Silver Range Resources Ltd. — Annual Report 2021

Mar 31, 2021

Silver Range Resources Ltd. Consolidated Financial Statements December 31, 2020 (Expressed in Canadian Dollars)

INDEPENDENT AUDITOR’S REPORT

To the Shareholders of Silver Range Resources Ltd.

Opinion

We have audited the accompanying consolidated financial statements of Silver Range Resources Ltd. (the “Company”), which comprise the consolidated statements of financial position as at December 31, 2020 and 2019, and the consolidated statements of changes in shareholders’ equity, income (loss) and comprehensive income (loss), and cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2020 and 2019, and its financial performance and its cash flows for the years then ended in accordance with International Financial Reporting Standards (“IFRS”).

Basis for Opinion

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

Other Information

Management is responsible for the other information. The other information obtained at the date of this auditor's report includes Management’s Discussion and Analysis.

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

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

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

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

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

In preparing the consolidated financial statements, management is responsible for assessing the 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 Consolidated Financial Statements

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

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

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

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the 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 consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.

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

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

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

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

The engagement partner on the audit resulting in this independent auditor’s report is Stephen Hawkshaw.

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Vancouver, Canada March 31, 2021

Chartered Professional Accountants

Silver Range Resources Ltd. Consolidated Statements of Financial Position

As at December 31, 2020 and December 31, 2019

Silver Range Resources Ltd. Consolidated Statements of Financial Position As at December 31, 2020 and December 31, 2019
		December 31,	December 31,
		2020	2019
	Note	$	$
Assets
Current assets
Cash and cash equivalents	13	235,603	139,081
Receivables and prepayments	3	79,662	28,683
Marketable securities	4	636,445	199,618
		951,710	367,382
Non-current assets
Mineral property interests	6	4,202,415	4,020,770
Equipment	7	46,039	63,819
Reclamation deposits	8	35,208	51,858
		4,283,662	4,136,447
Total assets		5,235,372	4,503,829
Liabilities and shareholders' equity
Current liabilities
Accounts payable and accrued liabilities		31,446	27,135
Accounts payable to related parties	11	45,504	62,799
Current portion of lease liability	14	18,000	18,000
		94,950	107,934
Non-current liabilities
Lease liability	14	30,933	46,432
Total liabilities		125,883	154,366
Shareholders' equity
Share capital	9	37,432,682	36,852,507
Contributed surplus	9	553,188	571,531
Commitment to issue shares	9	17,719	17,719
Deficit		(32,894,100)	(33,092,294)
Total shareholders' equity		5,109,489	4,349,463
Total liabilities and shareholders' equity		5,235,372	4,503,829
Nature of operations and going concern	1
Events after the reporting period	16

Approved on behalf of the Board of Directors on March 31, 2021:

Director Director “Bruce J. Kenway” “Bruce Youngman”

The accompanying notes are an integral part of these consolidated financial statements.

4

Silver Range Resources Ltd.

Consolidated Statements of Changes in Shareholders’ Equity

For the years ended December 31, 2020 and December 31, 2019

				Commitment		Total
	Number	Share	Contributed	to issue		shareholders'
	of shares	capital	surplus	shares	Deficit	equity
	#	$	$	$	$	$
January 1, 2019	72,135,991	36,592,572	643,858	-	(32,695,774)	4,540,656
Share-based payments	-	-	16,156	-	-	16,156
Re-allocated on expiry of options	-	-	(44,557)	-	44,557	-
Re-allocated on cancellation of options	-	-	(43,926)	-	43,926	-
Private placement shares issued	1,822,727	200,500	-	-	-	200,500
Share issue costs	-	(8,003)	-	-	-	(8,003)
Shares issued - property examination costs	400,000	32,000	-	-	-	32,000
Shares issued - services	389,483	35,438	-	-	-	35,438
Shares for services - commitment to issue	-	-	-	17,719	-	17,719
Loss and comprehensive loss for the year	-	-	-	-	(485,003)	(485,003)
December 31, 2019	74,748,201	36,852,507	571,531	17,719	(33,092,294)	4,349,463
January 1, 2020	74,748,201	36,852,507	571,531	17,719	(33,092,294)	4,349,463
Share-based payments	-	-	21,101	-	-	21,101
Re-allocated on cancellation of options	-	-	(39,444)	-	39,444	-
Private placement units issued	6,525,000	522,000	-	-	-	522,000
Share issue costs	-	(12,700)	-	-	-	(12,700)
Shares issued - services	710,439	70,875	-	(17,719)	-	53,156
Shares for services - commitment to issue	-	-	-	17,719	-	17,719
Income and comprehensive income for the year	-	-	-	-	158,750	158,750
December 31, 2020	81,983,640	37,432,682	553,188	17,719	(32,894,100)	5,109,489

The accompanying notes are an integral part of these consolidated financial statements.

5

Silver Range Resources Ltd.

Consolidated Statements of Income (Loss) and Comprehensive Income (Loss)

For the years ended December 31, 2020 and December 31, 2019

		December 31,	December 31,
		2020	2019
	Note	$	$
Expenses
Administrative expenses		12,910	13,302
Consultingfees	11	77,032	54,343
Finance costs	14	2,501	2,332
Insurance		25,685	24,568
Investor relations and shareholder information		46,009	14,862
Management,administrative and corporate development fees	11	62,980	70,108
Office rent	11	30,000	30,000
Professional fees	11	102,558	88,990
Share-basedpayments	9, 11	21,101	16,156
Transfer agent and filing fees		11,927	12,390
Loss from operating expenses		(392,703)	(327,051)
Interest income		559	4,733
Foreign exchange gain (loss)		6,519	(7,376)
Gain on marketable securities	4	180,310	42,091
Mineral property examination costs	11	(33,342)	(108,699)
Gain on sale of mineral properties	6	413,370	-
Mineral property write-offs	6	(20,963)	(88,701)
Sale of data, net		5,000	-
Income(loss) and comprehensive income(loss) for theyear		158,750	(485,003)
Earnings (loss) per share
Weighted average number of common shares outstanding
- basic #	10	79,150,912	73,867,423
- diluted #	10	79,233,016	73,867,423
Basic earnings (loss) per share $	10	0.00	(0.01)
Diluted earnings (loss) per share$	10	0.00	(0.01)

The accompanying notes are an integral part of these consolidated financial statements.

6

Silver Range Resources Ltd. Consolidated Statements of Cash Flows

For the years ended December 31, 2020 and December 31, 2019

		December 31,	December 31,
		2020	2019
	Note	$	$
Operating activities
Income(loss)for theyear		158,750	(485,003)
Adjustments for:
Finance costs		2,501	2,332
Commitment to issue shares included in operatingexpenses	9	10,829	11,259
Shares issued for services		41,773	27,243
Share-basedpayments		21,101	16,156
Gain on marketable securities		(180,310)	(42,091)
Shares issued for mineralpropertyexamination costs		-	32,000
Write-offprepaid exploration expenditures to mineralpropertyexamination costs		-	12,563
Gain on sale of mineralpropertyinterests		(413,370)	-
Mineralpropertywrite-offs		20,963	88,701
Interest income		(559)	(4,733)
Net change in non-cash working capital items	13	5,066	(1,613)
		(333,256)	(343,186)
Financing activities
Issue of common shares/units for cash		522,000	200,500
Share issue costs		(12,700)	(8,003)
Lease payments	14	(22,500)	(15,000)
		486,800	177,497
Investing activities
Interest received		559	4,733
Prepaid mineralpropertyrecoveries,net		-	219
Reclamation deposits	8	15,665	48,734
Proceeds from sale of marketable securities	4	103,304	19,570
Purchase of marketable securities	4	-	(45,000)
Mineralpropertyoptionproceeds	6	139,464	118,294
Mineralpropertyacquisition costs	6	(97,617)	(137,938)
Deferred exploration and evaluation expenditures		(218,397)	(59,811)
		(57,022)	(51,199)
Increase (decrease) in cash and cash equivalents		96,522	(216,888)
Cash and cash equivalents, beginning of year		139,081	355,969
Cash and cash equivalents, end ofyear		235,603	139,081

Supplemental cash flow information 13

The accompanying notes are an integral part of these consolidated financial statements.

7

Silver Range Resources Ltd. Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and December 31, 2019

1. Nature of operations and going concern

Silver Range Resources Ltd. (the “Company” or “Silver Range”) was incorporated on May 18, 2010 under the laws of the Province of British Columbia, Canada as a wholly owned subsidiary of Strategic Metals Ltd. (“Strategic”). In 2011, the Company and Strategic completed a Plan of Arrangement which reduced Strategic’s investment in the Company to less than 20%. The Company is registered extra-territorially to conduct operations in the Yukon Territory, Northwest Territories and Nunavut, Canada. The Company also has a US incorporated subsidiary company as detailed in note 5. The Company’s head office is located at 1016 - 510 West Hastings Street, Vancouver, British Columbia, Canada, V6B 1L8. Its records office is located at 1710 - 1177 West Hastings Street, Vancouver, British Columbia, Canada, V6E 2L3. The Company’s common shares trade on the TSX Venture Exchange (”TSX-V”).

The Company’s main corporate strategy is to advance its mineral properties to a drill-ready stage and then option or sell them to other parties. Under option or sale agreements, the Company may receive cash and/or shares in the acquiring companies and may retain interests or royalty interests in the properties. Through this process, the Company is assembling a portfolio of direct and indirect mineral property interests and marketable securities, which will assist in generating cash flows to meet overheads and ongoing exploration and drilling programs. The Company has not yet determined whether its direct or indirect mineral property interests contain mineral reserves that are economically viable. The Company's continued operations, and the underlying value and recoverability of the amounts shown for mineral property interests and marketable securities, are entirely dependent upon the existence of economically recoverable mineral reserves of the Company and those in which it holds a mineral property or shareholder interest. The continued exploration and development of projects will depend on it receiving future cash flows from the disposition or option of its mineral property interests and sale of marketable securities, or from its ability to obtain share capital financing.

In March 2020, the World Health Organization declared coronavirus COVID-19 a global pandemic. This contagious disease outbreak, which has continued to spread, and any related adverse public health developments, has adversely affected workforces, economies, and financial markets globally, potentially leading to an economic downturn. It is not possible for the Company to predict the duration or magnitude of the adverse results of the outbreak and its effects on the Company’s ability to raise capital or conduct exploration activities. There are travel restrictions and health and safety concerns in all areas where the Company operates, including the Yukon Territory, Northwest Territories and Nunavut in Canada, and in Nevada, USA, that may prohibit or delay exploration programs from proceeding. Operations will depend on obtaining necessary field supplies, obtaining contractor services and safeguarding all personnel during the outbreak, which may be prohibitive or too costly. Various Government wage and loan subsidies are available to qualified companies to assist them with operating costs during the pandemic. To date, the Company has not qualified for assistance, but the various programs are constantly being expanded and relaxed, which may qualify the Company for assistance.

These consolidated financial statements (the “financial statements”) are prepared on the basis that the Company will continue as a going concern, which assumes that the Company will be able to continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities and commitments in the normal course of operations. As an exploration stage company, the Company does not have revenues and historically has recurring operating losses. As at December 31, 2020, the Company had working capital of $856,760 (December 31, 2019 - $259,448), and shareholders’ equity of $5,109,489 (December 31, 2019 - $4,349,463). Subsequent to December 31, 2020, the Company completed a private placement for gross proceeds of $582,500 (note 16(b)). Management has assessed that this working capital is sufficient for the Company to continue as a going concern beyond one year. If the going concern assumption were not appropriate for these financial statements, it could be necessary to restate the Company’s assets and liabilities on a liquidation basis.

8

Silver Range Resources Ltd. Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and December 31, 2019

2. Significant accounting policies

(a) Basis of presentation

These financial statements have been prepared in accordance with International Financial Reporting Standards and Interpretations (collectively, “IFRS”), as issued by the International Accounting Standards Board (“IASB”) and the International Financial Reporting Interpretations Committee (“IFRIC”).

These financial statements have been prepared on an historical cost basis, except for financial instruments which are classified as fair value through profit or loss (“FVTPL”). In addition, these financial statements have been prepared using the accrual basis of accounting, except for cash flow information.

All amounts on these financial statements are presented in Canadian dollars which is the functional currency of the Company and its subsidiary.

(b) Principles of consolidation

These financial statements include the financial statements of the Company and its subsidiary.

Subsidiaries are entities controlled by the Company and are included in the consolidated financial statements from the date that control commences until the date that control ceases. The accounting policies of subsidiaries are changed where necessary to align them with the policies adopted by the Company.

Associates are those entities in which the Company has significant influence, but not control over the financial and operating policies. Significant influence is presumed to exist when the Company holds between 20 and 50 percent of the voting power of another entity. Investments in associates are accounted for using the equity method (equity accounted investees) and are recognized initially at cost. When applicable, the financial statements include the Company’s share of the income and expenses and equity movements of equity accounted investees, after adjustments to align the accounting policies with those of the Company from the date that significant influence or joint control commences, until the date that significant influence or joint control ceases. When the Company’s share of losses exceeds its interest in an equity accounted investee, the carrying amount of that interest, including any long-term investments, is reduced to nil, and the recognition of further losses is discontinued, except to the extent that the Company has an obligation, or has made payments on behalf of the investee. The Company has no associates requiring equity accounting.

A jointly controlled operation is a joint venture carried on by each venturer using its own assets in pursuit of the joint operations. When applicable, the financial statements include the assets that the Company controls and the liabilities that it incurs in the course of pursuing the joint operation and its share of any revenues and expenses from the joint operation.

Inter-company balances and transactions, and any unrealized income and expenses arising from inter-company transactions, are eliminated in preparing the financial statements. Unrealized gains arising from transactions with equity accounted investees are eliminated against the investment, to the extent of the Company’s interest in the investee. Unrealized losses are eliminated in the same way as unrealized gains, but only to the extent that there is no evidence of impairment.

9

Silver Range Resources Ltd. Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and December 31, 2019

2. Significant accounting policies (continued)

• (c) Financial instruments

The Company classifies its financial instruments in the following categories: as FVTPL, financial assets at amortized cost and other financial liabilities at amortized cost. The classification depends on the purpose for which the financial assets or liabilities were acquired or incurred. Management determines the classification of financial assets and liabilities at initial recognition.

Recognition

The Company recognizes financial assets and financial liabilities on the date the Company becomes a party to the contractual provisions of the instruments.

Classification

• The Company classifies its financial assets and financial liabilities using the following measurement categories:

• (a) Those to be measured subsequently at fair value (either through other comprehensive income (loss) or through profit or loss); and

• (b) Those to be measured at amortized cost.

The classification of financial assets depends on the business model for managing the financial assets and the contractual terms of the cash flows. Financial liabilities are classified as those to be measured at amortized cost unless they are designated as those to be measured subsequently at fair value through profit or loss (an irrevocable election at the time of recognition). For assets and liabilities measured at fair value, gains and losses are either recorded in profit or loss or other comprehensive income (loss).

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

10

Silver Range Resources Ltd. Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and December 31, 2019

2. Significant accounting policies (continued)

(c) Financial instruments (continued)

The Company’s marketable securities are classified as FVTPL. Marketable securities held in companies with an active market are classified as current assets at fair value. Marketable securities held in non-public companies without an active market are classified as non-current assets and are valued at fair value. In situations where fair value is indeterminable or impracticable to determine, the shares are recorded at cost. This may occur when nonpublic company shares are received as payment for mineral property interests. In such situations cost is determined by reference to the issue price of similar shares issued by the non-public entity for cash, at or near the time of issue of the investment shares, and in similar volumes. When, at future measurement dates fair value is still indeterminable, or impracticable, cost is used as the measure of fair value.

Cash and cash equivalents and reclamation deposits are classified as FVTPL and are accounted for at fair value. Other receivables are classified as amortized cost and are accounted for using the effective interest rate method.

Derivative financial assets

Warrants are classified as derivative financial assets and are recorded at FVTPL. Warrants without an active market that are received as attachments to common share units are initially recorded at nominal amounts. At the time of purchase the total unit cost is allocated in full to each common share. Subsequent value is determined at measurement date using a valuation technique, such as the Black-Scholes option pricing model, or when the valuation technique input variables are not reliable, using the intrinsic value, which is equal to the higher of the market value of the underlying security, less the exercise price of the warrant, or zero.

Other financial liabilities

The Company has the following other financial liabilities: accounts payable and accrued liabilities, and accounts payable to related parties.

Such financial liabilities are recognized initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition these financial liabilities are measured at amortized cost using the effective interest method. Interest expense is recorded to profit or loss.

(d) Mineral property interests

The acquisition costs of mineral property interests and any subsequent exploration and evaluation costs are capitalized until the property to which they relate is placed into production, sold, allowed to lapse or abandoned. Exploration and evaluation costs incurred prior to obtaining ownership, or the right to explore a property, are expensed as incurred as property examination costs. Mineral property interests that have close proximity and have the possibility of being developed as a single mine are grouped as projects and are considered separate cash generating units (“CGU”) for the purpose of determining future mineral reserves and impairments.

The acquisition costs include the cash consideration paid and the fair value of any shares issued for mineral property interests being acquired or optioned pursuant to the terms of relevant agreements.

Proceeds received from a partial sale or option of any interest in a property are credited against the carrying value of the property. When the proceeds exceed the carrying costs the excess is recorded in profit or loss in the year the excess is received. When all of the interest in a property is sold, subject only to any retained royalty interests which may exist, the accumulated property costs are written-off, with any gain or loss included in profit or loss in the year the transaction takes place. No initial value is assigned to any retained royalty interest. The royalty interest is subsequently assessed for value by reference to developments on the underlying mineral property.

Management reviews its mineral property interests at each reporting period for signs of impairment and annually after each exploration season to consider if there is impairment in value taking into consideration current year exploration results, or likely gains from the disposition or option of the property. If a property is abandoned or inactive for a prolonged period, or considered to have no future economic potential, the acquisition and deferred exploration and evaluation costs are written-off to profit or loss.

11

Silver Range Resources Ltd. Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and December 31, 2019

2. Significant accounting policies (continued)

(d) Mineral property interests (continued)

Once an economically viable resource has been determined for an area and the decision to proceed with development has been approved, mineral property interests attributable to that area are first tested for impairment and then reclassified to property and equipment. Subsequent recovery of the resulting carrying value depends on successful development or sale of the undeveloped project. Should a project be put into production, the costs of acquisition, exploration and evaluation will be amortized over the life of the project based on estimated economic reserves. If the carrying value of a project exceeds its estimated net realizable value or value in use, an impairment provision is recorded.

Exploration costs renounced to shareholders pursuant to flow-through share subscription agreements remain capitalized, however, for income tax purposes the Company has no right to claim these costs as tax deductible expenses.

When entitled, the Company records refundable mineral exploration tax credits or incentive grants on an accrual basis and as a reduction of the carrying value of the mineral property interest. When the Company is entitled to non-refundable exploration tax credits, and it is probable that they can be used to reduce future taxable income, a deferred income tax benefit is recognized.

(e) Equipment

Equipment is measured at cost less accumulated depreciation and impairment losses. Equipment not available for use is not subject to depreciation. Depreciation on the Company’s equipment, being a right-of-use asset is recognized on a straight-line basis over the term of the lease (note 7).

An asset’s residual value, useful life and depreciation method is reviewed at each reporting period and adjusted if appropriate. When parts of an item of equipment have different useful lives, they are accounted for as separate items (major components) of equipment.

Subsequent costs that meet the asset recognition criteria are capitalized, while costs incurred that do not extend the economic useful life of an asset are considered repairs and maintenance, which are accounted for as an expense recognized during the period. Gains and losses on disposal of an item are determined by comparing the proceeds from disposal with the carrying amount of the item and recognized in profit or loss.

(f) Impairment

Financial assets

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

Non-financial assets

Non-financial assets are reviewed quarterly by management for indicators that carrying value is impaired and may not be recoverable. When indicators of impairment are present the recoverable amount of an asset is evaluated at the CGU level, which is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. The recoverable amount of a CGU is the greater of the CGU’s fair value less costs to sell and its value in use. An impairment loss is recognized in profit or loss to the extent that the carrying amount exceeds the recoverable amount. The Company’s mineral property interest impairment policy is more specifically discussed in note 2(d) above.

12

Silver Range Resources Ltd. Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and December 31, 2019

2. Significant accounting policies (continued)

(g) Share capital

Common shares are classified as equity. Transaction costs directly attributable to the issue of common shares and share options are recognized as a deduction from equity, net of any tax effects. Common shares issued for consideration other than cash, are valued based on their market value at the date the shares are issued.

When share capital recognized as equity is repurchased, the amount of the consideration paid, which includes directly attributable costs, net of any tax effects, is recognized as a deduction from equity. Share capital is reduced by the average per-common-share carrying amount, with the difference between this amount and the consideration paid, added to or deducted from contributed surplus.

The Company has adopted a residual value method with respect to the measurement of shares and warrants issued as private placement units. The residual value method first allocates value to the more easily measurable component based on fair value and then the residual value, if any, to the less easily measurable component. The Company considers the fair value of common shares issued in a unit private placement to be the more easily measurable component and the common shares are valued at their fair value, as determined by the closing quoted bid price on the issue date. The balance, if any, is allocated to the attached warrants. Any value attributed to the warrants is recorded as contributed surplus.

(h) Flow-through share private placements

As an incentive to complete private placements the Company may issue common shares, which by agreement are designated as flow-through shares. Such agreements require the Company to spend the funds from these placements on qualified exploration expenditures and renounce the expenditures and income tax benefits to the flow-through shareholders, resulting in no exploration deductions to the Company.

The shares are usually issued at a premium to the trading value of the Company’s common shares at the date the private placement closes. The premium is a reflection of the value of the income tax benefits that the Company must pass on to the flow-through shareholders. On issue, share capital is increased only by the non-flow-through share equivalent value. Any premium is recorded as a flow-through share premium liability.

The loss of the tax benefit is recorded as a deferred income tax liability and eliminates the original flow-through share premium liability, with the difference, if any, recorded as a deferred income tax expense. In instances where the Company has unused temporary income tax benefits, or unused non-capital losses or tax credits available to offset the deferred income tax liability, the realization of these income tax benefits is shown as a recovery in profit or loss in the year the deferred income tax liability is recorded.

The deferred income tax liability and reversal of the flow-through share premium liability are recorded on a prorata basis as the required exploration expenditures are completed and renounced to the flow-through shareholders.

13

Silver Range Resources Ltd. Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and December 31, 2019

2. Significant accounting policies

(i) Share-based payment transactions

The Company has a stock option plan that provides for the granting of options to Officers, Directors, related company employees and consultants to acquire shares of the Company. The fair value of the options is measured on grant date and is recognized as an expense with a corresponding increase in contributed surplus as the options vest.

Options granted to employees and others providing similar services are measured at grant date at the fair value of the instruments issued. Fair value is determined using the Black-Scholes option pricing model taking into account the terms and conditions upon which the options were granted. The amount recognized as an expense is adjusted to reflect the actual number of share options that are expected to vest. Each tranche in an award with graded vesting is considered a separate grant with a different vesting date and fair value. Each grant is accounted for on that basis.

Options granted to non-employees are measured at the fair value of the goods or services received, unless that fair value cannot be estimated reliably, in which case the fair value of the equity instruments issued is used. The value of the goods or services is recorded at the earlier of the vesting date, or the date the goods or services are received.

On vesting, share-based payments are recorded as an operating expense and as contributed surplus. When options are exercised the consideration received is recorded as share capital. In addition, the related share-based payments originally recorded as contributed surplus are transferred to share capital. When an option is cancelled or expires, the initial recorded value is reversed from contributed surplus and credited to deficit.

(j) Environmental rehabilitation

An obligation to incur restoration, rehabilitation and environmental costs arises when environmental disturbance is caused by the exploration, development or ongoing production of a mineral property interest. The estimated costs arising from the decommissioning of plant and other site preparation work, discounted to their net present value, are determined, and capitalized at the start of each project to the carrying amount of the asset, as soon as the obligation to incur such costs arises. Discount rates, using a pre-tax rate that reflects the time value of money, are used to calculate the net present value. These costs are charged against profit or loss over the economic life of the related asset, through amortization using either the unit-of-production or the straight-line method. The related liability is adjusted at each reporting date for the unwinding of the discount rate, for changes to the current market-based discount rate, and for changes to the amount or timing of the underlying cash flows needed to settle the obligation. Costs for restoration of subsequent site damage which is created on an ongoing basis during production are provided for at their net present values and charged against profits as extraction progresses.

The Company has no known restoration, rehabilitation or environmental costs, of any significance, related to its mineral property interests.

14

Silver Range Resources Ltd. Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and December 31, 2019

2. Significant accounting policies (continued)

(k) Income taxes

Income tax expense is comprised of current and deferred income taxes. Current income tax and deferred income tax are recognized in profit or loss, except to the extent that they relate to items recognized directly in equity or equity investments.

Current income tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.

Deferred income tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred income tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred income tax assets and liabilities are offset if there is a legally enforceable right to offset current income tax liabilities and assets, and they relate to income taxes levied by the same tax authority for the same taxable entity. A deferred income tax asset is recognized for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that future taxable income will be available against which they can be utilized. Deferred income tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related income tax benefit will be realized.

(l) Earnings (loss) per share

The Company presents basic and diluted earnings (loss) per share (“EPS”) data for its common shares. Basic EPS is calculated by dividing the profit or loss attributable to common shareholders of the Company by the weighted average number of common shares outstanding during the year, adjusted for own shares held. Diluted EPS is determined by dividing the profit or loss attributable to common shareholders by the weighted average number of common shares outstanding, adjusted for own shares held and for the effects of all potential dilutive common shares related to outstanding stock options and warrants issued by the Company.

(m) Use of estimates and critical judgments

The preparation of financial statements requires management to make estimates and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the year. Actual results could differ from those estimates and judgments. Those areas requiring the use of management estimates and judgments include:

Estimates

• (i) Option or sale agreements, under which the Company may receive shares (marketable securities) as payment, require the Company to determine the fair value of the shares received. Many factors can enter into this determination, including, if public shares, the number of shares received, the trading value of the shares, and volume of shares, and if non-public shares, the underlying asset value of the shares, or value of the claims under option or sale. This determination is subjective and does not necessarily provide a reliable single measure of the fair value of the shares received.

• (ii) Recorded costs of flow-through share premium liabilities reflect the premium received by the Company on the issue of flow-through shares. The premium is subject to measurement uncertainly and requires the Company to assess the value of non-flow through shares. This determination is subjective and does not necessarily provide a reliable single measure of the fair value of the premium liability.

• (iii) The determination of the fair value of stock options or compensatory warrants using stock pricing models requires the input of highly subjective variables, including expected price volatility. Wide fluctuations in the variables could materially affect the fair value estimate; therefore, the existing models do not necessarily provide a reliable single measure of the fair value of the Company’s stock options and warrants.

15

Silver Range Resources Ltd. Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and December 31, 2019

2. Significant accounting policies (continued)

• (m) Use of estimates and critical judgments (continued)

Judgments

• (i) Recorded costs of mineral property interests and deferred exploration and evaluation costs are not intended to reflect present or future values of these properties. The recorded costs are subject to measurement uncertainty and it is reasonably possible, based on existing knowledge, that change in future conditions could require a material change in the recognized amount. Management is required, at each reporting date, to review its mineral property interests for signs of impairment. This is a highly subjective process taking into consideration exploration results, metal prices, economics, financing prospects and sale or option prospects. Management makes these judgments based on information available, but there is no certainty that a property is or is not impaired. Although the Company has taken steps to verify title to mineral properties in which it has an interest, these procedures do not guarantee the Company’s title. Such properties may be subject to prior agreements or transfers and title may be affected by undetected defects.

• (ii) The assessment of the Company’s ability to continue as a going concern as discussed in Note 1 involves judgment regarding future funding available for its operations and working capital requirements.

• (iii) The determination of deferred income tax assets or liabilities requires subjective assumptions regarding future income tax rates and the likelihood of utilizing tax carry-forwards. Changes in these assumptions could materially affect the recorded amounts, and therefore do not necessarily provide certainty as to their recorded values.

(n) Standards issued but not yet effective

Certain pronouncements have been issued by the IASB or IFRIC that are effective for accounting periods beginning on or after January 1, 2021. The Company has reviewed these updates and determined that many of these updates are not applicable or consequential to the Company and have been excluded from discussion within these significant accounting policies.

3. Receivables and prepayments

Receivables and prepayments consist of the following:

Receivables and prepayments consist of the following:
	December 31,	December 31,
	2020	2019
	$	$
Sales tax recoverable	1,513	6,160
Other receivables (Note 6)	48,439	-
Prepaid expenses	29,710	22,523
	79,662	28,683

16

Silver Range Resources Ltd. Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and December 31, 2019

4. Marketable securities

The Company holds share positions in other resource companies which were obtained under mineral property option agreements or by participation in private placements. The valuation of the shares has been determined in whole by reference to the bid price of the shares on the TSX-V at each reporting date. Warrants have been received as attachments to share purchase units and do not trade in an active market. At the time of purchase the per unit cost is allocated in full to each common share. The Company determines the value of the warrants at each reporting date using the Black-Scholes option pricing model.

A summary of the marketable security transactions for the years ended December 31, 2020 and December 31, 2019 is as follows:

is as follows:	is as follows:
Common Total shares Warrants Total gain $ $ $ $
Cost January 1, 2019 178,035 - 178,035 Additions 64,000 - 64,000 Proceeds on disposal (19,570) - (19,570) Realized gain 3,237 - 3,237 3,237 December 31,2019 225,702 - 225,702 Fair value January 1, 2019 113,097 - 113,097 Additions 64,000 - 64,000 Cost of disposals (16,333) - (16,333) Unrealized gain 16,563 22,291 38,854 38,854 December 31,2019 177,327 22,291 199,618
Total gain	42,091
Cost January 1, 2020 225,702 - 225,702 Additions 359,821 - 359,821 Proceeds on disposal (103,304) - (103,304) Realized gain 4,727 - 4,727 4,727 December 31, 2020 486,946 - 486,946 Fair value January 1, 2020 177,327 22,291 199,618 Additions 359,821 - 359,821 Cost of disposals (98,577) - (98,577) Unrealized gain 156,601 18,982 175,583 175,583 December 31, 2020 595,172 41,273 636,445
Total gain	180,310

Additions for the year ended December 31, 2020 include common shares of Trifecta Gold Ltd. (“Trifecta”) received pursuant to a Property Purchase Agreement in respect of the Yuge Property (note 6(d)(viii)), whereby Trifecta issued to the Company a total of 4,797,611 common shares at a fair value of $359,821.

Additions for the year ended December 31, 2019 included common shares received pursuant to a Debt Settlement Agreement entered into with Trifecta, whereby Trifecta issued to the Company a total of 200,000 common shares to settle an amount owing to the Company of $12,000. No gain or loss was recognized in connection with this settlement.

Additions for the year ended December 31, 2019 also included the Company’s subscription to a private placement with Rover Metals Corp. (“Rover”). The Company subscribed to 750,000 units of Rover at $0.06 per unit, for total cash consideration of $45,000. Each unit comprised of one common share and one share purchase warrant, with each warrant exercisable to purchase one common share at $0.12 each, until August 22, 2024. Rover used the proceeds from the Company’s subscription to make its Uptown Gold property option payment (note 6(b)(ii)). As at December 31, 2020, the warrants were valued at $41,273 using the Black-Scholes option pricing model (December 31, 2019 - $22,291).

Additions for the year ended December 31, 2019 also included the 200,000 common shares at a fair value of $7,000 received from Canarc Resource Corp. (“Canarc”) pursuant to the Hard Cash and Nigel option agreement (note 6(c)(ii)).

17

Silver Range Resources Ltd. Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and December 31, 2019

5. Subsidiary information

In July 2016, the Company completed the purchase of various mineral properties located in the Northwest Territories and Nunavut, Canada, and in Nevada, USA, from Panarc Resources Ltd. (“Panarc”). On closing, Panarc was issued 10,000,000 common shares of the Company at a price of $0.205 per share for total consideration of $2,050,000. Panarc did not retain any royalty or other interest in any of the acquired properties. The purchase price was allocated to the various properties based on the hectares of each property.

Also purchased from Panarc in July 2016 was a 100% interest in the shares of Manta Minerals Corporation (“Manta”), a company incorporated in the State of Nevada, USA. A nominal amount of $1 was allocated to the share purchase.

Panarc incorporated Manta to hold title to its mineral property interests in Nevada, as it is a requirement in the USA that title to USA mineral interests be held by US corporations. Since incorporation Manta has had no transactions other than to hold title to the Nevada mineral claims. All costs to acquire or explore the claims were incurred by Panarc prior to the sale to Silver Range, and by Silver Range after the sale. Other than to hold title to the Nevada minerals claims, Manta has no assets or liabilities, and has had no transactions since being acquired by Silver Range.

6. Mineral property interests

The Company’s mineral property interests include various mineral properties located in the Yukon Territory, Northwest Territories, and Nunavut in Canada and in Nevada, USA. Properties which are in close proximity and could be developed as a single economic unit are grouped into projects.

		Northwest
	Yukon	Territories	Nunavut	Nevada	Total
	$	$	$	$	$
January 1, 2019	935,445	481,268	1,823,367	709,945	3,950,025
Acquisitions/staking/assessments	-	15,356	64,133	75,609	155,098
Exploration and evaluation	20,238	15,021	13,525	80,858	129,642
Write-offs	-	(76,410)	(5,044)	(7,247)	(88,701)
Optionand sale proceeds	(17,500)	(45,000)	(49,500)	(13,294)	(125,294)
December 31, 2019	938,183	390,235	1,846,481	845,871	4,020,770
January 1, 2020	938,183	390,235	1,846,481	845,871	4,020,770
Acquisitions/staking (recoveries)/assessments	6,210	(14,441)	5,520	100,328	97,617
Exploration and evaluation	23,443	6,047	27,476	182,379	239,345
Write-offs			(11,220)	(9,743)	(20,963)
Option and sale proceeds	-	(20,000)	-	(527,724)	(547,724)
Gainonsale of mineralproperty	-	20,000	-	393,370	413,370
December 31, 2020	967,836	381,841	1,868,257	984,481	4,202,415

18

Silver Range Resources Ltd. Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and December 31, 2019

6. Mineral property interests (continued)

Changes in the project carrying amounts for the year ended December 31, 2019 are summarized as follows:

(1)	Acquisitions/ Exploration Beginning Staking/ and Option Ending Balance Assessments Evaluation Write-offs Proceeds Balance $ $ $ $ $ $
	Yukon Projects Barb 36,003 - - - - 36,003 Mel 626,905 - - - (17,500) 609,405 Michelle 110,001 - - - - 110,001 Silver Range 162,536 - 20,238 - - 182,774
	Total 935,445 - 20,238 - (17,500) 938,183
	Northwest Territories Projects Hare 36,892 - 55 - - 36,947 Itchen 43,101 - - - - 43,101 Sparta 10,567 15,356 14,264 - - 40,187 Uptown Gold 390,708 - 702 (76,410) (45,000) 270,000
	Total 481,268 15,356 15,021 (76,410) (45,000) 390,235
	Nunavut Projects Atlantis 755 24,886 347 - - 25,988 Bling 185,257 - - - (3,215) 182,042 Contwoyto 1,238 - - (1,238) - - Esker Lake 152,859 - - - (3,214) 149,645 Goldbugs 721,740 14,370 110 - (3,214) 733,006 Grumpy 9,698 14,615 - - - 24,313 Happy Thought 11,220 - - - - 11,220 Hard Cash 189,974 - - - (13,500) 176,474 Hiqiniq 5,066 - - (1,852) (3,214) - Nigel 34,026 - 414 - (13,500) 20,940 Noomut 8,502 - 134 - - 8,636 Quannituq 64,298 635 5,026 - (3,214) 66,745 Quartzite 45,949 - 110 - - 46,059 Tree River 92,184 9,627 1,244 - - 103,055 Uist 119,472 - - - (3,215) 116,257 Ujaraq 5,168 - - (1,954) (3,214) - Yandle 175,961 - 6,140 - - 182,101
	Total 1,823,367 64,133 13,525 (5,044) (49,500) 1,846,481
	Nevada Projects Bellehelen 13,315 1,873 110 - - 15,298 Black Star 8,933 948 (1,598) - - 8,283 Bottom Dollar 27,058 1,408 110 - - 28,576 Cold Springs 77,538 5,136 423 - - 83,097 East Gold Point - 19,606 6,222 - - 25,828 East Goldfield 10,428 944 40,532 - - 51,904 Enigma 80,867 4,900 110 - - 85,877 Gold Chief 135,816 5,593 110 - - 141,519 Hannapah 14,576 3,036 589 - (13,294) 4,907 Irwin - 1,515 3,277 - - 4,792 Kawich - 2,253 4,835 - - 7,088 Krug 12,788 1,873 110 - - 14,771 Legal Tender 24,073 2,803 110 - - 26,986 Loner 6,586 948 15,130 - - 22,664 Lucky Boy 10,952 2,110 110 - - 13,172 Posh 3,897 943 110 - - 4,950 Rand 17,641 2,106 110 - - 19,857 Robot 19,445 2,342 - - - 21,787 Skylight 105,269 3,733 1,082 - - 110,084 Sniper - 1,515 3,706 - - 5,221 Stash 7,247 - - (7,247) - - Stinson 44,069 4,896 606 - - 49,571 Strongbox 89,447 5,128 5,064 - - 99,639
	Total 709,945 75,609 80,858 (7,247) (13,294) 845,871
	Total Projects 3,950,025 155,098 129,642 (88,701) (125,294) 4,020,770

(1) Includes depreciation on equipment of $17,781 (note 7).

19

Silver Range Resources Ltd. Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and December 31, 2019

6. Mineral property interests (continued)

Exploration and evaluation expenditures on the projects consisted of the following:

			Northwest	Northwest
	Yukon		Territories		Nunavut		Nevada	Total
Year ended December 31, 2019	$		$		$		$	$
Assays		-		1,039		-	12,071	13,110
Depreciation	17,781			-		-	-	17,781
Field		206		1,080		359	11,186	12,831
Helicopter and fixed wing		-		1,985		-	-	1,985
Labour		1,762		95		1,983	16,913	20,753
Survey and consulting (note 11)		-	10,615		11,183		32,105	53,903
Travel and accommodation		489		207		-	8,583	9,279
Total	20,238		15,021		13,525		80,858	129,642

20

Silver Range Resources Ltd. Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and December 31, 2019

6. Mineral property interests (continued)

Changes in the project carrying amounts for the year ended December 31, 2020 are summarized as follows:

(1)	Acquisitions/ Exploration Beginning staking (recoveries)/ and Option Gain on Ending balance assessments evaluation Write-offs proceeds Sale balance $ $ $ $ $ $ $
	Yukon Projects Barb 36,003 - - - - - 36,003 Mel 609,405 6,210 1,618 - - - 617,233 Michelle 110,001 - - - - - 110,001 Silver Range 182,774 - 21,825 - - - 204,599
	Total 938,183 6,210 23,443 - - - 967,836
	Northwest Territories Projects Cabin Lake - - - - (20,000) 20,000 - Hare 36,947 - - - - - 36,947 Itchen 43,101 - - - - - 43,101 Sparta 40,187 (14,441) 5,077 - - - 30,823 UptownGold 270,000 - 970 - - - 270,970
	Total 390,235 (14,441) 6,047 - (20,000) 20,000 381,841
	Nunavut Projects Atlantis 25,988 - 70 - - - 26,058 Bling 182,042 5,520 645 - - - 188,207 Esker Lake 149,645 - - - - - 149,645 Goldbugs 733,006 - - - - - 733,006 Grumpy 24,313 - - - - - 24,313 Happy Thought 11,220 - - (11,220) - - - Hard Cash 176,474 - 488 - - - 176,962 Nigel 20,940 - - - - - 20,940 Noomut 8,636 - - - - - 8,636 Quannituq 66,745 - 201 - - - 66,946 Quartzite 46,059 - - - - - 46,059 Tree River 103,055 - 24,966 - - - 128,021 Uist 116,257 - 115 - - - 116,372 Yandle 182,101 - 991 - - - 183,092
	Total 1,846,481 5,520 27,476 (11,220) - - 1,868,257
	Nevada Projects Bellehelen 15,298 1,958 40,187 - - - 57,443 Black Star 8,283 991 - - - - 9,274 Bottom Dollar 28,576 1,473 - - - - 30,049 Cold Springs 83,097 5,365 165 - (30,000) - 58,627 East Gold Point 25,828 - 7,629 - (57,986) 24,529 - East Goldfield 51,904 28,827 3,780 - (30,000) - 54,511 Enigma 85,877 8,717 18,095 - - - 112,689 Gold Chief 141,519 5,843 110 - - - 147,472 Hannapah 4,907 - 660 - (14,016) 9,020 571 Irwin 4,792 - - (4,792) - - - Kawich 7,088 1,473 3,384 - - - 11,945 Krug 14,771 1,958 - - - - 16,729 Legal Tender 26,986 2,929 20,874 - - - 50,789 Loner 22,664 5,638 29,910 - (25,901) - 32,311 Lucky Boy 13,172 2,205 14,153 - - - 29,530 Mount Tobin - - 568 - - - 568 Neversweat - 1,602 1,342 - - - 2,944 Posh 4,951 - - (4,951) - - - Rand 19,856 2,201 - - - - 22,057 Robot 21,787 2,448 - - - - 24,235 Rough Rider - 4,055 2,209 - - - 6,264 Skylight 110,084 3,901 871 - (10,000) - 104,856 Sniper 5,221 987 18,798 - - - 25,006 Stinson 49,571 12,400 13,985 - - - 75,956 Strongbox 99,639 5,357 3,559 - - - 108,555 Tom - - 2,100 - - - 2,100 Yuge - - - - (359,821) 359,821 -
	Total 845,871 100,328 182,379 (9,743) (527,724) 393,370 984,481
	Total Projects 4,020,770 97,617 239,345 (20,963) (547,724) 413,370 4,202,415

(1) Includes depreciation on equipment of $17,780 (note 7).

21

Silver Range Resources Ltd. Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and December 31, 2019

6. Mineral property interests (continued)

Exploration and evaluation expenditures on the projects consisted of the following:

		Northwest
	Yukon	Territories	Nunavut	Nevada	Total
Year ended December 31, 2020	$	$	$	$	$
Assays	-	-	-	17,079	17,079
Depreciation (note 7)	17,780	-	-	-	17,780
Field	-	708	993	21,178	22,879
Labour	5,663	339	1,011	27,290	34,303
Survey and consulting (note 11)	-	5,000	25,472	98,310	128,782
Travel and accommodation	-	-	-	18,522	18,522
Total	23,443	6,047	27,476	182,379	239,345

The cumulative acquisition, exploration and evaluation costs incurred on the projects for all years and the current carrying values are as follows:

	Cumulative	Option Proceeds /	Carrying
	costs, net	Write-offs / Gain on Sale	Value
As at December 31, 2020	$	$	$
Yukon	28,601,460	(27,633,624)	967,836
Northwest Territories	1,118,108	(736,267)	381,841
Nunavut	2,513,423	(645,166)	1,868,257
Nevada	1,213,079	(228,598)	984,481
Total	33,446,070	(29,243,655)	4,202,415

Option proceeds on the projects for the years ended December 31, 2020 and December 31, 2019 consisted of the following:

	December 31,	December 31,
	2020	2019
	$	$
Yukon Projects	-	17,500
Northwest Territories Projects	20,000	45,000
Nunavut Projects	-	49,500
Nevada projects	527,724	13,294
	547,724	125,294

Certain of the Company’s mineral property interests are subject to option out or sale agreements, earn-in or purchase agreements or net smelter return royalties (“NSR”), as detailed below.

22

Silver Range Resources Ltd. Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and December 31, 2019

6. Mineral property interests (continued)

(a) Yukon projects

(i) Mel and Barb projects

The Mel and Barb projects were purchased in 2014 for $220,000. The claims are located in the Watson Lake Mining District, Yukon Territory. The Mel project is subject to a prior 1% NSR on any commercial production from the property and there is an additional 1% NSR due to the vendor of the properties on both the Mel and Barb projects, which may be purchased at any time for $1,000,000.

On March 14, 2017, and as amended on March 27, 2019, the Company entered into an Agreement with Benz Mining Corp. (“Benz”) for the sale of a 100% interest in the Company’s Mel property. On October 28, 2019, the Company provided a termination notice to Benz as the option was in default. During the option period, the Company received cash payments totalling $192,500 ($17,500 received during the year ended December 31, 2019), and common shares of Benz with an aggregate fair value of $75,000.

(ii) Silver Range project

The Silver Range and Mint group of claims were acquired in January 2011 from Strategic, by the issue of Silver Range common shares and warrants having a value of $2,954,026. The claims are located in the Whitehorse Mining District, Yukon Territory. The projects were considered impaired in 2015 and writtendown to a $14 carrying value. The Mint project was sold in 2015.

The Silver Range project also includes the JRV claims which were purchased in 2011 for cash and shares totalling $309,000. The JVR claims are subject to a 2% NSR on any commercial production of precious metals and a 1% NSR on commercial production of other metals. One-half of the NSR on the precious metals can be purchased by the Company for $1,500,000.

The Silver Range project also includes the BP4 claim which was acquired in 2015 for $1. The BP4 claim is subject to a prior 2% NSR to a third party.

In 2016, the Company signed a Letter of Intent (“LOI”) to option out its Silver Range project to a private British Columbia company for future shares and a retained 2% and 1% NSR. On December 11, 2020, the parties signed an Amending Agreement whereby the LOI was extended to June 30, 2021.

(iii) Michelle project

The Michelle property was acquired in 2015 in exchange for cash and the Company’s Mint property. The Michelle property is located in the Dawson and Mayo Mining Districts, Yukon Territory.

On October 17, 2018, the Company entered into an agreement with Zinciferous Limited (“Zinciferous”) to option to Zinciferous a 100% interest in the Michelle project. Under the agreement, the Company was to receive cash and Zinciferous common shares. A $10,000 payment was received on execution of the agreement. On February 4, 2020, the option agreement was terminated as Zinciferous could not obtain a public listing nor make an extension payment as required under the agreement. See note 16(a) for details of a subsequent sale agreement.

23

Silver Range Resources Ltd. Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and December 31, 2019

6. Mineral property interests (continued)

• (b) Northwest Territories projects

(i) Cabin Lake royalty interest

By agreement dated November 7, 2017, and amended on August 9, 2018, the Company agreed to sell 100% of its Cabin Lake property located in the Northwest Territories, to Rover.

The Company retains a 2% NSR on all mineral production from the Cabin Lake property and Rover is required to make annual advance royalty payments equal to the lesser of $20,000 or 7% of annual exploration expenditures by Rover for each of the calendar years 2019, 2020 and 2021, and thereafter at $20,000 per year. The advance royalty payments cease once a total of $220,000 has been paid.

During the year ended December 31, 2020, the Company accrued $20,000 as an advance royalty payment from Rover (2019 - $nil as Rover did not incur any expenditures on the property during the year then ended). The royalty was recognized within gain on sale of mineral property interests as the carrying value of the Cabin Lake property was $nil.

Rover has the right to acquire up to 1.5% of the 2% NSR by making payments of either $750,000 or $1,500,000, depending on the indicated gold reserves that may be reported.

(ii) Uptown Gold property option

By Agreement dated September 9, 2016, and as amended on August 15, 2017, April 6, 2018, September 5, 2018, February 18, 2020, December 4, 2020, and March 18, 2021, the Company granted Rover the right to earn up to a 100% interest in the Company’s Uptown Gold property. For a 75% interest (the “First Option”), Rover issued Silver Range 1,970,694 common shares in 2018 at a fair value of $98,535 ($0.05 each) and must make cash payments of $300,000 and incur exploration expenditures as detailed below. On December 4, 2020, Rover assigned its interest and obligations in the First Option to a private Ontariobased company (the “Assignee”) in addition to amending the timing and amount of expenditures required.

To complete the First Option, the following payments and expenditures are required:

Cash payments of $300,000:

• $30,000 on or before March 9, 2017 (received from Rover);

• $60,000 on or before September 9, 2017 (received from Rover);

• $45,000 on or before September 9, 2018 (received from Rover);

• $45,000 in cash or shares on or before April 30, 2019 (received from Rover in cash);

• $75,000 on execution of the March 18, 2021 amendment (subsequently received); and

• $45,000 on the earlier of five business days of the Assignee earning a public listing, or June 30, 2021.

Incurring exploration expenditures of $1,600,000:

• $350,000 on or before September 9, 2017 (incurred by Rover);

• $500,000 on or before December 31, 2021; and

• $750,000 on or before December 31, 2022.

Should the Assignee attain its 75% interest and not proceed to acquire the remaining interest, a joint venture would be formed to further explore the properties, unless otherwise agreed. For an additional 25% interest (the “Second Option”) Rover is required to issue Silver Range 2,500,000 common shares by September 30, 2022.

Should Assignee and Rover acquire a collective 100% interest in the property, the Company will retain a 2% NSR from any commercial production, one-half of which may be purchased by Rover for $1,000,000. Advance annual royalty payments of $50,000 will be paid to the Company commencing September 30, 2023.

During the year ended December 31, 2019, a write-off of $76,410 was recorded against the Uptown Gold project as it was determined that the carrying value of the project exceeded the then expected proceeds from the option to Rover.

24

Silver Range Resources Ltd. Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and December 31, 2019

6. Mineral property interests (continued)

(c) Nunavut projects

(i) Amaroq option

On February 4, 2019, the Company signed a Letter Agreement which superseded a Letter of Intent (“LOI”) signed on March 5, 2018, and amended on May 28, 2018, with Amaroq Gold Corp. (“Amaroq”) to sell Amaroq a 100% interest in the Company’s Bling, Esker Lake, Gold Bugs, Hiqiniq, Qannitug, Uist and Ujaraq claims located in Nunavut, Canada. Under the Letter Agreement, the Company was to receive cash and Amaroq common shares staged over five years from when Amaroq received a TSX-V or Canadian Securities Exchange Listing (“listing”). In 2019, the Company received cash payments totalling $32,500.

On February 4, 2020, the agreement was terminated as Amaroq was unable to obtain a listing as required under the Letter Agreement.

(ii) Hard Cash and Nigel option

On November 23, 2018, the Company signed a Property Option Agreement with Canarc to sell Canarc a 100% interest in the Company’s Hard Cash and Nigel properties located in Nunavut, Canada. Under the Option Agreement, the Company was to receive cash and Canarc common shares staged over four years.

On November 16, 2020, the agreement was terminated by Canarc. During the option period the Company received cash payments of $30,000 and 300,000 common shares (at a fair value of $11,500) from Canarc.

(d) Nevada projects

(i) Cold Springs property option

On September 1, 2020, the Company signed a Definitive Agreement with Supernova Metals Corp. (“Supernova”), formerly Volt Energy Corp., which superseded a letter of intent (“LOI”) signed on August 15, 2020, to sell Supernova up to a 75% interest in certain claims underlying the Cold Springs project in Nevada. Under the Definitive Agreement, Supernova can acquire the project by making cash payments to the Company as detailed below, and by completing a minimum of 2,000 metres of drilling by August 31, 2023.

Cash payments of $300,000:

• $10,000 due by August 20, 2020 (received);

• $20,000 on or before November 30, 2020 (received);

• $20,000 on or before February 28, 2021 (subsequently received);

• $50,000 on or before August 31, 2021;

• $100,000 on or before August 31, 2022;

• $100,000 on or before August 31, 2023;

The claims will be subject to a 2.5% NSR, of which 1.5% can be purchased by Volt for $1,250,000.

25

Silver Range Resources Ltd. Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and December 31, 2019

6. Mineral property interests (continued)

• (d) Nevada projects (continued)

  • (ii) East Gold Point project option

EGP claims:

On July 27, 2020, the Company signed an Option Agreement with GGL Resources Corp. (“GGL”), to sell GGL a 75% interest in certain claims underlying the East Gold Point Project (the “EGP property”). Pursuant to the terms of the Option Agreement, GGL has the right to acquire a 75% interest in the project by making cash payments to the Company as detailed below and incurring minimum aggregate exploration expenditures of $1,500,000 on or before July 31, 2023.

Cash payments of $180,000:

• $10,000 upon the execution of the option agreement (received);

• Reimbursing the Company for certain staking costs and fees on or before September 15, 2020 (completed);

• $20,000 on or before December 31, 2020 (received); and

• The aggregate of $150,000 as calculated bi-annually and based on 10% of the expenditures incurred during each of the periods from January 1 to June 30, 2021, and July 1 to December 31, 2021 (expenditures commenced during the year ended December 31, 2020, and $28,439 is included in receivables as at December 31, 2020).

Upon GGL having earned the 75% interest in the EGP property it will enter into a 75%/25% joint venture with the Company for further exploration of the project. Additionally, the Company will be entitled to receive a one-time cash payment of US$4 per ounce of gold identified in a NI 43-101 compliant measured or indicated resource estimate (or proven or probable reserve estimate) on the project.

Tom claims:

On July 27, 2020, the Company and a private Nevada corporation (collectively, the “Optionors”) signed an Option Agreement with GGL, to sell GGL a 100% interest in certain additional claims underlying the East Gold Point Project (the “TOM property”) in which both the Company and the private Nevada corporation each hold a 50% interest. Pursuant to the terms of the Option Agreement, GGL can acquire the project by incurring aggregate minimum exploration expenditures of US$1,500,000 on or before July 31, 2023 and reimbursing the Optionors for certain staking costs and fees on or before September 15, 2020 (completed).

Upon GGL having earned the 100% interest in the TOM property, the Optionors will be entitled to receive a one-time cash payment of US$1 per ounce of gold identified in a NI 43-101 compliant measured or indicated resource estimate (or proven or probable reserve estimate) on the project.

Additionally, the Optionors shall each retain a 1% NSR on all mineral production from the property, from which 50% can be purchased by GGL for a payment of US$2 per ounce on the first 250,000 ounces of gold contained in any measured or indicated resource estimate (or proven or probable reserve estimate), and US$1 per ounce of gold above 250,000 ounces thereafter.

26

Silver Range Resources Ltd. Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and December 31, 2019

6. Mineral property interests (continued)

• (d) Nevada projects (continued)

  • (iii) East Goldfield property option

On February 20, 2020, the Company signed a Property Option Agreement with ATAC Resources Ltd. (“ATAC”), a company with common Directors and Officers, to sell ATAC a 100% interest in the Company’s East Goldfield property located in Nevada, USA. Pursuant to the Option Agreement, ATAC has the right to earn an initial 75% interest in the property (the “Initial Option”) by making cash payments to the Company based on the following schedule:

Cash payments of $400,000:

• $30,000 on execution of the Option Agreement (received);

• $40,000 on or before April 1, 2021;

• $70,000 on or before April 1, 2022;

• $100,000 on or before April 1, 2023; and

• $160,000 on or before April 1, 2024.

In addition, the Initial Option requires ATAC to incur exploration expenditures on the property as follows:

• $200,000 on or before April 1, 2021;

• An additional $200,000 on or before April 1, 2022; and

• An additional $9,600,000 on or before December 1, 2025.

ATAC has the right at its sole election to make up 50% of all of the cash payments under the Initial Option through the issuance of common shares to the Company. The number of common shares to be issued as payment is to be calculated using a share price equal to the volume weighted average price of ATAC’s common shares for the 10 trading days immediately preceding the applicable payment date, subject to such price not being less than $0.05 per share. The Company is not required to accept any number of common shares where accepting the number of shares will result in the Company holding (directly or indirectly) more than an aggregate 19.9% of the issued and outstanding shares of ATAC.

On completion of the Initial Option, ATAC will have the right to acquire an additional 25% interest in the property (the “Second Option”) by paying the Company an additional $10,000,000 on or before the date that is six months from receipt of a notice from ATAC confirming their desire to exercise the Second Option.

The Company will retain a 2% NSR on all mineral production from the properties, of which up to 1% can be purchased for $1,000,000.

The Company will also be entitled to receive a one-time cash payment equal to $2 per ounce of gold (or the value equivalent in other metals) on the first 1,000,000 ounces of gold, identified in a NI 43-101 compliant measured and indicated resource estimate application (or proven and probable reserves) to the property; and an additional one-time cash payment equal to $1 per ounce of gold (or the value equivalent in other metals) on all ounces of gold in excess of 1,000,000 ounces of gold, identified in a NI 43-101 compliant proven or probable reserve estimate applicable (or proven and probable reserves) to the property.

(iv) Gold Chief property option

On November 1, 2018, the Company signed an option agreement with Crocan Capital Corp. (“Crocan”), giving Crocan the right to purchase a 100% interest in the Gold Chief property. Exercise of the option was conditional upon Crocan obtaining a public listing on or before June 30, 2019. The listing was not obtained, and the option was terminated. A $10,000 payment was received on execution of the agreement.

27

Silver Range Resources Ltd. Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and December 31, 2019

6. Mineral property interests (continued)

• (d) Nevada projects (continued)

(v) Hannapah property option

On July 16, 2019, the Company signed a Property Option Agreement with Mercury Exploration Nevada Inc. (“Mercury”) to sell Mercury a 100% interest in the Company’s Hannapah property located in Nevada, USA. On June 30, 2020, Mercury assigned its interest and obligations in the agreement to Infield Capital Corp. (“Infield”). Pursuant to the agreement, the Company will receive cash from Infield based on the following schedule:

Cash payments of US$30,000:

• US$10,000 upon execution of the Agreement (received, $13,294);

• US$10,000 on or before July 16, 2020 (received $14,016); and

• US$10,000 on or before July 16, 2021.

After exercising the option, Infield is required to make annual royalty payments to the Company not to exceed in aggregate US$205,000, as follows:

• US$10,000 on or before July 16, 2024;

• US$15,000 on or before July 16, 2025; and

• US$20,000 on or before July 16, 2026 and each year through to July 16, 2034.

Additionally, the Company is entitled to receive a one-time cash payment of US$2 per ounce of gold or equivalent identified in a NI 43-101 compliant measured or indicated resource estimate (or proven and probable reserve) to the property.

The Company will retain a 2% NSR on all mineral production from the property, of which up to 1% can be purchased by Infield for US$1,000,000.

(vi) Loner property option

On December 1, 2020, the Company signed a Property Option Agreement with Victory Resources Corporation (“Victory”) to sell Victory a 80% interest in the Company’s Loner property located in Nevada, USA. Pursuant to the Option Agreement, the Company will receive cash and common shares of Victory staged over three years based on the following schedule:

Cash payments of US$400,000:

• US$20,000 upon execution of the Agreement ($25,901 received);

• US$20,000 on or before May 8, 2021;

• US$40,000 on or before December 8, 2021;

• US$60,000 on or before December 8, 2022;

• US$100,000 on or before December 8, 2023; and

• US$160,000 on or before December 8, 2024.

To exercise the option, Victory must also complete 1,200 metres of drilling on the property on or before December 8, 2024.

The Company will retain a 2% NSR on all mineral production from the property, of which up to 1% can be purchased by Victory at any time before commencement of commercial production on the property for US$1,000,000. Additionally, the Company is entitled to receive a one-time cash payment of US$4 per ounce of gold or equivalent identified in a proven or probable reserve estimate contained in a Feasibility Study applicable to the property.

28

Silver Range Resources Ltd. Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and December 31, 2019

6. Mineral property interests (continued)

• (d) Nevada projects (continued)

(vii) Skylight property option

On August 28, 2020, the Company signed a Property Option Agreement with Rush Gold Corp. (“Rush”) to sell Rush a 100% interest in the Company’s Skylight property located in Nevada, USA. Pursuant to the agreement, the Company will receive cash and common shares of Rush staged over three years based on the following schedule:

Cash payments of $320,000:

• $10,000 upon execution of the Agreement (received);

• $10,000 upon Rush obtaining a public listing (not yet completed);

• $100,000 on or before August 28, 2022; and

• $200,000 on or before August 28, 2023.

650,000 common shares of Rush:

• 50,000 common shares upon Rush obtaining a public listing (not yet completed);

• 100,000 common shares on or before August 28, 2021;

• 200,000 common shares on or before August 28, 2022;

• 300,000 common shares on or before August 28, 2023.

To exercise the option, Rush must also complete 3,000 metres of drilling on the property on or before August 28, 2023; and provide the Company with US$3,600 on or before August 1, 2021, for the purposes of maintaining the claims comprising the property in good standing.

The Company will retain a 3% NSR on all mineral production from the property, of which up to 2% can be purchased by Rush at any time before commencement of commercial production on the property for $1,000,000. Additionally, the Company is entitled to receive a one-time cash payment of US$4 per ounce of gold or equivalent identified in a NI 43-101 compliant measured or indicated resource estimate (or proven and probable reserve) to the property. If Rush has not identified either a mineral resource or mineral reserve on or before August 28, 2026, Rush will be required to pay US$10,000 to the Company on such date and on all subsequent anniversaries of the agreement until such time that a mineral resource or mineral reserve is established.

(viii) Yuge property option

On February 27, 2018, the Company signed a letter of intent, which was subsequently replaced with a definitive agreement (the “Option Agreement”), to option to Trifecta up to a 75% interest in the Company’s Yuge property, located in Nevada, USA. Under the Option Agreement, Trifecta reimbursed the Company staking and recording costs of $9,066.

On July 7, 2020, the Option Agreement was replaced with a Property Purchase Agreement (the “PP Agreement”). Pursuant to the terms of the PP Agreement, Trifecta can acquire a 100% interest in the Yuge property by:

• Issuing to the Company that number of common shares equal to 9.9% of the total number of issued and outstanding common shares of Trifecta immediately following the closing of the first $500,000 of a financing (4,797,611 common shares received at a fair value of $359,821);

• Reimbursing the Company for property maintenance payments, rentals and filing fees made to maintain the property in good standing until September 1, 2021 ($15,734, subsequently received); and

• Paying the Company $250,000 on or before July 7, 2021 (the “Final Payment”).

Upon completion of the PP Agreement, the Company will retain a 2% NSR from the commercial production of any mineral products on the property. At any time following the closing of the PP Agreement, Trifecta will have the right to purchase one-half of the NSR for $1,000,000. Additionally, the Company is entitled to receive a one-time cash payment of US$2 per ounce of gold or equivalent identified in NI 43-101 compliant technical report of a measured or indicated mineral resource, or proven or probable mineral reserve, as applicable, to the property.

29

Silver Range Resources Ltd. Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and December 31, 2019

7. Equipment

Equipment
	Right-of-use
	asset
	$
Cost
January 1, 2019	-
Additions	81,600
December 31,2019	81,600
Accumulated depreciation
January 1, 2019	-
Depreciation	17,781
December 31,2019	17,781
Cost
January 1, 2020 and December 31, 2020	81,600
Accumulated depreciation
January 1, 2020	17,781
Depreciation	17,780
December 31, 2020	35,561
Net book value
December 31,2019	63,819
December 31, 2020	46,039

Equipment is comprised of a right-of-use (“ROU”) asset, being the lease to purchase of exploration equipment situated at the Company’s Silver Range project (Keg claims). Depreciation is taken on the ROU asset on a straight-line basis over the term of the lease and has been capitalized as part of the Silver Range mineral property interest (note 6). Title to the equipment remains with the lessor until completion of the lease. See note 14 for lease liability details.

8. Reclamation deposits

The reclamation deposits are comprised of cashable guaranteed investment certificates with one-year terms. They are pledged to the Northwest Territories, the Kivalliq Inuit Association in Nunavut (“KIA”), and the Bureau of Land Management in the State of Nevada (“BLM”) to ensure specified properties are properly restored after exploration. Management has determined that the Company has no material reclamation work related to the properties requiring the deposits.

During the year ended December 31, 2019, the BLM released one of the Company’s bonds totalling $48,734 which matured during the year ended December 31, 2020.

During the year ended December 31, 2020, the KIA released one of the Company’s bonds totalling $15,665.

30

Silver Range Resources Ltd. Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and December 31, 2019

9. Share capital

The authorized share capital of the Company consists of an unlimited number of common shares without par value. All issued shares are fully paid.

Transactions for the issue of share capital

during the year ended December 31, 2020:

• (a) On April 6, 2020, the Company closed the first tranche of a private placement consisting of 1,300,000 units at a price of $0.08 per unit for gross proceeds of $104,000. Each unit is comprised of one common share and one share purchase warrant, exercisable at a price of $0.16 until April 6, 2022. No value was allocated to the warrant component of the unit.

Legal and filing fees amounted to $4,500 and were recorded as a reduction to share capital.

• (b) On May 6, 2020, the Company issued 412,839 common shares to Paladin Geoscience Corp. (“Paladin”) with a fair value of $35,438 for services as described below.

• (c) On May 26, 2020, the Company closed the second tranche of a private placement consisting of 5,225,000 units at a price of $0.08 per unit for gross proceeds of $418,000. Each unit is comprised of one common share and one share purchase warrant, exercisable at a price of $0.16 until May 26, 2022. No value was allocated to the warrant component of the unit.

Legal and filing fees amounted to $8,200 and were recorded as a reduction of share capital.

• (d) On October 29, 2020, the Company issued 297,600 common shares to Paladin Corp. in settlement of $35,437 for services as described below.

Transactions for the issue of share capital during the year ended December 31, 2019:

• (a) On March 21, 2019, the Company completed a private placement consisting of the issue of 1,822,727 common shares at a price of $0.11 per share for gross proceeds of $200,500. No finders’ fees were incurred in respect of the placement. Legal and filing fees amounted to $6,003 and were recorded as a share issue cost deducted from share capital.

• (b) On May 29, 2019, the Company issued 400,000 common shares with a fair value of $32,000 recorded within property examination costs ($0.08 per common share), in respect of a Purchase and Sale Agreement entered into with Discovery Consultants to acquire an exploration database with data on targets in Nevada. A $10,000 cash payment was also made under the Purchase and Sale Agreement. Legal fees amounted to $2,000 and were recorded as a share issue cost deducted from share capital.

• (c) On October 25, 2019, the Company issued 389,483 common shares with a fair value of $35,438 to Paladin pursuant to a revised Consulting Agreement entered into on April 1, 2019 for services.

31

Silver Range Resources Ltd. Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and December 31, 2019

9. Share capital (continued)

Commitment to issue shares

On April 1, 2019, the Company entered into a revised Consulting Agreement with Paladin a company controlled by the President and CEO of the Company. The Consulting Agreement terminated on March 31, 2020 and was extended by way of an Amending Agreement effective April 1, 2020 for twelve months to March 31, 2021.

Pursuant to the Amending Agreement, Paladin Corp. will continue to receive a monthly consulting fee of $11,250 in cash and shares, of which a minimum of 50% of the fee and, at the sole discretion of Paladin Corp., up to a maximum of 100% of the fee will be payable in common shares of the Company. All other terms of the Amending Agreement are unchanged from the original revised Consulting Agreement. The consulting fee is paid/accrued on a monthly basis, and the common shares are issuable semi-annually. Amounts rendered by Paladin Corp. are recorded within both operating expenses and mineral property interests (notes 11,13).

All share issuances are subject to regulatory approval, including TSX-V acceptance, and are subject to such hold periods as are required by the TSX-V and applicable regulatory authorities. The number of common shares to be issued by the Company is calculated at the end of each month during which services are provided, at a deemed price per share equal to the Market Price of the Company's shares (as that term is defined in the policies of the TSX-V) on the last day of each such month on which the shares of the Company traded, minus 50% of the maximum discount permitted by those policies.

As at December 31, 2020, the Company has accrued a commitment for $17,719, comprised of $10,829 included within operating expenses and $6,046 capitalized as mineral property costs (both amounts are before applicable sales taxes). On October 29, 2020, the Company issued 297,600 common shares to Paladin Corp. in settlement of the accrued commitment which represents services rendered from April 1, 2020 to September 30, 2020. Additionally, on May 6, 2020, the Company issued 412,839 common shares to Paladin Corp. for services rendered from October 1, 2019 to March 31, 2020, (October 25, 2019 - 389,483 common shares were issued for services from April 1, 2019 to September 30, 2019).

As at December 31, 2019, $17,719 was accrued of which $11,259 was included as part of operating expenses and $6,460 capitalized as mineral property costs.

Stock options

The Company has adopted an incentive stock option plan (the “Plan”). The essential elements of the Plan provide that the aggregate number of common shares of the Company’s capital stock issuable pursuant to options granted under the Plan may not exceed 10% of the number of issued shares of the Company at the time of grant. Options granted under the Plan may have a maximum term of ten years. A participant who is not a consultant conducting investor relations activities, who is granted an option that is exercisable at or above the market price at the date of grant, can have their options vest immediately, unless otherwise determined by the Board of Directors. A participant who is a consultant conducting investor relations activities, who is granted options under the Plan, will become vested with the right to exercise one-quarter of the options upon conclusion of every three months subsequent to the grant date. All options are to be settled by physical delivery of common shares.

A summary of the status of the Company’s stock options as at December 31, 2020 and December 31, 2019 and changes during the years then ended is as follows:

	Year ended	Year ended	Year ended	Year ended	Year ended	Year ended
	December	31, 2020		December	31, 2019
			Weighted			Weighted
			average			average
	Options	exercise price		Options	exercise price
	#		$	#		$
Options outstanding, beginning of year	3,665,000		0.22	4,945,000		0.20
Granted	500,000		0.15	-		-
Expired	-		-	(1,035,000)		0.15
Cancelled	(220,000)		0.25	(245,000)		0.25
Options outstanding, end ofyear	3,945,000		0.21	3,665,000		0.22

32

Silver Range Resources Ltd. Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and December 31, 2019

9. Share capital (continued)

Stock options (continued)

As at December 31, 2020, the Company has stock options outstanding and exercisable as follows:

Options	Options	Exercise
outstanding	exercisable	price	Expiry date
#	#	$
400,000	400,000	0.21	July 11, 2021
150,000	150,000	0.15	January 5, 2022
1,895,000	1,895,000	0.25	June 19, 2022
400,000	400,000	0.15	February 8, 2023
500,000	500,000	0.17	March 14, 2023
100,000	100,000	0.15	October 26, 2023
300,000	225,000	0.11	January 13, 2025
100,000	25,000	0.19	September 2, 2025
100,000	-	0.24	November 5, 2025
3,945,000	3,695,000

The following table summarizes information about the stock options outstanding at December 31, 2020:

Exercise		Weighted average	Weighted average
prices	Options	remaining life	exercise price
$	#	(years)	$
0.11 - 0.21	1,950,000	2.19	0.16
0.24-0.25	1,995,000	1.64	0.25
	3,945,000	1.91	0.21

During the year ended December 31, 2020, 500,000 stock options were granted to a new Director and consultants. The stock options are exercisable at a weighted average price of $0.15 each and expire on January 13, 2025 (300,000), September 2, 2025 (100,000), or November 5, 2025 (100,000). The Company recorded the fair value of all options granted using the Black-Scholes option pricing model. Share-based payment expense was calculated using the following weighted average assumptions: expected life of options – five years, stock price volatility – 89.00%, no dividend yield, and a risk-free interest rate yield – 1.13%. The fair value is particularly impacted by the Company’s stock price volatility, determined using data from the previous five years. During the year ended December 31, 2019, no stock options were granted.

Using the above assumptions, the fair value weighted average of options granted during the year ended December 31, 2020, was $0.09 per option, for an aggregate total of $44,822. The total share-based payment expense for the year ended December 31, 2020 was $21,101 (2019 - $16,156) and includes only options that vested during the year.

During the year ended December 31, 2020, 220,000 options were cancelled as a result of a Director leaving employment. As a result, the original share-based payments expense of $39,444 was reversed from contributed surplus and credited to deficit.

During year ended December 31, 2019, 1,280,000 options were either cancelled as a result of certain employees, directors, and consultants leaving employment, or expired unexercised. As a result, the original share-based payments expense of $43,926 and $44,557 respectively, was reversed from contributed surplus and credited to deficit.

33

Silver Range Resources Ltd. Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and December 31, 2019

9. Share capital (continued)

Warrants

As an incentive to complete private placements, the Company may issue units which include common shares and common share purchase warrants. Using the residual value method, the Company determines whether a value should be allocated to warrants attached to units sold in completed private placements. Finders’ warrants may be issued as a private placement share issue cost and are valued using the Black-Scholes option pricing model.

A summary of the Company’s common share purchase warrants as at December 31, 2020 and December 31, 2019 and changes during the years then ended is as follows:

	Year ended	Year ended	Year ended	Year ended
	December	31, 2020	December	31, 2019
		Weighted		Weighted
		average		average
	Warrants	exercise price	Warrants	exercise price
	#	$	#	$
Warrants outstanding, beginning of year	4,615,333	0.25	13,302,833	0.27
Issued	6,525,000	0.16	-	-
Expired	(4,615,333)	0.25	(8,687,500)	0.27
Warrants outstanding, end ofyear	6,525,000	0.16	4,615,333	0.25

As at December 31, 2020, the Company has warrants outstanding and exercisable as follows:

Warrants	Warrants	Warrants	Exercise
outstanding		exercisable	price	Expiry date
#		#	$
	1,300,000	1,300,000	0.16	April 6, 2022
	5,225,000	5,225,000	0.16	May26,2022
	6,525,000	6,525,000

Contributed surplus

Contributed surplus is comprised of the accumulated fair value of stock options recognized as share-based payments and the value of previously forfeited common shares. Contributed surplus is increased by the fair value of stock options on vesting and is reduced by corresponding amounts when the options expire or are exercised or cancelled. Future fluctuations in contributed surplus may also include the fair value of finders’ warrants issued on private placements and corresponding reductions when the warrants expire or are exercised.

	Shares	Options	Total
	$	$	$
January 1, 2019	9,874	633,984	643,858
Options vesting	-	16,156	16,156
Options expired	-	(44,557)	(44,557)
Options cancelled	-	(43,926)	(43,926)
December 31,2019	9,874	561,657	571,531
January 1, 2020	9,874	561,657	571,531
Options vesting	-	21,101	21,101
Options cancelled	-	(39,444)	(39,444)
December 31, 2020	9,874	543,314	553,188

34

Silver Range Resources Ltd. Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and December 31, 2019

10. Earnings (loss) per share

The calculation of basic and diluted earnings (loss) per share for the years ended December 31, 2020 and December 31, 2019, is based on the following:

		Year ended	December 31,	December 31,
		2020		2019
Income (loss) for the year	$	158,750	$	(485,003)
Weighted average number of common shares outstanding - basic		79,150,912		73,867,423
Dilutive effect of stock options and warrants		82,104		-
Weighted average number of common shares outstanding- diluted		79,233,016		73,867,423
Basic earnings (loss) per share $	$	0.00	$	(0.01)
Diluted earnings (loss) per share$	$	0.00	$	(0.01)

The calculation of basic earnings per share for the year ended December 31, 2020 was based on the income attributable to common shareholders, and the weighted average number of common shares outstanding. The calculation of diluted earnings per share reflects the potential dilution of common share equivalents, such as outstanding stock options and warrants, in the weighted average number of common shares outstanding, if dilutive. During the year ended December 31, 2020, certain stock options had a dilutive impact.

11. Related party payables and transactions

A number of key management personnel and Directors hold positions in other entities that result in them having control or significant influence over the financial or operating policies of these entities. There were no loans to management personnel or Directors, or entities over which they have control or significant influence during the years ended December 31, 2020 and December 31, 2019.

Key management personnel and Directors receive no salaries, non-cash benefits (other than incentive stock options), or other remuneration directly from the Company, other than noted below, and there are no employment contracts with them that cannot be terminated without penalty on thirty days’ advance notice. Key management personnel and Directors participate in the Company’s stock option plan.

During the year ended December 31, 2020, the Company granted 200,000 stock options (2019 – none) to a new Director having a fair value on grant of $10,161.

During the year ended December 31, 2020, 220,000 (2019 – 940,000 were either cancelled or expired unexercised) stock options were cancelled as result of a Director resigning. As a result, the original share-based payments expense of $39,444 (2019 - $70,440 in aggregate), was reversed from contributed surplus and credited to deficit.

The Company transacted with the following related parties:

• (a) Douglas Eaton is a Company Director. He is a shareholder and has significant influence over Archer, Cathro & Associates (1981) Limited (“Archer Cathro”), which is a geological consulting firm. Archer Cathro provides the Company with geological consulting services, office rent and administration.

• (b) Glenn Yeadon is the Company’s Secretary. He controls Glenn R. Yeadon Personal Law Corporation (“Yeadon Law Corp.”), which provides the Company with legal services.

• (c) Larry Donaldson is the Company’s CFO. He is a principal of Donaldson Brohman Martin CPA Inc. (“DBM CPA”), a firm in which he has significant influence. DBM CPA provides the Company with accounting and tax services.

• (d) Ian Talbot is the Company’s COO. He provides the Company with management services.

• (e) Michael Power is the Company’s President and CEO. He controls Paladin Corp., which provides the Company with consulting services. The consulting fees are paid by cash and shares (note 9). He also had a financial interest in Panarc, which was party to the mineral property transaction with the Company as detailed in note 6. He has relinquished his interest in Panarc for shares of Silver Range owned by Panarc

• (f) Richard Drechsler is the Company’s Vice-President of Communications. He controls Drechsler Consulting Ltd. (“Drechsler Consulting”), which provides the Company with management and administrative services.

35

Silver Range Resources Ltd. Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and December 31, 2019

11. Related party payables and transactions (continued)

The aggregate value of transactions and outstanding balances with key management personnel and Directors and entities over which they have control or significant influence were as follows:

		Transactions	Transactions	Balances	Balances	Balances	Balances
		for the year ended	for the year ended	outstanding		outstanding
		December 31,	December 31,	December 31,		December	31,
		2020	2019	2020		2019
		$	$	$		$
Archer Cathro
- geological services		28,621	24,563		12,362		31,664
-rent and administration		71,292	53,356		2,919		5,186
		99,913	77,919		15,281		36,850
Yeadon Law Corp.	(1)	49,500	33,028		11,580		6,444
DBM CPA		39,000	40,700		13,000		13,000
Ian Talbot		32,392	42,000		3,675		-
Paladin Corp.	(2)(3)	142,533	140,961		1,968		6,505
Drechsler Consulting		19,125	20,160		-		-
		382,463	354,768		45,504		62,799

(1) Includes $12,700 in share issue costs for the year ended December 31, 2020 (2019 - $7,000).

(2) Includes geological services (w ithin survey and consulting) of $36,800 for the year ended December 31, 2020 (2019 - $40,407).

(3) As at December 31, 2020, an additional $17,719 has been accrued and included w ithin commitment to issue shares (December 31, 2019 - $17,719).

All related party balances are unsecured and are due within thirty days without interest. The related party transactions do not include expense reimbursements or recoverable sales tax amounts that are included in the year end related party payable balances.

The transactions with the key management personnel and Directors are included in general and administrative expenses as follows:

• (a) Consulting fees

• Includes the consulting fees paid to the Company’s president and CEO, Mike Power, charged to the Company by Paladin Corp.

• (b) Management, administration and corporate development fees

• Includes the services of Company’s COO, Ian Talbot.

• Includes the services of Company’s Vice President of Communications, Richard Drechsler, charged to the Company by Drechsler Consulting.

• Includes charges by Archer Cathro for administrative personnel.

• (c) Office rent

• Charged by Archer Cathro.

• (d) Professional fees

• Includes the legal services of the Company’s Secretary, Glenn Yeadon, charged to the Company by Yeadon Law Corp.

• Includes the accounting and tax services of the Company’s CFO, Larry Donaldson, charged to the Company by DBM CPA.

• (e) Mineral property examination costs

• Includes charges by Paladin Corp.

36

Silver Range Resources Ltd. Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and December 31, 2019

12. Income taxes

Income tax recovery varies from the amount that would be computed from applying the combined federal and provincial income tax rate to income (loss) before income taxes as follows:

	December 31,	December 31,
	2020	2019
	$	$
Income (loss) for the period before income taxes	158,750	(485,003)
Statutory Canadian corporate tax rate	27.0%	27.0%
Anticipated income tax (expense) recovery	(42,863)	130,951
Change in tax resulting from:
Unrecognized items for tax purposes	23,505	5,370
Tax benefits recognized (unrecognized)	19,358	(136,321)
Net deferred income tax recovery	-	-

The significant components of the Company’s unrecognized deferred tax assets are as follows:

	December 31,	December 31,
	2020	2019
	$	$
Mineral property interests	4,682,000	4,784,000
Marketable securities	(20,000)	4,000
Investment tax credits	964,000	964,000
Non-capital loss carry forwards	1,165,000	1,061,000
Share issue costs	7,000	7,000
Unrecognized deferred tax assets	(6,798,000)	(6,820,000)
Net deferred tax assets	-	-

As at December 31, 2020, the Company has unclaimed resource and other deductions in the amount of approximately $21,542,000 (December 31, 2019 - $21,738,000), which may be deducted against future taxable income. These costs are approximately $17,340,000 more than the carrying value of the mineral property interests mainly because of the large impairment charges in both 2018 and 2015. The tax benefit of approximately $4,682,000 on the difference has not been recognized for tax purposes as there is no certainty that there will be adequate taxable income to utilize the deductions.

As at December 31, 2020, the Company has unused non-capital losses of approximately $4,315,000 of which $219,000 will expire in 2031, $576,000 in 2032, $551,000 in 2033, $372,000 in 2034, $303,000 in 2035 and $2,294,000 thereafter. The tax benefit of approximately $1,165,000 on the losses has not been recognized for tax purposes as there is no certainty that there will be adequate taxable income to utilize the losses.

As at December 31, 2020, there are share issue costs totaling approximately $26,000 (December 31, 2019 – $27,000), which have not been claimed for income tax purposes. The tax benefit of approximately $7,000 (December 31, 2019 - $7,000) has not been recognized for tax purposes as there is no certainty that there will be adequate taxable income to utilize the deductions.

As at December 31, 2020, the Company has unused investment tax credits of approximately $1,320,000 (December 31, 2019 - $1,320,000), of which $1,137,000 will expire in 2031, $87,000 in 2032 and $96,000 in 2033. The tax benefit of approximately $964,000 on the credits has not been recognized for tax purposes as there is no certainty that there will be adequate taxable income to utilize the credits.

Income tax attributes are subject to review, and potential adjustments, by tax authorities.

37

Silver Range Resources Ltd. Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and December 31, 2019

13. Supplemental cash flow information

Changes in non-cash operating working capital during the years ended December 31, 2020 and December 31, 2019 were comprised of the following:

were comprised of the following:
	December 31,	December 31,
	2020	2019
	$	$
Receivables and prepayments	(711)	(2,057)
Accounts payable and accrued liabilities	3,771	(6,225)
Accounts payable to related parties	2,006	6,669
Net change	5,066	(1,613)

The Company incurred non-cash financing and investing activities during the years ended December 31, 2020 and December 31, 2019, which were comprised of the following:

December 31, 2019, which were comprised of the following:
	December 31,	December 31,
	2020	2019
	$	$
Non-cash financing activities:
Lease paymentsincludedinaccounts payable and accruedliabilities (note14)	-	4,500
	-	4,500
Non-cash investing activities:
Prepayments included in accounts payable and accrued liabilities	-	1,350
Marketable securities received on optioned properties	(359,821)	(7,000)
Marketable securities received pursuant to Debt Settlement (note 4)	-	(12,000)
Depreciation included in mineral property interests (note 6)	17,780	17,781
Recognition of equipment as an ROU asset (note 7)	-	81,600
Deferred mineral property costs included in accounts payable and related party payables	17,808	32,069
Value of commitment to issue shares included in mineral property interests (note 9)	6,046	6,460
Value of shares issued included in mineral property interests	11,383	8,195
Mineral property option proceeds received by marketable securities	359,821	7,000
Mineralproperty optionproceedsincludedinother receivables	48,439	-
	101,456	135,455

During the years ended December 31, 2020 and December 31, 2019, no amounts were paid for interest or income tax expenses.

Cash and cash equivalents consist of the following:

tax expenses. Cash and cash equivalents consist of the following:
	December	31,	December 31,
	2020		2019
	$		$
Bank and broker balances	235,603		91,361
Cashable investment certificates		-	47,720
	235,603		139,081

38

Silver Range Resources Ltd. Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and December 31, 2019

14. Lease liability

Equipment lease

On April 30, 2019, the Company entered into a lease to purchase agreement with a third party for certain exploration equipment situated on its Silver Range project (note 7).

A reconciliation of the carrying amount of the lease liability as at December 31, 2020 and December 31, 2019, and for the years then ended is shown below. The lease commenced on April 30, 2019 and has a term of 4.5 years to November 30, 2023.

(1)	December 31, 2020 $ December 31, 2019 $
	Balance, beginning of year 64,432 - Additions - 81,600 Lease payments (18,000) (19,500) Lease interest (finance costs) 2,501 2,332
	Balance, end ofyear 48,933 64,432
	Current portion of lease liability 18,000 18,000 Non-current portion of lease liability 30,933 46,432
	48,933 64,432

• (1) As at December 31, 2020, none of the lease payments are included within accounts payable and accrued liabilities (December 31, 2019 - $4,500).

As at December 31, 2020, the total undiscounted amount of the estimated future cash flows to settle the Company’s lease liability over the remaining lease term is $52,500.

The Company’s minimum annual commitments are as follows:

ease liability over the remaining lease term is $52,500. The Company’s minimum annual commitments are as follows:
	Total
	Commitment
Fiscal Year	$
2021	18,000
2022	18,000
2023	16,500
Undiscounted amount of lease liability	52,500
Future finance charges	(3,567)
	48,933

39

Silver Range Resources Ltd. Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and December 31, 2019

15. Financial risk management

Capital management

The Company is a junior resource exploration company and considers items included in shareholders’ equity as capital. The Company has no debt and does not expect to enter into debt financing. The Company manages its capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of underlying assets. In order to maintain or adjust its capital structure, the Company may issue new shares, purchase shares for cancellation pursuant to normal course issuer bids or make special distributions to shareholders. The Company is not subject to any externally imposed capital requirements and does not presently utilize any quantitative measures to monitor its capital. The Company’s capital structure as at December 31, 2020, is comprised of shareholders’ equity of $5,109,489 (December 31, 2019 - $4,349,463).

The Company currently has no source of revenues. In order to fund future projects and pay for administrative costs, the Company will spend its existing working capital and raise additional funds as needed. The Company's ability to continue as a going concern on a long-term basis and realize its assets and discharge its liabilities in the normal course of business rather than through a process of forced liquidation is primarily dependent upon its ability to sell or option its mineral properties and its ability to borrow or raise additional financing from equity markets.

Financial instruments - fair value

The Company’s financial instruments consist of cash and cash equivalents, other receivables, marketable securities, reclamation deposits, accounts payable and accrued liabilities, and accounts payable to related parties.

The carrying value of other receivables, accounts payable and accrued liabilities, and accounts payable to related parties approximated their fair value because of the short-term nature of these instruments.

Financial instruments measured at fair value on the statements of financial position are summarized into the following fair value hierarchy levels:

• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.

• Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

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

	Level 1	Level 2	Level 3		Total
	$	$	$		$
December 31, 2020
Cash and cash equivalents	235,603	-		-	235,603
Marketable securities	595,172	41,273		-	636,445
Reclamation deposits	35,208	-		-	35,208
	865,983	41,273		-	907,256
December 31, 2019
Cash and cash equivalents	139,081	-		-	139,081
Marketable securities	177,327	22,291		-	199,618
Reclamation deposits	51,858	-		-	51,858
	368,266	22,291		-	390,557

40

Silver Range Resources Ltd. Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and December 31, 2019

15. Financial risk management (continued)

Financial instruments - risk

The Company’s financial instruments can be exposed to certain financial risks, including credit risk, interest rate risk, liquidity risk and market and currency risk.

(a) Credit risk

The Company is exposed to credit risk by holding cash and cash equivalents. This risk is minimized by holding the funds in Canadian banks or with Canadian governments. The Company has minimal receivables exposure as its refundable credits are due from the Canadian government.

(b) Interest rate risk

The Company is exposed to interest rate risk because of fluctuating interest rates. Fluctuations in market rates do not have a significant impact on the Company’s operations. For the year ended December 31, 2020, every 1% fluctuation in interest rates would have impacted income (loss) for the year by approximately $3,000 (2019 - $3,000) before income taxes.

(c) Liquidity risk

Liquidity risk is the risk that the Company is unable to meet its financial obligations as they come due. The Company manages this risk by careful management of its working capital to ensure its expenditures will not exceed available resources.

(d) Market risk

The Company is exposed to market risk because of the fluctuating values of its marketable securities. The Company has no control over these fluctuations and does not hedge its investments. Based on the December 31, 2020 portfolio value, every 10% increase or decrease in the share price of the securities would have impacted income (loss) for the year by approximately $64,000 (2019 - $20,000) before income taxes.

(e) Currency risk

The Company is exposed to currency risk because it holds funds and receivables in United States Dollars (“USD”), which, because of fluctuating exchange rates can create gains or losses at the time the funds are converted to Canadian dollars. The Company has no control over these fluctuations and does not hedge its foreign currency holdings. Based on its December 31, 2020 USD holdings, every 5% increase or decrease in the exchange rate would have impacted income (loss) for the year by approximately $1,000 (2019 - $3,000) before income taxes.

16. Events after the reporting period

• (a) On February 19, 2021, the Company signed an Asset Purchase Agreement with Silver47 Exploration Corp. (“Silver47”) to sell Silver47 a 100% interest in the Company’s Michelle project located in the Yukon, Canada.

To complete the purchase, Silver47 is required to:

• Issue to the Company 19.9% of Silver47’s common shares following a listing on a Canadian securities exchange before March 1, 2022;

• Grant the Company a 1% NSR royalty. Silver47 will have the right of first refusal on the sale of the royalty; and

• Making a one-time milestone payment of $1,000,000 in cash or Silver47 common shares upon the declaration of a NI 43-101 compliant resource or reserve estimate in excess of 80,000,000 ounces of silver.

• (b) On February 24, 2021, the Company closed a non-brokered private placement consisting of the issuance of 2,330,000 units at a price of $0.25 each, for gross proceeds of $582,500. Each unit consists of one common share and one share purchase warrant, with each warrant exercisable at $0.33 until February 24, 2024.

41