Silver Valley Metals Corp. - Interim / Quarterly Report 2021

OrganiMax Nutrient Corp. (An Exploration Stage Enterprise)

Condensed Consolidated Interim Financial Statements For the Six Months Ended December 31, 2020 and 2019

(Expressed in Canadian Dollars)

Responsibility for Financial Statements

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

The accompanying unaudited condensed consolidated interim financial statements of the Company have been prepared by and are the responsibility of the Company’s management.

The Company’s independent auditor has not performed a review of these condensed consolidated interim financial statements in accordance with standards established by Chartered Professional Accountants of Canada for the review of interim financial statements by an entity’s auditor.

OrganiMax Nutrient Corp.

(An Exploration Stage Enterprise)

Condensed Consolidated Interim Statements of Financial Position

(Expressed in Canadian Dollars)

	December 31,
As at	2020	June 30,2020
	$	$
ASSETS
Current
Cash	82,344	63,791
Amounts receivable	30,376	32,466
	112,720	96,257
Equipment (Note 4)	6,615	7,783
Exploration and evaluation assets (Note 5)	2,198,747	3,637,402
	2,318,082	3,741,442
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Current
Accounts payable and accrued liabilities (Note 8)	151,426	1,606,112
	151,426	1,606,112
Loan payable (Note 6)	40,000	40,000
	191,426	1,646,112
Shareholders' equity
Share capital (Note 7)	5,632,680	5,412,680
Reserves	8,205,701	8,205,701
Deficit	(11,711,725)	(11,523,051)
	2,126,656	2,095,330
	2,318,082	3,741,442

Nature of operations and going concern (Note 1)

These consolidated financial statements were authorized for issued by the Board of Directors on March 1, 2021. They are signed on the Company’s behalf by:

“ Timothy Mosey ”

_____ Director

“ Brandon Rook ”

_____ Director

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

OrganiMax Nutrient Corp.

(An Exploration Stage Enterprise)

Condensed Consolidated Interim Statements of Loss and Comprehensive Loss

For the three and six months ended December 31, 2020 and 2019 (Expressed in Canadian Dollars)

	Three months ended	December 31,	Six months ended December 31	Six months ended December 31
	2020	2019	2020	2019
	$	$	$	$
EXPENSES
Advertising and promotion	1,118	4,830	3,559	11,683
Consulting fees (Note 8)	-	22,100	-	52,600
Depreciation (Note 4)	406	580	812	1,160
General administrative	7,138	28,625	21,749	53,313
Professional fees (Note 8)	42,204	39,359	72,117	51,359
Salaries and wages (Note 8)	30,000	32,165	60,000	56,087
LOSS BEFORE OTHER ITEMS	(80,866)	(127,659)	(158,237)	(226,202)
OTHER ITEMS
Foreign exchange gain (loss)	563	(18,235)	(30,437)	(10,380)
Interest and other income	-	-	-	3,709
NET LOSS AND COMPREHENSIVE LOSS	(80,303)	(145,894)	(188,674)	(232,873)
Loss and comprehensive loss per share,
basic and diluted	(0.00)	(0.01)	(0.01)	(0.01)
Weighted average number of common shares outstanding,
basic and diluted	23,084,785	18,684,785	20,884,785	16,067,828

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

OrganiMax Nutrient Corp.

(An Exploration Stage Enterprise)

Condensed Consolidated Interim Statements of Changes in Shareholders' Equity

For the six months ended December 31, 2020 and 2019 (Expressed in Canadian Dollars)

	Number Subscriptions Received Total Shareholders’ of Shares Amount in Advance Reserves Deficit Equity Common Shares
Balance, June 30, 2019 Private placement Loss and comprehensive loss	(Note 7) $ $ $ $ $ 9,424,785 4,954,680 60,000 8,205,701 (11,386,296) 1,834,085 9,260,000 463,000 (60,000) - - 403,000 - - - - (232,873) (232,873)
Balance,December 31,2019	18,684,785 5,417,680 - 8,205,701 (11,619,169) 2,004,212
Balance, June 30, 2020 Private placement Loss and comprehensive loss	18,684,785 5,412,680 - 8,205,701 (11,523,051) 2,095,330 4,400,000 220,000 - - - 220,000 - - - - (188,674) (188,674)
Balance,December 31,2020	23,084,785 5,632,680 - 8,205,701 (11,711,725) 2,126,656

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

OrganiMax Nutrient Corp.

(An Exploration Stage Enterprise)

Condensed Consolidated Interim Statements of Cash Flows

For the six months ended December 31, 2020 and 2019

(Expressed in Canadian Dollars)

	2020	2019
	$	$
CASH USED IN:
OPERATING ACTIVITIES
Loss and comprehensive loss	(188,674)	(232,873)
Items not involving cash:
Depreciation	812	1,160
Changes in non-cash working capital items:
Amounts receivable	2,090	(8,836)
Prepaid expenses	-	(19,000)
Accounts payable and accrued liabilities	(15,675)	(151,911)
	(201,447)	(411,460)
FINANCING ACTIVITIES
Proceeds from share issuance, net of issue costs	220,000	403,000
	220,000	403,000
INVESTING ACTIVITIES
Exploration and evaluation assets expenditures	-	(5,130)
	-	(5,130)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	18,553	(13,590)
CASH AND CASH EQUIVALENTS, BEGINNING OF THE PERIOD	63,791	60,141
CASH AND CASH EQUIVALENTS,END OF THE PERIOD	82,344	46,551
Supplemental Cash Flow Information:
Income tax paid	-	-
Interestpaid	-	-

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

ORGANIMAX NUTRIENT CORP. (An Exploration Stage Enterprise) NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (Expressed in Canadian Dollars) For the Six Months Ended December 31, 2020 and 2019

1. NATURE OF OPERATIONS AND GOING CONCERN

OrganiMax Nutrient Corp. (the “Company”) was incorporated on July 10, 2003 under the laws of British Columbia. On April 28, 2016, the Company changed its name from Benton Capital Corp. to Alset Energy Corp. On May 3, 2017, the Company further changed its name to Alset Minerals Corp., and retained the same ticker symbol “ION” on the TSX Venture Exchange. On August 28, 2018, the Company further changed its name to OrganiMax Nutrient Corp. and ticker symbol to “KMAX” on the TSX Venture Exchange. The Company is an exploration stage company which engages in the business of acquisition, exploration and development of mineral properties in Canada and Mexico. The Company’s head office is located at Suite 1400 – 1040 West Georgia Street, Vancouver, B.C., V6E 4H8. The Company began trading on the TSX Venture Exchange in April 2005.

The Company had a working capital deficiency of $38,706 (June 30, 2020 – $1,509,855) and a deficit of $11,711,725 (June 30, 2020 - $11,523,051) as at December 31, 2020, which has been funded mainly by the issuance of equity. The accompanying consolidated financial statements have been prepared on the basis that the Company will continue as a going concern, which assumes the realization of assets and the settlement of liabilities in the normal course of business. The appropriateness of the going concern assumption is dependent upon the Company’s ability to generate future profitable operations and/or generate continued financial support in the form of equity financings. These material uncertainties may cast significant doubt regarding the Company’s ability to continue as a going concern. These consolidated financial statements do not reflect any adjustments to the carrying values of assets and liabilities and the reported expenses and the financial position classification that would be necessary if the going concern assumption were not appropriate and such adjustments could be material.

In March 2020, the World Health Organization declared a global pandemic related to the virus known as Covid-19. The expected impacts on global commerce are anticipated to be far reaching. To date there have been significant effects on the world’s equity markets and the movement of people and goods has become restricted. As the Company does not have production activities, the ability to fund ongoing exploration is affected by the availability of financing. Due to market uncertainty, the Company may be restricted in its ability to raise additional funding. The impact of these factors on the Company is not yet determinable; however, they may have a material impact on the Company's financial position, results of operations and cash flows in future periods. It is not possible to reliably estimate the length and severity of these developments and the impact on the financial results and condition of the Company and its operations in future periods.

2. BASIS OF PREPARATION

Statement of Compliance

These condensed consolidated interim financial statements have been prepared in accordance with IAS 34, Interim Financial Reporting of International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) applicable to the preparation of the condensed consolidated interim financial statements. The accounting policies followed in these consolidated financial statements are the same as those applied in the audited annual consolidated financial statements for the Company for the year ended June 30, 2020.

These condensed consolidated interim financial statements of the Company for the six months ended December 31, 2020 were reviewed, approved and authorized for issue by the Board of Directors on March 1, 2021.

Basis of Measurement

These consolidated financial statements have been prepared on an accrual basis, except for cash flow information, and are based on historical costs except for certain financial instruments, which are measured at fair value. The consolidated financial statements are presented in Canadian dollars which is also the functional currency of the Company and its subsidiary.

2. BASIS OF PREPARATION (continued)

Basis of Consolidation

These consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary Grupo Minero Alset, S.A. de. C.V. (“Grupo”) in Mexico. Grupo was incorporated on June 7, 2016. All inter-company balances and transactions have been eliminated on consolidation.

Use of Accounting Judgments, Estimates and Assumptions

The preparation of the Company’s consolidated financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the reported amounts of assets, liabilities and contingent liabilities as at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates and assumptions are continuously evaluated and are based on management’s experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. However, actual outcomes can differ from these estimates.

The effect of a change in an accounting estimate is recognized prospectively by including it in comprehensive loss in the period of the change, if the change affects that period only, or in the period of the change and future periods, if the change affects both.

The areas which require management to make significant judgments, estimates and assumptions in determining carrying values include, but are not limited to:

a) Exploration and Evaluation Expenditures

The application of the Company’s accounting policy for exploration and evaluation expenditure requires judgment in determining whether it is likely that future economic benefits will flow to the Company, which may be based on assumptions about future events or circumstances. Estimates and assumptions made may change if new information becomes available. If, after expenditures are capitalized, information becomes available suggesting that the recovery of the expenditures is unlikely, the amount capitalized is written off in the profit or loss in the period the new information becomes available.

b) Title to Mineral Properties

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.

c) Going Concern

The assessment of the Company’s ability to execute its strategy by funding future working capital requirements involves judgment. Management monitors future cash requirements to assess the Company’s ability to meet these future funding requirements. Further information regarding going concern is outlined in Note 1.

3. SIGNIFICANT ACCOUNTING POLICIES

Adoption of New Pronouncements

There were no new accounting standards, amendments and updates that would either be applicable or have a material effect upon adoption.

4. EQUIPMENT

	Computer Hardware and	Drilling and
	Software	Exploration Equipment	Total
	$	$	$
COST
Balance at June 30, 2019	16,571	4,313	20,884
Additions	-	874	874
Balance at June 30, 2020 and
December 31, 2020	16,571	5,187	21,758
DEPRECIATION
Balance at June 30, 2019	8,837	1,995	10,832
Depreciation	2,320	823	3,143
Balance at June 30, 2020	11,157	2,818	13,975
Depreciation	812	356	1,168
Balance at December 31, 2020	11,969	3,174	15,143
NET CARRYING AMOUNT AS AT
June 30, 2020	5,414	2,369	7,783
December 31,2020	4,602	2,013	6,615

5. EXPLORATION AND EVALUATION ASSETS

Mineral property acquisition, exploration and development expenditures are deferred until the properties are placed into production, sold, impaired or abandoned. These deferred costs will be amortized over the estimated useful life of the properties following commencement of production, or written-down if the properties are allowed to lapse, are impaired, or are abandoned. The deferred costs associated with each property for the six months ended December 31, 2020 and the year ended June 30, 2020 are summarized in the tables below:

	Lithium
	Salars
	$
Acquisition costs
Balance, June 30, 2020	1,656,217
Acquisition	-
Total, December 31, 2020	1,656,217
Exploration and evaluation costs
Balance, June 30, 2020	1,981,185
Depreciation	356
Taxes and duties	297,051
Cost recovery	(1,736,062)
Total,December 31,2020	542,530
Total, December 31, 2020	2,198,747
	Lithium
	Salars
	$
Acquisition costs
Balance, June 30, 2019	1,656,217
Acquisition	-
Total,June 30,2020	1,656,217
Exploration and evaluation costs
Balance, June 30, 2019	1,126,231
Depreciation	823
Field supplies and miscellaneous	2,055
Permitting and prospecting	544
Taxes and duties	851,532
Total, June 30, 2020	1,981,185
Total, June 30, 2020	3,637,402

5. EXPLORATION AND EVALUATION ASSETS (continued)

(a) Lithium Salars, Mexico

Pursuant to an agreement dated July 28, 2016 and amended on April 7, 2017 with MKG Mining Mexico, S.A. de C. V. (“MKG”), the Company acquired a 100% interest in lithium, potassium, boron soils, and brine salar assets located in Zacatecas and San Luis Potosi, Mexico, which includes four large concessions containing seven top priority salars namely, Caliguey, La Doncella, Colorada, La Salada, Santa Clara, Saldivar and Chapala. As consideration for the properties, the Company agreed to pay the outstanding mining taxes on the four concessions of $143,870 (paid) and US$210,000 to MKG. During the year ended June 30, 2017, the Company paid US$20,000 in cash and issued 700,505 common shares of the Company as payment of the remaining US$190,000 balance.

The Company also paid $44,587 as finder’s fee to an individual who became a director of the Company in March 2017.

The property is subject to a 2% net smelter royalty (“NSR”) of which 1% can be purchased by the Company for US$250,000. The property is also subject to a 0.25% NSR in favour of the finder mentioned above.

Pursuant to an agreement dated June 15, 2017, the Company entered into an assignment of mining rights and obligations agreement with Hot Spring Mining, S.A. de C.V. (“Hot Spring Mining”) to acquire two concessions located in Zacatecas and San Luis Potosi, Mexico. The Company agreed to issue 444,444 common shares to Hot Spring Mining as consideration for the properties (issued in August 2017). The Company also agreed to pay the outstanding mining taxes on the two concessions totaling $180,998. The properties are subject to a 2.5% NSR of which the Company has the right to purchase up to 1.5% for $1,500,000.

In November 2017, the Company completed the staking and filing of additional mineral claims for this property.

During the year ended June 30, 2019, the Company incurred acquisitions costs of $155,839 which consist of annual mining fees on the mining claims that make-up the property.

During the six months ended December 31, 2020, the Company has been successful in challenging the Mexican Mining Authority in the Federal Court of Administrative Justice to reduce its land position significantly focusing on its three primary salar assets and in so doing eliminating the past 3 years of back dated taxes charged by the government to the Company on its total land package. The judgment in favour has resulted in the Company’s accounts payable having been decreased by $1,736,062.

6. LOAN PAYABLE

On April 28, 2020, the Company received $40,000 under the Canada Emergency Business Account (“CEBA”). The loan is non-interest bearing and no principal repayments are required up to December 31, 2022. If the principal balance of $30,000 is repaid by December 31, 2022, then the remaining $10,000 of the principal balance will be forgiven. Any remaining balance after January 1, 2023 will be converted into a 3 year term loan with a fixed interest of 5% per annum, monthly interest-only payments and the outstanding balance must be repaid in full by December 31, 2025.

7. SHARE CAPITAL

Authorized:

Class A common - unlimited Class B common - unlimited Common shares - unlimited Issued: Class A common - Nil Class B common - Nil Common shares – 23,084,785 shares

Effective May 6, 2019, the Company completed a share consolidation on the basis of 3 pre-consolidation common shares for 1 post-consolidation common share. All references to common shares, options, and warrants and per common share amounts have been retroactively restated to reflect this share consolidation.

(a) Shares issued

On September 30, 2020 the Company closed a private placement through the issuance of 4,400,000 units at $0.05 per unit for gross proceeds of $220,000. Each unit consists of one common share and one share purchase warrant. Each full warrant entitles the holder to purchase an additional common share at $0.15 for 24 months from the date of closing of the private placement.

On August 21, 2019, the Company received approval from the TSX Venture Exchange for a non-brokered $0.05 unit private placement financing. The Company issued 9,260,000 units for gross proceeds of $463,000, each unit consisting one common share and one common share purchase warrant. $60,000 of these gross proceeds were received in the year ended June 30, 2019. Each warrant entitles the holder to purchase one common share at a price of $0.075 per share at any time within two years of the date of issuance.

(b) Stock options

The Company has adopted an incentive stock option plan for granting options to directors, employees and consultants. The exercise prices shall be determined by the board, but shall, in no event, be less than the closing market price of the Company’s shares on the grant date, less the maximum discount permitted under the TSX Venture Exchange’s policies. Options granted may not exceed a term of five years. All options vest upon grant unless otherwise specified by the Board of Directors.

7. SHARE CAPITAL (continued)

(b) Stock options (continued)

Details of stock option transactions for the six months ended December 31, 2020 and the year ended June 30, 2020 are detailed below.

		Weighted Average
	Number of Options	Exercise Price
		$
Balance, June 30, 2019	208,332	1.21
Expired and forfeited	(83,333)	0.99
Balance, June 30, 2020	124,999	1.35
Expired	-	-
Balance,December 31,2020	124,999	1.35

As at December 31, 2020, the following stock options were outstanding:

	Exercise
ExpiryDate	Price	Number of Options	Options Exercisable
	$
April 21, 2021	0.63	25,000	25,000
July 27, 2021	3.51	11,111	11,111
December 12, 2021	1.17	33,333	33,333
May10,2022	1.35	55,555	55,555
		124,999	124,999

The weighted average life of the options outstanding and exercisable at December 31, 2020 is 0.97 years (June 30, 2020 – 1.47 years).

7. SHARE CAPITAL (continued)

(c) Warrants

The changes in warrants during the six months ended December 31, 2020 and the year ended June 30, 2020 were as follows:

		Weighted Average
	Number of Warrants	Exercise Price
		$
Balance, June 30, 2019	1,908,626	0.510
Issued	9,260,000	0.075
Expired	(296,825)	0.900
Balance, June 30, 2020	10,871,801	0.130
Issued	4,400,000	0.150
Balance,December 31,2020	15,271,801	0.135

Warrants outstanding at December 31, 2020 were as follows:

ExpiryDate	Number of Warrants	Exercise Price
		$
April 13, 2021	1,378,361	0.450
April 13, 2021	233,440	0.360
August 21, 2021	9,260,000	0.075
September 30,2022	4,400,000	0.150
	15,271,801

8. RELATED PARTY TRANSACTIONS

The Company accrued the following amounts to related parties during the six months ended December 31, 2020 and 2019:

Payee	Description of Relationship	Nature of Transaction	2020	2019
			$	$
Gordon J. Fretwell Law	Company controlled by Gorden	Letgal fees and	6,234	10,175
Corporation	Fretwell, officer and former dirctor	consultingfees
Gilberto Zapata Casteneda	Former Director,and former CFO	Consultingfees	-	21,600
Bradonon Rook	CEO and director	Consulting fees and	60,000	62,308
		salaries and wages
Golden Tree Capital Corp.	Company controlled by Dong	Accounting fees	18,000	18,000
	Shim, CFO
SHIM & Associates LLP	Company controlled by Dong	Accounting fees	6,000	6,000
	Shim, CFO

The services provided by and fees charged by the related parties are in the normal course of operations and are measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties.

Amounts due to related parties as at December 31, 2020 and June 30, 2020 were as follows:

		December 31,	June 30,
Payee	Description of Relationship	2020	2020
		$	$
Gilberto Zapata Casteneda	Former Director, and former CFO	9,280	9,280
Albert Wu & Associates Ltd.	Companycontrolled byAlberta Wu,former CFO	4,620	4,620
Allan Laboucan	Former president, former CEO, and a former	36	36
	director
Golden Tree Capital Corp.	Companycontrolled byDongShim,CFO	30,500	12,600
SHIM & Associates LLP	Company controlled bu Dong Shim, CFO	8,500	8,500

The amounts due to related parties are included in accounts payable and are non-interest bearing, unsecured, and have repayment terms similar to other non-related party trade payables.

During the year ended June 30, 2020, the Company wrote-off accounts payable to Mr. Timothy Mosey and Golden Tree Capital Corp. in the amount of $21,500 and $7,950, respectively.

8. RELATED PARTY TRANSACTIONS (continued)

The Company has identified its directors and senior officers as its key management personnel. No post-employment benefits, other long-terms benefits and termination benefits were made during the six months ended December 31, 2020 and 2019.

Short-term key management compensation consists of the following for the six months ended December 31, 2020 and 2019:

	2020	2019
	$	$
Professional fees	30,234	34,175
Consulting fees	-	31,600
Salariesand wages	60,000	52,308
	90,234	118,083

9. CAPITAL DISCLOSURES

The Company’s objectives when managing capital are as follows:

To safeguard the Company’s ability to continue as a going concern;
To raise sufficient capital to finance its exploration activities on its mineral exploration properties;
To raise sufficient capital to meet its general and administrative expenditures.

The Company manages its capital structure and makes adjustments to it based on the general economic conditions, its short-term working capital requirements, and its planned exploration and development program expenditure requirement. The capital structure of the Company is composed of working capital (deficiency) and shareholders’ equity. The Company may manage its capital by issuing flow through or common shares, or by obtaining additional financing.

The Company utilizes annual capital and operating expenditure budgets to facilitate the management of its capital requirement. These budgets are approved by management and updated for changes in the budgets underlying assumptions as necessary.

There were no changes in the Company’s approach to managing capital during the current period. In order to maintain or adjust the capital structure, the Company considers the following;

i) incremental investment and acquisition opportunities;
ii) equity and debt capital available from capital markets;
iii) equity and debt credit;
iv) sale of assets;
vi) limiting the size of the investment program; and
vi) new share issuances if available on favorable terms.

Except as otherwise disclosed, the Company is not subject to any external financial covenants at December 31, 2020 and June 30, 2020.

10. FINANCIAL INSTRUMENTS AND FINANCIAL RISK

IFRS establishes a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy has the following levels:

Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities;

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

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

Fair Value of Financial Instruments

The Company’s financial assets include cash, which is classified as Level 1.

Assets measured at fair value on a recurring basis were presented on the Company’s consolidated statements of financial position as at December 31, 2020 and June 30, 2020 are as follows:

		Fair Value Measurements Using	Fair Value Measurements Using
	Quoted Prices in	Significant
	Active Markets	Other	Significant
	For Identical	Observable	Unobservable
	Instruments	Inputs	Inputs
	(Level 1)	(Level 2)	(Level	3)	Total
	$	$		$	$
Cash and cash equivalents
December 31, 2020	82,344	-		-	82,344
June 30,2020	63,791	-		-	63,791

Fair value

The fair value of the Company’s financial instruments approximates their carrying value as at December 31, 2020 and - June 30, 2020 because of the demand nature or short term maturity of these instruments.

The following table summarizes the carrying value of the Company’s financial instruments:

	December 31, 2020	June 30, 2020
	$	$
Fair value through profit and loss (i)	82,344	63,791
Amortized cost (ii)	191,426	1,646,112

(i) Cash (ii) Accounts payable and loan payable

10. FINANCIAL INSTRUMENTS AND FINANCIAL RISK (continued)

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

(a) Credit risk

Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. Financial instruments that potentially subject the Company to credit risk consist of cash. The Company’s cash are held through a large Canadian financial institution. Management believes the risk of loss to be remote.

(b) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. In management’s opinion, the Company is not exposed to significant interest rate risk.

(c) Liquidity risk

Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities. The Company’s approach to managing liquidity risk is to ensure that it will have sufficient liquidity to meet liabilities when due. The Company monitors and reviews current and future cash requirements and matches the maturity profile of financial assets and liabilities. This is generally accomplished by ensuring that cash is always available to settle financial liabilities. At December 31, 2020, the Company had cash on hand of $82,344 (June 30, 2020 - $63,791) available to settle current liabilities of $151,426 (June 30, 2020 - $1,606,112). All of the Company’s financial liabilities have contractual maturities of less than 30 days and are subject to normal trade terms.

(d) Currency risk

The Company’s functional currency is the Canadian dollar. The Company is primarily exposed to currency fluctuations related to accounts payable and accrued liabilities and payment obligations for exploration and evaluation that are denominated in Mexican Pesos. As at December 31, 2020, the Company had net current liabilities of $29,077 (June 30, 2020 – net current liabilities of $1,452,864) denominated in Mexican Pesos which was translated at 0.06404 pesos to $1 (June 30, 2020 - 0.05905). The Company does not actively manage this risk.

(e) Market risk

Market risk is the risk of loss that may arise from changes in market factors such as market prices, foreign exchange rates and interest rates. In management’s opinion, the Company is not exposed to significant market risk.

11. SEGMENTED INFORMATION

The Company currently operates in two geographical operating segments, the exploration of mineral properties in Canada and Mexico. Management of the Company makes decisions about allocating resources based on the operating segments. A geographic summary of identifiable assets and liabilities by country is as follows:

As at December 31, 2020
	Canada	Mexico	Total
	$	$	$
Equipment	4,601	2,014	6,615
Exploration and evaluation assets	-	2,198,747	2,198,747

As at June 30, 2020
	Canada	Mexico	Total
	$	$	$
Equipment	5,414	2,369	7,783
Exploration and evaluation assets	-	3,637,402	3,637,402

12. SUBSEQUENT EVENTS

On February 10, 2021, the Company granted 2,150,000 stock options to directors, officers and consultants of the Company with an exercise price of $0.20 per share for a term of five years.

In February 2021, the Company entered into a binding letter of intent with Blackhawk Exploration LLC (“Blackhawk”) providing the Company with the option to acquire a 100% interest in the past producing Government Gulch Silver project in the Silver Valley, Coeur d’Alene Mining District, Idaho USA (the “Option”). The Company may exercise the Option by paying US$650,000 and incurring US$3,000,000 of exploration expenditures on the property to earn a 75% interest in the property as follows:

Pay a non-refundable deposit of US$20,000 upon execution of the binding letter of intent
Pay US$130,000 upon approval of the Option by the TSX Venture Exchange
Pay US$250,000 and completing a minimum of US$600,000 of expenditures on the property by the first anniversary of the option date
Pay an additional US$250,000 and completing an additional minimum of US$600,000 of expenditures on the property by the second anniversary of the option date
Completing an additional minimum of US$1,200,000 of expenditures on the property by the third anniversary of the option date
Completing an additional $600,000 of expenditures on the property by the fourth anniversary of the option date

Upon the Company acquiring a 75% interest in the property, the Company shall have the right to either:

Cause the parties to form a joint venture with terms consistent with the usual industry practice including a provision for a participant’s interest to be converted to a 2% NSR if its interest is diluted to less than a 10% interest. The Company has the right, at any time after the NSR takes effect to purchase one half of the NSR by making a payment of US$1,000,000 and has the right of first refusal to purchase the remainder of the NSR; or

Purchase Blackhawk’s 25% interest at a price to be negotiated between Blackhawk and the Company with both parties acting diligently and in good faith to arrive at a mutually acceptable purchase price. If the parties do not come to agreement on the purchase price, the Company, at its option, can either pay US$2,000,000 or issue US$2,000,000 worth of shares of the Company to Blackhawk priced at the 20 day volume weighted average price following the date that the Company acquires the 75% interest.

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Silver Valley Metals Corp. — Interim / Quarterly Report 2021

45539_rns_2021-03-02_830e609c-e222-41ea-9832-b7ea5ac9ecfd.pdf

Responsibility for Financial Statements

OrganiMax Nutrient Corp.

Condensed Consolidated Interim Statements of Financial Position

OrganiMax Nutrient Corp.

(An Exploration Stage Enterprise)

Condensed Consolidated Interim Statements of Loss and Comprehensive Loss

OrganiMax Nutrient Corp.

Condensed Consolidated Interim Statements of Changes in Shareholders' Equity

OrganiMax Nutrient Corp.

Condensed Consolidated Interim Statements of Cash Flows

1. NATURE OF OPERATIONS AND GOING CONCERN

2. BASIS OF PREPARATION

Statement of Compliance

Basis of Measurement

2. BASIS OF PREPARATION (continued)

Basis of Consolidation

Use of Accounting Judgments, Estimates and Assumptions

a) Exploration and Evaluation Expenditures

b) Title to Mineral Properties

c) Going Concern

3. SIGNIFICANT ACCOUNTING POLICIES

Adoption of New Pronouncements

4. EQUIPMENT

5. EXPLORATION AND EVALUATION ASSETS

5. EXPLORATION AND EVALUATION ASSETS (continued)

(a) Lithium Salars, Mexico

6. LOAN PAYABLE

7. SHARE CAPITAL

(a) Shares issued

(b) Stock options

7. SHARE CAPITAL (continued)

(b) Stock options (continued)

7. SHARE CAPITAL (continued)

(c) Warrants

8. RELATED PARTY TRANSACTIONS

8. RELATED PARTY TRANSACTIONS (continued)

9. CAPITAL DISCLOSURES

10. FINANCIAL INSTRUMENTS AND FINANCIAL RISK

10. FINANCIAL INSTRUMENTS AND FINANCIAL RISK (continued)

(a) Credit risk

(b) Interest rate risk

(c) Liquidity risk

(d) Currency risk

(e) Market risk

11. SEGMENTED INFORMATION

12. SUBSEQUENT EVENTS

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Silver Valley Metals Corp. Interim / Quarterly Report 2021