SILVER WOLF EXPLORATION LTD.

Condensed Consolidated Interim Financial Statements

For three and the nine months ended September 30, 2023 and 2022

(Unaudited)

MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL REPORTING

The condensed consolidated interim financial statements of Silver Wolf Exploration Ltd. (the "Company") are the responsibility of the Company's management. The condensed consolidated interim financial statements are prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board, and reflect management's best estimates and judgment based on information currently available.

Management has developed and is maintaining a system of internal controls to ensure that the Company's assets are safeguarded, transactions are authorized and properly recorded and financial information is reliable.

The Board of Directors is responsible for ensuring management fulfills its responsibilities, and reviews the results of the audit and reviews the condensed consolidated interim financial statements prior to their approval.

The condensed consolidated interim financial statements as at September 30, 2023, and for the periods ended September 30, 2023 and 2022, have not been reviewed or audited by the Company's independent auditors.

"David Wolfin" "Nathan Harte"

David Wolfin Nathan Harte, CPA

Chairman & CEO Chief Financial Officer November 27, 2023 November 27, 2023

Silver Wolf Exploration Ltd. Condensed Consolidated Interim Statements of Financial Position Expressed in Canadian Dollars - Unaudited

	Note	September 30, 2023 (Unaudited)		December 31, 2022
ASSETS
Current Assets
Cash		\$	69,915	\$ 208,715
Sales taxes receivables and other			163,296	122,628

Non-Current Assets			233,211	331,343
Investments	4		7,475	13,649
Exploration and evaluation assets	5		1,739,421	1,354,363
Property and equipment	6		25,349	30,877
Reclamation deposit	8		3,000	3,000

TOTAL ASSETS		\$	2,008,456	\$ 1,733,232

LIABILITIES
Current Liabilities
Trade and other payables		\$	139,404	\$ 110,424
Current portion of lease liability	7		8,548	7,828
Due to related parties	10		513,704	246,394
			661,656	364,646
Non-Current Liabilities
Lease liability	7		5,384	11,882
Site restoration obligation			3,000	3,000
			670,040	379,528

SHAREHOLDERS' EQUITY
Share capital	9		6,623,015	6,546,765
Contributed surplus			612,771	641,421
Accumulated other comprehensive income			115,278	4
Deficit			(6,012,648)	(5,834,486)
			1,338,416	1,353,704

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY		\$	2,008,456	\$ 1,733,232

Note 1 – Nature of Operations and Going Concern

These condensed consolidated interim financial statements are authorized for issue by the Board of Directors on November 27, 2023:

"David Wolfin" Director "Stephen Williams" Director

Silver Wolf Exploration Ltd. Condensed Consolidated Interim Statements of Operations and Comprehensive Income (Loss) Expressed in Canadian Dollars - Unaudited

	Three months ended September 30,				Nine months ended September 30,
Note		2023		2022	2023		2022
General and Administrative Expenses
Administrative benefits and salaries	\$	10,669	\$	9,887	\$ 33,220	\$	53,954
Automobile		274		274	823		1,006
Consulting fees		7,500		7,500	22,500		25,202
Depreciation		1,136		1,136	3,409		6,169
Foreign exchange (gain) loss		(3,691)		(69,230)	1,828		(53,476)
Interest and bank charges		389		1,477	2,266		6,429
Listing and filing fees		1,517		7,956	16,232		31,488
Office and miscellaneous		2,721		16,221	6,865		50,668
Professional fees		29,403		28,437	50,839		28,642
Share-based compensation		-		62,100	-		304,500
Shareholder information		7,768		51,115	29,440		73,783
Transfer agent fees		6,023		6,972	13,140		12,221
Operating Loss		(63,709)		(123,845)	(180,562)		(540,586)

Other Comprehensive Income (Loss):
Items that will not subsequently be re-classified to net income: Unrealized gain (loss) on
investment securities 4		(1,950)		(4,875)	(6,175)		20,325
Reclassification of accumulated
loss on investment sold 4 Currency translation differences		- (36,919)		- (2,152)	- 121,449		357,265 706

Total Comprehensive Loss	\$	(102,578)	\$	(130,872)	\$ (65,288)	\$	(162,290)
Basic and Diluted Loss per Share	\$	(0.00)	\$	(0.00)	\$ (0.01)	\$	(0.02)
Weighted Average Number of Shares Outstanding		35,763,500		35,263,500	35,631,632		32,729,762

Silver Wolf Exploration Ltd. Condensed Consolidated Interim Statements of Changes in Equity Expressed in Canadian Dollars - Unaudited

		Number of		Contributed	Accumulated	Accumulated Other Comprehensive
	Note	Common Shares	Share Capital	Surplus	Deficit	Income (Loss)	Total Equity
Balance, January 1, 2022		30,998,766	\$ 6,065,144	\$ 591,542	\$ (5,101,144)	\$ (545,831)	\$ 1,009,711
Common shares issued for cash:
Private placement		4,014,734	441,621	-	-	-	441,621
Issuance of shares for Option Agreement	5, 9	250,000	40,000	160,589	-	-	200,589
Share-based compensation		-	-	304,500	-	-	304,500
Stock options cancelled or expired				(323,000)	323,000	-	-
Net loss for the period Reclassification of accumulated losses on		-	-	-	(540,586)	-	(540,586)
investments sold	4	-	-	-	(357,265)	357,265	-
Other comprehensive income for the period		-	-	-	-	21,031	21,031
Balance, September 30, 2022		35,263,500	\$ 6,546,765	\$ 773,631	\$ (5,675,995)	\$ (167,535)	\$ 1,436,866

Balance, January 1, 2023		35,263,500	\$ 6,546,765	\$ 641,421	\$ (5,834,486)	\$ 4	\$ 1,353,704
Issuance of shares for Option Agreement	5, 9	500,000	50,000	-	-	-	50,000
Warrants expired			26,250	(26,250)	-	-	-
Stock options cancelled or expired				(2,400)	2,400		-
Net loss for the period		-	-	-	(180,562)	-	(180,562)
Other comprehensive income for the period		-	-	-	-	115,274	115,274
Balance, September 30, 2023		35,763,500	\$ 6,623,015	\$ 612,771	\$ (6,012,648)	\$ 115,278	\$ 1,338,416

Silver Wolf Exploration Ltd. Condensed Consolidated Interim Statements of Cash Flows Expressed in Canadian Dollars - Unaudited

	For the nine months ended September 30,
		2023		2022
Cash provided by (used in):
Operating Activities
Net Loss	\$	(180,562)	\$	(540,586)
Items not involving cash in the period
Share-based compensation		-		304,500
Interest charges		1,083		3,371
Depreciation		6,547		6,169
Foreign exchange movements		(13,180)		(14,216)
Changes in non-cash working capital items:
Sales taxes recoverable and other		(40,668)		(96,798)
Trade and other payables		28,979		(110,114)
Due to related parties		267,310		176,678
		69,509		(270,996)

Financing Activities
Issuance of common shares or units for cash, net		-		602.210
Finance lease payments		(6,860)		(11,878)
		(6,860)		590,332

Investing Activities
Proceeds from disposition of investments		-		50,383
Additions to machinery and equipment		-		1,581
Exploration and evaluation expenditures		(201,449)		(421,471)
		(201,449)		(369,507)

Change in Cash		(138,800)		(50,171)
Cash, Beginning of Period		208,715		364,784
Cash, End of Period	\$	69,915	\$	314 ,613

Supplementary Disclosure of Cash Flow Information
Shares issued for Option Agreement payments	\$	50,000	\$	40,000
Interest paid	\$	-	\$	-
Income taxes paid	\$	-	\$	-

1. NATURE OF OPERATIONS AND GOING CONCERN

Silver Wolf Exploration Ltd. (formerly Gray Rock Resources Ltd.) ("Silver Wolf" or the "Company") was incorporated under the laws of the Province of British Columbia, Canada. It is in the exploration stage with regards to its business of the exploration and development of mineral properties. The Company has an option on the Ana Maria and Laberinto properties in Durango, Mexico. The Company's head office and principal place of business is Suite 900, 570 Granville Street, Vancouver, BC, Canada.

Silver Wolf is in the exploration stage and has not yet determined whether the properties contain ore reserves which are economically recoverable. The underlying carrying value of the mineral property interest and related exploration and evaluation assets is dependent upon the existence of economically recoverable reserves, confirmation of Silver Wolf's interest in the mineral claims, the ability of Silver Wolf to obtain necessary financing to complete the exploration and development, and future profitable production or proceeds from the sale of all or an interest in its mineral claims.

These condensed consolidated interim financial statements have been prepared on a going concern basis, which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business. As at September 30, 2023, the Company has a working capital deficit of \$428,445 and accumulated losses of \$6,012,648. The Company has not yet generated any revenues from its operations and requires financing through the sale of shares or issuance of debt to continue with its operations and to develop its mineral properties. Although management intends to secure additional financing, there is no assurance that management will be successful in its efforts to secure additional financing, or that it will ever develop a selfsupporting business. These factors together form a material uncertainty that raises significant doubt about the Company's ability to continue as a going concern. These condensed consolidated interim financial statements do not include any adjustments that might result from the outcome of this uncertainty.

2. BASIS OF PRESENTATION

Statement of compliance

These unaudited condensed consolidated interim financial statements have been prepared in accordance with International Accounting Standard ("IAS") 34 – Interim Financial Reporting under International Financial Reporting Standards ("IFRS") issued by the International Accounting Standards Board ("IASB"). These unaudited condensed consolidated interim financial statements follow the same accounting policies and methods of application as the most recent annual audited consolidated financial statements of the Company. These unaudited condensed consolidated interim financial statements do not contain all of the information required for full annual consolidated financial statements. Accordingly, these unaudited condensed consolidated interim financial statements should be read in conjunction with the Company's December 31, 2022, annual consolidated financial statements, which were prepared in accordance with IFRS as issued by the IASB.

Significant Accounting Judgments and Estimates

The preparation of these condensed consolidated interim financial statements requires management to make judgements and estimates that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of expenses during the reporting period. Actual outcomes could differ from these judgements and estimates. The condensed consolidated interim financial statements include judgements and estimates, which, by their nature, are uncertain. The impacts of such judgements and estimates are pervasive throughout the condensed consolidated interim financial statements and may require accounting adjustments based on future occurrences. Revisions to accounting estimates are recognized in the period, in which the estimate is revised, and may affect both current and future periods.

The critical judgments and estimates applied in the preparation of the Company's unaudited condensed consolidated interim financial statements for the nine months ended September 30, 2023, are consistent with those applied and disclosed in Note 2 to the Company's audited consolidated financial statements for the year ended December 31, 2022.

Functional Currency

The presentation and functional currency of the Company and its subsidiary is the Canadian dollar.

Foreign Currency Translation

Transactions in currencies other than the functional currency are recorded at the rates of exchange prevailing on dates of transactions. At each financial position reporting date, monetary assets and liabilities that are denominated in foreign currencies are translated at the rates prevailing at the date of the condensed consolidated interim statement of financial position. Non-monetary items that denominated in foreign currencies are translated at historical rates.

Basis of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries:

Cortez, a company incorporated on June 21, 2006 in Nevada, USA.
Compania Minera Mexicana de Gray Rock, S.A. de C.V., a company incorporated under the Mexican United States law on July 21, 2020.

Inter-company balances and transactions, including unrealized income and expenses arising from intercompany transactions, are eliminated on consolidation.

3. RECENT ACCOUNTING PRONOUNCEMENTS

New and amended IFRS that are effective for the current year:

In the current year, the Company has applied the below amendments to IFRS Standards and Interpretations issued by the IASB that were effective for annual periods that begin on or after January 1, 2023. These standards did not have a material impact on the Company's disclosures or on the amounts in the current reporting periods.

Amendments to IAS 1 – Presentation of Financial Statements and IFRS Practice Statement 2 Making Material Judgments – Disclosure of Accounting Policies

The amendments change the requirements in IAS 1 with regards to disclosure of accounting policies. The amendments replace all instances of the term "significant accounting policies" with "material accounting policy information." Accounting policy information is material if, when considered together with other information included in an entity's financial statements, it can reasonable by expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements.

The supporting paragraphs in IAS 1 are also amended to clarify that accounting policy information that relates to immaterial transactions, other events, or conditions, is immaterial and not required to be disclosed. Accounting policy information may be material because of the nature of the related transactions, other events, or conditions, even of the amounts are immaterial. However, not all accounting policy information relating to material transactions, other events, or conditions, is itself material. The IASB has also developed guidance and examples to explain and demonstrate the application of the "four-step materiality process" described in IFRS Practice Statement 2.

The amendments were applied effective January 1, 2023, and did not have a material impact on the Company's interim consolidated financial statements.

Amendments to IAS 8 – Accounting Policies, Changes in Accounting Estimates and Errors – Definition of Accounting Estimates

The amendments replace the definition of a change in accounting estimates with a definition of accounting estimates. Under the new definition, accounting estimates are "monetary amounts in financial statements that are subject to measurement uncertainty."

The definition of a change in accounting estimates was deleted; however, the IASB retained the concept of changes in accounting estimates in the Standard with the following clarifications:

A change in accounting estimate that results from new information or new developments is not a correct of an error
The effects of a change in an input or a measurement technique used to develop an accounting estimate are changes in accounting estimates if they do not result from the correction of prior period errors

The amendments were applied effective January 1, 2023, and did not have a material impact on the Company's interim consolidated financial statements.

Amendments to IAS 12 – Deferred Tax Related to Assets and Liabilities Arising from a Single Transaction

The amendments clarify that companies are required to recognize deferred taxes on transactions where both assets and liabilities are recognized, such as with leases and decommissioning liabilities. The amendments were applied effective January 1, 2023, and did not have a material impact on the Company's interim consolidated financial statements.

Future Changes in Accounting Policies Not Yet Effective as at September 30, 2023:

Certain new accounting standards and interpretations have been published that are not mandatory for the current period and have not been early adopted. These standards are not expected to have a material impact on the Company in the current or future reporting periods.

Amendments to IAS 1 – Classification of Liabilities as Current or Non-Current with Covenants

The amendments aim to promote consistency in applying the requirements by helping companies determine whether, in the statement of financial position, debt and other liabilities with an uncertain settlement date should be classified as current (due or potentially due to be settled within one year) or non-current.

In addition, the amendment requires entities to disclose information to enable users of the financial statements to understand the risk that non-current liabilities with covenants could become repayable within twelve months. The amendments are applied on or after the first annual reporting period beginning on or after January 1, 2024, with early application permitted. The amendment is not expected to have a material impact on the Company's consolidated financial statements.

Amendments to IFRS 16 – Lease Liability in a Sale and Leaseback

The amendments require a seller/lessee to subsequently measure lease liabilities arising from a leaseback in a way that it does not recognize any amount of the gain or loss that relates to the right of use it retains. The new requirements do not prevent a seller/lessee from recognizing in profit or loss any gain or loss relating to the partial or full termination of a lease. A seller-lessee applies the amendments retrospectively in accordance with IAS 8 Accounting Policies, Change in Accounting Estimates and Errors to sale or leaseback transactions entered into after the date of initial application.

The amendments are applied on or after the first annual reporting period beginning on or after January 1, 2024, with early application permitted. The amendment is not expected to have a material impact on the Company's consolidated financial statements.

4. INVESTMENTS

Investments consist of the following:

			Accumulated	September	December 31,
	Number of		Unrealized	30, 2023	2022
	Shares	Cost	Gain/(Loss)	Fair Value	Fair Value
Garibaldi Resources Corp	65,000	\$ 202,800	\$ (193,375)	\$ 7,475	\$ 13,650
		\$ 202,800	\$ (193,375)	\$ 7,475	\$ 13,650

5. EXPLORATION AND EVALUATION ASSETS

Exploration and evaluation assets consist of the following:

	Ana Maria & El
	Laberinto Option	Total
Balance, January 1, 2022	\$ 784,713	\$ 784,713
Exploration costs incurred during the year:
Geological consulting	251,355	251,355
Field expenditures	153,773	153,773
Taxes and Licensing	70,753	70,753
Acquisition costs	40,000	40,000
Assays	24,472	24,472
Foreign exchange	29,297	29,297
Balance, December 31, 2022	1,354,363	1,354,363
Exploration costs incurred during the year:
Acquisition costs	50,000	50,000
Field expenditures	99,441	99,441
Taxes and Licensing	102,008	102,008
Foreign exchange	133,609	133,609
Balance, September 30, 2023	\$ 1,739,421	\$ 1,739,421

a) Ana Maria & Laberinto Properties

During 2020, the Company announced the signing of an option agreement (the "Option Agreement") with Avino Silver & Gold Mines Ltd. ("Avino"), a company with directors and management in common, as optionor. Pursuant to the terms of the Option Agreement, the Company was granted the exclusive right to acquire an 100% interest in the Ana Maria and El Laberinto properties in Mexico (the "Option"), in consideration of the issuance to Avino of share purchase warrants to acquire 300,000 common shares of the Company at an exercise price of \$0.20 per share for a period of 36 months from the date of the TSX Venture Exchange's final approval date of the Option Agreement of March 8, 2021.

During year ended December 31, 2021, the Company received final acceptance from the TSX Venture Exchange and issued to Avino the share purchase warrants to acquire 300,000 common shares and issued 131,718 common shares at an average price of \$0.3796, valued at \$50,000, to satisfy the terms laid out in Item 1 a) of the Option Agreement

In order to exercise the Option, the Company will:

1. Pay or issue to Avino a total of \$600,000 in cash or common shares of the Company as follows:
a. \$50,000 in common shares of the Company within 30 days of March 8, 2021;
b. A further \$50,000 on or before March 8, 2022;
c. A further \$100,000 on or before March 8, 2023;
d. A further \$200,000 on or before March 8, 2024; and
e. A further \$200,000 on or before March 8, 2025; and
1. Incur a total of \$750,000 in exploration expenditures on the properties, as follows:
a. \$50,000 on or before March 8, 2022;
b. A further \$100,000 on or before March 8, 2023; and
c. A further \$600,000 on or before March 8, 2025.

All share issuances will be based on the average volume weighted trading price of the Company's shares on the TSX Venture Exchange for the ten (10) trading days immediately preceding the date of issuance of the shares, and the shares will be subject to resale restrictions under applicable securities legislation for 4 months and a day from their date of issue.

Any exploration expenditures in excess of any period stated above will be applied towards the next succeeding period's minimum requirements. During the option period, the Company will also assume liability and be responsible for all required semi-annual property payments required to maintain the properties in good standing.

The Company also granted to Avino a right of first refusal on 60 days' notice to Avino to purchase and process any ore or concentrate extracted from the properties under a custom milling contract at Avino's mine facilities.

During the nine months ended September 30, 2023, the Company issued 500,000 common shares to Avino as part of the terms outlined in 1.c. in the Option Agreement, and as of the date of these financial statements, all requirements have been fulfilled within the timeline of the Option Agreement outlined above.

Ana Maria Property

The Ana Maria property is located 21 kilometres (km) northwest of the City of Gómez Palacio and the adjacent City of Torreón, and 1 km north of the town of Dinimita, in the municipality of Gómez Palacio, Durango, Mexico. The claims are located in the Minitas mining district in the Guadalupe Victoria mining region. The property consists of 9 mining concessions encompassing 2,549 hectares ("ha").

Laberinto Project

The Laberinto Project is located in the "Sierra de la Silla" northwest of the town of Francisco I. Madero in the municipality of Panuco de Coronado. It is approximately 60 kilometres northeast of the city of Durango City, México. The property consists of mining concession encompassing 91.7 ha.

6. PROPERTY AND EQUIPMENT

	Right of Use Asset (Note 7)	Office equipment, furniture, and fixtures	Computer equipment	Machinery and equipment	Total
	\$	\$	\$	\$	\$
COST
Balance at January 1, 2022	97,534	2,762	8,891	2,741	111,928
Additions / Transfers Effect of movements in	(53,109)	-	-	-	(53,109)
exchange rates	-	349	973	356	1,678
Balance at December 31, 2022	44,425	3,111	9,864	3,097	60,497
Additions / Transfers Effect of movements in	-	-	-	-	-
exchange rates	-	228	511	280	1,019
Balance at September 30, 2023	44,425	3,339	10,375	3,377	61,516

ACCUMULATED DEPLETION AND DEPRECIATION
Balance at January 1, 2022	16,566	168	1,669	101	18,504
Additions / Transfers Effect of movements in exchange rates	7,306 -	627 -	3,027 -	156 -	11,114 -
Balance at December 31, 2022	23,872	795	4,696	257	29,620
Additions / Transfers Effect of movements in exchange rates	3,409 -	516 -	2,494 -	128 -	6,547 -
Balance at September 30,
2023	27,281	1,311	7,190	385	36,167
NET BOOK VALUE
At September 30, 2023	17,144	2,028	3,185	2,992	25,349
At December 31, 2022	20,553	2,316	5,168	2,840	30,877
At January 1, 2022	80,968	2,594	7,222	2,640	93,424

7. LEASE LIABILITY & RIGHT-OF-USE ASSET

(a) Right-of-use asset

The Company shares office space with other companies related to it by virtue of certain directors and management in common (Note 10). In 2020 the Company recognized a right-of-use asset in relation to its share of office space lease allocated through Oniva International Services Corp. ("Oniva")

	September 30,	December 31,
	2023	2022
Balance, beginning	\$ 20,553	\$ 80,968
Changes to lease terms	-	(53,109)
Depreciation	(3,409)	(7,306)
Balance, ending	\$ 17,144	\$ 20,553

(b) Lease liability

The contractual maturities and interest charges in respect of the Company's lease obligations in connection with its share of the office lease are as follows:

	September 30,			December 31,
		2023		2022
Not later than one year	\$	9,367	\$	9,186
Later than one year and not later than five years		5,503		12,545
Less: future interest charges		(938)		(2,021)
Present value of lease payments		13,932		19,710
Less: current portion		(8,548)		(7,828)
Non-current portion	\$	5,384	\$	11,882

During the nine months ended September 30, 2023, the Company and Oniva amended the share of rental expense allocated to Silver Wolf. As a result, the Company recognized a lease modification and adjusted the right-of-use asset and lease liability accordingly as noted above.

Payments relating to short-term leases recognized as an expense during the nine months ended September 30, 2023, totalled \$Nil (2022 - \$Nil ).

Amounts Recognized in Statement of Cash Flows

Cash payments relating to short-term leases during the nine months ended September 30, 2023, totalled \$Nil (2022 - \$Nil).

8. RECLAMATION DEPOSIT

As at September 30, 2023 and December 31, 2022, the Company has hypothecated a term deposit in the amount of \$3,000 as security to the Province of British Columbia for future mineral claims site reclamation costs.

9. SHARE CAPITAL

(a) Authorized: Unlimited common shares without par value.
(b) Issued:
(i) During the nine months ended September 30, 2023, the Company issued 500,000 common shares at an average price of \$0.10, valued at \$50,000, to satisfy the terms laid out in Item 1 c) of the Option Agreement. For full details of the Option Agreement, see Note 5.
(ii) During the year ended December 31, 2022, the Company closed a non-brokered private placement of 4,014,734 shares at a price of \$0.15 per unit for gross proceeds of \$602,160. The Company also issued 250,000 common shares at an average price of \$0.16, valued at \$40,000, to satisfy the terms laid out in Item 1 b) of the Option Agreement. For full details of the Option Agreement, see Note 5.

(c) Share purchase warrants

At September 30, 2023, the Company had 4,014,734 (December 31, 2022 – 4,389,734) share purchase warrants outstanding and exercisable. Continuity of share purchase warrants is as follows:

	Number of Warrants	Weighted Average Exercise Price
Outstanding and exercisable, January 1, 2022	695,250	\$0.47
Issued	4,014,734	\$0.25
Expired	(320,250)	\$0.60
Outstanding and exercisable, December 31, 2022	4,389,734	\$0.26
Expired	(375,000)	\$0.35
Outstanding and exercisable, September 30, 2023	4,014,734	\$0.25

At September 30, 2023, weighted average remaining contractual life of warrants outstanding was 0.21 years (December 31, 2022 – 0.92 years).

The following table summarizes information about the Company's warrants outstanding at September 30, 2023:

Expiry Date	Exercise Price	Warrants Outstanding and Exercisable
December 16, 2023	\$0.25	4,014,734
		4,014,734

(d) Stock option plan

The Company established a stock option plan, under which it may grant stock options totalling in aggregate up to 10% of the Company's total number of shares issued and outstanding on a non-diluted basis, and to any one optionee in a 12 month period not to exceed 5% of the total number of shares issued and outstanding on a non-diluted basis. The stock option plan limits the options issuable within a one-year period to regular employees and persons providing investor-relation or consulting services to 5% and 2% respectively of the Company's total number of issued and outstanding shares on a non-diluted basis on the date of grant.

The stock options are fully vested on the date of grant. The option price must be greater or equal to the discounted market price on the grant date, and the option expiry date can not exceed five years after the grant date.

Continuity of stock options is as follows:

	Number of Options	Weighted Average Exercise Price
Outstanding and exercisable, December 31, 2021	2,155,000	\$0.31
Granted	2,520,000	\$0.19
Forfeited	(1,330,000)	\$0.38
Outstanding, December 31, 2022	3,345,000	\$0.19
Cancelled / forfeited	(20,000)	\$0.19
Outstanding and exercisable, September 30, 2023	3,325,000	\$0.19

Details of stock options outstanding and exercisable are as follows:

Expiry Date	Exercise Price	Options Outstanding and Exercisable
January 8, 2026	\$0.20	845,000
March 30, 2027	\$0.20	1,795,000
August 8, 2027	\$0.15	685,000
		3,325,000

As at September 30, 2023, the weighted average remaining contractual life of stock options outstanding was 3.24 years (December 31, 2022 – 4.01 years).

Option pricing requires the use of highly subjective estimates and assumptions including the expected stock price volatility. The expected volatility used in valuing stock options is based on volatility observed in historical periods. Changes in the underlying assumptions can materially affect the fair value estimates.

10.RELATED PARTY TRANSACTIONS AND BALANCES

(a) Key management compensation

The Company has identified its directors and certain senior officers as its key management personnel. The compensation costs for key management personnel are as follows:

	Three months ended September 30,				Nine months ended September 30,
	2023		2022		2023		2022
Consulting fees, wages and benefits Share-based payments	\$ 2,269 -	\$	2,063 -	\$	7,065 -	\$	15,865 146,900
	\$ 2,269	\$	2,063	\$	7,065	\$	162,765

(b) Amounts due to related parties

In the normal course of operations the Company transacts with companies related to its directors or officers. All amounts payable are non-interest bearing, unsecured, and due on demand. As at September 30, 2023 and December 31, 2022, the following amounts were due to related parties:

	September 30,	December 31, 2022
Oniva International Services Corp.	\$	2023 180,583	\$ 128,909
Avino Silver and Gold Mines Ltd.		333,121	117,485
	\$	513,704	\$ 246,394

(c) Related party transactions

During the nine months ended September 30, 2023, \$48,013 (2022 - \$81,985) was charged for office, occupancy, miscellaneous costs and salaries, and administrative services paid on behalf of the Company by Oniva. Further, the Company paid \$1,200 of administrative fees during the nine months ended September 30, 2023 (2022 - \$2,050) to Oniva.

The Company takes part in a cost-sharing arrangement to reimburse Oniva for a variable percentage of its overhead expenses, to reimburse 100% of its out-of-pocket expenses incurred on behalf of the Company, and to pay a percentage fee based on the total overhead and corporate expenses. The arrangement may be terminated with one-month notice by either party.

11. FINANCIAL INSTRUMENTS

The fair values of the Company's cash, trade and other payables, and amounts due to related party approximate their carrying values because of the short-term nature of these instruments. The fair value of the Company's investments is detailed in Note 4.

The Company's financial instruments are exposed to certain financial risks comprising credit risk, liquidity 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. The Company's cash is exposed to credit risk. The Company manages credit risk, in respect of cash, by maintaining the majority of cash at high credit rated Canadian financial institutions. Concentration of credit risk exists with respect to the Company's cash, as the majority of the amounts are held with a single Canadian financial institution.

(b) Liquidity Risk

Liquidity risk is the risk that the Company will encounter difficulty in satisfying financial obligations as they become due. The Company manages its liquidity risk by forecasting cash flows required by operations and anticipated investing and financing activities. At September 30, 2023, the Company had cash in the amount of \$69,915 (December 31, 2022 - \$208,715) in order to meet short-term business requirements. At September 30, 2023, the Company had current liabilities of \$661,656 (December 31, 2022 – \$364,646). Accounts payable have contractual maturities of approximately 30 to 90 days, or are due on demand and are subject to normal trade terms.

The maturity profiles of the Company's contractual obligations and commitments as at September 30, 2023, are summarized as follows:

	Total	More Than 5 Years
Trade and other payable	\$ 139,404	\$ 139,404	\$ -	\$ -
Finance lease obligations	13,932	8,548	5,384	-
Due to related parties	513,704	513,704	-	-
Total	\$ 667,040	\$ 661,656	\$ 5,384	\$ -

(c) Market Risk

Market risk consists of interest rate risk, foreign currency risk, and other price risk. These are discussed further below.

Interest Rate Risk

Interest rate risk consists of two components:

(i) To the extent that payments made or received on the Company's monetary assets and liabilities are affected by changes in the prevailing market interest rates, the Company is exposed to interest rate cash flow risk.
(ii) To the extent that changes in prevailing market rates differ from the interest rate in the Company's monetary assets and liabilities, the Company is exposed to interest rate price risk.

The Company's cash is currently held in highly liquid short-term investments and therefore management considers the interest rate risk to be minimal.

Foreign Currency Risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in foreign exchange rates. The Company is exposed to foreign currency risk to the extent that monetary assets and liabilities are denominated in foreign currency.

The Company is exposed to foreign currency risk to the extent that the following monetary assets and liabilities are denominated in Mexican pesos and US dollars:

	September 30, 2023		December 31, 2022
	MXN	USD	MXN	USD
Cash and cash equivalents	\$ -	\$ 1,750	\$ 201,936	\$ 3,552
Amounts receivable Accounts payable and accrued	1,866,092	-	1,596,057	-
liabilities	(4,788,177)	-	(2,026,316)	-
Net exposure	(2,922,085)	1,750	(228,323)	3,552
Canadian dollar equivalent	\$ (224,646)	\$ 2,369	\$ (21,616)	\$4,810

Based on the net Canadian dollar denominated asset and liability exposures as at September 30, 2023, a 10% fluctuation in the Canadian/Mexican and Canadian/US exchange rates would impact the Company's earnings for the year ended September 30, 2023 by approximately \$22,701 (year ended December 31, 2022 - \$640). The Company has not entered into any foreign currency contracts to mitigate this risk.

Other Price Risk

Other price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market prices, other than those arising from interest rate risk or foreign currency risk.

The Company is exposed to other price risk with respect to its investment in marketable securities, as they are carried at fair value based on quoted market prices.

(d) Classification of Financial instruments

IFRS 7 'Financial Instruments: Disclosures' establishes a fair value hierarchy that prioritizes the input to valuation techniques used to measure fair value as follows:

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).

The following table sets forth the Company's financial assets measured at fair value on a recurring basis by level within the fair value hierarchy as at September 30, 2023:

	Level 1	Level 2	Level 3
Cash	\$ 69,915	\$ -	\$ -
Investments	7,475	-	-
	\$ 77,390	\$ -	\$ -