(s) of Interest
	Mr. Bazo is a director and shareholder of Mula Mining Corp., a significant shareholder of the Company and a minority shareholder of SMR Peru None None None None Mr. Vizquerra is a director and indirect shareholder of Mula Mining Corp., a significant shareholder of the Company and a minority shareholder of SMR Peru None None

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Indebtedness of Directors and Executive Officers

None of the directors, executive officers or employees of the Company or former directors, executive officers or employees of the Company have any indebtedness outstanding to the Company as at the date hereof and no indebtedness of these individuals to another entity is the subject of a guarantee, support agreement, letter of credit or other similar arrangement or understanding provided by the Company as at the date hereof. Additionally, no individual who is, or at any time during the Company's last financial year was, a director or executive officer of the Company, proposed management nominee for director of the Company or associate of any such director, executive officer or proposed nominee is as at the date hereof indebted to the Company or to another entity where the indebtedness to such other entity is the subject of a guarantee, support agreement, letter of credit or other similar arrangement or understanding provided by the Company, including indebtedness for security purchase or any other programs.

DIRECTOR AND EXECUTIVE COMPENSATION

The Company has not been a reporting issuer at any time during the period from incorporation until the date of this prospectus. As an "IPO Venture Issuer" in accordance with Form 51-102F6V Statement of Executive Compensation – Venture Issuers , the following is a discussion of all significant elements of compensation to be awarded to, earned by, paid to or payable to directors and NEOs, once the Company becomes a reporting issuer, to the extent this compensation has been determined. Notwithstanding that the Company has not been a reporting issuer at any time prior to the date of this prospectus, the following disclosure also contains a summary of compensation paid, payable, awarded, granted, given or otherwise provided, directly or indirectly, to the directors and NEOs for the current financial year.

In this section, NEO means: (a) each individual who, in respect of the Company, during any part of the most recently completed financial year, served as chief executive officer, including an individual performing functions similar to a chief executive officer; (b) each individual who, in respect of the Company, during any part of the most recently completed financial year, served as chief financial officer, including an individual performing functions similar to a chief financial officer; (c) in respect of the Company and its subsidiary, the most highly compensated executive officer other than the chief executive officer and the chief financial officer at the end of the most recently completed financial year whose total compensation was more than $150,000, as determined in accordance with Form 51-102F6V; and (d) each individual who would be a NEO under paragraph (c) but for the fact that the individual was not an executive officer of the Company, and was not acting in a similar capacity, at the end of that financial year. For the purposes of this prospectus, as of the date of this prospectus, the Company had three NEOs, namely:

Alfredo Bazo, Chief Executive Officer
Jean Pierre Fort, Chief Financial Officer
Torsten Danne, Director of Exploration of SMR Peru

Compensation Discussion and Analysis

The Company operates in a dynamic and rapidly evolving market. To succeed in this environment and to achieve its business and financial objectives, the Company must attract, retain and motivate a highly talented team of executive officers. The Company expects its team of executive officers to possess

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and demonstrate strong leadership and management capabilities, as well as foster a pioneering culture, which is at the foundation of the Company's success and remains a pivotal part of everyday operations. The Compensation Committee is responsible for assisting the Board in fulfilling its governance and supervisory responsibilities, and overseeing the human resources, succession planning, and compensation policies, processes and practices. The Compensation Committee is also responsible for ensuring that the compensation policies and practices provide an appropriate balance of risk and reward consistent with the risk profile. The Board has adopted a written charter for the Compensation Committee setting out its responsibilities for administering the compensation programs and reviewing and making recommendations to the Board concerning the level and nature of the compensation payable to the directors and officers. The Compensation Committee's oversight includes reviewing objectives, evaluating performance and ensuring that total compensation paid to the executive officers and various other key employees is fair, reasonable and consistent with the objectives of the philosophy and compensation program.

The Compensation Committee is required to evaluate the Company's compensation programs as circumstances require and on an annual basis. As part of this evaluation process, the Compensation Committee is guided by the philosophy and objectives outlined above, as well as other factors which may become relevant, such as the cost to the Company if it were required to find a replacement for a key employee.

The Company's compensation practices are designed to retain, motivate and reward its executive officers for their performance and contribution to the Company's long-term success. The Compensation Committee seeks to compensate executive officers by combining short-term and long-term cash and equity incentives. It also seeks to reward the achievement of corporate and individual performance objectives and to align executive officers' incentives with the Company's performance. The Compensation Committee seeks to tie individual goals to the area of the executive officer's primary responsibility. These goals may include the achievement of specific financial or business development goals. Corporate performance goals are based on financial performance of the Company during the applicable financial year.

In order to achieve its growth objectives, attracting and retaining the right team members is critical. A key part of this is a well-thought out compensation plan that attracts high performers and compensates them for continued achievements. Many of the Company's team members will participate in the Stock Option Plan, driving retention and ownership. Communicating clear and concrete criteria and process for merit-based increases and bonuses will also motivate the entire team to achieve individual and corporate goals.

As the Company transitions from being a privately-held company to a publicly-traded company, it will continue to evaluate its compensation philosophy and compensation program as circumstances require and plan to continue to review compensation on an annual basis.

The Company's executive compensation consists primarily of three elements: (a) base salary; (b) short-term incentives; and (c) long-term incentives.

Compensation of Named Executive Officers

The following table sets forth the compensation of the NEOs and directors paid by the Company from incorporation (January 28, 2021) to December 31, 2021.

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			-	97 -
Name and position Alfredo Bazo CEO and Director Jean Pierre Fort CFO Julio Jose Arce Ortiz Director Alfredo Plenge Thorne Director Jose Vizquerra Director Victoria Vargas Proposed Director Bryan Coates Proposed Director	Year 2021 2021 2021 2021 2021 2021 2021	Salary, consulting fee, retainer or commission (US$) 80,164 95,625 Nil Nil Nil Nil Nil	Bonus (US$) Nil Nil Nil Nil Nil Nil Nil	Committee or meeting fees (US$) Nil Nil Nil Nil Nil Nil Nil	Value of perquisites (US$) Nil Nil Nil Nil Nil Nil Nil	Value of all other compensation (US$) Nil Nil Nil Nil Nil Nil Nil	Total compensation (US$)
							80,164 95,625 Nil Nil Nil Nil Nil

Notes:

(1) None of the NEOs or directors are entitled to perquisites or other personal benefits which, in the aggregate, are worth over $50,000 or over 10% of their base salary.

(2) Compensation paid to Mr. Bazo was in respect of his role as an officer of the Company.

Employment, Consulting and Management Agreements

The Company, or a subsidiary of the Company, has entered into executive employment agreements with each of Alfredo Bazo, Jean Pierre Fort and Torsten Danne. These agreements provide for, among other things, the continuation of the executive's employment for an indeterminate term in accordance with applicable law, as well as their base salary and bonus entitlement. Compensation in fiscal year 2021, pursuant to these executive employment agreements, for Alfredo Bazo and Jean Pierre Fort is set out above under " Director and Executive Compensation – Compensation of Named Executive Officers ". On January 3, 2022, Torsten Danne was appointed as the Director of Exploration for SMR Peru. The general terms of the employment agreements with Alfredo Bazo, Jean Pierre Fort and Torsten Danne are set out below.

Alfredo Bazo, Chief Executive Officer

Mr. Bazo's employment agreement provides for an annual salary of US$240,000. Mr. Bazo is eligible for a discretionary annual bonus, with a target bonus equal to 60% of Mr. Bazo's base salary. Mr. Bazo is entitled to participate in the Stock Option Plan and receive other corporate employee benefits, including director and officer insurance coverage, health benefits and expense reimbursement. The Company may terminate Mr. Bazo's employment in accordance with applicable employment laws, and Mr. Bazo must provide four weeks' notice in the event that he terminates his employment agreement voluntarily. Mr. Bazo is entitled to receive a lump sum payment equal to one year annual total salary plus bonus in the event that he is terminated without cause or following a change of control. Mr. Bazo's employment agreement contains non-competition, non-solicitation and non-disparagement restrictions.

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Jean Pierre Fort, Chief Financial Officer

Mr. Fort's employment agreement provides for an annual salary of US$150,000. Mr. Fort is eligible for a discretionary annual bonus, with a target bonus equal to 50% of Mr. Fort's base salary. Mr. Fort is entitled to participate in the Stock Option Plan and receive other corporate employee benefits, including director and officer insurance coverage, health benefits and expense reimbursement. The Company may terminate Mr. Fort's employment in accordance with the Employment Standards Act (Ontario), and Mr. Fort must provide four weeks' notice in the event that he terminates his employment agreement voluntarily. Mr. Fort is entitled to receive a lump sum payment equal to 12 months of his then existing monthly base salary plus bonus in the event that he is terminated without cause or following a change of control. Mr. Fort's employment agreement contains non-competition, non-solicitation and nondisparagement restrictions.

Torsten Danne, Director of Exploration of SMR Peru

Mr. Danne's employment agreement provides for an annual gross salary of US$137,200. Mr. Danne is eligible for a discretionary annual bonus, with a target bonus equal to 31.2% of Mr. Danne's base salary. Mr. Danne is entitled to participate in the Stock Option Plan and receive other corporate employee benefits, including director and officer insurance coverage, health benefits and expense reimbursement. SMR Peru may terminate Mr. Danne's employment in accordance with Peruvian employment laws, and Mr. Danne must provide a 30-day prior written notice in the event that he terminates his employment agreement voluntarily. Mr. Danne is not entitled to any specific lump sum payment in the event that he is terminated without cause, including if such decision is made following a change of control. Mr. Danne's employment agreement contains non-competition and confidentiality restrictions.

Outstanding Option-Based Awards and Share-Based Awards

The following table discloses all security-based awards granted to each director or NEO by the Company that are outstanding as at the date of this prospectus.

Name and Position Alfredo Bazo CEO and Director Jean Pierre Fort CFO Torsten Danne Director of Exploration of SMR Peru Julio Jose Arce Ortiz Director Alfredo Plenge Thorne Director Jose Vizquerra Director Victoria Vargas(1) Proposed Director Bryan Coates(1)	Type of compensation security Options Options Options Options Options Options Options Options	Compensation Securities	Compensation Securities	Compensation Securities
		Number of Common Shares underlying unexercised Options andpercentage of class 1,660,000 (⚫%) 600,000 (⚫%) Nil 660,000 (⚫%) 660,000 (⚫%) 660,000 (⚫%) Nil(2) Nil(2)	Date of grant Sep 17, 2021 Sep 17, 2021 N/A Sep 17, 2021 Sep 17, 2021 Sep 17, 2021 N/A N/A	Exercise price (US$) 0.30 0.30 N/A 0.30 0.30 0.30 N/A N/A	Expiry Date
					Apr 30, 2025 Apr 30, 2025 N/A Apr 30, 2025 Apr 30, 2025 Apr 30, 2025 N/A N/A

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Name and Position Proposed Director	Type of compensation security	Compensation Securities	Compensation Securities	Compensation Securities
		Number of Common Shares underlying unexercised Options andpercentage of class	Date of grant	Exercise price (US$)	Expiry Date

Notes:

(1) Conditionally elected as a director of the Company at the Meeting, to become a director of the Company concurrently with Closing.
(2) Following Closing and subject to the addition of Victoria Vargas and Bryan Coates to the Board, it is expected that each of Ms. Vargas and Mr. Coates will be granted 660,000 Options, with such Options being exercisable at the Offering Price for a period four years and vesting over a period of three years.

No director or NEO has exercised compensation securities since the date of incorporation.

Director Compensation

Currently, none of the directors of the Company are compensated for their position on the Board.

Prior to the listing of the Common Shares on the TSXV, the Company expects to implement a new independent director compensation program as follows: a total compensation envelope value of $30,000 per year, plus additional fees for the Chair ($30,000), Chair of the Audit Committee ($3,000), and Chair of the Compensation Committee ($3,000). Directors are also reimbursed for their out-of-pocket expenses incurred in connection with rendering services to the Company.

AUDIT COMMITTEE

The Board has established the audit committee of the Company (the " Audit Committee ") to provide assistance to the Board in fulfilling its obligations relating to the integrity of the internal financial controls and financial reporting of the Company. The external auditors of the Company report directly to the Audit Committee. The Audit Committee's primary duties and responsibilities include: (i) reviewing and reporting to the Board on the annual audited financial statements (including the auditor's report thereon) and unaudited interim financial statements and any related MD&A, if any, and other financial disclosure related thereto that may be required to be reviewed by the Audit Committee pursuant to applicable legal and regulatory requirements; (ii) reviewing material changes in accounting policies and significant changes in accounting practices and their impact on the financial statements; (iii) overseeing the audit function, including engaging in required discussions with the Company's external auditor and reviewing a summary of the annual audit plan at least annually, overseeing the independence of the Company's external auditor, overseeing the Company's internal auditor, and pre-approving any non-audit services to the Company; (iv) reviewing at least annually, the Company's policies for risk assessment and risk management; (v) reviewing with management and the Company's external auditors, at least annually, the integrity of the internal controls over financial reporting and disclosure; (vi) reviewing management reports related to legal or compliance matters that may have a material impact on the Company and the effectiveness of the Company's compliance policies; and (vii) establishing whistleblowing procedures and investigating any complaints or concerns it deems necessary. The Company's Audit Committee is governed by a charter in the form attached as Appendix "A" to this prospectus.

Composition of the Audit Committee

Pursuant to section 6.1.1 of NI 52-110, an audit committee of a venture issuer must be composed of at least three members, each of whom must be a director of the issuer. The majority of the members

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must not be executive officers, employees or control persons of the venture issuer or of an affiliate of the venture issuer. The Audit Committee is currently comprised of Alfredo Plenge Thorne, Julio Jose Arce Ortiz and Jose Vizquerra. It is anticipated that, immediately following Closing, the Audit Committee will be reconstituted and will be composed of three directors, being Victoria Vargas, Alfredo Plenge Thorne and Bryan Coates (Chair). Julio Jose Arce Ortiz is currently a control person of the Company. Except for Mr. Ortiz, all current and proposed members of the Audit Committee are not executive officers, employees or control persons of the Company or of an affiliate of the Company. Under NI 52-110, an independent director is one who is free from any direct or indirect relationship which could, in the view of the Board, be reasonably expected to interfere with a director's exercise of independent judgment. The Board has determined that all of the proposed members of the Audit Committee following completion of the Offering are independent directors within the meaning of NI 52-110.

Each current and proposed member of the Audit Committee is considered financially literate, as they each have a good command of IFRS and the ability to understand a set of financial statements that presents a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of the issues that can reasonably be expected to be raised by the Company's financial statements and the internal controls and procedures for financial reporting. See " Directors and Executive Officers " for a brief summary of the education and experience of each proposed Audit Committee member that will be relevant to his or her performance as a member of the Audit Committee.

Relevant Education and Experience

The education and experience of each current and proposed member of the Audit Committee relevant to the performance of his or her duties as a member of the Audit Committee can be found under the heading " Directors and Executive Officers ."

Reliance on Certain Exemptions

At no time since incorporation has the Company relied on the exemption in Section 2.4 of NI 52110 ( De Minimis Non-audit Services ), or an exemption from NI 52-110, in whole or in part, granted under Part 8 of NI 52-110.

Exemption for Venture Issuers

The Company is a "venture issuer" as defined in NI 52-110 and is relying on Part 5 (Reporting Obligations) of NI 52-110.

Pre-Approval Policies and Procedures

The Audit Committee has the authority to engage and communicate with advisors and professionals for non-audit services .

External Auditor Service Fees

The aggregate fees billed by BDO Canada LLP, the Company's external auditor, for audit and non-audit services from the date of incorporation until September 30, 2021:

Period 2021	Audit Fees(1) ($) 85,500	Audit-Related Fees(2) ($) nil	Tax Fees(3) ($) nil	All Other Fees(4) ($) nil	Total Fees ($)
					85,500

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Notes:

(1) "Audit Fees" are fees necessary to perform quarterly review engagements and the annual audit of the Company's financial statements, including review of tax provisions, accounting consultations on matters reflected in the financial statements, and audit or other attest services required by legislation or regulation, such as comfort letters, consents, reviews of securities filings and statutory audits.
(2) "Audit-Related Fees" are fees for services that are traditionally performed by the auditor including employee benefit audits, due diligence assistance, accounting consultations on proposed transactions, internal control reviews and audit or attest services not required by legislation or regulation.
(3) "Tax Fees" are fees for all tax services other than those included in "Audit Fees" and "Audit-Related Fees" including tax compliance, tax planning and tax advice. Tax planning and tax advice includes assistance with tax audits and appeals, tax advice related to mergers and acquisitions, and requests for rulings or technical advice from tax authorities.
(4) "All Other Fees" include all other non-audit services.

STATEMENT ON CORPORATE GOVERNANCE

NP 58-201 establishes corporate governance guidelines which apply to all public companies. The Company has reviewed its own corporate governance practices in light of these guidelines. National Instrument 58-101 – Disclosure of Corporate Governance Practices mandates disclosure of corporate governance practices which disclosure is set out below.

The Board

The Board currently consists of four directors, one of whom is independent based upon the test for director independence in NI 52-110. Alfredo Plenge Thorne is the independent director. Victoria Vargas and Bryan Coates were conditionally elected to the Board at the Meeting, with such election to take effect concurrently with Closing. Following Closing, Alfredo Plenge Thorne, Victoria Vargas and Bryan Coates are expected to be independent directors. Alfredo Bazo is the Chief Executive Officer of the Company, and is not independent as a result. Jose Vizquerra is the brother-in-law of Alfredo Bazo, and is not independent as a result of such relationship. Julio Jose Arce-Ortiz previously served as an executive officer of SMR Peru, and is not independent as a result thereof.

Jose Vizquerra is the Chairman of the Board and is primarily responsible for the management and effective performance of the Board and provides leadership to the Board by leading, managing and organizing the Board consistent with the approach to corporate governance established by the Board; promoting cohesiveness among the directors; being satisfied that the responsibilities of the Board and the committees of the Board are well understood by the Board; assisting the Board in ensuring the integrity of the officers of the Company and that such officers create a culture of integrity throughout the Company; reviewing the committees of the Board, the Chairs of such committees and the mandates of such committees; and, ensuring that the Board, the committees of the Board, individual directors and the officers of the Company understand and discharge their respective obligations consistent with the approach to corporate governance established by the Board.

NP 58-201 suggests that the board of directors of reporting issuers should be constituted with a majority of individuals who qualify as "independent" directors. An "independent" director is a director who has no direct or indirect material relationship with the Company. A material relationship is a relationship that could, in the view of the board of directors, reasonably interfere with the exercise of a director's independent judgment. In addition, the independent judgment of the Board in carrying out its responsibilities is the responsibility of all directors.

The Board has a stewardship responsibility to supervise the management of and oversee the conduct of the business of the Company, provide leadership and direction to management, evaluate management, set policies appropriate for the business of the Company and approve corporate strategies and goals. The day-to-day management of the business and affairs of the Company is delegated by the

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Board to the senior officers of the Company. The Board will give direction and guidance through the Chief Executive Officer to management and will keep management informed of its evaluation of the senior officers in achieving and complying with goals and policies established by the Board.

The Board will recommend nominees to the shareholders for election as directors, and immediately following each annual general meeting will appoint the members of the committees of the Board.

In addition to the in camera sessions to be held by the Company's independent directors, the Board will exercise its independent supervision over management by its policies that (a) periodic meetings of the Board be held to obtain an update on significant corporate activities and plans; and (b) all material transactions of the Company are subject to prior approval of the Board. To facilitate open and candid discussion among its independent directors, such directors are encouraged to communicate with each other directly to discuss ongoing issues pertaining to the Company.

The mandate of the Board is to provide governance and stewardship to the Company and its business. The mandate sets out the Board's responsibility for, among other things, (i) participating in the development of and approving a strategic plan for the Company; (ii) supervising the activities and managing the investments and affairs of the Company; (iii) approving major decisions regarding the Company; (iv) reviewing, approving and monitoring annual operating plans and budgets; (v) defining the roles and responsibilities of management and delegating management authority to the Chief Executive Officer; (vi) approving related party transactions; (vii) reviewing and approving the business and investment objectives to be met by management; (viii) assessing the performance of and overseeing management; (ix) reviewing the Company's debt strategy; (x) identifying and managing risk exposure; (xi) ensuring the integrity and adequacy of the Company's internal controls and management information systems; (xii) succession planning; (xiii) establishing committees of the Board, where required or prudent, and defining their mandate; (xiv) maintaining records and providing reports to shareholders; (xv) ensuring effective communication with shareholders, other stakeholders and the public; (xvi) determining the amount and timing of distributions to shareholders; and (xvii) monitoring the social responsibility, integrity and ethics of the Company.

The Board will adopt a written position description for the chair of the Board which will set out the chair's key responsibilities, including, as applicable, duties relating to setting Board meeting agendas, chairing Board and shareholders meetings, director development and communicating with shareholders and regulators. The Board will also adopt a written position description for each of the committee chairs which will set out each of the committee chair's key responsibilities, including duties relating to setting committee meeting agendas, chairing committee meetings and working with the respective committee and management to ensure, to the greatest extent possible, the effective functioning of the committee.

The activities of the executive officers are subject to the overriding supervision and direction of the Board. The responsibilities of the executive officers of the Company will include, but is not limited to, the following: (i) providing the Board with information and advice relating to the operation of the Company's properties, acquisitions, dispositions, developments and financings; (ii) establishing, at least on an annual basis, investment and operating plans for the ensuing period, as approved by the Board, and implementing such plans and monitoring the financial performance of the Company; (iii) conducting and supervising the due diligence required in connection with proposed acquisitions and completing any acquisitions or dispositions, as approved by the Board; (iv) maintaining the books and financial records of the Company; (v) determining and preparing designations, elections and determinations to be made in connection with the income and capital gains of the Company for tax and accounting purposes, as approved by the Board; (vi) preparing reports and other information required to be sent to shareholders

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and other disclosure documents, as approved by the Board; (vii) calculating all distributions, as approved by the Board; (viii) communicating with shareholders and other persons, including investment dealers, lenders, investors, and professionals; (ix) administering or supervising the administration, on behalf of the Board, of the payment of distributions by the Company; and (x) ensuring the Company is in compliance with internal policies and regulatory and legal requirements.

The Board has adopted a written position description for the Chief Executive Officer which sets out the key responsibilities of the position. The primary functions of the Chief Executive Officer will be to lead the management of the business and affairs of the Company, to lead the implementation of the resolutions and the policies of the Board, to supervise day to day management and to communicate with shareholders and regulators. Whereas, the Board considers that the role and responsibilities of the Chief Executive Officer are to develop the Company's strategic plans and policies, recommend such plans and policies to the Board, report relevant matters to the Board, facilitate communications between the Board and management, provide executive leadership and identify business risks and opportunities and manage them accordingly. The mandate of the Chief Executive Officer will be considered by the Board for approval at least annually.

Participation of Directors in Other Reporting Issuers

The following directors and proposed directors of the Company currently hold directorships in the following reporting issuers (or equivalent in a foreign jurisdiction):

Name Jose Vizquerra Bryan Coates	Name of Reporting Issuer
	O3 Mining Inc. (TSXV: OIII) Osisko Mining Inc. (TSX: OSK) Moneta Gold Inc. (TSX: ME) Sierra Metals Inc. (TSX: SMT; NYSE: SMTS) Amex Exploration Inc. (TSXV: AMX)

Orientation and Continuing Education

While the Company does not have formal orientation and training programs, orientation of new members of the Board is conducted by informal meetings with members of the Board, briefings by management, and the provision of copies of or access to the Company's documents.

The Company has not adopted formal policies respecting continuing education for members of the Board. Members of the Board are encouraged to communicate with management, legal counsel, auditors and consultants, to keep themselves current with industry trends and developments and changes in legislation with management's assistance, and to attend related industry seminars and visit the Company's operations. Members of the Board have full access to the Company's records.

Ethical Business Conduct

The Board has found that the fiduciary duties placed on individual directors by the Company's governing corporate legislation and the common law, and the restrictions placed by the CBCA on an individual director's participation in decisions of the Board in which the director has an interest have helped to ensure that the Board operates independently of management and in the best interests of the Company.

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Under corporate legislation, a director is required to act honestly and in good faith with a view to the best interests of the Company and exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. In addition, if a director of the Company also serves as a director or officer of another company engaged in similar business activities to the Company, that director must comply with the conflict of interest provisions of the CBCA, as well as the relevant securities regulatory instruments, in order to ensure that directors exercise independent judgment in considering transactions and agreements in respect of which a director or officer has a material interest. Any interested director would be required to declare the nature and extent of his interest and would not be entitled to vote at meetings of directors that evoke such a conflict.

Nomination of Directors

The Company does not have a stand-alone nomination committee. The Board has responsibility for identifying potential candidates for the Board. The Board assesses potential candidates to fill perceived needs on the Board for required skills, expertise, independence and other factors. Members of the Board and representatives of the industry are consulted for possible candidates .

Compensation

It is anticipated that the Compensation Committee will initially consist of three independent directors and will be charged with reviewing, overseeing and evaluating the compensation policies. It is anticipated that the Compensation Committee will be comprised of Bryan Coates, Victoria Vargas (Chair) and Alfredo Plenge Thorne . The Board believes that each of these members hold experience with respect to oversight on compensation or executive compensation matters. For information regarding the steps taken to determine compensation for the directors and the executive officers, see " Director and Executive Compensation ".

The Board expects to adopt a written charter setting forth the purpose, composition, authority and responsibility of the Compensation Committee. The Compensation Committee's purpose will be to assist the Board in:

reviewing and approving compensation packages, including goals and objectives against which bonuses are assessed, of the Company's senior officers;
reviewing and recommending to the Board for approval all annual cash bonuses and incentive stock option allocations;
reviewing the compensation practices and policies of the Company to ensure that they are competitive and that they provide appropriate motivation for corporate performance and increased shareholder value;
overseeing the administration of the Company's compensation programs, including any incentive compensation plans and equity-based plans;
establishing policies and procedures designed to identify and mitigate risks associated with the Company's compensation policies and practices;
reviewing and making recommendations to the Board with respect to compensation of directors; and
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reviewing and making recommendations to the Board regarding the Company's director's and officer's liability insurance policies.

Other Committees

The Board has no other committees other than the Audit Committee and Compensation Committee.

Assessments

The Board will monitor the adequacy of information given to directors, communication between the Board and management and the strategic direction and processes of the Board and committees. On an ongoing annual basis, the Board will assess the performance of the Board as a whole, each of the individual directors and each committee of the Board in order to satisfy itself that each is functioning effectively.

Insider Trading Policy

The Board has adopted an insider trading policy to set forth basic guidelines for trading in the Company's securities and to preserve its confidential information so as to avoid any situation that might have the potential to damage the Company's reputation or which could constitute a violation of federal or provincial securities law by the Company, its officers, directors, or employees.

Under this policy, "insiders" (i.e., officers, members of the Board and other individuals having access to material non-public information) are prohibited from trading in securities of the Company on the basis of such material non-public information until after the information has been disclosed to the public. All matters regarding the "materiality" or "non-public" nature of any information shall be determined by the chair or legal counsel of the Company.

The obligation not to trade on inside information applies not only to the Company and insiders, but also to persons who obtain such information from insiders and use it to their advantage. Thus, liability may be imposed upon the Company, its insiders and also outsiders who are the source of leaks of material information not yet disclosed to the public and in circumstances where the leaks coincide with purchases or sales of the Company's securities (i) by such insiders or outsiders, (ii) by the Company itself, or (iii) by "tippees" (including relatives, friends, investment analysts, etc.).

Material non-public information shall not be disseminated to any person outside the Company and must be distributed within the Company only on a strict "need to know" basis. Violation of any of the securities laws described in this policy may result in the institution of a prosecution or an enforcement proceeding against the individual or the Company, or both.

In order to provide a degree of certainty as to when insider trading is permissible with respect to the timing of quarterly and annual releases of financial information, the Company will establish recurring "quiet periods" relative to such releases. Directors, all officers and employees with access to financial results, are not permitted to buy or sell securities of the Company during such quiet periods. Trading in securities of the Company at other times may be permissible, but all such transactions by directors, officers and other identified employees must be approved in advance by the chair of the Board and must be reported to the legal counsel after consummating the transaction.

The Company may impose additional quiet periods during which trading will not be allowed when there are developments which give rise to the need for public disclosure. Affected stockholders will be

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advised by memorandum from the chair when these additional quiet periods are in effect. All directors and officers and other specifically identified employees of the Company must (i) clear through the chair each and every proposed transaction in Company stock before consummating the transaction and (ii) promptly report to the legal counsel the consummation of any transactions, whenever consummated.

Restrictions in the quiet period relate solely to securities of the Company and do not relate to securities of other companies, however, the insider trading policy expressly prohibits entering into derivative-based transactions that involve, directly or indirectly, securities of the Company when such person is in possession of material non-public information. In addition, no officer or director is permitted to purchase financial instruments for the purpose of, or shall otherwise engage in, hedging or other price protective transactions with respect to options or other equity or equity related securities of the Company which are held, directly or indirectly, by the officer or director. In addition, no officer or director is permitted to engage in the short sale of securities of the Company or sales of borrowed securities of the Company. For the purposes of the insider trading policy, the concurrent short sale of Company shares as a method of facilitating the exercise of a vested option granted by the Company shall be deemed not to be a short sale for purposes of the aforementioned restriction.

The insider trading policy precludes the grant of stock options or similar forms of stock-based compensation during any period in which the person granting such options or similar compensation possesses material non-public information. The insider trading policy does not preclude the exercise of fixed price share options during quiet periods, however, the insider trading policy does preclude the sale of any securities acquired upon such exercise during the quiet period. Trading during such period may be permitted in exceptional circumstances with the prior approval of the Chief Executive Officer or Chief Financial Officer, provided that the individual is not in possession of material non-public information.

The insider trading policy also outlines the Company's reporting obligations for changes in securities of the Company owned by insiders.

Disclosure Policy

The Board has adopted a disclosure policy, which aims to promote consistent disclosure practices by the Company in connection with the timely disclosure of material information about the Company to the market. The disclosure policy applies to all directors, officers, spokespersons and employees of the Company and its subsidiaries and covers all methods used by the Company to communicate to its shareholders, the media and members of the investment community, including: press releases, written statements made in annual and quarterly reports, communications to shareholders, documents filed with the securities regulatory authorities, communications made during investor conferences, speeches made by senior management, oral statements made in the course of meetings or calls with securities markets professionals, shareholders, media or other external audiences and website and social media communications (including through corporate blogs, chat boards, Twitter, Facebook, LinkedIn, YouTube and other non-traditional means of communication). The Board is responsible for the administration and implementation of this disclosure policy.

The disclosure policy sets out a non-exhaustive list of examples of the types of events or information that may be material for the purposes of issuing news releases. Material information will be publicly disclosed promptly by news release. The only exceptions will occur in restricted circumstances where applicable securities laws and stock exchange policies permit the maintenance of confidentiality and regulatory filings on a confidential basis.

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The Company may provide forward-looking information in appropriate circumstances to enable evaluation of the Company's operations and prospects for performance. Forward-looking information will only be released in circumstances determined by the Chief Executive Officer. Forward-looking information may include statements about future or anticipated growth, operating results and performance of the Company and business prospects and opportunities.

To the extent that forward-looking information is provided by the Company in a disclosure document, news release or statement by a spokesperson, it will be accompanied by: cautionary language to warn of the risk that material factors could cause actual results to differ materially from statements made in the forward-looking information and a statement of material factors or assumptions that were applied in the preparation of the forward-looking information.

The Company will also disclaim any intention to update or revise the forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable securities laws.

The disclosure policy also sets out how the Company plans to respond to rumours, when to hold conference calls for quarterly and annual financial results, sets out procedures for contact with analysts, investors and the media and includes guidelines for the Company's website, use of social media, public presentations and speeches.

RISK FACTORS

Investing in the Units is speculative and involves a high degree of risk due to the nature of the Company's business and the present stage of exploration and development of the Company's mineral property, the Castrovirreyna Project. Risk increases substantially where mineral properties are in the exploration or development stages as opposed to the operational stage. An investment in the Units should only be made by persons who can afford the total loss of their investment. The following risks, as well as risks currently unknown to the Company, could adversely affect the Company's current or future business, properties, operations, results, cash flows and financial condition and could cause future results, cash flows, financial condition, prospects, events or circumstances to differ materially from those currently expected, including the estimates and projections contained in this prospectus. Investors should carefully consider the risks described below and elsewhere in this prospectus .

Risks Related to the Company and to Mineral Exploration and Development

Estimating Mineral Resources is risky

The information on historical Mineral Resources are estimates only, and no assurance can be given that the anticipated tonnages and grades reported in the Castrovirreyna Technical Report will be achieved. Mineral Resource estimates may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing and other factors. There are numerous uncertainties inherent in estimating Mineral Resources, including many factors beyond the Company's control. Estimation is a subjective process, and the accuracy of the Mineral Resource estimate is a function of the quantity and quality of available data, and of the assumptions made and judgments used in engineering and geological interpretation of that data and the level of congruence with the actual size and characteristics of the Company's deposits. These estimates may require adjustments or downward revisions based upon further exploration or development work, drilling or actual production experience.

Fluctuations in silver prices, results of drilling, metallurgical testing and production, the evaluation of mine plans after the date of any estimate, permitting requirements or unforeseen technical or

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operational difficulties may require revision of the Company's Mineral Resource estimates. Mineral Resource estimates are based on drill hole information, which is not necessarily indicative of conditions between and around the drill holes. Accordingly, such Mineral Resource estimates may require revision as more geologic and drilling information becomes available and as actual production experience is gained. Should reductions in Mineral Resources occur, the Company may be required to take a material write-down of its investment in the Castrovirreyna Project, reduce the carrying value of the Castrovirreyna Project or delay the development of, or production from, some or all of the deposits forming the Castrovirreyna Project, which could have a material adverse effect on the Castrovirreyna Project and the Company's business, financial condition, results of operations, cash flows and prospects. Mineral Resources should not be interpreted as assurances of life of mine or of the profitability of future operations. There is a degree of uncertainty in estimating Mineral Resources and of the grades and tonnage that are forecast to be mined and, as a result, the grade and volume of silver that the Company mines, processes and recovers may not be the same as currently anticipated. Any material reductions in estimates of Mineral Resources could have a material adverse effect on the Castrovirreyna Project and the Company's business, financial condition, results of operations, cash flows or prospects.

Mineral Resources are not Mineral Reserves and have a greater degree of uncertainty as to their existence and feasibility. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. There is no assurance that Mineral Resources will be upgraded to Proven or Probable Mineral Reserves. Mineral Resources that are in the Inferred category are even more risky. Due to the uncertainty and speculative nature of Inferred Mineral Resources, economic considerations cannot be applied to this category and there is no assurance that Inferred Mineral Resources will be upgraded to Proven or Probable Mineral Reserves as a result of continued exploration.

Grant of permits to allow the proposed drill programs may take longer than envisaged, and may delay the start of proposed drill programs

The Company will require certain permits and approvals to allow the proposed drill programs that the Company intends to complete. The grant of permits to allow the proposed drill programs may take longer than envisaged, and may delay the start of proposed drill programs. Any such delays or costs associated with the process risk impeding the Company's operations or potentially having a material adverse effect on the Company's business, financial condition and results of operations or prospects.

There may be as-yet unrecognized environmental or compliance issues relating to the previous operations

The Castrovirreyna Project has historically been used for mining activities. Environmental hazards may exist on the Castrovirreyna Project that are unknown to the Company at present and that have been caused by previous owners or operators of the property and for which the Company may be liable for remediation. Parties engaged in mining operations, including the Company, may be required to compensate those suffering loss or damage by reason of the mining activities and may have civil or criminal fines or penalties imposed for violations of applicable environmental laws or regulations, regardless of whether the Company actually caused the loss or damage. The costs of such compensation, fines or penalties could have a material adverse effect on the Company's business, financial condition, results of operations, cash flows or prospects.

The future price of silver is uncertain and may be lower than expected

The price of silver realized by the Company will affect future production levels, earnings, cash flows and the financial condition of the Company. The price of silver is affected by numerous factors

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beyond the Company's control, including: (i) the strength of the US economy and the economies of other industrialized and developing nations; (ii) global or regional political or economic conditions; (iii) the relative strength of the US dollar and other currencies; (iv) expectations with respect to the rate of inflation; (v) current and expected interest rates and exchange rates; (vi) actual and anticipated purchases and sales of silver by central banks, financial institutions and other large holders, including speculators; (vii) demand for jewellery containing silver; (viii) investment activity, including speculation, in silver as a commodity or as a hedge against currency devaluation; and (ix) supply and demand dynamics, including the cost of substitutes, inventory levels and carrying charges.

The silver price has fluctuated widely in recent years, and future material price declines could cause development of, and commercial production from, the Castrovirreyna Project to be less profitable than expected and could render it uneconomic. Continuing to conduct mining in a low silver price environment would have a material adverse effect on the Company's business, financial condition, results of operations, cash flows and prospects. Depending on the current and expected price of silver, projected cash flows from planned or current mining operations may not be sufficient to warrant commencing or continuing mining, and the Company could be forced to discontinue exploration or, if commenced, development or, if commenced, to discontinue commercial production. The Company may be forced to sell one or more portions of the Castrovirreyna Project to generate cash. Future production from the Castrovirreyna Project will be dependent on a price of silver that is adequate to make a deposit economically viable. Furthermore, future mine plans using significantly lower silver prices could result in material write-downs of the Company's investment in the Castrovirreyna Project. The occurrence of any of the foregoing could have a material adverse effect on the Company's business, financial condition, results of operations, cash flows or prospects.

A declining or sustained low price of silver could negatively impact the Company by requiring a reassessment of the feasibility of the Castrovirreyna Project. If such a reassessment determines that the Castrovirreyna Project is not economically viable in whole or in part, then operations may cease or be curtailed and the Castrovirreyna Project may never be fully developed or developed at all. Even if the Castrovirreyna Project is ultimately determined to be economically viable, the need to conduct such a reassessment may cause substantial delays or may interrupt operations until the reassessment can be completed. The occurrence of any of the foregoing could have a material adverse effect on the Company's business, financial condition, results of operations, cash flows or prospects.

Commercial viability may not be achieved even with an acceptable silver price

The Company's ability to complete development work and commence a profitable commercial mining operation at the Castrovirreyna Project will depend upon numerous factors in addition to a favourable silver price, many of which are beyond its control, including the adequacy of infrastructure, geological characteristics, prolonged periods of severe weather, metallurgical characteristics of the ore, the availability of processing capacity, the availability of storage capacity, the availability of equipment and facilities necessary to complete development, the cost of consumables and mining and processing equipment, technological and engineering problems, accidents or acts of sabotage or terrorism, currency fluctuations, the availability and productivity of skilled labour, the regulation of the mining industry by various levels of government and quasi-governmental organizations and political factors. Furthermore, significant cost overruns could make the Castrovirreyna Project uneconomical. Accordingly, notwithstanding the positive results of the Castrovirreyna Technical Report, there is a risk that the Company will be unable to complete development work and commence a commercial mining operation at the Castrovirreyna Project, which would have a material adverse effect on the Company's business, financial condition, results of operations, cash flows or prospects.

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The Company currently depends on a single mineral property

The Company's only mineral property will be the Castrovirreyna Project. As a result, unless the Company acquires additional properties or projects, any adverse development affecting this property could have a material adverse effect on the Company and would materially and adversely affect the Company's potential mineral resource production, profitability, financial performance and results of operations. See "Castrovirreyna Project".

Civil unrest in Peru may adversely affect the Company's operations

There generally is occasional social unrest in Peru resulting from high expectations of an improvement of living standards and high levels of unemployment. Protestors have targeted specific foreign and national firms in the mining sector in recent years. Although the Castrovirreyna Project is situated in a historical mining district, in an area which has not experienced any significant civil unrest to date, there can be no assurance that future social unrest will not have an adverse impact on the Company's operations.

The Company is subject to risks related to political instability and expropriation

The uncertain political landscape of recent years is expected to continue in Peru under left-wing President Pedro Castillo, who initiated his 5-year term on July 28, 2021. His government plan included reference to the nationalization of resources, which would amount to expropriation from foreign owners to place them in the hands of Peruvian operators. The risk of expropriation or nationalization has, therefore, increased when compared with that under administrations over the last 20 years. However, the current Constitution and Castillo's lack of control of a majority in Congress make such apparent goal particularly difficult to achieve. In order to implement the reforms they desire, members of the party that invited Castillo to run for President (Peru Libre) are seeking that a Constitutional Assembly is instated to approve a new Constitution via referendum. This also poses significant legal challenges. The administration's most recent political statements point towards a more moderate approach. The first -and yet only- example being the expressed intention of renegotiating the license contracts with the consortium operating the Camisea natural gas fields in order to apparently increase the government take.

The Company is subject to foreign operations risks

The Castrovirreyna Project is located in Peru and, accordingly, the Company is subject to risks normally associated with exploration for and development of mineral properties in Peru. In addition, Peru is a developing country that has experienced political and economic difficulties over the years. The Company's mineral exploration activities could be affected in varying degrees by such political stability and government regulation relating to foreign investment and the mining business. Operations may also be affected in varying degrees by terrorism, military conflict or repression, crime, extreme fluctuations in currency rates and high inflation.

The Peruvian government has granted permits that enable the Company to conduct its current exploration activities, however the Company's ability to conduct future exploration and development activities is subject to changes in government regulations and shifts in political attitudes, which may include increases in the validity fees or penalties payable to keep the mining property in good standing, increases in rates of current taxes or royalties payable to the government, or the creation of new taxes, contributions or other levies, over which the Company has no control.

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The Company will be subject to the Peruvian legal system

The Peru legal system may expose the Company to risks such as: (a) effective legal redress in the courts, whether in respect of a breach of law or regulation or in an ownership dispute, being more difficult to obtain; (b) a higher degree of discretion on the part of governmental authorities; (c) the lack of judicial or administrative guidance on interpreting applicable rules and regulations; (d) inconsistencies or conflicts between and within various laws, regulations, decrees, orders and resolutions; or (e) relative inexperience of the judiciary and courts in such matters. The commitment of local business people, government officials and agencies and the judicial system to abide by legal requirements and negotiated agreements may be more uncertain in Peru, creating particular concerns with respect to licences and agreements for business. These may be susceptible to revision or cancellation and legal redress may be uncertain or delayed. There can be no assurance that joint ventures, licences, licence applications or other legal arrangements will not be adversely affected by the actions of government authorities or others and the effectiveness of and enforcement of such arrangements in Peru cannot be assured.

Risks related to ILO Convention 169 compliance

The Company may, or may in the future, operate in areas presently or previously inhabited or used by indigenous peoples. As a result, the Company's operations are subject to national and international laws, codes, resolutions, conventions, guidelines and other similar rules respecting the rights of indigenous peoples, including the provisions of ILO Convention 169 and the laws and regulations that have been enacted to develop the precepts of ILO Convention 169 into the Peruvian legal system. ILO Convention 169 mandates, among other things, that governments consult with indigenous peoples who may be impacted by mining projects prior to granting rights, permits or approvals in respect of such projects that may affect the collective rights of such indigenous peoples.

ILO Convention 169 has been ratified by most Latin American countries including Peru. It is possible however that these governments may not (i) have implemented procedures to ensure their compliance with ILO Convention 169 or (ii) have complied with the requirements of ILO Convention 169 despite implementing such procedures. Government compliance with ILO Convention 169 can result in delays and significant additional expenses to the Company arising from the consultation process with indigenous peoples in relation to the Company's exploration, mining or development projects. Moreover, any actual or perceived past contraventions, or potential future actual or perceived contraventions, of ILO Convention 169 create a risk that the permits, rights, approvals, and other governmental authorizations that the Company has relied upon, or may in the future rely upon, to carry out its operations or plans could be challenged by or on behalf of indigenous peoples in such countries. Such challenges may result in, without limitation, additional expenses with respect to the Company's operations, the suspension, revocation or amendment of the Company's rights or mining, socio-environmental or export permits, a delay or stoppage of the Company's development, exploration or mining operations, the refusal by governmental authorities to grant new permits or approvals required for the Company's continuing operations until the settlement of such challenges, or the requirement for the responsible government to undertake the requisite consultation process in accordance with ILO Convention 169.

As a result of the inherent uncertainty in respect of such proceedings, the Company is unable to predict what the results of any such challenges would be; however, any ILO Convention 169 proceedings relating to the Company's mining and exploration operations in Peru may have a material adverse effect on the business, operations, and financial condition of the Company.

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Geological, hydrological and climatic events could suspend mining operations or increase costs

All mining operations face geotechnical, hydrological and climate challenges. Unanticipated adverse geotechnical and hydrological conditions, such as landslides, subsidence and uplift, embankment failures and rock fragility may occur in the future and such events may not be detected in advance. Geotechnical instabilities and adverse climatic conditions can be difficult to predict and are often affected by risks and hazards outside of the Company's control, such as severe weather and seismic activity. Prolonged periods of cold weather or severe atmospheric conditions could result in loss of revenue or increased costs, and could result in a material adverse effect on the Company's business, financial condition, results of operations, cash flows or prospects.

Geotechnical failures could result in limited or restricted access to mines, suspension of operations, environmental damage, government investigations, increased monitoring costs, remediation costs, loss of ore and other impacts, which could result in loss of revenue or increased costs, and could result in a material adverse effect on the Company's business, financial condition, results of operations, cash flows or prospects.

The Company may not be able to obtain the financing needed to achieve commercial production

Substantial capital investments are necessary to complete the development of the Castrovirreyna Project. The Company has: (i) sustained operating losses since incorporation; (ii) finite financial resources; (iii) not earned any operating revenue; and (iv) no current source of operating cash flow. It is anticipated that funds from the Offering will support the initial development of the Castrovirreyna Project. However, the Company may need to raise further funds to complete the development of the Castrovirreyna Project as a result of increased capital costs or decreased cash flows from production as a result of risks described elsewhere in this prospectus, as well as to conduct other exploration and development activities. The Company may seek to raise further funds through equity or debt financings. There is no assurance that additional funding will be available to the Company (or on commercially reasonable terms) for further exploration and development of the Castrovirreyna Project, or that the Company will ever be cash flow positive. Failure to obtain necessary additional financing could result in delay or indefinite postponement of further exploration and development of the Castrovirreyna Project. If the Company is unable to obtain additional financing or if it obtains additional financing on unfavourable terms, it could have a material adverse effect on the Company's business, financial condition, results of operations, cash flows or prospects.

Construction and start-up of new mines is risky

The successful construction and development of the Castrovirreyna Project and the commencement of commercial production is subject to a number of factors including the availability and performance of engineering and construction contractors and employees, mining contractors, suppliers and consultants, the receipt of required approvals and permits in connection with the further development and construction of the existing mining facilities and the conduct of mining operations (including socioenvironmental permits), and the successful design, manufacture, delivery and construction of the mine, among others. Any delay in performance by any one or more of the contractors, suppliers, consultants or other persons on which the Company is dependent in connection with its development and construction activities, a delay in or failure to receive the required governmental approvals and permits in a timely manner or on reasonable terms, or a delay in or failure to complete and successfully operate the mining and processing components of the Castrovirreyna Project could delay or prevent the further development of the Castrovirreyna Project, could change the manner in which the Castrovirreyna Project

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is developed, or could delay or prevent the start-up of commercial production and revenue producing activities.

There can be no assurance that development of the Castrovirreyna Project will be completed when expected, will be constructed as expected, or that capital costs and the ongoing operating costs at the Castrovirreyna Project will not be significantly higher than anticipated by the Company. Any of the foregoing could adversely impact the Company's business, financial condition, results of operations, cash flows or prospects.

Estimates of capital and operating costs may be lower than actual costs

As a result of the substantial expenditures involved in the development of a mineral project, the need to project years into the future, the need to make assumptions and use models that may not adequately approximate reality, and the fluctuation of costs over time, a development project is prone to material cost overruns. Decisions about the development of the Castrovirreyna Project have been based on studies, including the Castrovirreyna Technical Report.

Capital costs, operating costs, production and economic returns, and other estimates may differ significantly from those anticipated by the Company, and there can be no assurance that the Company's actual capital or operating costs will not be higher than currently anticipated or that returns will not be lower than anticipated. The Company's actual costs may vary from estimates for a variety of reasons, including: limitations inherent in modelling; changes to assumed third party costs; short term operating factors; revisions to mine plans; risks and hazards associated with development and mining described elsewhere in this prospectus; natural phenomena, such as inclement weather conditions, water availability, floods, and earthquakes; and unexpected labour shortages or strikes. Operating costs may also be affected by a variety of factors, including: changing waste-to-ore ratios, ore grade metallurgy, labour costs, the cost of commodities, general inflationary pressures and currency exchange rates. Many of these factors are beyond the Company's control. Failure to achieve estimates or material increases in costs could have a material adverse effect on the Company's business, financial condition, results of operations, cash flows and prospects.

Furthermore, delays in the construction and commissioning of mineral projects or other technical difficulties may result in even further capital expenditures being required. Any delay in the development of the Castrovirreyna Project or cost overruns or operational difficulties once the Castrovirreyna Project is fully developed may have a material adverse effect on the Company's business, financial condition, results of operations, cash flows or prospects.

Inadequate infrastructure may constrain development and mining operations

Commercial production at the Castrovirreyna Project depends on adequate infrastructure. In particular, reliable power sources, water supply, transportation and surface facilities are all necessary to develop and operate a mine. Failure to adequately meet these infrastructure requirements in a timely and cost effective manner could affect the Company's ability to commence or continue production at the Castrovirreyna Project and could have a material adverse effect on the Company's business, financial condition, results of operations, cash flows or prospects.

While the Company believes there will be sufficient electrical power available at the Castrovirreyna Project, it will need to develop or access newly constructed or refurbished sources of power in order to conduct commercial mining operations at the Castrovirreyna Project. Additional power plants are planned for the Castrovirreyna Project, and will be installed in anticipation of ramping up mining

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activities at these locations. There can be no assurance that these sources of power for the Castrovirreyna Project will be constructed, refurbished or commissioned, as applicable, or that they will provide sufficient quantities of power for the Castrovirreyna Project's current or future development and operations. The failure to secure adequate sources of power to support the development and operation of the Castrovirreyna Project may limit production, which could have a material adverse effect on the Company's business, financial condition, results of operations, cash flows or prospects.

The use of water sources close to the Castrovirreyna Project is subject to certain environmental and permitting restrictions. While the Company has secured the necessary water-related permits and licenses to conduct its current and near-term contemplated operations, there is no guarantee that the Company will be able to obtain or renew the necessary permits and licenses to secure adequate water supply for all contemplated phases of development and operations at the Castrovirreyna Project. The Company's planned development and operation of the Castrovirreyna Project is a water-intensive activity and the inability of the Company to secure the appropriate authorizations for the use of water, or the storage and treatment of waste water, may result in a material adverse effect on the Company's business, financial condition, results of operations, cash flows or prospects.

Fluctuations in the market prices and availability of commodities and equipment affect the Company's business

The cash flows and profitability of the Company's business will also be affected by the market prices and availability of commodities and equipment that are consumed or otherwise used in connection with the Company's operations and development projects. Prices of such commodities and resources are also subject to volatile price movements, which can be material and can occur over short periods of time due to factors beyond the Company's control.

If there is a significant and sustained increase in the cost of certain commodities, the Company may decide that it is not economically feasible to continue all of the Company's commercial production and development activities and this could have an adverse effect on profitability. Higher worldwide demand for critical resources like input commodities, drilling equipment, mobile mining equipment, tires and skilled labour, etc. could affect the Company's ability to acquire them and lead to delays in delivery and unanticipated cost increases, which could have an effect on the Company's operating costs, capital expenditures and production schedules. The occurrences of one or more of these events may result in a material adverse effect on the Company's business, financial condition, results of operations, cash flows or prospects.

The successful development and operation of the Castrovirreyna Project depends on the skills of the Company's management and teams

The Company's business is dependent on retaining the services of its key management personnel with a variety of skills and experience, including in relation to the development and operation of mineral projects, and operations in the Castrovirreyna Project. The success of the Company is, and will continue to be, dependent to a significant extent on the expertise and experience of its directors and senior management. Failure to retain, or loss of, one or more of these people could have a material adverse effect on the Company's business, financial condition, results of operations, cash flows or prospects. The Company's success will also depend to a significant degree upon the contributions of qualified technical personnel and the Company's ability to attract and retain highly skilled personnel. Competition for such personnel is intense, and the Company may not be successful in attracting and retaining qualified personnel, or in obtaining the necessary work permits to hire qualified expatriates. The Company's

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inability to attract and retain these people could have a material adverse effect on its business, financial condition, results of operations, cash flows or prospects.

Mining operations are very risky

The Company's current business, and any future development or mining operations, involve various types of risks and hazards typical of companies engaged in the mining industry. These risks affect the current exploration, development and refurbishment activities of the Company, and will affect the Company's business to an even larger extent once commercial mining operations commence. Such risks include, but are not limited to: (i) industrial accidents; (ii) unusual or unexpected rock formations; (iii) structural cave-ins or slides and pitfall, ground or slope failures and accidental release of water from surface storage facilities; (iv) fire, flooding and earthquakes; (v) rock bursts; (vi) metals losses; (vii) periodic interruptions due to inclement or hazardous weather conditions; (viii) environmental hazards; (ix) discharge of pollutants or hazardous materials; (x) failure of processing and mechanical equipment and other performance problems; (xi) geotechnical risks, including the stability of the underground hanging walls and unusual and unexpected geological conditions; (xii) unanticipated variations in grade and other geological problems, water, surface or underground conditions; (xiii) labour disputes or slowdowns; (xiv) work force health issues as a result of working conditions; and (xv) force majeure events, or other unfavourable operating conditions.

These risks, conditions and events could result in: (i) damage to, or destruction of the value of, the Castrovirreyna Project or its facilities; (ii) personal injury or death; (iii) environmental damage to the Castrovirreyna Project, surrounding lands and waters, or the properties of others; (iv) delays or prohibitions on mining or the transportation of minerals; (v) monetary losses; and (vi) potential legal liability. Any of the foregoing could have a material adverse effect on the Company's business, financial condition, results of operation or prospects. In particular, underground development and exploration activities present inherent risks of injury to people and damage to equipment. Significant mine accidents could occur, potentially resulting in a complete shutdown of the Company's operations at the Castrovirreyna Project which could have a material adverse effect on the Company's business, financial condition, results of operations, cash flows or prospects.

There are also risks related to the reliance on the reliability of current and new or developing technology; the reliance on the work performance of outside consultants, contractors, and manufacturers; changes to project parameters over which the Company does not have complete control such as the silver price or labour or material costs; unknown or unanticipated or underestimated costs or expenses; unknown or unanticipated or underestimated additions to the scope of work due to changing or adverse conditions encountered as a mine is refurbished and redeveloped; unexpected variances in the geometry or quality of ore zones; unexpected reclamation requirements or expenses; permitting time lines; unexpected or unknown ground conditions; unexpected changes to estimated parameters utilized to estimate past timelines, projections, or costs; and liquidity risks. An adverse change in any one of such factors, hazards and risks may result in a material adverse effect on the Company's business, financial condition, results of operations, cash flows or prospects.

Operations during mining cycle peaks are more expensive

During times of increased demand for metals and minerals, price increases may encourage expanded mining exploration, development and construction activities. These increased activities may result in escalating demand for and cost of contract exploration, development and construction services and equipment. Increased demand for and cost of services and equipment could cause exploration and project costs to increase materially, resulting in delays if services or equipment cannot be obtained in a

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timely manner due to inadequate availability, and increased potential for scheduling difficulties and cost increases due to the need to coordinate the availability of services or equipment, any of which could materially increase project development or construction costs, result in project delays, or increase operating costs.

The success of the Company depends on its relationships with local communities

Several communities have agreements with the Company and future agreements will be required to support development of, and mining at, the Castrovirreyna Project. Written permission must be obtained in writing from owners and community members when surface rights are owned by local communities. The Company has obtained certain surface access and mineral exploration rights respectively from local communities and will need to obtain and maintain additional surface and mineral rights from such communities to support future operations and development activities. The Company believes that it currently enjoys good working relationships with such communities. The loss of these good working relationships could have a material adverse effect on the Company's ability to carry out the development of, or mining at, the Castrovirreyna Project, which would have a material adverse effect on the Company's business, financial condition, results of operations, cash flows or prospects.

The loss of surface rights would be material and adverse

At present, the Company has adequate surface rights for commercial production for the Reliquias underground mine at the Castrovirreyna Project. The Company believes it has a good relationship with local communities and the government and that all of its current surface rights are in good standing. There can be no guarantee that the terms upon which surface rights are extended to the Company will not change materially from those upon which existing surface rights were granted or that the Company will be able to meet the future requirements for accessing surface rights. The failure by the Company to secure the surface rights necessary to operate and develop the Castrovirreyna Project and conduct its operations in accordance with its plans may have a material adverse effect on the Company's business, financial condition, results of operations, cash flows or prospects.

The Company may fail to comply with the law or may fail to obtain or renew necessary permits and licences

The Company's development and exploration operations are subject to extensive national, territorial and local laws and regulations governing, among other things, such matters as environmental protection, management and use of toxic substances and explosives, health, exploration and development of mines, production and post-closure reclamation, safety and labour, taxation and royalties, maintenance of leases and claims, and expropriation of property. The activities of the Company require permits and licenses from various governmental authorities and associations.

The costs associated with compliance with these laws and regulations and of obtaining permits and licenses are substantial, and possible future laws and regulations, changes to existing laws and regulations and more stringent enforcement of current laws and regulations by governmental authorities, could cause additional expenses, capital expenditures, restrictions on or suspensions of the Company's operations and delays in the development of its properties. There is no assurance that future changes in such laws and regulations, if any, will not adversely affect the Company's operations. Moreover, these laws and regulations may allow governmental authorities and private parties to bring lawsuits based upon damages to property and injury to persons resulting from the socio-environmental, health and safety practices of the Company's past and current operations, or possibly even the actions of former property owners, and could lead to the imposition of substantial fines, penalties or other civil or criminal sanctions.

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The Company may fail to comply with current or future laws and regulations. Such non-compliance can lead to financial restatements, civil or criminal fines, penalties, and other material negative impacts on the Company.

As the development of the Castrovirreyna Project and exploration activities proceed, the Company may be required to obtain or renew further government permits for its current and contemplated operations. Obtaining or renewing the necessary governmental permits and licenses can be a timeconsuming process potentially involving numerous regulatory agencies, involving public hearings and costly undertakings on the Company's part. The duration and success of the Company's efforts to obtain and renew permits are contingent upon many variables not within its control, including the interpretation of applicable requirements implemented by the relevant permitting authority. The Company may not be able to obtain or renew permits that are necessary to its operations, or the cost to obtain or renew permits may exceed what the Company believes it can ultimately recover from a given property once in production. Any unexpected delays or costs associated with the permitting process could delay the development or impede the operation of a mine. To the extent necessary permits, licenses or authorizations are not obtained or renewed, or are subsequently suspended or revoked, the Company may be curtailed or prohibited from proceeding with planned development, commercialization, operation and exploration activities. Such curtailment or prohibition may result in a material adverse effect on the Company's business, financial condition, results of operations, cash flows or prospects.

Compliance with socio-environmental regulations can be costly

The Company's development of, and any mining operations at, the Castrovirreyna Project, and the exploration of the surrounding area are all subject to socio-environmental regulation. Regulations cover, among other things, water quality standards, land reclamation, the generation, transportation, storage and disposal of hazardous waste, general health and safety matters, and commitments towards social stakeholders. There is no assurance that the Company has been or will at all times be in full compliance with all socio-environmental laws and regulations or hold, and be in full compliance with, all required socio-environmental and health and safety permits. The potential costs and delays associated with compliance with such laws, regulations and permits could prevent the Company from economically operating or proceeding with the further development of the Castrovirreyna Project, and any noncompliance with such laws, regulations and permits may result in a material adverse effect on the Company's business, financial condition, results of operations, cash flows or prospects.

Socio-environmental approvals and permits are currently, and may in the future be, required in connection with the Company's current and planned operations. To the extent such socio-environmental approvals are required and not obtained, the Company's plans and the operation of mines may be curtailed or it may be prohibited from proceeding with planned exploration or development of additional mineral properties. Failure to comply with applicable socio-environmental laws, regulations and permitting requirements may result in enforcement actions, including orders issued by regulatory or judicial authorities causing operations to cease or be curtailed, and may include corrective measures requiring capital expenditures, installation of additional equipment, or remedial actions.

There is no assurance that any future changes in socio-environmental regulation will not adversely affect the Company's operations. Changes in government regulations have the potential to significantly increase compliance costs and thus reduce the profitability of current or future operations.

Environmental hazards may also exist on the current and future properties on which the Company holds interests that are unknown to the Company at present and that have been caused by previous or existing owners or operators of the properties and for which the Company may be liable for remediation.

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Parties engaged in mining operations, including the Company, may be required to compensate those suffering loss or damage by reason of the mining activities and may have civil or criminal fines or penalties imposed for violations of applicable environmental laws or regulations, regardless of whether the Company actually caused the loss or damage. The costs of such compensation, fines or penalties could have a material adverse effect on the Company's business, financial condition, results of operations, cash flows or prospects.

Social and environmental activism can negatively impact exploration, development and mining activities

There is an increasing level of public concern relating to the effects of mining on the natural landscape, on communities and on the environment. Certain non-governmental organizations, public interest groups and reporting organizations (" NGOs ") who oppose resource development can be vocal critics of the mining industry. In addition, there have been many instances in which local community groups have opposed resource extraction activities, which have resulted in disruption and delays to the relevant operation. While the Company seeks to operate in a socially responsible manner and believes it has good relationships with local communities and other social stakeholders in the Castrovirreyna region, NGOs or local community organizations could direct adverse publicity and/or disrupt the operations of the Company in respect of the Castrovirreyna Project, regardless of its successful compliance with social and environmental best practices, due to political factors, activities of unrelated third parties on lands in which the Company has an interest or the Company's operations specifically. Any such actions and the resulting media coverage could have an adverse effect on the reputation and financial condition of the Company or its relationships with the communities in which it operates, which could have a material adverse effect on the Company's business, financial condition, results of operations, cash flows or prospects.

Competition with other mining companies is intense

The mining industry is intensely competitive. The Company competes with other mining companies, many of which have greater resources and experience. Competition in the mining industry is primarily for: (i) properties which can be developed and can produce economically; (ii) the technical expertise to find, develop, and operate such properties; (iii) labour to operate the properties; and (iv) capital to fund such properties. Such competition may result in the Company being unable to acquire desired properties, to recruit or retain qualified employees or to acquire the capital necessary to fund its operations and develop its properties. The Company's inability to compete with other mining companies for these resources could have a material adverse effect on the Company's business, financial condition, results of operations, cash flows or prospects.

Many competitors not only explore for and mine minerals, but conduct refining and marketing operations on a worldwide basis. In the future, the Company may also compete with such mining companies in refining and marketing its products to international markets. Any inability to compete with established competitors could have a material adverse effect on the Company's business, financial condition, results of operations, cash flows or prospects.

A failure to maintain satisfactory labour relations can adversely impact the Company

The Company's operations and further development of the Castrovirreyna Project is dependent upon the efforts of its employees and the Company's operations would be adversely affected if it failed to maintain satisfactory labour relations. In addition, relations between the Company and its employees may be affected by changes in the scheme of labour relations that may be introduced by the relevant

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governmental authorities who have jurisdiction over the various aspects of the Company's business. Changes in such legislation or in the relationship between the Company and its employees may have a material adverse effect on the Company's business, results of operations or financial condition.

The Company has limited operating history and negative cash flows

The Company has not yet recorded any revenues from its operations nor has the Company commenced commercial production on the Castrovirreyna Project. The Company does not expect to generate revenues from operations in the foreseeable future. The Company expects to continue to incur losses unless and until such time as the Castrovirreyna Project enters into commercial production and generates sufficient revenues to fund its continuing operations. There can be no assurance that the Company will generate any revenues or achieve profitability or that the Castrovirreyna Project or any of the properties the Company may hereafter acquire or obtain an interest in will generate earnings, operate profitably or provide a return on investment in the future. There can be no assurance that the underlying assumed levels of expenses will prove to be accurate. There can be no assurance that significant additional losses will not occur in the near future or that the Company will be profitable in the future. The Company's operating expenses and capital expenditures may increase in subsequent years as consultants, personnel and equipment associated with advancing exploration, development and commercial production of its properties are added. The amount and timing of expenditures will depend on the progress of ongoing exploration and development, the results of consultants' analyses and recommendations, the rate at which operating losses are incurred, the execution of any joint venture agreements with strategic partners, the Company's acquisition of additional properties and other factors, many of which are beyond the Company's control.

The Castrovirreyna Project has not yet commenced commercial production and has not generated cash flow from operations. The Company is devoting significant resources to development of the Castrovirreyna Project, however there can be no assurance that it will generate positive cash flow from operations in the future. The Company expects to continue to incur negative operating cash flow and losses until such time as it enters into commercial production and will not generate revenues sufficient to fund the continuing operation of the Castrovirreyna Project.

To the extent that the Company has negative cash flow in future periods, the Company may need to deploy a portion of its cash reserves to fund such negative cash flow.

The Company may not use the proceeds as described in this prospectus

The Company currently intends to use the net proceeds received from the Offering as described under "Use of Proceeds". However, the Board and/or management will have discretion in the actual application of the net proceeds, and may elect to allocate net proceeds differently from that described under "Use of Proceeds" if they believe it would be in the Company's best interests to do so. Shareholders may not agree with the manner in which the Board and/or management chooses to allocate and spend the net proceeds. The failure by the Board and/or management to apply these funds effectively could have a material adverse effect on the Company's business, financial condition, results of operations, cash flows or prospects.

The Company's insurance coverage may be inadequate and result in losses

The Company's business is subject to a number of risks and hazards (as further described in this prospectus). Although the Company maintains insurance and intends, upon completion of the Offering, to obtain certain additional insurance to protect against certain risks in such amounts as it considers to

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be reasonable, its insurance will not cover all the potential risks associated with its activities, including any future mining operations. The Company may also be unable to obtain or maintain insurance to cover its risks at economically feasible premiums, or at all. Insurance coverage may not continue to be available or may not be adequate to cover any resulting liability. Moreover, insurance against risks such as environmental pollution or other hazards as a result of exploration or production may not be available to the Company on acceptable terms. The Company might also become subject to liability for pollution or other hazards which it is not currently insured against and/or in future may not insure against because of premium costs or other reasons. Losses from these events may cause the Company to incur significant costs which could have a material adverse effect on the Company's business, financial condition, results of operations, cash flows or prospects.

Currency fluctuations can result in unanticipated losses

The Company is subject to foreign exchange rate fluctuations with respect to United States, Canadian and Peruvian currencies. Silver is sold throughout the world principally in United States dollars. The Company has traditionally raised funds through United States dollar equity issuances. The Company's proceeds from the Offering will be received in Canadian dollars. From time to time, the Company may borrow funds and incur expenditures that are denominated in a foreign currency, generally Canadian or United States dollars.

The Company presents its financial results in United States dollars and, if the Company commences production at the Castrovirreyna Project, substantially all of its operating costs on the Castrovirreyna Project will be incurred in Peruvian soles. As a result, any significant and sustained appreciation of the Peruvian sol or Canadian dollar against the United States dollar may materially reduce reported revenues from sales of silver, if any, from the Castrovirreyna Project. The Company currently has no foreign exchange hedging contracts to offset currency fluctuations.

It may be difficult to enforce judgements and effect service of process on directors

Some of the directors of the Company, particularly Julio Jose Arce Ortiz, Alfredo Plenge Thorne and Alfredo Bazo, named in this prospectus reside outside of Canada. Some or all of the assets of those persons may be located outside of Canada. Therefore, it may not be possible for investors to collect or to enforce judgments obtained in Canadian courts against such directors. Moreover, it may not be possible for investors to effect service of process within Canada upon such directors.

Conflicts of interest could result in suboptimal decisions being made by the Company

Certain directors and officers of the Company are or may become associated with other mining and/or mineral exploration and development companies which may give rise to conflicts of interest. Directors who have a material interest in any person who is a party to a material contract or a proposed material contract with the Company are required, subject to certain exceptions, to disclose that interest and generally abstain from voting on any resolution to approve such a contract. In addition, directors and officers are required to act honestly and in good faith with a view to the best interests of the Company. Some of the directors and officers of the Company have either other full-time employment or other business or time restrictions placed on them and accordingly, the Company will not be the only business enterprise of these directors and officers. Further, any failure of the directors or officers of the Company to address these conflicts in an appropriate manner, or to allocate opportunities that they become aware of to the Company could have a material adverse effect on the Company's business, financial condition, results of operations, cash flows or prospects.

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Future acquisitions may require significant expenditures or dilution and may result in inadequate returns

The Company may seek to expand through future acquisitions; however, there can be no assurance that the Company will locate attractive acquisition candidates, or that the Company will be able to acquire such candidates on economically acceptable terms, if at all, or that the Company will not be restricted from completing acquisitions pursuant to the terms and conditions from time to time of arrangements with third parties, such as the Company's creditors. Future acquisitions may require the Company to expend significant amounts of cash, resulting in the Company's inability to use these funds for other business or may involve significant issuances of equity. Future acquisitions may also require substantial management time commitments, and the negotiation of potential acquisitions and the integration of acquired operations could disrupt the Company's business by diverting management and employees' attention away from day-to-day operations. The difficulties of integration may be increased by the necessity of coordinating geographically diverse organizations, integrating personnel with disparate backgrounds and combining different corporate cultures.

Any future acquisition involves potential risks, including, among other things: (i) mistaken assumptions and incorrect expectations about mineral properties, Mineral Resources and costs; (ii) an inability to successfully integrate any operation the Company acquires; (iii) an inability to recruit, hire, train or retain qualified personnel to manage and operate the operations acquired; (iv) the assumption of unknown liabilities; (v) limitations on rights to indemnity from the seller; (vi) mistaken assumptions about the overall cost of equity or debt; (vii) unforeseen difficulties operating acquired projects, which may be in geographic areas new to the Company; and (viii) the loss of key employees and/or key relationships at the acquired project.

At times, future acquisition candidates may have liabilities or adverse operating issues that the Company fails to discover through due diligence prior to the acquisition. If the Company consummates any future acquisitions with unanticipated liabilities or that fails to meet expectations, the Company's business, results of operations, cash flows or financial condition may be materially adversely affected. The potential impairment or complete write-off of goodwill and other intangible assets related to any such acquisition may reduce the Company's overall earnings and could negatively affect the Company's balance sheet.

The Company is dependent on information technology systems

The Company's operations depend, in part, upon information technology systems. The Company's information technology systems are subject to disruption, damage or failure from a number of sources, including, but not limited to, computer viruses, security breaches, natural disasters, power loss and defects in design. Although to date the Company has not experienced any material losses relating to information technology system disruptions, damage or failure, there can be no assurance that it will not incur such losses in the future. Any of these and other events could result in information technology systems failures, operational delays, production downtimes, destruction or corruption of data, security breaches or other manipulation or improper use of the Company's systems and networks, any of which may result in a material adverse effect on the Company's business, financial condition, results of operations, cash flows or prospects.

The Company may be subject to costly legal proceedings

The Company may be subject to regulatory investigations, civil claims, lawsuits and other proceedings in the ordinary course of its business. The results of these legal proceedings cannot be

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predicted with certainty due to the uncertainty inherent in regulatory actions and litigation, the difficulty of predicting decisions of regulators, judges and juries and the possibility that decisions may be reversed on appeal. Defense and settlement costs of legal claims can be substantial, even with claims that have no merit. Management is committed to conducting business in an ethical and responsible manner, which it believes will reduce the risk of legal disputes. However, if the Company is subject to legal disputes, there can be no assurances that these matters will not have a material adverse effect on the Company's business, financial condition, results of operations, cash flows or prospects.

The Company will incur increased costs as a result of complying with the reporting requirements, rules and regulations affecting public issuers

As a public issuer, the Company will be subject to the reporting requirements and rules and regulations under the applicable Canadian securities laws and rules of any stock exchange on which the Company's securities may be listed from time to time. Additional or new regulatory requirements may be adopted in the future. The requirements of existing and potential future rules and regulations will increase the Company's legal, accounting and financial compliance costs, make some activities more difficult, time-consuming or costly and may also place undue strain on its personnel, systems and resources, which could adversely affect its business and financial condition.

In particular, as a result of the Offering, the Company will become subject to reporting and other obligations under applicable Canadian securities laws, including National Instrument 52-109 — Certification of Disclosure in Issuers' Annual and Interim Filings, which requires annual management assessment of the effectiveness of the Company's internal controls over financial reporting. Effective internal controls, including financial reporting and disclosure controls and procedures, are necessary for the Company to provide reliable financial reports, to effectively reduce the risk of fraud and to operate successfully as a public company. These reporting and other obligations will place significant demands on the Company as well as on the Company's management, administrative, operational and accounting resources.

COVID-19 is an emerging risk that may impact the Company

An emerging risk is a risk not well understood at the current time and for which the impacts on strategy and financial results are difficult to assess or are in the process of being assessed. Since December 31, 2019, the outbreak of the novel strain of coronavirus, specifically identified as SARS-CoV2 resulting in the COVID-19 illness, and its different strains or variants, has resulted in governments worldwide enacting emergency measures to combat the spread of the virus. These measures, which include the implementation of travel bans, self-imposed quarantine periods and social distancing, have caused material disruption to businesses globally, resulting in an economic slowdown and the mining industry has not been immune. Global equity markets have experienced significant volatility and weakness. Governments and central banks have reacted with significant monetary and fiscal interventions designed to stabilize economic conditions. The duration and impact of the COVID-19 outbreak is unknown at this time, as is the efficacy of the government and central bank interventions. It is not possible to reliably estimate the length and severity of these developments and the impact on the financial results and condition of the Company in future periods. Currently there are COVID-19 related travel restrictions in place in Canada. These travel restrictions may impact upon the ability of qualified personnel to travel to the Castrovirreyna Project. In addition, there is a risk that more restrictive COVID19 related travel restrictions may be imposed in the future that may further impact on the ability of the Company to complete the planned work program at the Castrovirreyna Project.

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In addition, COVID-19 has recently resulted in widespread disruption to the global supply chain which may result in delays to the Company's ability to procure required supplies or equipment necessary to advance the Castrovirreyna Project towards production or to achieve the Company's business objectives and milestones. Any prolonged disruption could impair the Company's ability to reach its stated objectives, which could have a material adverse effect on the Company's business, financial condition, results of operations, cash flows or prospects.

Risks Related to the Securities and the Offering

Investors may lose their entire investment

An investment in the Units is speculative and may result in the loss of an investor's entire investment. Only potential investors who are experienced in high risk investments and who can afford to lose their entire investment should consider an investment in the Company.

There is no existing market for the Unit Shares, Warrants or Warrant Shares

There is currently no existing public market for the Unit Shares, Warrants or Warrant Shares. The Unit Shares, Warrants and Warrant Shares are not currently listed or quoted on any stock exchange or market in Canada or elsewhere. If an active trading market does not develop, the trading price of the Unit Shares, Warrants or Warrant Shares may decline, and investors may have difficulty selling any of the Unit Shares, Warrants or Warrant Shares that they purchase or acquire by way of the Offering.

Prior to the Offering, there has been no public trading market for the Unit Shares, Warrants or Warrant Shares, and the Company cannot offer assurances that one will develop or be sustained after the Offering. The Company cannot predict the prices at which the Unit Shares, Warrants or Warrant Shares will trade. The Offering Price was determined through negotiations among the Company and the Underwriters and may not bear any relationship to the market price at which the Unit Shares, Warrants or Warrant Shares will trade after the Offering, or to any other established criteria of the Company's value. Shares of companies often trade at a discount to the initial offering price due to sales loads, underwriting discounts and related offering expenses. Therefore, the Unit Shares, Warrants or Warrant Shares should not be treated as a trading vehicle.

The market price for the Unit Shares, Warrants and Warrant Shares could be subject to significant volatility. Factors such as commodity prices, government regulation, interest rates, share price movements of the Company's peer companies and competitors, as well as overall market movements, may have a significant impact on the market price of the Unit Shares, Warrants or Warrant Shares. The stock market has from time to time experienced extreme price and volume fluctuations, particularly in the mining sector, which have often been unrelated to the operating performance of particular companies.

Timing of Listing of the Common Shares May Affect Eligibility for Investment by Registered Plans

Adverse tax consequences may arise with respect to any Common Shares held in RRSPs, RRIFs, TFSAs or other Registered Plans if the Company does not list the Common Shares on the TSXV prior to the time of Closing in the manner contemplated under " Eligibility for Investment ".

Dilution from equity financing could negatively impact holders of Common Shares

The Company may from time to time raise funds through the issuance of Common Shares or the issuance of debt instruments or other securities convertible into Common Shares. The Company cannot predict the size or price of future issuances of Common Shares or the size or terms of future issuances

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of debt instruments or other securities convertible into Common Shares, or the effect, if any, that future issuances and sales of the Company's securities will have on the market price of the Common Shares. Sales or issuances of substantial numbers of Common Shares, or the perception that such sales could occur, may adversely affect prevailing market prices of the Common Shares. With any additional sale or issuance of Common Shares, or securities convertible into Common Shares, investors will suffer dilution to their voting power and the Company may experience dilution in its earnings per share.

Equity securities are subject to trading and volatility risks

The securities of publicly traded companies, particularly mineral exploration and development companies, can experience a high level of price and volume volatility and the value of the Company's securities can be expected to fluctuate depending on various factors, not all of which are directly related to the success of the Company and its operating performance, underlying asset values or prospects. These include the risks described elsewhere in this prospectus. Factors which may influence the price of the Company's securities, including the Common Shares, include, but are not limited to:

worldwide economic conditions;
changes in government policies;
investor perceptions;
movements in global interest rates and global stock markets;
variations in operating costs;
the cost of capital that the Company may require in the future;
metals prices;
the price of commodities necessary for the Company's operations;
recommendations by securities research analysts;
issuances of Common Shares or debt securities by the Company;
operating performance and, if applicable, the share price performance of the Company's competitors;
the addition or departure of key management and other personnel;
the expiration of lock-up or other transfer restrictions on outstanding Common Shares;
significant acquisitions or business combinations, strategic partnerships, joint ventures or capital commitments by or involving the Company or its competitors;
news reports relating to trends, concerns, technological or competitive developments, regulatory changes and other related industry and market issues affecting the mining sector;
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publicity about the Company, the Company's personnel or others operating in the industry;
loss of a major funding source; and
all market conditions that are specific to the mining industry.

There can be no assurance that such fluctuations will not affect the price of the Company's securities, and consequently purchasers of Units may not be able to sell Common Shares or Warrants at prices equal to or greater than the price or value at which they purchased the Units or acquired the Common Shares or Warrants by way of the secondary market.

Sales by existing shareholders can reduce share prices

Sales of a substantial number of Common Shares in the public market could occur at any time. These sales, or the market perception that the holders of a large number of Common Shares intend to sell Common Shares, could reduce the market price of the Common Shares. If this occurs and continues, it could impair the Company's ability to raise additional capital through the sale of securities.

It is anticipated that a majority of the Common Shares issued and outstanding prior to Closing will be subject to post-Closing resale restrictions. See "Plan of Distribution" and "Securities Subject to Contractual Restriction on Transfer" for descriptions of these resale restrictions. Upon expiration of the resale restrictions to which they are subject, such Common Shares will be freely tradable in the public market, subject to the provisions of applicable securities laws.

The Common Shares do not pay dividends

No dividends on the Common Shares have been declared or paid to date. Payment of any future dividends will be at the discretion of the Board after taking into account many factors, including earnings, operating results, financial condition, current and anticipated cash needs and any restrictions in financing agreements, and the Company may never pay dividends.

The Company anticipates that, for the foreseeable future, it will retain its cash resources for the operation and development of its business. In this regard, achieving production and generating cash flow at the Castrovirreyna Project is unlikely to result in payment of dividends or other distributions by the Company to shareholders of the Company.

Global macroeconomic trends can impact the Company

Various macroeconomic factors could adversely affect the Company's business and the results of the Company's operations and financial condition, including changes in inflation, interest rates and foreign currency exchange rates, and overall economic conditions and uncertainties, including those resulting from political instability and the current and future conditions in the global financial markets. For instance, if inflation or other factors were to significantly increase the Company's business costs, it may not be feasible to pass through price increases. Interest rates, the liquidity of the credit markets and the volatility of the capital markets could also affect the value of the Company's investments and the Company's ability to liquidate the Company's investments in order to fund the Company's operations, if necessary. In addition, interest rates and the ability to access credit markets could also adversely affect the ability of customers to purchase and pay for the Company's products. These factors could adversely affect the Company's business and financial condition.

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CERTAIN CANADIAN FEDERAL INCOME TAX CONSIDERATIONS

In the opinion of Dentons Canada LLP, counsel to the Company, and Bennett Jones LLP, counsel to the Underwriters, subject to the limitations and qualifications stated herein, the following summary describes of the principal Canadian federal income tax considerations under the Tax Act generally applicable to an investor who acquires, as beneficial owner, a Unit, consisting of one Unit Share and one half of one Warrant pursuant to the Offering and who, for the purposes of the Tax Act and at all relevant times: (i) deals at arm's length with the Company and the Underwriters, (ii) is not "affiliated" (within the meaning of the Tax Act) with the Company, the Underwriters or any subsequent purchaser of Unit Shares, Warrant Shares or Warrants and (iii) acquires and holds the Unit Shares and any Warrant Shares acquired on the exercise of Warrants (for the purpose of this specific summary, such Unit Shares and Warrant Shares sometimes collectively referred to as " Shares "), and Warrants, as capital property (a " Holder "). Generally, the Shares and Warrants will be considered to be capital property to a Holder thereof provided that the Holder does not use or hold the Shares or Warrants in the course of carrying on a business of trading or dealing in securities and such Holder has not acquired them in one or more transactions considered to be an adventure or concern in the nature of trade.

This summary does not apply to a Holder (i) that is a "financial institution" for the purposes of the mark-to-market rules contained in the Tax Act; (ii) that is a "specified financial institution" as defined in the Tax Act; (iii) an interest in which would be a "tax shelter investment" as defined in the Tax Act; (iv) that has elected to report its "Canadian tax results" (as defined in the Tax Act) in a currency other than Canadian currency; (v) that is exempt from tax under the Tax Act; (vi) that has entered or will enter into a "derivative forward agreement" or "synthetic disposition arrangement", as those terms are defined in the Tax Act, with respect to the Shares or Warrants; (vii) that receives dividends on the Shares under or as part of a "dividend rental arrangement", as defined in the Tax Act or (viii) that is a corporation resident in Canada and is or becomes, or does not deal at arm's length with a corporation resident in Canada that is or becomes, as part of a transaction or event or series of transactions or events that includes the acquisition of Units pursuant to the Offering, controlled by a non-resident person, or a group of nonresident persons not dealing with each other at arm's length, for purposes of the foreign affiliate dumping rules in section 212.3 of the Tax Act. Such Holders should consult their own tax advisors with respect to an investment in Unit Shares and Warrants.

This summary is based upon the current provisions of the Tax Act, and counsel's understanding of the current published administrative policies and assessing practices of the Canada Revenue Agency (the " CRA ") and all specific proposals to amend the Tax Act publicly announced by or on behalf of the Minister of Finance (Canada) prior to the date hereof (the " Tax Proposals "). This summary assumes that the Tax Proposals will be enacted substantially as proposed; however, no assurance can be given that the Tax Proposals will be enacted as proposed or at all. This summary does not otherwise take into account or anticipate any changes in law or the CRA's administrative policies or assessing practices, whether by legislative, governmental or judicial decision or action, nor does it take into account other federal or any provincial, territorial or foreign tax legislation or considerations.

This summary is of a general nature only, is not exhaustive of all possible Canadian federal income tax considerations and is not intended to be, nor should it be construed to be, legal or tax advice to any particular Holder. Accordingly, Holders should consult their own tax advisors with respect to their particular circumstances.

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Allocation of Purchase Price of Units

Holders will be required to allocate, on a reasonable basis, their cost of each Unit between the Unit Share and the one half of one Warrant comprising a Unit to determine the cost of each to the Holder for purposes of the Tax Act. For its purposes, the Company intends to allocate $⚫ to each Unit Share and $⚫ to the one half of one Warrant forming part of each Unit. Although the Company believes that this allocation is reasonable, it is not binding on the CRA or the Holder, and the Company expresses no opinion with respect to such allocation. The Holder's adjusted cost base of the Unit Share comprising a part of each Unit will be determined by averaging the cost allocated to the Unit Share with the adjusted cost base to the Holder of all Common Shares (if any) owned by the Holder as capital property immediately prior to such acquisition.

Exercise of Warrant

The exercise of a Warrant to acquire a Warrant Share will be deemed not to constitute a disposition of property for purposes of the Tax Act. As a result, no gain or loss will be realized by a Holder upon the exercise of a Warrant to acquire a Warrant Share. When a Warrant is exercised, the Holder's cost of the Warrant Share acquired thereby will be equal to the aggregate of the Holder's adjusted cost base of such Warrant and the exercise price paid for the Warrant Share. The Holder's adjusted cost base of the Warrant Share so acquired will be determined by averaging the cost of the Warrant Share with the adjusted cost base to the Holder of all Common Shares (if any) owned by the Holder as capital property immediately prior to such acquisition.

Residents of Canada

The following section of this summary is generally applicable to a Holder who, for the purposes of the Tax Act, is or is deemed to be resident in Canada at all relevant times (" Resident Holder "). Certain Resident Holders whose Shares might not otherwise qualify as capital property may be entitled to make an irrevocable election permitted by subsection 39(4) of the Tax Act to deem the Shares, and every other "Canadian security" (as defined in the Tax Act), held by such persons, in the taxation year of the election and each subsequent taxation year to be capital property. This election does not apply to Warrants. Resident Holders should consult their own tax advisors regarding this election.

Expiry of Warrants

In the event of the expiry of an unexercised Warrant, a Resident Holder generally will realize a capital loss equal to the Resident Holder's adjusted cost base of such Warrant immediately before its expiry. The tax treatment of capital gains and capital losses is discussed in greater detail below under the subheading " Capital Gains and Capital Losses ".

Dividends

Dividends received or deemed to be received on the Shares will be included in computing a Resident Holder's income. In the case of a Resident Holder who is an individual (other than certain trusts), such dividends will be subject to the gross-up and dividend tax credit rules normally applicable in respect of "taxable dividends" received from a "taxable Canadian corporation" (as defined in the Tax Act). An enhanced gross up and dividend tax credit will be available to individuals (other than certain trusts) in respect of "eligible dividends" designated by the Company to the Resident Holder in accordance with the provisions of the Tax Act. There may be limitations on the ability of the Company to designate dividends as "eligible dividends".

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Dividends received or deemed to be received on the Shares by a Resident Holder that is a corporation must be included in computing its income but generally will be deductible in computing its taxable income. In certain circumstances, subsection 55(2) of the Tax Act will treat a taxable dividend received or deemed to be received by a Resident Holder that is a corporation as proceeds of disposition or a capital gain. Resident Holders that are corporations should consult their own tax advisors having regard to their own circumstances.

A Resident Holder that is a "private corporation" (defined in the Tax Act) or a "subject corporation" (as defined for the purposes of Part IV of the Tax Act), may be liable to pay a refundable tax under Part IV of the Tax Act on dividends received or deemed to be received on the Shares to the extent such dividends are deductible in computing taxable income for the year.

Dispositions of Shares and Warrants

Upon a disposition or a deemed disposition of a Share (other than to the Company, subject to detailed exceptions under the Tax Act) or a Warrant (other than on the exercise thereof), a Resident Holder generally will realize a capital gain (or a capital loss) equal to the amount by which the proceeds of disposition, net of any reasonable costs of disposition, are greater (or are less) than the adjusted cost base of such security to the Resident Holder. The tax treatment of capital gains and capital losses is discussed in greater detail below under the subheading " Capital Gains and Capital Losses ". The adjusted cost base to a Resident Holder of a Share will be determined by averaging the cost of that Share with the adjusted cost base (determined immediately before the acquisition of the Share) of all other Common Shares held as capital property at that time by the Resident Holder.

Capital Gains and Capital Losses

Generally, a Resident Holder is required to include in computing its income for a taxation year one-half of the amount of any capital gain (a " taxable capital gain ") realized in the year. Subject to and in accordance with the provisions of the Tax Act, a Resident Holder is required to deduct one-half of the amount of any capital loss (an " allowable capital loss ") realized in a taxation year from taxable capital gains realized in the year by such Resident Holder. Allowable capital losses in excess of taxable capital gains realized in a taxation year may be carried back and deducted in any of the three preceding taxation years or carried forward and deducted in any following taxation year against taxable capital gains realized in such year to the extent and under the circumstances described in the Tax Act.

The amount of any capital loss realized on the disposition or deemed disposition of Shares by a Resident Holder that is a corporation may be reduced by the amount of dividends received or deemed to have been received by it on such Shares or shares substituted for such Shares, to the extent and in the circumstances specified by the Tax Act. Similar rules may apply where a Share is owned by a partnership or trust of which a corporation, trust or partnership is a member or beneficiary. Resident Holders to whom these rules may be relevant should consult their own tax advisors.

A Resident Holder that is throughout the relevant taxation year a "Canadian-controlled private corporation" (as defined in the Tax Act) also may be liable to pay an additional tax (refundable in certain circumstances) on certain investment income, including taxable capital gains.

Minimum Tax

Capital gains realized and dividends received or deemed to be received by a Resident Holder that is an individual or a trust, other than certain specified trusts, may give rise to minimum tax under the

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Tax Act. Resident Holders should consult their own advisors with respect to the application of the minimum tax.

Non-Residents of Canada

The following section of this summary is generally applicable to Holders who for the purposes of the Tax Act and at all relevant times (i) are not, and are not deemed to be, resident in Canada; and (ii) do not use or hold (or be deemed to use or hold) the Shares or Warrants in carrying on a business in Canada (" Non-Resident Holders ").

Special rules, which are not discussed in this summary, may apply to a Non-Resident Holder that is an insurer carrying on business in Canada and elsewhere or is an "authorized foreign bank" (as defined in the Tax Act). Such Non-Resident Holders should consult their own tax advisors.

Dividends

Dividends paid or credited or deemed to be paid or credited to a Non-Resident Holder by the Company on any Shares will be subject to Canadian withholding tax at the rate of 25% of the gross amount of the dividend unless such rate is reduced by the terms of an applicable income tax treaty or convention. For example, under the Canada-United States Tax Convention (1980), as amended (the " Canada-U.S. Treaty "), the rate of withholding tax on dividends paid or credited to a Non-Resident Holder who is resident in the United States for purposes of the Canada-U.S. Treaty, is the beneficial holder of the dividends, and is fully entitled to benefits under the Canada-U.S. Treaty (a " U.S. Holder ") is generally reduced to 15% of the gross amount of the dividend (or 5% in the case of a U.S. Holder that is a company beneficially owning at least 10% of the Company's voting shares). The Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting , of which Canada is a signatory, affects many of Canada's bilateral tax treaties (but not the Canada-U.S. Treaty), including the ability to claim benefits thereunder. Non-Resident Holders should consult their own tax advisors.

Dispositions of Shares and Warrants

A Non-Resident Holder generally will not be subject to tax under the Tax Act in respect of a capital gain realized on the disposition or deemed disposition of a Share or a Warrant, nor will capital losses arising therefrom be recognized under the Tax Act, unless the Share or Warrant constitutes "taxable Canadian property" to the Non-Resident Holder for purposes of the Tax Act, and the gain is not exempt from tax pursuant to the terms of an applicable income tax treaty or convention.

Provided the Shares are listed on a "designated stock exchange" as defined in the Tax Act (which currently includes the TSXV), at the time of disposition, the Shares and Warrants generally will not constitute taxable Canadian property of a Non-Resident Holder at that time, unless at any time during the 60 month period immediately preceding the disposition of such Shares or Warrants, as applicable, the following two conditions are met concurrently: (i) 25% or more of the issued shares of any class or series of shares of the Company were owned by one or any combination of the (a) Non-Resident Holder, (b) persons with whom the Non-Resident Holder did not deal at arm's length, or (c) partnerships in which persons referred to in (a) or (b) hold a membership interest (directly or indirectly through one or more partnerships); and (ii) more than 50% of the fair market value of the Shares was derived directly or indirectly from one or any combination of real or immovable property situated in Canada, "Canadian resource properties" (as defined in the Tax Act), "timber resource properties" (as defined in the Tax Act) or an option in respect of, an interest in, or for civil law, a right in such properties, whether or not such

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property exists. Notwithstanding the foregoing, a Share or Warrant may also be deemed to be taxable Canadian property to a Non-Resident Holder for purposes of the Tax Act in certain circumstances.

Even if a Share or Warrant is "taxable Canadian property" to a Non-Resident Holder, such NonResident Holder may be exempt from tax under the Tax Act on the disposition of such Share or Warrant by virtue of an applicable income tax treaty or convention..

A Non-Resident Holder's capital gain (or capital loss) in respect of a disposition of Shares or Warrants that constitute or are deemed to constitute taxable Canadian property to a Non-Resident Holder (and is not exempt from tax under an applicable income tax treaty) will generally be computed in the manner described above under the subheading " Residents of Canada — Dispositions of Shares and Warrants " and " Residents of Canada – Capital Gains and Capital Losses ". Non-Resident Holders whose Shares or Warrants are taxable Canadian property should consult their own tax advisors regarding the tax and compliance considerations that may be relevant to them.

LEGAL PROCEEDINGS AND REGULATORY ACTIONS

To the Company's knowledge, there are no legal proceedings or regulatory actions material to the Company to which it is a party, or has been a party to, or of which any of its property is the subject matter of, or was the subject matter of, since the date of incorporation, and no such proceedings or actions are known by the Company to be contemplated.

There have been no penalties or sanctions imposed against the Company by a court or regulatory authority, and the Company has not entered into any settlement agreements before any court relating to provincial or territorial securities legislation or with any securities regulatory authority, as of the date hereof or since its incorporation.

INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS

Other than as disclosed below and elsewhere in this prospectus, no director, executive officer or shareholder that beneficially owns, or controls or directs, directly or indirectly, more than 10% of the issued Common Shares, or any of their respective associates or affiliates, has any material interest, direct or indirect, in any transaction which has materially affected or is reasonably expected to materially affect the Company within the three years preceding the date of this prospectus.

On March 10, 2021, the Company completed a private placement of 2,500,000 Common Shares (on a pre-Share Split basis) to Mula Mining Corp. for aggregate gross proceeds of $25,000.00. Each of Alfredo Bazo and Jose Vizquerra are directors and shareholders of Mula Mining Corp.
On April 8, 2021, the Corporation entered into the Share Exchange Agreement in relation to the SMR Peru Acquisition. As consideration for the acquisition of SMR Peru, the Company issued 7,499,989 Common Shares (on a pre-Share Split basis) to the shareholders of SMR Peru. Pursuant to the Share Exchange Agreement, as previous shareholders of SMR Peru, each of Julio Jose Arce Ortiz and Alfredo Plenge Thorne received Common Shares, being 2,695,249 Common Shares and 1,033,585 Common Shares, respectively (on a pre-Share Split basis).
In April 2021, the Company completed the Equity Financing. In connection with the Equity Financing, Victoria Vargas subscribed for 7,000 units, Alfredo Bazo subscribed for 33,334
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units and JJ Schwarz Properties Inc., a company over which Jose Vizquerra has direction, subscribed for 33,334 units, all of which are represented on a pre-Share Split basis.

AUDITORS, TRANSFER AGENT AND REGISTRAR

The Company's auditors are BDO Canada LLP, having an address at Unit 1100-Royal Centre, 1055 West Georgia Street, P.O. Box 11101, Vancouver, British Columbia V6E 3P3.

Pierrend, Gómez & Asociados S. Civil de R.L. (BDO Peru) audited the financial statements of SMR Peru for the years ended December 31, 2020 and December 31, 2019 and issued an auditor's report dated ⚫, 2021. As at ⚫, 2022, Pierrend, Gómez & Asociados S. Civil de R.L. (BDO Peru) was not required by securities legislation to enter, and had not entered, into a participation agreement with the Canadian Public Accountability Board. An audit firm that enters into a participation agreement is subject to the oversight program of the Canadian Public Accountability Board.

The transfer agent and registrar for the Common Shares is Marrelli Trust Company Ltd., at its principal office in 620 -1111 Melville Street, Vancouver, British Columbia, V6E 3V6.

MATERIAL CONTRACTS

Except for material contracts entered into in the ordinary course of business, set out below are material contracts entered into since the date of incorporation which still remain in effect and material to the Company. Copies of such material contracts will be filed with the Canadian securities regulatory authorities and will be available for review under the Company's profile on SEDAR at www.sedar.com.

the Share Exchange Agreement;
the Offtake Agreement; and
the Underwriting Agreement.

EXPERTS

Information of a scientific or technical nature in respect of the Castrovirreyna Project is included in this prospectus based upon the Castrovirreyna Technical Report, dated August 17, 2021, prepared by Antonio Cruz Bermudez, who is an independent "qualified person" under NI 43-101. To the Company's knowledge, after reasonable inquiry, as of the date hereof, the aforementioned individual and his firm, does not beneficially own, directly or indirectly, any Common Shares.

To the Company's knowledge, after reasonable inquiry, as of the date hereof, Pierrend, Gómez & Asociados S. Civil de R.L. (BDO Peru) (and its designated professionals) beneficially owns, directly or indirectly, in the aggregate, less than 1% of the outstanding Common Shares.

BDO Canada LLP have advised the Company that they are independent of the Company in accordance with the Rules of Professional Conduct of the Chartered Professional Accountants of Ontario (registered name of the Institute of Chartered Accountants of Ontario).

The matters referred to under " Eligibility for Investment " have been passed upon on the Company's behalf by Dentons Canada LLP and on behalf of the Underwriters by Bennett Jones LLP. Certain other legal matters related to the Offering have been passed upon on the Company's behalf by Dentons Canada LLP and on behalf of the Underwriters by Bennett Jones LLP. To the Company's

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knowledge, after reasonable inquiry, as of the date hereof, the aforementioned partnerships (and their partners and associates) each beneficially own, directly or indirectly, in the aggregate, less than 1% of the outstanding Common Shares.

PROMOTER

Mula Mining Corp., may be considered a promoter of the Company within the meaning of applicable securities laws in that it took the initiative in founding and organizing the business of the Company. On March 10, 2021, the Company issued 2,500,000 Common Shares (on a pre-Share Split basis) to Mula Mining Corp. in exchange for US$25,000. To the Company's knowledge, as at the date of this prospectus, Mula Mining Corp. beneficially owns, controls or directs, directly or indirectly, 25,000,000 Common Shares (on a post-Share Split basis), representing approximately ⚫% of the outstanding Common Shares on a non-diluted basis.

No promoter of the Company, is, as at the date of this prospectus, or was, within 10 years before the date of this prospectus, a director, chief executive officer or chief financial officer of any company (including the Company), that was subject to a cease trade order, an order similar to a cease trade order, or an order that denied the relevant company access to any exemption under securities legislation, that was in effect for a period of more than 30 consecutive days:

that was issued while the promoter was acting in the capacity as director, chief executive officer or chief financial officer, or
that was issued after the promoter ceased to be a director, chief executive officer or chief financial officer and which resulted from an event that occurred while that person was acting in the capacity as director, chief executive officer or chief financial officer.

No promoter of the Company:

is, as at the date of the prospectus, or has been within the 10 years before the date of the prospectus, a director or executive officer of any company (including the Company) that, while that person was acting in that capacity, or within a year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets; or
has, within the 10 years before the date of the prospectus, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or become subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of the promoter.

No promoter of the Company has been subject to (a) any penalties or sanctions imposed by a court relating to securities legislation or by a securities regulatory authority or has entered into a settlement agreement with a securities regulatory authority; or (b) any other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable investor in making an investment decision

PURCHASERS' STATUTORY RIGHTS OF RESCISSION

Securities legislation in certain of the provinces of Canada provides purchasers with the right to withdraw from an agreement to purchase securities. This right may be exercised within two business days after receipt or deemed receipt of a prospectus and any amendment. In several of the provinces,

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the securities legislation further provides a purchaser with remedies for rescission or, in some jurisdictions, revisions of the price or damages if this prospectus and any amendment contains a misrepresentation or is not delivered to the purchaser, provided that the remedies for rescission, revisions of the price or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser's province. Purchasers that purchase Units as part of the President's List Allocation will have the same rights for rescission and/or damages against the Company and the Underwriters, as the case may be, as purchasers who acquired Units through the Underwriters. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser's province for the particulars of these rights or consult with a legal advisor.

In an offering of units, investors are cautioned that the statutory right of action for damages for a misrepresentation contained in the prospectus is limited, in certain provincial securities legislation, to the price at which the units are offered to the public under the prospectus offering. This means that, under the securities legislation of certain provinces, if the purchaser pays additional amounts upon exercise of the security, those amounts may not be recoverable under the statutory right of action for damages that applies in those provinces. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser's province for the particulars of this right of action for damages or consult with a legal adviser.

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APPENDIX "A"

AUDIT COMMITTEE CHARTER

1. Introduction

The Audit Committee (the " Committee " or the " Audit Committee ") of Silver Mountain Resources Inc. (the " Company ") is a committee of the Board of Directors (the " Board "). The Committee shall oversee the accounting and financial reporting practices of the Company and the audits of the Company's financial statements and exercise the responsibilities and duties set out in this Charter.

2. Membership

Number of Members

The Committee shall be composed of three or more members of the Board.

Independence of Members

Subject to compliance with National Instrument 52-110 – Audit Committees (“ NI 52-110 ”), a majority of the members of the Committee must be independent. "Independent" shall have the meaning, as the context requires, given to it in NI 52-110, as may be amended from time to time.

Chair

At the time of the annual appointment of the members of the Audit Committee, the Board shall appoint a Chair of the Audit Committee. The Chair shall be a member of the Audit Committee, preside over all Audit Committee meetings, coordinate the Audit Committee's compliance with this Charter, work with management to develop the Audit Committee's annual work-plan and provide reports of the Audit Committee to the Board.

Financial Literacy of Members

At the time of his or her appointment to the Committee, each member of the Committee shall have, or shall acquire within a reasonable time following appointment to the Committee, the ability to read and understand a set of financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of the issues that can reasonably be expected to be raised by the Company's financial statements.

Term of Members

The members of the Committee shall be appointed annually by the Board. Each member of the Committee shall serve at the pleasure of the Board until the member resigns, is removed, or ceases to be a member of the Board. Unless a Chair is elected by the Board, the members of the Committee may designate a Chair by majority vote of the full Committee membership.

3. Meetings

Number of Meetings

The Committee may meet as many times per year as necessary to carry out its responsibilities.

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Quorum

No business may be transacted by the Committee at a meeting unless a quorum of the Committee is present. A majority of members of the Committee shall constitute a quorum.

Calling of Meetings

The Chair, any member of the Audit Committee, the external auditors, the Chairman of the Board, the Chief Executive Officer or the Chief Financial Officer may call a meeting of the Audit Committee by notifying the Company's Corporate Secretary who will notify the members of the Audit Committee. The Chair shall chair all Audit Committee meetings that he or she attends, and in the absence of the Chair, the members of the Audit Committee present may appoint a chair from their number for a meeting.

Minutes; Reporting to the Board

The Committee shall maintain minutes or other records of meetings and activities of the Committee in sufficient detail to convey the substance of all discussions held. Upon approval of the minutes by the Committee, the minutes shall be circulated to the members of the Board. However, the Chair may report orally to the Board on any matter in his or her view requiring the immediate attention of the Board.

Attendance of Non-Members

The external auditors are entitled to attend and be heard at each Audit Committee meeting. In addition, the Committee may invite to a meeting any officers or employees of the Company, legal counsel, advisors and other persons whose attendance it considers necessary or desirable in order to carry out its responsibilities. At least once per year, the Committee shall meet with the internal auditor and management in separate sessions to discuss any matters that the Committee or such individuals consider appropriate.

Meetings without Management

The Committee shall hold unscheduled or regularly scheduled meetings, or portions of meetings, at which management is not present.

Procedure

The procedures for calling, holding, conducting and adjourning meetings of the Committee shall be the same as those applicable to meetings of the Board.

Access to Management

The Committee shall have unrestricted access to the Company's management and employees and the books and records of the Company.

4. Duties and Responsibilities

The Committee shall have the functions and responsibilities set out below as well as any other functions that are specifically delegated to the Committee by the Board and that the Board is authorized to delegate by applicable laws and regulations. In addition to these functions and responsibilities, the Committee shall perform the duties required of an audit committee by any stock exchange upon which securities of the Company are traded, or any governmental or regulatory body exercising authority over the Company, as are in effect from time to time (collectively, the " Applicable Requirements ").

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Financial Reports

(a) General

The Audit Committee is responsible for overseeing the Company's financial statements and financial disclosures. Management is responsible for the preparation, presentation and integrity of the Company's financial statements and financial disclosures and for the appropriateness of the accounting principles and the reporting policies used by the Company. The auditors are responsible for auditing the Company's annual consolidated financial statements and for reviewing the Company's unaudited interim financial statements.

(b) Review of Annual Financial Reports

The Audit Committee shall review the annual consolidated audited financial statements of the Company, the auditors' report thereon and the related management's discussion and analysis of the Company's financial condition and results of operation (" MD&A "). After completing its review, if advisable, the Audit Committee shall approve and recommend for Board approval the annual financial statements and the related MD&A.

(c) Review of Interim Financial Reports

The Audit Committee shall review the interim consolidated financial statements of the Company, the auditors' review report thereon and the related MD&A. After completing its review, if advisable, the Audit Committee shall approve and recommend for Board approval the interim financial statements and the related MD&A.

(d) Review Considerations

In conducting its review of the annual financial statements or the interim financial statements, the Audit Committee shall:

(i) meet with management and the auditors to discuss the financial statements and MD&A;
(ii) review the disclosures in the financial statements;
(iii) review the audit report or review report prepared by the auditors;
(iv) discuss with management, the auditors and legal counsel, as requested, any litigation claim or other contingency that could have a material effect on the financial statements;
(v) review the accounting policies followed and critical accounting and other significant estimates and judgements underlying the financial statements as presented by management;
(vi) review any material effects of regulatory accounting initiatives or off-balance sheet structures on the financial statements as presented by management, including requirements relating to complex or unusual transactions, significant changes to accounting principles and alternative treatments under IFRS;
(vii) review any material changes in accounting policies and any significant changes in accounting practices and their impact on the financial statements as presented by management;

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(viii) review management's report on the effectiveness of internal controls over financial reporting;
(ix) review the factors identified by management as factors that may affect future financial results;
(x) review results of the Company's audit committee whistleblower program; and
(xi) review any other matters, related to the financial statements, that are brought forward by the auditors, management or which are required to be communicated to the Audit Committee under accounting policies, auditing standards or Applicable Requirements.

(e) Approval of Other Financial Disclosures

The Audit Committee shall review and, if advisable, approve and recommend for Board approval financial disclosure in a prospectus or other securities offering document of the Company, press releases disclosing, or based upon, financial results of the Company and any other material financial disclosure, including financial guidance provided to analysts, rating agencies or otherwise publicly disseminated.

(f) Periodic Review of Procedures

The Audit Committee shall assess the adequacy of the procedures set out in (d) and (e) above on an annual basis and shall make recommendations to the Board with respect to any necessary amendments to this Charter.

Auditors

(a) General

The Audit Committee shall be responsible for oversight of the work of the auditors, including the auditors' work in preparing or issuing an audit report, performing other audit, review or attest services or any other related work.

(b) Nomination and Compensation

The Audit Committee shall review and, if advisable, select and recommend for Board approval the external auditors to be nominated and the compensation of such external auditor. The Audit Committee shall have ultimate authority to approve all audit engagement terms and fees, including the auditors' audit plan.

(c) Resolution of Disagreements

The Audit Committee shall resolve any disagreements between management and the auditors as to financial reporting matters brought to its attention.

(d) Discussions with Auditors

At least annually, the Audit Committee shall discuss with the auditors such matters as are required by applicable auditing standards to be discussed by the auditors with the Audit Committee.

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(e) Audit Plan

At least annually, the Audit Committee shall review a summary of the auditors' annual audit plan. The Audit Committee shall consider and review with the auditors any material changes to the scope of the plan.

(f) Quarterly Review Report

The Audit Committee shall review a report prepared by the auditors in respect of each of the interim financial statements of the Company.

(g) Independence of Auditors

At least annually, and before the auditors issue their report on the annual financial statements, the Audit Committee shall obtain from the auditors a formal written statement describing all relationships between the auditors and the Company; discuss with the auditors any disclosed relationships or services that may affect the objectivity and independence of the auditors; and obtain written confirmation from the auditors that they are objective and independent within the meaning of the applicable Rules of Professional Conduct/Code of Ethics adopted by the provincial institute or order of chartered accountants to which the auditors belong and other Applicable Requirements. The Audit Committee shall take appropriate action to oversee the independence of the auditors.

(h) Evaluation and Rotation of Lead Partner

At least annually, the Audit Committee shall review the qualifications and performance of the lead partner(s) of the auditors and determine whether it is appropriate to adopt or continue a policy of rotating lead partners of the external auditors.

(i) Requirement for Pre-Approval of Non-Audit Services

The Audit Committee shall approve in advance any retainer of the auditors to perform any non-audit service to the Company that it deems advisable in accordance with Applicable Requirements and Board approved policies and procedures. The Audit Committee may delegate pre-approval authority to a member of the Audit Committee. The decisions of any member of the Audit Committee to whom this authority has been delegated must be presented to the full Audit Committee at its next scheduled Audit Committee meeting.

(j) Approval of Hiring Policies

The Audit Committee shall review and approve the Company's hiring policies regarding partners, employees and former partners and employees of the present and former external auditors of the Company.

(k) Communication with Internal Auditor

The internal auditor, when appointed, shall report regularly to the Committee. The Committee shall review with the internal auditor any problem or difficulty the internal auditor may have encountered including, without limitation, any restrictions on the scope of activities or access to required information, and any significant reports to management prepared by the internal auditing department and management's responses thereto.

A-6

The Committee shall periodically review and approve the mandate, plan, budget and staffing of the internal audit department. The Committee shall direct management to make changes it deems advisable in respect of the internal audit function.

The Committee shall review the appointment, performance and replacement of the senior internal auditing executive and the activities, organization structure and qualifications of the persons responsible for the internal audit function.

Financial Executives

The Committee shall review and discuss with management the appointment of key financial executives and recommend qualified candidates to the Board, as appropriate.

Internal Controls

(a) General

The Audit Committee shall review the Company's system of internal controls.

(b) Establishment, Review and Approval

The Audit Committee shall require management to implement and maintain appropriate systems of internal controls in accordance with Applicable Requirements, including internal controls over financial reporting and disclosure and to review, evaluate and approve these procedures. At least annually, the Audit Committee shall consider and review with management and the auditors:

(i) the effectiveness of, or weaknesses or deficiencies in: the design or operation of the Company's internal controls (including computerized information system controls and security); the overall control environment for managing business risks; and accounting, financial and disclosure controls (including, without limitation, controls over financial reporting), non-financial controls, and legal and regulatory controls and the impact of any identified weaknesses in internal controls on management's conclusions;
(ii) any significant changes in internal controls over financial reporting that are disclosed, or considered for disclosure, including those in the Company's periodic regulatory filings;
(iii) any material issues raised by any inquiry or investigation by the Company's regulators;
(iv) the Company's fraud prevention and detection program, including deficiencies in internal controls that may impact the integrity of financial information, or may expose the Company to other significant internal or external fraud losses and the extent of those losses and any disciplinary action in respect of fraud taken against management or other employees who have a significant role in financial reporting; and
(v) any related significant issues and recommendations of the auditors together with management's responses thereto, including the timetable for implementation of recommendations to correct weaknesses in internal controls over financial reporting and disclosure controls.

A-7

Compliance with Legal and Regulatory Requirements

The Audit Committee shall review reports from the Company's Corporate Secretary and other management members on: legal or compliance matters that may have a material impact on the Company; the effectiveness of the Company's compliance policies; and any material communications received from regulators. The Audit Committee shall review management's evaluation of and representations relating to compliance with specific applicable law and guidance, and management's plans to remediate any deficiencies identified.

Audit Committee Whistleblower Procedures

The Audit Committee shall establish for (a) the receipt, retention, and treatment of complaints received by the Company regarding accounting, internal accounting controls, or auditing matters; and (b) the confidential, anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters. Any such complaints or concerns that are received shall be reviewed by the Audit Committee and, if the Audit Committee determines that the matter requires further investigation, it will direct the Chair of the Audit Committee to engage outside advisors, as necessary or appropriate, to investigate the matter and will work with management and legal counsel to reach a satisfactory conclusion.

Audit Committee Disclosure

The Audit Committee shall prepare, review and approve any audit committee disclosures required by Applicable Requirements in the Company's disclosure documents.

Delegation

The Audit Committee may, to the extent permissible by Applicable Requirements, designate a subcommittee to review any matter within this Charter as the Audit Committee deems appropriate.

5. Authority

The Audit Committee shall have the authority:

(a) to engage independent counsel and other advisors as it determines necessary to carry out its duties;
(b) to set and pay the compensation for any advisors employed by the Audit Committee; and
(c) to communicate directly with the internal and external auditors.

6. No Rights Created

This Charter is a statement of broad policies and is intended as a component of the flexible governance framework within which the Audit Committee, functions. While it should be interpreted in the context of all applicable laws, regulations and listing requirements, as well as in the context of the Company's Articles and By-laws, it is not intended to establish any legally binding obligations.

7. Charter Review

The Audit Committee shall review and update this Charter annually and present it to the Board for approval where the Audit Committee recommends amendments to this Charter.

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FINANCIAL STATEMENTS

SOCIEDAD MINERA RELIQUIAS S.A.C.

FINANCIAL STATEMENTS AS OF DECEMBER 31, 2020, AND 2019 AND INDEPENDENT AUDITORS’ REPORT

SOCIEDAD MINERA RELIQUIAS S.A.C.

FINANCIAL STATEMENTS AS OF DECEMBER 31, 2020, AND 2019

Independent Auditors’ Report Statement of Financial Position Statement of Comprehensive Loss Statement of Changes in Net Equity Statement of Cash Flows Notes to the Financial Statements

REPORT OF THE INDEPENDENT AUDITORS

To the Shareholders SOCIEDAD MINERA RELIQUIAS S.A.C.

Opinion

We have audited the financial statements of SOCIEDAD MINERA RELIQUIAS S.A.C. (in the preoperational stage), which comprise of the statement of financial position as of December 31, 2020, and 2019, and the statements of comprehensive loss, changes in net equity, and cash flows for the years 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 SOCIEDAD MINERA RELIQUIAS S.A.C. (in pre-operational stage), as of December 31, 2020, and 2019, and its financial performance and cash flows for the years then ended, in accordance with International Financial Reporting Standards issued by the International Accounting Standards Board (“IFRS”).

Basis for Opinion

We conducted our audit in accordance with International Auditing Standards as issued by the International Auditing and Assurance Standards Board (“ISAs”). 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 Peru, 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.

Responsibility of Mangement and Those Charged with Governance for the Financial Statements

Management is responsible for the preparation and fair presentation of these 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 ISAs 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 ISAs, 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.
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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.

(signed)

Certified Public Accountants Lima, Peru October ●4, 2021

SOCIEDAD MINERA RELIQUIAS S.A.C.

(In pre-operative stage)

STATEMENT OF FINANCIAL POSITION

AS OF DECEMBER 31, 2020, AND 2019 (In US dollars)

ASSETS CURRENT ASSETS Cash Accounts receivable Prepaid expenses Total current assets NON-CURRENT ASSETS Accounts receivable Property, machinery and equipment, net Mining concessions Exploration costs Total non-current assets Total assets LIABILITIES AND NET EQUITY CURRENT LIABILITIES Financial obligations Trade accounts payable Third-party loan Accounts payable Total current liabilities NON-CURRENT LIABILITIES Third-party loan Total non-current liabilities Total liabilities NET EQUITY Share capital Share premium Additional capital Loss accumulated Total net equity Total liabilities and net equity	Note 7 8 8 9 10 11 12 12 13	2020 203,610 1,799 - ------------ 205,409 ------------ 630,286 635,594 4,464,849 2,531,291 ------------ 8,262,020 ------------ 8,467,429 ======== - 14,716 541,409 920 ------------ 557,045 ------------ 2,038,415 ------------ 2,038,415 ------------ 2,595,460 ------------ 8,078,967 300,272 - (2,507,270) ------------ 5,871,969 ------------ 8,467,429 ========	2019 1,057,323 6,873 570 ------------ 1,064,766 ------------ 529,222 804,845 4,461,911 1,890,268 ------------ 7,686,246 ------------ 8,751,012 ======== 14,715 26,385 562,242 3,600 ------------ 606,942 ------------ 2,037,082 ------------ 2,037,082 ------------ 2,644,024 ------------ 6,331,536 144,403 1,319,850 (1,688,801) ------------ 6,106,988 ------------ 8,751,012 ========

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

SOCIEDAD MINERA RELIQUIAS S.A.C.

(In pre-operative stage)

STATEMENT OF COMPREHENSIVE LOSS

FOR THE YEARS ENDED DECEMBER 31, 2020, AND 2019

(In US dollars)

(EXPENSES) OPERATING INCOME: Administration expenses Financial income Financial expenses Loss before income tax	Note 14 15 15	2020 (717,543) 426,017 (526,943) ---------- (818,469) =======	2019 (1,080,933) 692,232 (597,680) ------------ (986,381) ========

The statement of other comprehensive loss is not presented as it does not have applicable items.

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

SOCIEDAD MINERA RELIQUIAS S.A.C.

(In pre-operative stage)

STATEMENT OF CHANGES IN NET EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2020, AND 2019

BALANCES AS OF JANUARY 1, 2019 Contributions Net loss BALANCES AS OF DECEMBER 31, 2019 Contributions Capitalization of credits Transfers Net loss BALANCES AS OF DECEMBER 31, 2020	Note 13 (c) 13 (a) & (b) 13 (a) & (b) 13 (c)	NUMBER OF SHARES 20,760,558 - - ------------- 20,760,558 1,410,903 43,500 4,487,490 - ------------- 26,702,451 =========	SHARE CAPITAL US$ 6,331,536 - - ------------ 6,331,536 414,787 12,794 1,319,850 - ------------ 8,078,967 ========	ISSUE PREMIUM US$ 144,403 - - ---------- 144,403 125,163 30,706 - - ---------- 300,272 =======	ADDITIONAL CAPITAL US$ - 1,319,850 - ------------ 1,319,850 - - (1,319,850) - ------------ - ========	LOSS ACCUMULATED US$ (702,420) - (986,381) ------------ (1,688,801) - - - (818,469) ------------ (2,507,270) ========	TOTAL NET EQUITY US$ 5,773,519 1,319,850 (986,381) ------------ 6,106,988 539,950 43,500 - (818,469) ------------ 5,871,969 ========

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

SOCIEDAD MINERA RELIQUIAS S.A.C.

(In pre-operative stage)

STATEMENT OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2020, AND 2019

(In US dollars)

OPERATING ACTIVITIES: Net loss Plus adjustments to net loss: Depreciation of property, machinery, and equipment Gain on extinguishment of debt Accretion and interest expenses Charges and credits for net changes in assets and liability: Increase in accounts receivable Decrease (increase) in prepaid expenses Increase (decrease) in trade accounts payable Decrease in accounts payable CASH USED IN OPERATING ACTIVITIES INVESTING ACTIVITIES: Property, machinery and equipment additions Mining concession additions Exploration cost additions CASH USED IN INVESTING ACTIVITIES FINANCING ACTIVITIES: Contributions Payment of loan received from third-party Payment of financial obligations CASH FROM FINANCING ACTIVITIES NET DECREASE IN CASH CASH AT THE BEGINNING OF THE YEAR CASH AT THE END OF THE YEAR	Note 9 12 (b) 12 (b) 9 10 11 13 (a), (b) y (c) 12 (b) 7 7	2020 (818,469) 182,251 (346,809) 513,995 (95,990) 570 31,831 (2,680) ------------ (535,301) ------------ (13,000) (2,938) (641,023) ------------ (656,961) ------------ 539,950 (186,686) (14,715) ------------ 338,549 ------------ (853,713) 1,057,323 ------------ 203,610 ========	2019 (986,381) 160,912 (653,598) 580,523 (258,563) (570) (37,159) (30,739) ------------ (1,225,575) ------------ (232,525) (207,467) (1,337,816) ------------ (1,777,808) ------------ 1,319,850 (207,519) (17,657) ------------ 1,094,674 ------------ (1,908,709) 2,966,032 ------------ 1,057,323 ========

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

SOCIEDAD MINERA RELIQUIAS S.A.C.

(In pre-operative stage)

NOTES TO THE FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2020, AND 2019

1. IDENTIFICATION, ECONOMIC ACTIVITY AND OTHER CORPORATE MATTERS

(a) Identification:

Sociedad Minera Reliquias S.A.C., (hereinafter the Company) was incorporated in Lima, Peru, on November 10, 2014, with the corporate name of Equs Consulting S.A.C. At the Shareholders’ Meeting on June 6, 2018, the company name change to Sociedad Minera Reliquias S.A.C. was approved, which became effective as of July 6, 2018, in public records. It is a private legal company that is governed by its statutes and the General Corporations Law.

Its legal domicile and its administrative offices are at Juan Dellepiani Street N° 480, San Isidro district, Lima, Peru.

(b) Economic activity:

The Company’s objective is to dedicate itself to the acquisition under any title of mining, mineral, water, and land concessions, for their exploration, exploitation, and any kind of exploitation, extraction, concentration, transformation, processing, and commercialization of all types of minerals.

In June 2018, the Company entered into an asset purchase-sale agreement with Corporación Minera Castrovirreyna S.A. In Liquidation, where the latter transferred the ownership of the assets that made up the productive unit. The purchase price amounted to US$ 7,160,000, including the General Sales Tax (IGV). The carrying value recorded on the acquisition date amounted to US$ 5,143,199 including IGV, which is equivalent to the initial payment of the party loan for US$ 2,620,000 (see Note 12 (a)) plus the fair value of the loan in its initial measurement of US$ 2,523,199 (see Note 12 (b)).

266 mining concessions were acquired (258 with a total of 20,532 hectares located in the province of Castrovirreyna, one of 200 hectares located in the province of Huaytara, all of these in the department of Huancavelica, and 7 concessions with a total of 77 hectares located in the province of Huarochiri, department of Lima), 2 concessions for the concentrator plant “Dorita” and “José Picasso Perata” with a total of 112.59 hectares and a Benefit concession for tailings field, all for a total of US$ 4,254,444 and, machinery and equipment for US$ 888,755 including IGV.

As of December 31, 2020, the Company has 294 polymetallic mining concessions (silver, lead, zinc, and copper) with a total of 38,296.65 hectares, of which 2 are in the province of San Genaro, 4 in the province of Huaytara, 281 in the province of Castrovirreyna, all of these in the department of Huancavelica, and 7 concessions in the province of Huarochiri, department of Lima. In addition, it also has two concentrator plant concessions and a tailings field benefit concession.

As of December 31, 2020, the Company is in the pre-operational stage. The Management estimates to start the exploitation in the year 2023.

(c) Effects of Covid-19:

As a consequence of the current pandemic in the world regarding the COVID-19 virus, the Peruvian State declared the country in a national emergency since March 16, 2020, which lead to social isolation and suspension, in the work centers themselves, of all industrial, commercial, and service activities, not linked to food processes, hospital services, and some other strategic sectors. It also closed the international and internal land, air, and sea borders, except those related to the loading and unloading of goods.

These restrictions have gradually been lifted, and many businesses have been operating again in accordance with the plan of phases of economic reactivation issued by the Peruvian Government. However, as a result of the aforementioned, many sectors have been operating in a limited manner, with the mining sector, where the Company operates, being one of those affected.

The consequences for the Company did not affect its situation as a going concern since the Company is in the pre-operational stage. Likewise, the mining sector has been one of the first sectors to reactivate.

(d) Framework Contract for the Sale of Concentrates

On November 2, 2019, the Company and the company Trafigura Perú S.A.C. (domiciled in Lima Peru) with the intervention of Trafigura Pte Ltd (domiciled in the Republic of Singapore), signed a framework contract for the sale of concentrates No. 203-19TRP-172-0-P, where the Company undertakes to sell and deliver and, Trafigura Peru undertakes to take and pay the concentrates according to the terms and conditions determined in the contract.

The concentrates that are the object of the contract may be:

Concentrates from the Company's mine, treated at the Jose Picasso Perata Concentrator Plant. Therefore, the Company undertakes to sell 100% of the production of zinc, lead, copper, silver concentrates and other qualities produced at the plant, during the life of the mine and based on a mineral treatment capacity in plant of approximately 2,000 tons per day for a silver ore or 1,600 tons per day for polymetallic ore. For excess production over this capacity, the buyer will be entitled to "first and last refusal" for 100% of this excess.
Concentrates from other mines but also treated at the Jose Picasso Perata plant.

The “first and last refusal” right consists in that the buyer will have the right to 100% of the production of concentrates produced at the Jose Picasso Perata plant during the toll campaign and for the life of the plant's operation. The Company will send a copy of the offer to the buyer, who will have 72 hours to communicate if he decides to execute and match it. In case the buyer decides not to buy, then the contract will be put on "Holiday" for a period of one year, keeping the buyer his commercial rights.

The Company and the buyer agree that the metal payments for the zinc concentrates will be as follows:

Zinc: 85% of the final zinc concentrate will be paid, subject to a deduction of 8 units, at the average of the official “London Metal Exchange (LME) Settlement” quotation, expressed in US dollars as published in the Metal Bulletin during the listing period.
Silver: After deduction of 3 oz / tms, 79% of the balance will be paid to the “London Bullion Market Association (LBMA) Silver Price” published in US dollars, at www.ibma.org.uk, during the period of quotes.

In the case of concessions that the Company wishes to expire, the Company required a waiver from the buyer. Likewise, if any of the concessions of the “Dorita” and “Others” blocks are transferred to third parties under any title, the Company must pay Trafigura Peru 10% net of what it receives for said transfer, up to a maximum accumulated amount total of US$ 500,000. Finally, the Company may not transfer under any title, the concessions of the "Reliquias" block, unless Trafigura Peru, in its sole discretion, previously authorizes it in writing.

(d) Approval of financial statements:

The financial statements as of December 31, 2020, have been authorized by General Management in March 2021. They will be presented for approval at the General Shareholders’ Meeting held during the second semester of 2021.

Those corresponding to December 31, 2019 were approved at the Board of Directors held on March 10,2020.

2. ACCOUNTING POLICIES FOLLOWED BY THE COMPANY

The main accounting policies adopted by the Company in the preparation and presentation of its financial statements are indicated below. They have been prepared in accordance with International Financial Reporting Standards (hereinafter IFRS), under principles and criteria consistently applied for the years presented.

(a) Basis of preparation

(i) In preparing the accompanying financial statements, Company Management has complied with all IFRS issued by the International Accounting Standards Board (hereinafter IASB) in force as of December 31, 2020.
(ii) The information contained in these financial statements is the responsibility of Company’s Management, which expressly states that it has fully complied with the application of IFRS, without restrictions or reservations.
(iii) The financial statements have been prepared in historical cost terms , based on the accounting records kept by the Company, except for financial assets and liabilities at fair value through profit or loss.
(iv) The accompanying financial statements are presented in US dollars, except where otherwise indicated.
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(b) New accounting standards in force

The standards that became effective in 2020 and apply to the Company are summarized below but did not affect the financial statements.

Amendments to IFRS 7, IFRS 9, and IAS 39 - Reform of the Reference Interest Rate	The amendments to IFRS 9 and IAS 39 Financial Instruments: Recognition and Measurement provide a series of exemptions that apply to all hedging relationships directly affected by the benchmark interest rate reform. A hedging relationship is affected if the reform creates uncertainty about the timing or amount of benchmark-based cash flows of the hedged item or hedging instrument.
Amendments to IAS 1 and IAS 8 - Definition of Materiality	The amendments provide a new definition of materiality that states that “information is material if it can reasonably be expected that, by omitting it, misrepresenting it or concealing it, it will influence the decisions that the primary users of general purpose financial statements make based on those financial statements, which provide financial information for a specific reporting entity." The amendments clarify that materiality will depend on the nature or magnitude of the information, either individually or in combination with other information, in the context of the financial statements.
Conceptual Framework for Financial Reporting issued on March 29, 2018	The Conceptual Framework is not a standard, and none of the concepts contained in it prevails over the concepts or requirements of any standard. The Conceptual Framework aims to assist the IASB in the development of standards, help preparers develop consistent accounting policies where there is no applicable standard in place, and help all parties understand and interpret the standards. This will affect those entities that developed their accounting policies based on the Conceptual Framework. The revised Conceptual Framework includes some new concepts, updated definitions and recognition criteria for assets and liabilities, and clarifies some important concepts.
Amendments to IFRS 16 - Rental Concessions related to Covid-19	On May 28, 2020, the IASB issued the amendments to IFRS 16 “Leases” in relation to “Covid-19 Related Rental Concessions.” These amendments propose a practical solution for lessee to register the modifications in the lease contracts, which occur as a direct consequence of the Covid-19 pandemic, affecting the profit or loss of the period only if the following conditions are met: (a) the change in the lease payments (payment of installments) results in a consideration substantially less than or equal to the initial payment, (b) any reduction in the fee affects only payments originally due on or before June 30, 2021,

(c) there are no other substantial changes to the lease agreements. If these conditions are met, the lessee may choose not to consider these changes as a lease modification, as established in paragraph 46 of IFRS 16 that implies modification of the lease asset and liability. However, if they do, they should record any change in lease payments in profit or loss. Modification is understood as a change in the scope of the lease or consideration that was not part of the terms and conditions initially agreed upon. The amendments apply to annual periods beginning on or after June 1, 2020. Early application is permitted.

The financial statements preparation also requires Management to carry out estimates and judgments to determine the balances of assets and liabilities, income and expenses, the number of contingencies, and the exposure of significant events in notes to the financial statements.

The use of reasonable estimates is an essential part of preparing financial statements and does not harm their reliability. The estimates and judgments determined by the Company are continuously evaluated and are based on historical experience and any information that is considered relevant.

If these estimates and judgments vary in the future due to changes in the assumptions that supported them, the corresponding balances of the financial statements will be corrected on the date on which the change in estimates and judgments occurs.

The estimates in relation to the accompanying financial statements refer to:

Expected credit losses on accounts receivable,
The useful life and recoverable value of property, machinery and equipment, mining concessions and exploration costs,
Assesment of deferred income tax, and
Measurement of the fair value of financial assets and liabilities.
(d) Foreign currency transactions
Functional currency and presentation currency

To express its financial statements, the Company has determined its functional currency, based on the main economic environment where it operates, which fundamentally influences the determination of the prices of the goods and services it acquires. The financial statements are presented in US dollars, which is, in turn, the functional currency and the presentation currency of the Company. All transactions are measured in the functional currency, and, on the contrary, foreign currency is anything other than the functional currency.

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Transactions and balances in foreign currency

Operations in foreign currency are recorded in US dollars applying the exchange rates on the day of the transaction. Balances as of December 31, 2020, and 2019 are valued at the year-end exchange rate. The exchange differences that are generated between the exchange rate recorded at the beginning of an operation and the settlement exchange rate of the operation or the year-end exchange rate are part of the financial income and expense items in the statement of comprehensive loss.

(e) Classification and measurement of financial instruments

Financial instruments are contracts that give rise simultaneously to a financial asset in one entity and a financial liability or a capital instrument in another. In the case of the Company, financial instruments correspond to primary instruments such as cash, accounts receivable, and accounts payable.

Financial assets:

Financial assets on initial recognition are measured at their fair value plus transaction costs that are directly attributable to the acquisition or issue of the asset.

An entity classifies financial assets as subsequently measured at amortized cost, at fair value through other comprehensive income, and at fair value through profit or loss. The classification depends on how an entity manages its financial assets according to its business model and the characteristics of the contractual cash flows that it expects to receive.

For the subsequent measurement of the Company’s financial assets, the following sections (i) and (ii) are applicable:

(i) Financial assets at amortized cost (debt instruments)

The Company measures financial assets at amortized cost when it meets the following conditions:

The objective of the business model is to maintain a financial asset to collect contractual cash flows and,
According to the contract conditions, cash flows are received on specific dates that exclusively constitute payments of the principal plus interest on such principal.

The determination of the amortized cost for these financial assets is made using the effective interest rate method. These financial assets are subject to impairment. Gains and losses are recognized in the statement of comprehensive loss when the asset is written-off, modified, or impaired.

The Company’s financial assets measured at amortized cost correspond to accounts receivable, which are short-term, and their nominal value is similar to their amortized cost.

(ii) Financial assets at fair value through profit or loss

An entity measures a financial asset at fair value through profit or loss unless it cannot be measured at amortized cost or fair value through other comprehensive income.

Financial assets at fair value through profit or loss correspond to cash.

Cash is a financial asset because it represents a means of payment, and therefore, it is the basis on which all transactions are measured and recognized in the financial statements.

Changes in the fair value of these assets are recorded in the statement of comprehensive loss.

Financial liabilities:

Financial liabilities on initial recognition are measured at fair value minus transaction costs directly attributable to the acquisition of the liability.

An entity classifies financial liabilities and measures them either at amortized cost or at fair value through profit or loss.

The determination of the amortized cost of financial liabilities is made using the effective interest rate method. Gains and losses are recognized in the statement of comprehensive loss.

The Company’s financial liabilities measured at amortized cost correspond to financial obligations, thirdparty loan, and accounts payable, which are short and long-term, and their nominal value is similar to their amortized cost.

(f) Compensation of financial assets and liabilities

Financial assets and liabilities are compensated when it has the legal right to compensate them, and Management intends to cancel them on a net basis or to realize the asset and cancel the liability simultaneously.

(g) Write-off of financial assets and liabilities

Financial assets:

A financial asset is written-off when: (i) the rights to receive cash flows from the asset have ended, or (ii) the Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay all of the cash flows received immediately to a third party under a transfer agreement, and (iii) the Company has transferred substantially all the risks and benefits of the asset or, failing to transfer or retain substantially all the risks and benefits of the asset if having transferred control.

Financial liabilities:

A financial liability is written-off when the payment obligation is terminated, canceled, or expires.

When an existing financial liability is replaced by another of the same borrower under significantly different conditions or the conditions are significantly modified, such replacement or modification is treated as a write-off of the original liability, the new liability is recognized, and the difference between the two is reflected in the profit or loss of the period in the item of financial income (expenses), as appropriate.

(h) Impairment of financial assets

The Company recognizes an allowance for expected credit losses for all debt instruments that are not measured at fair value through profit or loss. Expected credit losses are based on the difference between the contractual cash flows in accordance with the contract and all the cash flows that the Company expects to receive, discounted at the original effective interest rate. The expected cash flows will include cash flows from the sale of maintained guarantees or other credit enhancements that are an integral part of the contractual terms.

For accounts receivable, the Company applies the general approach. The general approach defined in IFRS 9 is based on the analysis of the debtor’s credit quality. Unlike IAS 39, it requires provisioning for ECLs before there is objective evidence of impairment.

The general approach is structured through 3 phases based on the degree of credit risk and the circumstance that there has been a significant increase in it.

Phase 1, for credit exposures, that at the reporting date there has not been a significant increase in credit risk, expected credit losses are recognized for events of default that are possible within the next 12 months (an expected credit loss of 12 months).

Phase 2, for those credit exposures for which there has been a significant increase in credit risk since initial recognition, an allowance for expected credit loss is required over the remaining life of the exposure, regardless of the time of default (an expected lifetime credit loss).

Phase 3, for those credit exposures for which there has been a significant increase in credit risk since initial recognition, an allowance for expected credit loss is required over the remaining life of the exposure on a net interest basis, regardless of the time of default (an expected lifetime credit loss).

(i) Property, machinery, and equipment, and accumulated depreciation

Property, machinery, and equipment are presented at acquisition cost minus accumulated depreciation and, if any, the accumulated amount of impairment losses. The depreciation of fixed assets is calculated following the straight-line method based on their estimated useful life minus their residual values indicated in Note 9. The historical acquisition cost includes the disbursements directly attributable to the acquisition of the assets. Maintenance and minor repairs are recognized as expenses as incurred. The useful life, residual values, and the depreciation method are periodically reviewed to ensure that the depreciation method and period are consistent with the expected pattern of future economic benefits. Subsequent disbursements and major renovations are recognized as assets when it is probable that the Company will obtain future economic benefits derived from them, and their cost can be reliably valued.

By selling or retiring the property, machinery, and equipment, the Company eliminates the cost and the corresponding accumulated depreciation. Any gain or loss resulting from their disposal is included in the statement of comprehensive loss.

(j) Mining concessions and exploration costs

Mining concessions are recorded at acquisition cost and are not amortized until the start of their exploitation, and as long as the mineral reserves offer expectations of future production. If these expectations are not offered, they will be recognized as expenses in the profit or loss of the year.

Disbursements for exploration of mineral resources are recognized at cost and are amortized from the beginning of the exploitation of the deposit, during the term of useful life that is estimated for it.

(k) Impairment of non-financial assets

The value of the property, machinery and equipment, mining concessions, and exploration costs is periodically reviewed to determine if there is impairment when circumstances arise that indicate that the carrying amount may not be recoverable. If there are signs of impairment, the Company estimates the recoverable amount of the assets and recognizes a devaluation loss in the statement of comprehensive loss.

The recoverable value of an asset is the higher of its fair value minus sales expenses and its use-value. The use-value is the present value of the estimated future cash flows that will result from the continuous use of an asset and its disposal at the end of its useful life. Recoverable amounts are estimated for each asset or, if not possible, for the smallest cash-generating unit identified. If there is a decrease in devaluation losses, determined in previous years, an income is recorded in the statement of comprehensive loss.

(l) Operating leases

Leases in which the lessor retains a significant portion of the risks and benefits related to ownership are classified as operating leases. Payments made under an operating lease, including advance payments (net of any incentive received from the lessor), are charged to the statement of comprehensive loss based on the straightline method in the lease period.

(m) Provisions

A provision is recognized only when the Company has any present obligation (legal or implicit) because of a past event, an outflow of resources will probably be required for its settlement, and a reliable allowance can be made of the amount of the obligation. Provisions are periodically reviewed and adjusted to reflect the best allowance available at the date of the statement of financial position. The expense related to a provision is shown in the statement of comprehensive loss.

(n) Classification of items into current and non-current

The Company presents assets and liabilities in the statement of financial position, classified as current and non-current. An asset is classified as current when the Company:

Expects to realize the asset or intend to sell or consume it in its normal operating cycle,
Holds the asset primarily for trading purposes,
Expects to carry out the asset within twelve months of the reporting period, or
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The asset is cash unless it is restricted and cannot be exchanged or used to cancel a liability for a minimum period of twelve months following the reporting period.

All other assets are classified as non-current.

A liability is classified as current when the Company:

Expects to settle the liability in its normal operating cycle,
Holds liabilities primarily for trading purposes,
The liability must be settled within the twelve months following the reporting period, or
There is no unconditional right to postpone the liability settlement for at least the twelve months following the reporting period.

All other liabilities are classified as non-current.

Deferred income tax assets and liabilities are classified as non-current assets and liabilities in all cases.

(o) Share capital

Common shares are classified in net equity. Incremental costs directly attributable to the issue of new shares or options are shown in net equity as a deduction from the amount received, net tax.

(p) Recognition of interest income, exchange differences, and other income

Interest income is recognized based on the proportion of time elapsed, using the effective interest method.

Exchange differences corresponding to the adjustment of monetary items represented in foreign currency favorable for the Company are recognized as financial income when the exchange rate fluctuates.

Other income is recognized as they accrue.

(q) Recognition of interest expenses, exchange differences, and other expenses

Interest is recognized in proportion to the time elapsed to reflect the effective cost of the financial instrument.

Exchange differences corresponding to the adjustment of monetary items represented in foreign currency unfavorable for the Company are recognized as a financial expense when the exchange rate fluctuates.

Other expenses are recognized as they accrue.

(r) Income tax

Income tax includes a current and deferred component.

Current –

The current income tax is considered as the amount payable to the tax authority. It is calculated based on the taxable income determined for tax purposes.

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Deferred -

Deferred income tax is calculated using the balance sheet liability method, which consists of determining the temporary differences between financial and tax assets and liabilities and applying the income tax rate to those differences.

Deferred assets are recognized for all deductible differences and tax loss carry forward, to the extent that it is probable that there is taxable profit against which temporary deductible differences can be compensated, and any carried forward tax loss can be used.

Deferred liabilities are recognized for all temporary taxable differences, in which the timing of reversals of temporary differences can be controlled, and it is probable that temporary differences will not be reversed in the foreseeable future.

The carrying amount of the deferred asset is reviewed on each date of the statement of financial position and is reduced to the extent that it is unlikely that there is sufficient taxable profit against which all or part of the deferred asset to be used can be compensated. Unrecognized deferred assets are revalued on each date of the statement of financial position and are recognized to the extent that the future taxable profit will probably allow the deferred asset to be recovered. Deferred assets and liabilities are recognized regardless of the moment when it is estimated that the temporary differences are annulled.

Deferred assets and liabilities are measured at the legal rates expected to be applied in the year in which the asset is realized, or the liability is liquidated, based on the rates that have been promulgated or substantially promulgated on the date of the statement of financial position.

Deferred assets and liabilities are compensated if there is a legal right to compensate current taxes against current liabilities, and deferred taxes relate to the same entity and the same tax authority.

Uncertain positions -

The Company assesses at each financial statement closing whether each uncertain tax treatment is considered separately or together with one or more uncertain tax treatment and uses the approach that best predicts the resolution of the uncertainty.

The Company applies significant judgment when identifying uncertainties about income tax treatments.

(s) Contingencies

Contingencies are assets or liabilities that arise due to past events, the existence of which will be confirmed only if future events occur that are not entirely under the control of the Company.

Contingent assets are not recorded in the financial statements but are disclosed in notes when their degree of contingency is probable.

Contingent liabilities are not recorded in the financial statements and are disclosed in notes to the financial statements only when there is a possible obligation.

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(t) New accounting pronouncements

The Company decided to adopt at the time of its effectiveness and not adopt early the accounting standards and interpretations issued by the IASB, and that will be effective as of January 1, 2021, or later (See Note 18).

3. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS

3.1 Critical accounting estimates -

The preparation of financial statements in accordance with IFRS requires that Management use criteria and assumptions to determine the reported amounts of assets, liabilities, income, and expenses.

Accounting estimates, by definition, will seldom equal the respective actual results. In Management's opinion, these estimates were made based on its better knowledge of the relevant events and circumstances at the date of preparation of the financial statements. However, the final results may differ from the estimates included in the financial statements. Company Management does not expect that the variations will have a material effect on the financial statements, if any.

The estimates and assumptions that have a risk of causing adjustments to the balances of reported assets and liabilities are presented below:

Review of carrying amounts and allowance for impairment

The Company assesses on an annual basis whether a permanent asset requires an impairment allowance in accordance with the accounting policy outlined in Note 2 (k). This determination requires the use of professional judgment by Management to analyze the impairment indicators and the determination of use-value.

In the latter case, the application of judgment is required in the preparation of future cash flows that includes the projection of the level of future operations of the Company, projection of economic factors that affect its income and costs, as well as the determination of the discount rate to be used in this flow.

As a consequence of evaluating the internal and external indicators that could indicate impairment, the Company concluded that there are not sufficient indications that require the execution of an impairment test of property, machinery, and equipment, mining concessions and exploration costs.

Taxes

The determination of the obligations and expenses for taxes requires interpretations of the applicable tax legislation. The Company has professional advice on tax matters to make any decision on tax matters. Even when Management considers that its estimates in tax matters are prudent and conservative, discrepancies may arise with the tax administration in interpreting standards that require tax adjustments in the future.

3.2 Critical judgments in the application of accounting policies -

The transactions for the year ended December 31, 2020, and 2019 have not required the special application of complex professional judgment when applying the accounting policies adopted by the Company.

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4. ADMINISTRATION OF FINANCIAL RISKS AND CAPITAL MANAGEMENT

(a) Financial risk factors

The Company’s activities expose it to a variety of financial risks. The main risks that may adversely affect the Company’s financial assets and liabilities, as well as its future cash flows, are liquidity, credit, interest, and exchange rates. The Company's risk management program tries to minimize potential adverse effects. Company Management is aware of the existing market conditions and, based on its knowledge and experience, reviews, agrees, and controls risks, following the policies approved by the Board of Directors.

A sensitivity analysis is included in the Company’s financial instruments (accounts receivable and accounts payable) to see their variability in the face of market changes and show the impact on the statement of comprehensive loss or net equity if it were the case.

The sensitivity has been prepared for the years ended December 31, 2019, and 2020, with the balances of financial assets and liabilities as of those dates. The Company does not hold derivative instruments for speculative purposes.

(i) Risk management structure and organization

The Company maintains different separate and independent bodies responsible for risk management and monitoring, as explained below:

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The Board of Directors provides the principles and guidelines for risk management in general, as well as the policies developed for specific areas, such as market liquidity, operational risk, and credit risk.

(ii) Liquidity risk

Liquidity risk is the risk that cash may not be available to pay obligations when due at a reasonable cost. The Company controls the required liquidity through proper management of the maturities of assets and liabilities in such a way as to achieve a match between the flow of income and future payments. The liquidity risk is mainly covered with third-party loan and shareholder contributions.

The following table shows the maturities of financial liabilities at their nominal value (in US dollars):

As of December 31, 2020 Trade accounts payable Third-party loan Accounts payable	Less than 1 year 14,716 443,551 248 ---------- 458,515 =======	More than 1 year - 3,004,444 - ------------ 3,004,444 ========	Total 14,716 3,447,995 248 ------------ 3,462,959 ========

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As of December 31, 2019 Financial obligations Trade accounts payable Third-party loan Accounts payable	Less than 1 year 14,715 26,385 483,736 53 ---------- 524,889 =======	More than 1 year - - 3,004,444 - ------------ 3,044,444 ========	Total 14,715 26,385 3,488,180 53 ------------ 3,529,333 ========

(iii) Credit risk

The Company's financial assets potentially exposed to concentrations of credit risk consist mainly of bank deposits. The Company reduces the probability of significant concentrations of credit risk because it maintains its deposits and places its cash investments in first-class financial institutions, and limits the amount of exposure to credit risk in any of the financial institutions.

(iv) Interest risk

The Company’s exposure to this risk is due to changes in interest rates on its financial liabilities. The Company has financial liabilities, mainly due to its loan with Trafigura Pte Ltd. The Company has agreed interest at fixed and variable rates.

For those indebtedness at variable interest rates, Company Management has not made financial hedging instruments to minimize this risk.

The Company does not have a formal policy to determine how much of its exposure should be at a fixed rate or a variable rate. However, when assuming new loans or indebtedness, Management exercises its criteria to decide whether a fixed or variable rate would be more favorable for the Company for a period of time until it becomes due.

The following shows the sensitivity of the statement of comprehensive loss for the possible effect of changes in the variable interest rate on financial expenses for one year, before income tax, assuming that financial liabilities as of December 31, 2020, and 2019, were renewed at the end and will be maintained for the remainder of the following year:

Changes in basis points + (-) 100 + (-) 200	Effect on comprehensive loss (in US dollars)	Effect on comprehensive loss (in US dollars)
	2020 (19,635) (39,270)	2019 (21,413) (42,828)

The interest rate sensitivities shown in the table above are illustrative only and are based on simplified scenarios. The figures represent the effect of the pro forma movements in the net financial expense based on the projected scenarios of the yield curve and the interest rate risk profile that the Company currently has.

However, this effect does not include the actions taken by Company Management to mitigate the impact of this risk on interest rates.

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(v) Exchange risk

Most transactions are made in US dollars. Exposure to exchange rates comes from some supplier invoices and accounts receivable, and cash balances, which are basically denominated in Soles. In the statement of financial position, these items are presented at the end-of-period exchange rate.

To mitigate exposure to foreign exchange risk, cash flows in non-functional currency are continually reviewed. In general, when the amounts to be paid for purchases in Soles exceed the amount available in that currency, a currency exchange operation is carried out.

Operations in foreign currency are carried out at the exchange rate set by supply and demand in the National Financial System.

As of December 31, 2020, the weighted average exchange rate published by the Superintendency of Banking, Insurance, and Pension Fund Managers for transactions in Soles was S/ 0.2764 for purchase operations and S/ 0.2759 for sale operations (S/ 0.302 for purchase, and S/ 0.301 for sale, in 2019).

The financial assets and liabilities in Soles are as follows:

Assets Cash (Note 7) Accounts receivable Liabilities Trade accounts payable Accounts payable Net assets	2020 198,610 4,197 ---------- 202,807 ---------- (35,031) - ---------- (35,031) ---------- 167,776 =======	2019 75,608 4,807 --------- 80,415 --------- (31,919) (76) --------- (31,995) --------- 48,420 ======

As of December 31, 2020, and 2019, Company Management has decided to assume the exchange risk generated by this position. Therefore, it has not carried out hedging operations with derivative products. During the fiscal year 2020, the Company recorded a net exchange difference loss of US$ 4,085 (US$ 5,822 during 2019).

Various hypotheses have been assumed for the variation of the Sol against the US dollar as of December 31, 2020, and 2019. For this purpose, the average exchange rate for the year is compared with the exchange rate calculated according to the percentages indicated below. These variation percentages have been based on potentially probable scenarios of the evolution of the Peruvian economy and allow us to know the exchange gain and loss for the year. Therefore, as a basis, the average exchange rate for 2020 of S/ 0.286, and S/ 0.300 for 2019, was considered.

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A sensitivity analysis of the profit or loss for the years 2020, and 2019, has been carried out with respect to the effect of a reasonably possible variation in the exchange rate of the Sol on financial assets and liabilities denominated in that currency, considering that all other variables will remain constant. If the Sol exchange rate had increased or decreased with respect to the functional currency (US dollar) according to the percentages in the table below, these would have been the effects on the Company's loss before income tax (in US dollars):

2020	Effect on profit or loss for the year 2,399 (2,399)	2019	Effect on profit or loss for the year 726 (726)
Percentage change in the exchange rate + 5 - 5		Percentage change in the exchange rate + 5 - 5

(b) Capital management

For capital management purposes, the Company considers the share capital as such. The objective is to safeguard the Company's ability to continue as an ongoing business to provide returns to its shareholders and benefits for stakeholders and maintain an optimal structure that reduces the cost of capital.

Company Management manages its capital structure and makes adjustments to face changes in the economic market conditions. The policy of Company Management is to finance all its short and medium-term projects with the contributions of shareholders and long-term third-party loan. To maintain or adjust the capital structure, the Company may adjust the payment of dividends to shareholders, return capital to its shareholders, or issue new shares. There have been no changes in objectives, policies, or procedures during the years ended December 31, 2020, and 2019.

5. MAIN FINANCIAL INSTRUMENTS

Accounting standards define a financial instrument as any financial asset and liability of a company, considering as such cash, accounts receivable, and accounts payable, among others.

In the opinion of Company Management, as of December 31, 2020, and 2019, the fair value of its financial instruments is not significantly different from their respective carrying amounts. Therefore, the disclosure of such information does not affect the financial statements on those dates.

The following are the amounts of financial assets and liabilities in the statement of financial position, classified by category (in US dollars):

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Assets Cash Accounts receivable Liabilities Financial obligations Trade accounts payable Third-party loan Accounts payable	As of December 31, 2020		Total 203,610 1,799 ------------ 205,409 ======== - 14,716 2,579,824 248 ------------ 2,594,788 ========	As of December 31, 2019		Total 1,057,323 5,276 ------------ 1,062,599 ======== 14,715 26,385 2,599,324 53 ------------ 2,640,477 ========
	Financial assets At fair value through profit or loss At amortized cost 203,610 - - 1,799 ---------- ------- 203,610 1,799 ======= ===== - - - - - - - - ---------- ------- - - ======= =====	Financial liabilities at amortized cost - - ------------ - ======== - 14,716 2,579,824 248 ------------ 2,594,688 ========		Financial assets At fair value through profit or loss At amortized cost 1,057,323 - - 5,276 ------------ ------- 1,057,323 5,276 ======== ===== - - - - - - - - ------------ ------- - - ======== =====	Financial liabilities at amortized cost - - ------------ - ======== 14,715 26,385 2,599,324 53 ------------ 2,640,477 ========
	At fair value through profit or loss 203,610 - ---------- 203,610 ======= - - - - ---------- - =======			At fair value through profit or loss 1,057,323 - ------------ 1,057,323 ======== - - - - ------------ - ========

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Fair value hierarchy of financial instruments

To increase the consistency and comparability of fair value measurements, a fair value hierarchy has been established that classifies the input data of valuation techniques used to measure fair value into three levels:

Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets. A quoted price in an active market provides the most reliable evidence of fair value and will be used without adjustment to measure fair value whenever available.
Level 2: The information is different from the quoted prices included in Level 1. Other techniques are used by which all the data that have a significant effect on the registered fair value are either directly or indirectly observable.
Level 3: Techniques that use data that are not based on observable market data and significantly affect fair value.

The carrying amount of cash corresponds to its fair value. The Company considers that the carrying amount of current accounts receivable and accounts payable is similar to their fair values due to their maturity in the short-term. The fair value of long-term financial liabilities approximates the carrying amout at amortized cost using the effective interest method.

6. TRANSACTIONS THAT HAVE NOT GENERATED FUND MOVEMENTS

In 2020, an increase in share capital and share premium was made through the capitalization of credits for US$ 12,794 and US$ 30,706, respectively, from trade liabilities that were included in the trade accounts payable item. See Note 13 (a) and (b).

7. CASH

A breakdown of this heading is given below (in US dollars):

Fixed funds Bank current accounts (a)	2020 US$ 1,367 202,243 ---------- 203,610 =======	2020 S/ 4,944 193,666 ---------- 198,610 =======	2019 US$ 1,375 1,055,948 ------------ 1,057,323 ========	2019 S/ 4,553 71,055 --------- 75,508 ======

(a) Corresponds to bank accounts in Soles and US dollars in various local financial entities. These are freely available and do not generate interest.
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8. ACCOUNTS RECEIVABLE

A breakdown of this heading is given below (in US dollars):

General Sales Tax - Recoverable Tax Credit (a) Advances to suppliers Other Current portion Non-current portion	2020 630,286 - 1,799 ---------- 632,085 (1,799) ---------- 630,286 =======	2019 529,222 1,597 5,276 ---------- 536,095 (6,873) ---------- 529,222 =======

(a) As of December 31, 2020, and 2019, the balance includes the General Sales Tax credit that results from the investments made to start operations. The balance will be applied against the sale of future years.

9. PROPERTY, MACHINERY, AND EQUIPMENT, NET

The movement and breakdown of the heading are presented below (in US dollars):

Year 2020 COST OF: Land Building and facilities Machinery and equipment Right-of-use assets Transport units Furniture and fixtures Various equipment Computer equipment Total cost ACCUMULATED DEPRECIATION OF: Building and facilities Machinery and equipment Right-of-use assets Transport units Furniture and fixtures Various equipment Computer equipment Total accumulated depreciation Net value	Opening balances 36,041 151,544 763,039 28,305 - 4,875 25,032 6,403 ------------ 1,015,239 ------------ 1,665 196,600 7,548 - 465 2,238 1,878 ------------ 210,394 ------------ 804,845 ========	Additions - - 13,000 - - - - - ---------- 13,000 ======= 16,609 153,475 5,661 - 488 4,417 1,601 ---------- 182,251 =======	Transfers - - - (28,305) 28,305 - - - --------- - ====== - - (13,209) 13,209 - - - --------- - ======	Closing balances 36,041 151,544 776,039 - 28,305 4,875 25,032 6,403 ------------ 1,028,239 ------------ 18,274 350,075 - 13,209 953 6,655 3,479 ------------ 392,645 ------------ 635,594 ========

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Year 2019 COST OF: Land Building and facilities Machinery and equipment Right-of-use assets Furniture and fixtures Various equipment Computer equipment Total cost ACCUMULATED DEPRECIATION OF: Buildings and facilities Machinery and equipment Right-of-use assets Furniture and fixtures Various equipment Computer equipment Total accumulated depreciation Net value	Opening balances 36,041 - 700,020 28,305 3,000 10,889 4,459 ------------ 782,714 ------------ - 46,934 1,887 100 167 394 ------------ 49,482 ------------ 733,232 ========	Additions - 151,544 63,019 - 1,875 14,143 1,944 ---------- 232,525 ======= 1,665 149,666 5,661 365 2,071 1,484 ---------- 160,912 =======	Transfers - - - - - - - --------- - ====== - - - - - - --------- - ======	Closing balances 36,041 151,544 763,039 28,305 4,875 25,032 6,403 ------------ 1,015,239 ------------ 1,665 196,600 7,548 465 2,238 1,878 ------------ 210,394 ------------ 804,845 ========

(a) The depreciation of the property, machinery, and equipment is calculated following the straight-line method to assign the cost minus its residual value during the estimated economic useful life, as follows:

Building and facilities Machinery and equipment Transport units Furniture and fixtures Various equipment Computer equipment	Useful life
	5 and 20 years 5 years 5 years 10 years 5 and 10 years 4 years

(b) The carrying amounts of certain machinery and equipment temporarily without use amounts to approximately US$ 700 thousand since 2018.

Exploration costs Administration expenses (Note 15)	2020 398 181,853 ---------- 182,251 =======	2019 490 160,422 ---------- 160,912 =======

(d) Management did not identify any signs of impairment because the Company is in the pre-operating stage and its assets have been acquired, mainly in 2018 (see Note 1 (b)), so it is not necessary to estimate the recoverable value of these assets and recognize an impairment loss.

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10. MINING CONCESSIONS

The movement and breakdown of the heading are presented below (in US dollars):

Year 2020 COST OF: Mining concessions Year 2019 COST OF: Mining concessions	Opening balances 4,461,911 ======== 4,254,444 ========	Additions 2,938 ======= 207,467 =======	Closing balances
			4,464,849 ======== 4,461,911 ========

They correspond mainly to polymetallic mining concessions acquired in 2018 from Corporación Minera Castrovirreyna S.A. In liquidation. These concessions had begun their exploitation when they were under the ownership of Corporación Minera Castrovirreyna S.A. However, such Company entered into a liquidation process, for which they suspended their operations, including the exploitation of the aforementioned concessions. See Note 1 (b).

In 2020, 2 concessions were acquired with a total of 1,000 hectares located in the province of Castrovirreyna, department of Huancavelica.

As of December 31, 2020, the Company has 294 mining concessions (292 as of December 31, 2019), with a total of 38,296.65 hectares, located mainly in the department of Huancavelica. It also has two concessions for the concentrator plant “Dorita” and “José Picasso Perata” with a total of 112.59 hectares, and a benefit concession for tailings field, located in the province of Castrovirreyna, department of Huancavelica.

Management did not identify any signs of impairment because the Company is in the preoperating stage and its assets have been acquired, mainly in 2018 (see Note 1 (b)), so it is not necessary to estimate the recoverable value of these assets and recognize an impairment loss.

11. EXPLORATION COSTS

The movement and breakdown of the heading are presented below (in US dollars):

Year 2020 COST OF: Operating costs Year 2019 COST OF: Operating costs	Opening balances 1,890,268 ======== 552,452 ========	Additions 641,023 ======== 1,337,816 ========	Closing balances 2,531,291 ======== 1,890,268 ========

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Corresponds mainly to the costs disbursed as of 2018 for geological, geophysical, and geochemical studies, sampling, and other disbursements related to the Company's activity.

Management estimates that the exploitation will begin in 2023, a period in which these assets will begin to be amortized.

12. THIRD-PARTY LOAN

A breakdown of this heading is given below (in US dollars):

Loan payable – current Loan payable – non-current	2020 541,409 2,038,415 ------------ 2,579,824 ========	2019 562,242 2,037,082 ------------ 2,599,324 ========

Contract for the assignment of credit rights

(a) Terms and conditions

On May 6, 2018, the Company and the company Trafigura Pte Ltd, domiciled in the Republic of Singapore, signed a contract for the assignment of credit rights for US$ 7,160,000 for the acquisition of assets (machinery and equipment, and mining concessions) of Corporación Minera Castrovirreyna S.A. In liquidation (see Note 1 (b)). The Company made an initial payment of US$ 2,620,000, and the remaining balance would be paid in 36 monthly installments and a single payment at the end of US$ 1,160,000, at a 3-month Libor rate + 2.25% per annum, initially. This last final installment would be forgiven as long as the Company makes the payment of US$ 3,380,000, which would begin to be paid the month following the month in which the “José Picasso Perata” concentrator plant reaches a minimum average monthly treatment rate of 1000 mtpd. If this rate is not reached by January 1, 2020, the payment period would start in October 2020.

On November 2, 2019, by virtue of the subscription of the contract for the sale of concentrates indicated in Note 1 (d), the first addendum was signed where Trafigura Pte Ltd agreed to advance the forgiveness the debt for US$ 1,160,000. Likewise, the interest rate increased to a 3-month Libor rate + 3% per annum.

On August 13, 2020, the second addendum was signed where the parties agreed to extend the term for the start of debt repayment until October 1, 2021. This extension will automatically cease to take effect if:

The Company transfers its assets under any legal structure
The Company will enter into any merger and acquisition process (including spin-off, simple reorganization or any similar process)
The current shareholders of the Company transfer their shares or control of it under any legal structure.

The assets acquired with this credit maintain a negative pledge for US$ 6,000,000 in favor of Trafigura Pte Ltd until the total repayment of the debt.

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(b) Recognition and measurement of loan

Carrying value, opening Movement of the year: Accretion expense (Note 15) Interest expense (Nota 15) Interest repayments Gain on extinguishment of financial liability (Nota 15) Carrying value, ending	2020 2,599,324 348,142 165,853 (186,686) (346,809) ------------ 2,579,824 ========	2019 2,879,918 379,948 200,575 (207,519) (653,598) ------------ 2,599,324 ========

The third-party loan, on initial recognition, was measured at fair value for US$ 2,523,199 using a 20% discount rate, equivalent to a market rate that would apply to a loan with similar conditions. Likewise, the purchase price of the assets acquired with this loan was reduced by the same amount. See Note 1(b).

The substantial modifications of the loan conditions in accordance with the 2019 and 2020 amendments resulted in the recognition of newly recognised financial liability in 2020 and 2019, and derecognition of the exiting one in both year.

13. NET EQUITY

(a) Share capital - It is represented by 26,702,451 common shares, subscribed and paid, whose nominal value is one Sol per share.

The Shareholders’ Meeting on August 18, 2020, approved the capital increase through cash contributions for US$ 414,787.

On August 18,2020, US$ 12,794 of trade accounts payable was settled through the issuance of 43,500 number of common shares.

(b) Share premium - Corresponds to the additional value paid by the new shareholder for the shares acquired through their contribution.

The Shareholders’ Meeting on August 18, 2020, approved the capital increase through cash contributions for US$ 125,613. Likewise, US$ 30,706 of trade accounts payable was settled through the increase of share premium.

(c) Additional capital - During 2019, shareholders made cash contributions for US$ 1,319,850, which were registered in public records on September 24, 2020.
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14. ADMINISTRATION EXPENSES

A breakdown of this heading is given below (in US dollars):

Legal and administration expenses (a) Services provided by third parties (b) Depreciation (Note 9 (c)) Various management charges Taxes	2020 205,742 267,466 181,853 58,706 3,776 ---------- 717,543 =======	2019 430,655 357,783 160,422 130,755 1,318 ------------ 1,080,933 ========

(a) Corresponds mainly to legal and tax advisory services for US$ 26,589 (US$ 47,978 in 2019), administration services for US$ 49,329 (US$ 69,658 in 2019), environmental monitoring services for US$ 90,113 (US$ 265,036 in 2019), provided by third parties.

(b) It mainly corresponds to the general services carried out in the mining concessions for US$ 104,114 (US$ 128,028 in 2019), maintenance and repair services for US$ 22,927 (US$ 65,232 in 2019), electric power services for US$ 54,127 (US$ 26,367 in 2019).

15. (EXPENSES) INCOME FINANCIAL

The composition of the item is presented below (expressed in US dollars):

Financial expenses Accrual expenses (Note 12 (b)) Interest on loan (Note 12 (b)) Exchange difference loss Other Financial income Gain on extinguisment of financial libaility (Note 12 (b)) Gain from exchange difference Others	2020 (348,142) (165,853) (11,289) (1,659) ---------- (526,943) ======= 346,809 7,204 72,004 ---------- 426,017 =======	2019 (379,948) (200,575) (13,643) (3,514) ---------- (597,680) ======= 653,598 7,821 30,813 ---------- 692,232 =======

16. CONTINGENCIES

In the opinion of Company Management and its legal advisors, there are no significant lawsuits or claims pending resolution or other contingencies against the Company at the date of approval of this financial statements.

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17. TAX SITUATION

(a) The Peruvian Tax Administration has the power to review and, under certain circumstances, determine the income tax calculated by the Company in the last four years, as of January 1 of the year following the filing of the corresponding tax return (years subject to control). The income tax returns from 2016 to 2020 are pending review by the National Superintendency of Tax Administration. Because differences may arise in the interpretation by the Peruvian Tax Administration of the standards applicable to the Company, it is not possible to anticipate whether additional tax liabilities will arise due to eventual revisions. In the event of receiving tax assessments, the highest taxes, surcharges, adjustments, penalties, and default interest that may arise, as appropriate, would be applied against the profit or loss of the years in which the final settlements occur.
(b) The tax loss for 2020 and 2019 of US$ 1,311,954 (equivalent to S/ 4,632,140) and US$ 473,156 (equivalent to S/ 1,597,078), respectively, has been determined as follows (in US dollars):

Loss before income tax A) Permanent conciliatory items Additions 1. Expenses not accepted for tax purposes B) Temporary conciliatory items Additions 1. Pre-operating expenses 2. Others Deductions 1. Exploration costs 2. Others Tax-loss for the year Tax loss from previous years Tax loss carried forward as of December 31,	2020 (818,469) ------------ 43,023 ------------ 863,401 - ------------ 863,401 ------------ (641,023) (285,730) ------------ (926,753) ------------ (838,798) (473,156) ------------ (1,311,954) ========	2019 (986,381) ------------ 94,299 ------------ 1,364,310 841,614 ------------ 2,205,924 ------------ (1,341,552) - ------------ (1,341,552) ------------ (27,710) (445,446) ------------ (473,156) ========

In accordance with the Income Tax Law, tax loss carried forward occurs in accordance with one of the following systems:

(i) Compensate the total net loss of the third category of Peruvian source that they record in a taxable year imputing it yearly until its amount is exhausted to the net income of the third category that is obtained in the four (4) immediate subsequent years completed as of the year next of its generation. For the purposes of the losses recorded in the fiscal year 2020, the term will be five (5) years, counted from the fiscal year 2021. The balance not compensated after that term has elapsed may not be computed in the following fiscal years.
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(ii) Compensate the total net loss of the third category of Peruvian source that they record in a taxable year, imputing it yearly, until its amount is exhausted, to 50% of the net income of the third category that is obtained in the immediately subsequent years.

The Company has opted for the method that allows compensating the total third category net loss of Peruvian sources recorded in a taxable year, imputing it yearly, until its amount is exhausted, to 50% of the third category net income obtained in immediate subsequent exercises.

The tax loss carryforward as of December 31, 2020, subject to the results of the pending examination referred to in paragraph a), amounts to US$ 1,311,954. Such losses of US$ 838,798, US$ 27,710, and US$ 445,446 were generated in 2020, 2019, and 2018 respectively, and have not yet begun to be computed.

Pre-operating expenses Difference in tax base of fixed assets and mining concessions on initial recognition Explorations costs Inicial measurement at fair value and modifications of financial liabilities Others Unrecorded net deferred income tax asset Net deferred income tax asset	2020 795,442 567,540 (746,642) (236,052) (88) (380,200) ---------- - =======	2019
		540,739 588,102 (557,541) (230,299) (563) (340,438) ---------- - =======

Future tax benefits, which may arise as a result of the tax losses, have not been recognized in thes financial statements.

(d) Company Management and its tax advisers estimate, based on compliance with income tax standards, transfer pricing standards, and the results of the latest audits carried out by the Tax Administration, in which there were no discrepancies regarding the tax treatments followed by the Company, that there are no significant uncertain tax positions as of December 31, 2020.

The Interpretation had no impact on the Company's financial statements.

(e) The Income Tax rate applicable to companies during the fiscal year 2020 is 29.5% of net income.

For purposes of determining this, it should be taken into account that, as of January 1, 2019:

A definition of tax accrual was expressly incorporated in the Income Tax Law , according to which income is accrued when the substantial events for its generation have occurred, provided that the right to obtain them is not subject to a suspensive condition, regardless of the time in which they are charged and even when the precise terms for their payment have not been set. Likewise, it was specified that when the consideration or part of it is set based on a fact or event that will occur in the future, the income will accrue when such a fact or event occurs.
27 -

Special regulations have also been established for the case of executed services over time, temporary assignments of goods, and obligations not to do.

Likewise, it has been established that when the transaction involves more than one benefit, the accrual of income is determined independently by each of them.

Regarding expenses, it has been specified that they are charged in the taxable year in which the substantial events for their generation occur, provided that the obligation to pay them is not subject to a suspensive condition, regardless of the opportunity in which they are paid, and even when the precise terms for their payment have not been set.

However, when the consideration or part of it is set based on a fact or event in the future, third category expenses are accrued when such a fact or event occurs.

(f) If the company distributes all or part of dividends or makes any other form of distribution of its profits, it must retain 5% of the amount distributed, provided that the shareholder is a natural person or a legal person not domiciled in the country. To the retained earnings or other items likely to generate taxed dividends obtained between January 1, 2015, and December 31, 2016, distributed among shareholders, natural persons, and/or non-domiciled legal persons, the withholding of the 6.8% of the amount distributed will be applicable. Likewise, it will be presumed, without admitting proof to the contrary, that the distribution of dividends or any other form of distribution of profits that is made corresponds to the retained earnings or other items likely to generate older taxed dividends.

In addition, any sum or delivery in kind that results in the taxable income of the third category that represents an indirect disposition of income not subject to subsequent tax control, including amounts charged to expenses and undeclared income (presumed dividends), are subject to the rate of the Income Tax rate, payable by the company, of 5% during 2020.

STANDARDS AND AMENDMENTS TO IFRS ISSUED THAT ARE NOT EFFECTIVE AS OF THE DATE OF THE FINANCIAL STATEMENTS

The standards and amendments to IFRS that have been issued up to the date of issue of the financial statements and that apply to the Company, but are not yet in force, are described below. The impact that its initial application will have on the financial statements is unknown since its amount cannot be reasonably estimated. The Company intends to adopt these new and modified standards and interpretations, if applicable when they become effective.

Amendments to IAS 1:
Classification of
liabilities as current or
non-current

In January 2020, the IASB published amendments to paragraphs
69-76 of IAS 1 to specify the requirements for classifying
liabilities as current or non-current. The amendments clarify:

What is understood by the right to postpone liquidation.

That there should be a right to defer at the end of the
reporting period.

That classification is not affected by the probability that
an entity will exercise its deferral right.

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	 That only if a derivative embedded in a convertible liability is itself an equity instrument, the terms of a liability would not affect its classification. The amendments are effective for annual periods beginning on or after January 1, 2023, and must be applied retroactively.
Property, Plant, and Equipment: Product before Intended Use - Amendments to IAS 16	In May 2020, the IASB issued Property, Plant and Equipment: Product Before Intended Use, which prohibits entities from deducting from the cost of an item of property, plant, and equipment, any proceeds from the sale of items produced while bringing that asset to the location and condition necessary for it to operate in the manner intended by management. Instead, an entity recognizes the proceeds from the sale of those items and the costs of producing them, in profit or loss. The amendment is effective for annual periods beginning on or after January 1, 2022, and must be applied retrospectively to items of property, plant, and equipment available for use on or after the beginning of the earliest period presented when the entity first applies the amendment. The amendments are not expected to have a significant impact on the Company.
Onerous contracts - Costs of fulfilling a contract - Amendments to IAS 37	In May 2020, the IASB issued amendments to IAS 37 to specify what costs an entity should include when assessing whether a contract is onerous or loss-making. The amendments apply a “directly related cost approach.” Costs directly related to a contract to provide goods or services include both incremental costs and an allocation of costs directly related to contract activities. General and administrative costs are not directly related to a contract and are excluded unless explicitly attributable to the counterparty under the contract. The amendments are effective for annual periods beginning on or after January 1, 2022. The Company will apply these modifications to contracts for which it has not yet fulfilled all its obligations at the beginning of the annual period, to which it applies the modifications for the first time.
IFRS 9 Financial Instruments: Fees in the “10 percent” test for the write-off of financial liabilities	As part of its 2018-2020 annual improvement process to IFRS standards, the IASB issued an amendment to IFRS 9. The amendment clarifies the rates that an entity includes when assessing whether the terms of a new or modified financial liability are substantially different from the terms of the original financial liability. These fees include only those paid or received by the borrower or the lender, including the fees paid or received by the borrower or the lender on behalf of the other. An entity applies the modification to financial liabilities modified or exchanged on or after the beginning of the annual period in which the entity first applies the modification.

29 -

The amendment is effective for annual periods beginning on or
after January 1, 2022, and early adoption is permitted. The
Company will apply the modifications to financial liabilities
that are modified or exchanged on or after the beginning of
the annual reporting period in which the entity applies the
modification for the first time.
The amendments are not expected to have a material impact
on the Company.

Interest Rate
Benchmark Reform –
IBOR ‘phase 2’
(Amendments to IFRS
9, IAS 39, IFRS 7, IFRS
4 and IFRS 16) On august 27,2020, the IASB published Interest Rate
Benchmarck Reform – Phase 2 (Amendments to IFRS 9, IAS 39,
IFRS 7, IFRS 4 and IFRS 16).
The changes relate to the modification of financial assets,
financial liabilities and lease liabilities, specific hedge
accounting requirements, and disclosure requirements
applying IFRS 7 to accompany the amendments regarding
modifications and hedge accounting.
 Modification of financial assets, financial liabilities and
lease liabilities.The IASB introduces a practical expedient
for modifications required by the reform (modifications
required as a direct consequence of the IBOR reform and
made on an economically equivalent basis). These
modifications are accounted for by updating the effective
interest rate. All other modifications are accounted for using
the current IFRS requirements. A similar practical expedient
is proposed for lessee accounting applying IFRS 16.
 Hedge accounting requirements.Under the amendments,
hedge accounting is not discontinued solely because of the
IBOR reform. Hedging relationships (and related
documentation) must be amended to reflect modifications to
the hedged item, hedging instrument and hedged risk.
Amended hedging relationships should meet all qualifying
criteria to apply hedge accounting, including effectiveness
requirements.
 Disclosures.In order to allow users to understand the nature
and extent of risks arising from the IBOR reform to which the
entity is exposed to and how the entity manages those risks
as well as the entity’s progress in transitioning from IBORs to
alternative benchmark rates, and how the entity is managing
this transition, the amendments require that an entity
discloses information about.
o
how the transition from interest rate benchmarks to
alternative benchmark rates is managed, the progress
made at the reporting date, and the risks arising from
the transition;
o
quantitative information about non-derivative financial
assets, non-derivative financial liabilities and
derivatives that continue to reference interest rate
benchmarks subject to the reform, disaggregated by
significant interest rate benchmark;

30 -

`o` to the extent that the IBOR reform has resulted in
changes to an entity’s risk management strategy, a
description of these changes and how is the entity
managing those risks.
The IASB also amended IFRS 4 to require insurers that apply
the temporary exemption from IFRS 9 to apply the
amendments in accounting for modifications directly required
by IBOR reform.

The amendments are effective for annual periods beginning on or after January 1, 2021, with earlier application permitted.

19. SUBSEQUENT EVENTS

(a) Given the increase in positive cases because of the second wave of infections by Covid-19, within the framework of the state of emergency that the country is currently going through, the Peruvian State declared a targeted quarantine that includes certain restrictions at a social and commercial level, from January 31 to February 28, 2021. Subsequently, a nationwide quarantine was decreed for Easter from April 1 to 4, 2021. However, the above has not affected the Company’s operations because it is still in the pre-operational stage.
(b) On April 6 and June 15, 2021, a share exchange agreement was signed, whereby 13 and 5 shareholders, respectively, transfer 100% of their shares owned with voting rights of a nominal value of S/ 1.00 each, fully subscribed and fully paid to in favor of the company Silver Mountain Resources Inc., domiciled in Canada. This agreement was registered in public records date June 15, 2021.
(c) On June 1, 2021, by signing the third addendum to the assignment of credit rights with Trafigura Pte. Ltd, it was agreed to amortize the debt for US$ 375,556, which became effective in said month. The reamining balance for US$ 3,004,444 will be amortized in 36 monthly installments from October 2021 to September 2024. With this, the agreement of the second addendum described in Note 12 is null and void.

Likewise, the parties agree that if the Company is listed on any Stock Exchange, the amortization of the monthly installments must be advanced and the Company must pay a minimum of US$ 1,168,395 equivalent to 14 monthly installments, plus interest.

(d) On September 11, 2021, 1 share of the Company was transferred to Mula Mining Corp. (which is a Canadian entity) through a private agreement since Peruvian Corporate Law requires companies to have more than one shareholder (plurality of shareholders) and does not allow a single shareholder to be the sole owner of the Company for more than 6 months.

Between December 31, 2020, and October 3●, 2021, no other subsequent events have occurred that may affect the reasonableness of the financial statements issued and/or that need to be disclosed in notes.

==> picture [102 x 116] intentionally omitted <==

SILVER MOUNTAIN RESOURCES INC.

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

(EXPRESSED IN UNITED STATES DOLLARS) (UNAUDITED)

Silver Mountain Resources Inc.

Condensed Interim Consolidated Statements of Financial Position (Expressed in United States Dollars) (Unaudited)

		As at		As at
	September 30,		December 31,
		2021		2020
ASSETS
Current assets
Cash and cash equivalents	$	8,373,980	$	203,610
Amounts receivable		913		1,799
		8,374,893		205,409
Non-current assets
Property, plant and equipment (Note 4)		497,609		635,594
Exploration and evaluation costs (Note 5)		7,738,728		6,996,140
Tax credits(Note 6)		609,252		630,286
Total assets	$	17,220,482	$	8,467,429
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Amounts payable and other payables (Note 7)	$	264,378	$	15,636
Loanpayable(Note 8)		1,122,288		541,409
		1,386,666		557,045
Non-current liabilities
Loanpayable(Note 8)		1,254,322		2,038,415
Total liabilities		2,640,988		2,595,460
Shareholders' equity
Share capital (Note 9)		18,301,457		8,379,239
Contributed surplus (Note 10)		14,114		-
Deficit		(3,736,077)		(2,507,270)
Total shareholders' equity		14,579,494		5,871,969
Total liabilities and shareholders' equity	$	17,220,482	$	8,467,429

Nature and continuance of operations (Note 1) Subsequent events (Note 16)

The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.

Silver Mountain Resources Inc.

Condensed Interim Consolidated Statements of Net and Comprehensive Income (Loss) (Expressed in United States Dollars) (Unaudited)

(Expressed in United States Dollars) (Unaudited)
		Three Months Ended			Nine Months Ended
		September 30,			September 30,
		2021	2020		2021		2020
Operating expenses
General and administrative (Note 13)	$	429,051	$ 201,395	$	805,279	$	551,870
Share-based compensation(Note 10)		14,114	-		14,114		-
Operating loss before the following items		(443,165)	(201,395)		(819,393)		(551,870)
Financial expenses		(764)	(180,080)		(280,161)		(378,886)
Gain on modification of Trafigura loan (Note 8)		-	407,224		-		407,224
Foreign exchange loss		(117,309)	(94)		(129,253)		(4,259)
Net and comprehensive (loss) income
for the period	$	(561,238)	$ 25,655	$	(1,228,807)	$	(527,791)
Basic and diluted(loss) incomeper share	$	(0.00)	$ 0.00	$	(0.01)	$	(0.01)
Weighted average number of common shares
outstanding - basic and diluted	133,519,860		74,999,890	106,296,284			74,999,890

The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements. - 5 -

Silver Mountain Resources Inc. Condensed Interim Consolidated Statements of Cash Flows (Expressed in United States Dollars) (Unaudited)

Silver Mountain Resources Inc. Condensed Interim Consolidated Statements of Cash Flows (Expressed in United States Dollars) (Unaudited)
		Nine Months Ended 2021 2020
		~~September 30,~~
Operating activities
Net loss for the period	$	(1,228,807)	$	(527,791)
Items not affecting cash
Depreciation		137,985		135,856
Accretion on Trafigura loan payable		208,961		334,357
Gain on modification of Trafigura loan		-		(407,224)
Interest accrued on Trafigura loan		70,174		43,239
Share-based compensation		14,114		-
Changes in non-cash working capital items:
Amounts receivable and other assets		21,920		(80,533)
Amountspayable and other liabilities		20,396		(7,092)
Net cash and cash equivalents used in operating activities		(755,257)		(509,188)
Investing activities
Exploration cost additions		(615,652)		(635,667)
Purchase of fixed assets		-		(12,603)
Net cash and cash equivalents used in investing activities		(615,652)		(648,270)
Financing activities
Cash acquired in RTO Transaction (Note 3)		9,523,628		-
Cash advanced before the RTO Transaction (Note 3)		500,000		-
Shareholder contributions		-		583,500
Repayment of loans		(482,349)		(114,680)
Repayment of financial obligations		-		(13,243)
Net cash and cash equivalentsprovided by financing activities		9,541,279		455,577
Net change in cash and cash equivalents		8,170,370		(701,881)
Cash and cash equivalent, beginning ofperiod		203,610		1,057,323
Cash and cash equivalent, end ofperiod	$	8,373,980	$	355,442

The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements. - 6 -

Silver Mountain Resources Inc.

Condensed Interim Consolidated Statements of Changes in Shareholders' Equity (Expressed in United States Dollars) (Unaudited)

	Share Capital Shares to Contributed Number Amount be Issued Surplus Deficit Total
Balance, December 31, 2019 Shareholder's contributions Trade accounts payable settled for shares Shares issued Net loss for theperiod	207,605,580 $ 6,475,939 $ 1,319,850 $ - $ (1,688,801) $ 6,106,988 - - 583,500 - - 583,500 - 43,500 (43,500) - - - 59,418,930 1,859,850 (1,859,850) - - - - - - - (527,791) (527,791)
Balance, September 30, 2020	267,024,510 8,379,289 - - (2,216,592) 6,162,697

Balance, December 31, 2020 Share adjustment for RTO (Note 3) Shareholders' equity after RTO adjustment (Note 3) Shares issued in RTO Transaction (Note 3) Share based compensation (Note 10) Net loss for theperiod	267,024,510 8,379,239 - - (2,507,270) 5,871,969 (192,024,620) - - - - -
	74,999,890 8,379,239 - - (2,507,270) 5,871,969 58,519,970 9,922,218 - - - 9,922,218 - - - 14,114 - 14,114 - - - - (1,228,807) (1,228,807)
Balance, September 30, 2021	133,519,860 $ 18,301,457 $ - $ 14,114 $ (3,736,077) $ 14,579,494

The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements. - 7 -

Silver Mountain Resources Inc. Notes to the Condensed Interim Consolidated Financial Statements Three and Nine Months Ended September 30, 2021 (Expressed in United States Dollars) (Unaudited)

1. Nature and continuance of operations

Silver Mountain Resources Inc. ("SMR") was incorporated on January 28, 2021 under the Canada Business Corporations Act as Roxy Mining Corp. On March 5, 2021, the Company changed its name to Silver Mountain Resources Inc. SMR and its subsidiary (together the “Company”) is engaged in the acquisition of mining concessions for exploration, exploitation, extraction, and processing of all types of minerals with a special focus on precious metals. The Company’s shares are not presently listed for trading on any stock exchange.

The head office, principal address and records office of the Company are located at 150 King Street West, Toronto, Ontario, Canada. The Company’s registered address is 150 King Street West, Toronto, Ontario, Canada. On July 2021, the Company changed its registered address and the head office, principal address and records office of the Company are located at 82 Richmond Street East, Toronto, Ontario, Canada.

On May 7, 2021, a reverse takeover transaction (the “RTO Transaction”) between Silver Mountain Resources Inc. and Sociedad Minera Reliquias S.A.C ("SMR Peru") was completed (Note 3). On completion of the RTO Transaction, SMR Peru was determined to be the accounting acquirer and accordingly, the financial statements are a continuation of SMR Peru.

These condensed interim consolidated financial statements of the Company for the three and nine months ended September 30, 2021 were approved and authorized for issue by the Board of Directors on November XX, 2021.

These condensed interim consolidated financial statements have been prepared on the assumption that the Company will continue as a going concern, meaning it will continue in operation for the foreseeable future and will be able to realize assets and discharge liabilities in the ordinary course of operations. As at September 30, 2021, the Company has not yet achieved profitable operations, has a working capital position of $6,988,227 and has an accumulated deficit of $3,736,077. Management expects to finance operations over the next twelve months with current cash on hand.

The Company’s continuation as a going concern is dependent upon the successful results from its ability to attain profitable operations and generate funds and/or raise equity capital or borrowings sufficient to meet current and future obligations. Management believes it will be able to raise sufficient funds to finance operations over the next twelve months by completing an IPO, which is subject to regulatory approvals; however there is no assurance that the Company will be able to obtain future financing if needed in the future.

These unaudited condensed consolidated interim financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

Silver Mountain Resources Inc. Notes to the Condensed Interim Consolidated Financial Statements Three and Nine Months Ended September 30, 2021 (Expressed in United States Dollars) (Unaudited)

2. Significant accounting policies and basis of presentation

(a) Statement of compliance

These condensed interim consolidated financial statements, including comparatives, have been prepared in accordance with International Accounting Standard 34 “Interim Financial Reporting” (“IAS 34”) using accounting policies consistent with the International Financial Reporting Standards (“IFRS”) issued by the International Accounting Standards Board (“IASB”) and Interpretations of the IFRS Interpretations Committee.

The same accounting policies and methods of computation are followed in these condensed interim consolidated financial statements as compared with the most recent annual consolidated financial statements as at and for the year ended December 31, 2020.

(b) Basis of preparation

These condensed interim consolidated financial statements have been prepared on an accrual basis, except for cash flow information and are based on historical costs, modified where applicable for financial instruments measured at fair value. These financial statements are presented in U.S. dollars, which is the Company’s functional currency.

(c) Basis of consolidation

These condensed interim consolidated financial statements include the accounts of the Company and its 99.99% owned subsidiary, SMR Peru, which was acquired on May 7, 2021 in conjunction with the RTO Transaction (Note 3). Pursuant to Peruvian General Corporate Law requirements that a Peruvian company must have more than one shareholder, in September 2021, the Company transferred one (1) share in SMR Peru to a shareholder of the Company. Because this non-controlling interest in SMR Peru is not material, it has not been recorded in the Company’s condensed interim consolidated financial statements.

Inter-company balances and transactions, including unrealized income and expenses arising from inter-company transactions, are eliminated on consolidation.

(d) New accounting policies

Unit offerings

The Company follows the residual value method to allocate proceeds in unit offerings to the common share and warrant component, where both components are considered equity items. Under the residual value method, unit offering proceeds are allocated first to share capital up to the fair value of the common share with the residual amount of proceeds, if any, allocated to the reserve for warrants. If and when the warrants are exercised, consideration paid by the warrant holder, together with the amount previously recognized in warrant reserve, is recorded as an increase to share capital.

Silver Mountain Resources Inc. Notes to the Condensed Interim Consolidated Financial Statements Three and Nine Months Ended September 30, 2021 (Expressed in United States Dollars) (Unaudited)

3. Reverse takeover

On May 7, 2021, there was an RTO Transaction between SMR Peru and SMR. In connection with the completion of the RTO Transaction, SMR acquired all the issued and outstanding shares of SMR Peru in exchange for 74,999,890 shares of the Company. In substance, the transaction involves SMR Peru shareholders obtaining control of SMR; accordingly, the transaction is considered to be a reverse acquisition transaction in which SMR Peru is identified as the accounting acquirer.

At the time of the transaction, SMR was a non-operating entity and did not meet the definition of a business under IFRS 3 - Business Combinations , the acquisition was accounted for as a purchase of SMR's net assets. The consideration paid was determined as an equity-settled share-based payments under IFRS 2, at the fair value of the net assets received at the date of closing. IFRS 2 requires the shares issued for the acquisition of the net assets of SMR to be measured at the fair value of the net assets, unless the fair value cannot be reliably estimated.

As SMR Peru was deemed to be the acquirer for accounting purposes, the Company's consolidated financial statements present the historical financial information to the date of the RTO Transaction are those of SMR Peru presented as a continuation of SMR Peru.

The following represent the preliminary fair value allocation to identifiable net assets acquired.

Consideration

Consideration
Fair value of 58,519,970 common shares of SMR(1)	$	9,922,218
Net assets acquired
Cash	$	9,523,628
Cash advanced before RTO Transaction		500,000
Accountspayable and accrued liabilities		(101,410)
	$	9,922,218

(1) The common shares issued were valued based on the fair value of net assets acquired.

Before the RTO Transaction, SMR closed a private placement of 33,333,330 units at a price of $0.30 for gross proceeds of $9,999,999. Each unit was comprised of one common share and one-half of one common share purchase warrant. Each warrant will be exercisable to acquire one common share at an exercise price of $0.90 per share for a period of 36 months from the closing.

In connection with the private placement, the SMR issued 186,640 compensation units and incurred professional costs of $91,784. Each unit is comprised of one common share and one-half of one common share purchase warrant. The warrants have the same terms as those of the private placement.

Using the residual value method, management determined that all of the proceeds received related to the common share component of the units issued. As such, $nil was allocated to the 16,759,870 warrants included in the units issued.

10 -

Silver Mountain Resources Inc.

Notes to the Condensed Interim Consolidated Financial Statements Three and Nine Months Ended September 30, 2021 (Expressed in United States Dollars) (Unaudited)

4. Property, plant and equipment

				Office		Processing		Furniture		Computer		Other		Leased
Cost		Land		equipment		plant	and fixtures			equipment		equipment		equipment		Total
At December 31, 2019	$	36,041	$	151,544	$	763,039	$	4,875	$	6,403	$	25,032	$	28,305	$	1,015,239
Additions duringtheyear		-		-		13,000		-		-		-		-		13,000
At December 31, 2020		36,041		151,544		776,039		4,875		6,403		25,032		28,305		1,028,239
At September 30, 2021	$	36,041	$	151,544	$	776,039	$	4,875	$	6,403	$	25,032	$	28,305	$	1,028,239
Accumulated depreciation
At December 31, 2019	$	-	$	1,665	$	196,600	$	465	$	1,878	$	2,238	$	7,548	$	210,394
Depreciation expense		-		16,609		153,475		488		1,601		4,417		5,661		182,251
At December 31, 2020		-		18,274		350,075		953		3,479		6,655		13,209		392,645
Depreciation expense		-		12,456		116,404		366		1,201		3,312		4,246		137,985
At September 30, 2021	$	-	$	30,730	$	466,479	$	1,319	$	4,680	$	9,967	$	17,455	$	530,630
Carrying value
At December 31, 2020	$	36,041	$	133,270	$	425,964	$	3,922	$	2,924	$	18,377	$	15,096	$	635,594
At September 30, 2021	$	36,041	$	120,814	$	309,560	$	3,556	$	1,723	$	15,065	$	10,850	$	497,609

11 -

Notes to the Condensed Interim Consolidated Financial Statements Three and Nine Months Ended September 30, 2021 (Expressed in United States Dollars) (Unaudited)

Silver Mountain Resources Inc.

5. Exploration and evaluation costs

In 2018, the Company acquired certain liquidated assets from Corporación Minera Castrovirreyna ("CMC") that comprised the Castrovirreyna Project (“the Project”). The Project is located near the town of Castrovirreyna, department of Huancavelica, province of Castrovirreyna, Peru. The Project includes mine infrastructure that supported the Reliquias and Caudalosa Grande underground operations, which were operated by CMC from 2005–2015.

In 2019, 26 mining concessions were acquired, of which 2 concessions with a total of 28 hectares ("ha") are located in the province of San Genaro, 3 concessions with a total of 1,400 ha are located in the province of Huaytara, and 21 concessions with a total of 15,060 ha are located in the province of Castrovirreyna, all in the department of Huancavelica.

SMR has a total mining concession rights of 28,821 ha. The total concessions are divided among the Castrovirreyna Project mining concessions (Reliquias and Dorita Blocks) with mineralization potential (27,450 ha), the plants and tailings associated to the Castrovirreyna Project (139 ha), and other concessions with mineralization potential (1,370 ha).

SMR has two sub-areas, referred to as Reliquias (12,972 ha) and Dorita (14,478 ha), and the Company holds all mineral concessions in these blocks. The Project acquired included the Reliquias and Caudalosa Grande underground mines and associated infrastructure, the Jose Picasso Perata processing plant and a tailings storage facility. SMR owns 100% of its concessions which are currently held in name of Sociedad Minera Reliquias S.A.C.

SMR agreed to acquire the Project for $7,160,000 and as consideration for the acquisition, the Company entered into a loan arrangement with Trafigura Pte. Ltd. (“Trafigura”), a creditor of CMC at the time of its liquidation. The loan arrangement and the acquisition fair value of the committed future cash flows under the Trafigura loan arrangement are outlined in Note 8. This acquisition date fair value was allocated based on the relative fair values of the acquired mining concessions and mining property plant and equipment.

Reliquias

After the acquisition of the Project, SMR Peru has conducted exploration work that consisted of geological mapping, rock chip and soil sampling, induced polarization geophysical surveys and a reconstruction of historical geological data. Geological evaluation also included preliminary non-compliant mineral resource assessments for the historic Reliquias and Caudalosa Grande underground mines.

Dorita

	As at September 30, 2021 Acquisition Costs Exploration Costs Total	As at December 31, 2020
		Acquisition Costs Exploration Costs Total
Brownfield - Reliquias Greenfield - Dorita Other	$ 2,749,742 $ 2,299,886 $ 5,049,628 1,340,537 792,094 2,132,631 374,570 181,899 556,469	$ 2,749,742 $ 1,724,677 $ 4,474,419 1,340,537 635,072 1,975,609 374,570 171,542 546,112
	$ 4,464,849 $ 3,273,879 $ 7,738,728	$ 4,464,849 $ 2,531,291 $ 6,996,140

12 -

Silver Mountain Resources Inc.

Notes to the Condensed Interim Consolidated Financial Statements Three and Nine Months Ended September 30, 2021 (Expressed in United States Dollars) (Unaudited)

5. Exploration and evaluation costs (continued)

	Brownfield -	Brownfield -		Greenfield -
		Reliquias		Dorita		Other		Total
Balance at December 30, 2019	$	4,030,209	$	1,806,962	$	515,008	$	6,352,179
Exploration costs
General on-site expenses		44,740		11,991		5,965		62,696
Geology		153,099		-		-		153,099
Right of use		243,433		156,656		25,139		425,228
		441,272		168,647		31,104		641,023
Acquisition costs
Miningrights		2,938		-		-		2,938
Balance at December 31, 2020	$	4,474,419	$	1,975,609	$	546,112	$	6,996,140
Exploration costs
General on-site expenses		26,310		-		-		26,310
Geology		96,153		-		-		96,153
Other		127,900		-		-		127,900
Outsourced geological studies		92,676		-		-		92,676
Right of use		189,356		157,022		10,357		356,735
Salaries and benefits		42,814		-		-		42,814
		575,209		157,022		10,357		742,588
Balance at September 30, 2021	$	5,049,628	$	2,132,631	$	556,469	$	7,738,728

6. Tax credits

As at September 30, 2021, the Company maintains in its non-current assets a tax credit for general sales tax (IGV, Impuesto General a las Ventas, in Spanish) of $609,252 (December 31, 2020 - $630,286), that will be applied to the IGV generated by local sales. Otherwise if sales are exported, the Company has the right to request the refund of the value-added tax as a Balance in Favor Matter of Benefit of the Exporter with a limit of 18 percent of the exported freight on board value.

7. Amounts payable and other payables

		As at		As at
		September 30,		December 31,
		2021		2020
Trade accounts payable	$	76,010	$	14,716
Taxes payable		11,059		673
Accrued liabilities		13,519		-
OEFA penalty		126,936		-
Other amountspayable		36,854		247
	$	264,378	$	15,636

13 -

Notes to the Condensed Interim Consolidated Financial Statements Three and Nine Months Ended September 30, 2021 (Expressed in United States Dollars) (Unaudited)

Silver Mountain Resources Inc.

8. Loan payable

On May 6, 2018, the Company and Trafigura Pte Ltd ("Trafigura"), domiciled in the Republic of Singapore, signed a contract for the assignment of credit rights for $7,160,000 for the acquisition of assets (machinery and equipment (Note 4), and mining concessions (Note 5)) from CMC in liquidation.

The Company made an initial payment of $2,620,000 and the remaining balance was to be paid in 36 monthly installments totaling $3,380,000, with a single final payment of $1,160,000. This loan bore interest at the 3-month Libor rate + 2.25% per annum. The final payment of $1,160,000 was to be forgiven as long as the Company made the initial payment of $2,620,000 and the 36 monthly installments. The 36 monthly installment payments were to commence in the month following the month in which the “José Picasso Perata” concentrator plant attained a minimum average monthly treatment rate of 1000 mtpd. If this rate was not attained by January 1, 2020, the payment period was to commence in October 2020.

On November 2, 2019, when the Company entered into an offtake agreement for the sale of concentrates with Trafigura, the Company and Trafigura signed an addendum to the foregoing loan agreement where Trafigura agreed to forgive the final payment of $1,160,000 leaving a remaining loan balance of $3,380,000. Additionally, the interest rate on the loan was increased to a 3-month Libor rate + 3% per annum.

On August 13, 2020, the Company and Trafigura entered into a second addendum where the parties agreed to extend the start of the 36 debt payments on the $3,380,000 portion of the loan until October 1, 2021.

On June 1, 2021, the Company and Trafigura entered into a third addendum agreement whereby the parties agreed to an amended repayment schedule for the $3,380,000 outstanding balance that consisted of the following payments:

A payment of $375,555 in equal monthly payments over a period of four months from June 2021 to September 2021, plus interest.
A payment of $3,004,444 in equal monthly payments over a period of 36 months from October 2021 to September 2024 plus interest.

The assets acquired under this loan arrangement maintain a negative pledge for $6,000,000 in favor of Trafigura until the total repayment of the debt.

		As at		As at
		September 30,		December 31,
		2021		2020
Principal payable – Trafigura – current potion	$	1,090,910	$	473,412
Interestpayable – Trafigura		31,378		67,997
Principal and interest payable – current portion		1,122,288		541,409
Principalpayable – Trafigura – long-termportion		1,254,322		2,038,415
	$	2,376,610	$	2,579,824

14 -

Silver Mountain Resources Inc. Notes to the Condensed Interim Consolidated Financial Statements Three and Nine Months Ended September 30, 2021 (Expressed in United States Dollars) (Unaudited)

9. Share capital

a) Authorized share capital

The authorized share capital consists of an unlimited number of common shares.

b) Issued share capital
(i) On January 2, 2020, the Company received shareholder contributions of $80,000 for 2,537,220 common shares to be issued on September 24, 2020.
(ii) On February 18, 2020, the Company received shareholder contributions of $200,000 for 6,343,040 common shares to be issued on September 24, 2020.
(iii) On June 30, 2020, the Company received shareholder contributions of $60,000 for 1,902,910 common shares to be issued on September 24, 2020.
(iv) On July 2, 2020, the Company received shareholder contributions of $100,000 for 3,171,520 common shares to be issued on September 24, 2020.
(v) On July 16, 2020, the Company received shareholder contributions of $100,000 for 3,171,520 common shares to be issued on September 24, 2020.
(vi) On August 18, 2020, $12,794 of trade accounts payable were settled through the issuance of 435,000 common shares. Additionally, the Company settled $30,706 of trade accounts payable as an increase of share premium, which is the additional value paid by a new shareholder for the shares acquired.
(vii) On September 24, 2020, the Company issued the 17,126,210 common shares for the shareholder contributions received during the nine months ended September 30, 2020, as well as 42,292,720 common shares of the Company for cash considerations received in fiscal 2019 of $1,276,350.

10. Stock options

On September 17, 2021, the Board of Directors of the Company approved the establishment of the Company's stock option plan relating to the Company's directors, officers, employees and consultants, and to reserve up to 10% of the common shares in the capital of the Company issued and outstanding from time to time for issuance thereunder.

The following table reflects the continuity of stock options for the periods ended September 30, 2021 and 2020:

	Number of	Weighted average	Weighted average
	stock options	exerciseprice
Balance, December 31, 2019 and September 30, 2020	-	$	-
Balance, December 31, 2020	-	$	-
Granted(1)	5,900,000		0.30
Balance, September 30, 2021	5,900,000	$	0.30

15 -

Silver Mountain Resources Inc.

Notes to the Condensed Interim Consolidated Financial Statements Three and Nine Months Ended September 30, 2021 (Expressed in United States Dollars) (Unaudited)

10. Stock options (continued)

(1) On September 17, 2021, the Company granted stock options to certain directors and officers of the Company and its subsidiaries to purchase up to 5,900,000 common shares of the Company, exercisable at a price of $0.30 per share and expiring on April 30, 2025. These options will vest over the span of three years, with 2,950,000 to be vested on the first anniversary of the date of grant, 1,475,000 to be vested on the second anniversary of the date of grant, and the remaining 1,475,000 to be vested on the third anniversary of the date of grant.

The fair value was determined to be $559,497 using the Black-Scholes option pricing model with the following assumptions: stock price of $0.169, dividend yield of 0%, expected volatility of 100%, risk free interest rate of 0.84% and expected life of 3.62 years.

During the three and nine months ended September 30, 2021, the Company recorded share-based compensation expense of $14,114 (three and nine months ended September 30, 2020 - $nil) related to stock options.

The following table reflects the actual stock options issued and outstanding as of September 30, 2021:

				Number of
		Remaining	Number of	Options	Number of
	Exercise	Contractual	Options	Vested	Options
Expiry Date	Price	Life(years)	Outstanding	(exercisable)	Unvested
April 30, 2025	$0.30	3.58	5,900,000	-	5,900,000

11. Warrants

The following table reflects the continuity of warrants for the periods ended September 30, 2021 and 2020:

	Number of	Weighted average	Weighted average
	warrants	exerciseprice
Balance, December 31, 2019 and September 30, 2020	-	$	-
Balance, December 31, 2020	-	$	-
Acquired in RTO Transaction(Note 3)	16,759,870		0.90
Balance, September 30, 2021	16,759,870	$	0.90

The following table reflects the actual warrants issued and outstanding as of September 30, 2021:

Number of Warrants	Exercise	Price	Expiry Date
16,759,870	$	0.90	April 15, 2024

12. Related party transactions

16 -

Notes to the Condensed Interim Consolidated Financial Statements Three and Nine Months Ended September 30, 2021 (Expressed in United States Dollars) (Unaudited)

Silver Mountain Resources Inc.

12. Related party transactions (continued)

Remuneration of key management personnel of the Company was as follows:

		Three Months	Three Months	Ended		Nine Months Ended	Nine Months Ended	Nine Months Ended
		September		30,		September 30,
		2021		2020		2021		2020
Management salaries(1)	$	175,715	$	-	$	203,840	$	-
Share-based compensation(Note 10)		14,114		-		14,114		-
	$	189,829	$	-	$	217,954	$	-

(1) During the three and nine months ended September 30, 2021, $139,535 and $167,660, respectively (three and nine months ended September 30, 2020 - $nil) was expensed as salaries and benefits, and $36,180 (three and nine months ended September 30, 2020 - $nil) was capitalized as exploration and evaluation costs. Included in accounts payable and accrued liabilities are amounts owing to management of $13,634 as at September 30, 2021 (December 31, 2020 - $nil).

13. General and administrative

13. General and administrative
		Three Months	Ended	Nine Months Ended
		September	30,	September 30,
		2021	2020	2021	2020
Administrative expenses	$	15,682$	55,514$	72,935$	110,831
Amortization		47,294	45,165	137,985	135,856
Contractor fees		35,703	34,282	93,431	97,508
Environmental fees		16,904	33,089	60,528	73,286
Equipment rental		2,631	405	18,206	8,389
Insurance		2,382	296	3,490	2,559
Meals and entertainment		7,555	7,435	21,023	26,803
Operational expenses		44,295	14,570	83,374	74,599
Professional fees		80,556	8,541	109,838	17,779
Salaries and benefits		166,714	-	191,329	-
Travel expenses		9,335	2,098	13,140	4,260
	$	429,051$	201,395$	805,279$	551,870

14. Segmented information

The Company operates in one reportable operating segment, being mineral exploration in Peru. The Company has an administrative office in Toronto, Canada.

15. Contingencies

The Company's exploration activities are subject to government laws and regulations, including tax laws and laws and regulations governing the protection of the environment. The Company believes that its operations comply in all material respects with all applicable past and present laws and regulations. The Company records provisions for any identified obligations, based on management's estimate at the time. Such estimates are, however, subject to changes in laws and regulations.

17 -

Silver Mountain Resources Inc.

Notes to the Condensed Interim Consolidated Financial Statements Three and Nine Months Ended September 30, 2021 (Expressed in United States Dollars) (Unaudited)

16. Subsequent events

On October 18, 2021, the Company filed a preliminary long-form prospectus with the securities regulatory authorities in each of the provinces of Canada other than Quebec and a final long-form prospectus with the same regulatory authorities on November XX, 2021. This prospectus qualifies for distribution XX units at a price of $XX per unit. Each unit is comprised of one common share and one half of one common purchase warrant of the Company. Each warrant is exercisable into one common share at a price of $XX per common share. The warrants expire on XX, 20XX.

On November 15, 2021, the Company’s Board of Directors approved a ten-for-one stock split of the Company’s issued and outstanding common shares. Shareholders of record at the close of business on November 15, 2021 received nine additional common shares for every common share owned. All share data contained in these condensed interim consolidated financial statements and notes has been adjusted to reflect this share split retrospectively.

18 -

C-1

CERTIFICATE OF THE COMPANY

Dated: January 7, 2022

This amended and restated prospectus constitutes full, true and plain disclosure of all material facts relating to the securities offered by this amended and restated prospectus as required by the securities legislation of each of the provinces of Canada other than Quebec.

SILVER MOUNTAIN RESOURCES INC.

(signed) "Alfredo Bazo" (signed) "Jean Pierre Fort" Alfredo Bazo Jean Pierre Fort Chief Executive Officer Chief Financial Officer

ON BEHALF OF THE BOARD OF DIRECTORS

(signed) "Julio Jose Arce Ortiz" Julio Jose Arce Ortiz Director

(signed) "Jose Vizquerra" Jose Vizquerra Director

C-2

CERTIFICATE OF THE PROMOTER

Dated: January 7, 2022

MULA MINING CORP.

(signed) "Alfredo Bazo" Alfredo Bazo Director

C-3

CERTIFICATE OF THE UNDERWRITERS

Dated: January 7, 2022

To the best of our knowledge, information and belief, this amended and restated prospectus constitutes full, true and plain disclosure of all material facts relating to the securities offered by this amended and restated prospectus as required by the securities legislation of each of the provinces of Canada other than Quebec.

EIGHT CAPITAL

SPROTT CAPITAL PARTNERS LP by its General Partner, SPROTT CAPITAL PARTNERS GP INC.

(signed) "John Sutherland" John Sutherland Managing Director, Investment Banking

(signed) "David Wargo" David Wargo Managing Director, Head of Investment Banking

RESEARCH CAPITAL CORPORATION

(signed) "David Greifenberger" David Greifenberger Managing Director

AI assistant

Silver Mountain Resources Inc. — Capital/Financing Update 2022

48123_rns_2022-01-07_24d9483c-e65f-4d0c-9464-82c6fe745795.pdf

AMENDED AND RESTATED PRELIMINARY PROSPECTUS

Initial Public Offering

SILVER MOUNTAIN RESOURCES INC.

$15,000,000

⚫ Units

⚫ per Unit

Notes:

TABLE OF CONTENTS

GLOSSARY

ABOUT THIS PROSPECTUS

MEANING OF CERTAIN REFERENCES

STATEMENT REGARDING FORWARD-LOOKING INFORMATION

EXCHANGE RATE INFORMATION

SCIENTIFIC AND TECHNICAL INFORMATION

CIM Definition Standards

LIST OF ABBREVIATIONS

ELIGIBILITY FOR INVESTMENT

THE COMMON SHARES ARE NOT CURRENTLY LISTED ON A "DESIGNATED STOCK EXCHANGE" AND THE COMPANY IS NOT CURRENTLY A "PUBLIC CORPORATION", AS THOSE TERMS ARE DEFINED IN THE TAX ACT.

PROSPECTIVE PURCHASERS OF UNITS WHO INTEND TO HOLD UNIT SHARES, WARRANT SHARES, AND/OR WARRANTS IN A REGISTERED PLAN SHOULD CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE APPLICATION OF THESE RULES IN THEIR PARTICULAR CIRCUMSTANCES.

MARKETING MATERIALS

PROSPECTUS SUMMARY

THE COMPANY

INVESTMENT HIGHLIGHTS

Existing Infrastructure at the Castrovirreyna Project

Location of the Project

Proven Management Team and Board

Why Silver?[ 1]

THE OFFERING

Notes:

Risk Factors

SELECTED FINANCIAL INFORMATION

CORPORATE STRUCTURE

GENERAL DEVELOPMENT AND BUSINESS OF THE COMPANY

Business Objectives

Three Year History

Project Acquisition and Financing

Offtake Agreement

Specialized Skills and Knowledge

Competitive Conditions

Cycles

Employees

Restructuring Transactions

Special Shareholder Meeting and Share Split

CASTROVIRREYNA PROJECT

Project Overview, Location and Access

Mineral Tenure, Surface Rights, Water Rights, Royalties and Agreements

History

Historical Mineral Resource[(1)]

Notes:

Geology and Mineralization

Exploration

Geological Mapping

Geochemical Sampling

Geophysical Surveys

Petrology

Exploration Potential

Drilling

Sampling, Analysis and Data Verification

Internal Data Verification

Verification by Qualified Person

DOING BUSINESS IN PERU

Government Organization

Peruvian Mining Regulations

Foreign Investments in Mining

Terms

Main Regulatory Obligations of the Mining Holder

Surface Rights

Indigenous Peoples Considerations

Environmental Regulations

Workers Participation

Main Taxation Provisions and Foreign Exchange Controls

Relevant Mining Taxes

General Stability Agreements

Sectorial Stability Agreements – Mining Stability Agreements

Internal Controls

Ownership of Properties & Required Permits

Restrictions on Business

Silver Mountain Resources Inc. Capital/Financing Update 2022