Silver X Mining Corp. — Interim / Quarterly Report 2021

Nov 26, 2021

==> picture [256 x 59] intentionally omitted <==

SILVER X MINING CORP.

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE SEVEN MONTHS ENDED SEPTEMBER 30, 2021 AND SIX MONTHS ENDED AUGUST 31, 2020

(Unaudited – Prepared by Management) Expressed in US Dollars

NOTICE OF NO AUDITOR REVIEW OF CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

In accordance with National Instrument 51-102 of the Canadian Securities Administrators, the Company discloses that its external auditors have not reviewed the unaudited condensed consolidated interim financial statements for the four and seven months ended September 30, 2021. These financial statements have been prepared by management and approved by the Audit Committee and the Board of Directors of the Company.

SILVER X MINING CORP.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION (Unaudited – Prepared by Management) (Expressed in US Dollars)

(Unaudited – Prepared by Management) (Expressed in US Dollars)
			September 30,		February 28,		March 1,
	Note		2021		2021		2020
ASSETS
Current assets
Cash		$	8,509,128	$	1,196,007$		34,886
Trade and other receivables	6		2,001,609		9,756		9,205
Prepaid expenses and deposits			378,735		156,974		2,301
Inventory	7		311,362		-		-
			11,200,834		1,362,737		46,392
Non-current assets
Other receivables – non current			835,154		-		-
Property and equipment	9		4,368,675		-		1,753
Development property	10		44,983,827		-		-
Explorationand evaluationassets	8		6,070,514		5,892,056		-
			56,258,170		5,892,056		1,753
TOTAL ASSETS		$	67,459,004	$	7,254,793	$	48,145
LIABILITIES and SHAREHOLDERS'
EQUITY (DEFICIENCY)
Current liabilities
Accounts payable and accrued
liabilities	11		11,098,364		264,788		490,213
Convertible debenture	13		3,888,655		-		-
Debenture	12		1,418,319		-		-
			16,405,338		264,788		490,213
Non-current liabilities
Debenture	12		1,145,637		-		-
Deferred income tax liability	5		6,360,268		-		-
Asset retirement obligation	14		3,141,868		-		-
Total liabilities			27,053,111		264,788		-
Shareholders' equity
Share capital	15		57,695,468		20,861,688		10,897,303
Obligation to issue shares			-		-		30,174
Deficit			(25,958,567)		(18,209,773)		(14,395,909)
Reserves			8,668,992		4,338,090		3,026,364
Total shareholders' equity			40,405,893		6,990,005		(442,068)
TOTAL LIABILITIES and
SHAREHOLDERS' EQUITY		$	67,459,004	$	7,254,793	$	48,145

Nature of operations and going concern (notes 1 & 2) Subsequent events (note 22) APPROVED ON BEHALF OF THE BOARD OF DIRECTORS ON NOVEMBER 26, 2021:

__”Luis Zapata”_ Director __”Darryl Cardey”__ Director

See accompanying notes to the condensed consolidated interim financial statements

4

SILVER X MINING CORP. CONDENSED CONSOLIDATED INTERIM STATEMENTS OF LOSS AND COMPREHENSIVE LOSS (Unaudited – Prepared by Management) (Expressed in US Dollars)

			Four		Three		Seven		Six
			months		months		months		months
			ended		ended		ended		ended
			Sept. 30,		Aug. 31,		Sept. 30,		Aug. 31,
	Note		2021		2020		2021		2020
EXPLORATION
EXPENDITURES	8	$	(217,183)	$	(38,220)	$	(318,866)	$	(80,672)
GENERAL AND
ADMINISTRATIVE
EXPENSES
Amortization			-		-		-		(1,682)
Consulting fees	16		(548,279)		(240,753)		(718,480)		(274,091)
Directors fees	16		(7,784)		(2,234)		(18,038)		(6,522)
Investor relations			(554,138)		(63,468)		(685,517)		(63,882)
Office and administration			(820,401)		(22,624)		(823,031)		(23,497)
Professional fees			(66,405)		(90,429)		(170,380)		(94,717)
Salaries and benefits	16		(15,058)		(15,981)		(66,435)		(15,981)
Share-based payments	15		(3,469,072)		(290,780)		(3,759,164)		(290,780)
Transfer agent and			(8,314)		(32,798)		(9,588)		(37,037)
regulatoryfees
Loss before other items			(5,706,634)		(797,287)		(6,569,499)		(888,861)
OTHER ITEMS
Finance income			41,878		-		41,878		16
Finance cost			(271,332)		-		(272,301)		-
Transaction cost	5		(942,810)		-		(942,810)		-
Other income			-		-		-		-
Foreign exchange gain			(5,513)		2,967		(6,062)		2,921
(loss)
Net loss for the period			(6,884,411)		(794,320)		(7,748,794)		(885,924)
(Loss) gain on translation of
foreign operations			(219,839)		24,013		419,473		37,321
Total comprehensive loss		$	(7,104,250)	$	(770,307)	$	(7,329,321)	$	(848,603)
Loss per share, basic and diluted		$	(0.07)	$	(0.04)	$	(0.10)	$	(0.08)
Weighted average number of common shares outstanding			102,685,190		18,334,821		77,063,289		11,376,763

See accompanying notes to the condensed consolidated interim financial statements

5

SILVER X MINING CORP.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIENCY) For the seven months ended September 30, 2021 and six months ended August 31, 2020 (Expressed in US Dollars)

Other Equity Reserves

	Number of		Share-	Share		Shares
	common	Share	based	purchase	Convertible &	to be	Accumulated
	shares	capital	payments	warrants	Other	issued	OCI	Deficit	**Total **
Balance, February 29, 2021	42,969,029	$ 20,861,688	$ 2,127,614	$ 1,342,226	-	-	$ 868,250	$ (18,209,773)	$ 6,990,005
Net loss for the period	-	-	-	-	-	-	-	(7,748,794)	(7,748,794)
(Loss) gain on translation of
foreign operations	-	-	-	-	-	-	419,473	-	419,473
Warrants exercised (note 15)	4,117,100	1,131,769	-	-	-	-	-	-	1,131,769
Options exercised (note 15)	200,000	99,287	(57,065)	-	-	-	-	-	42,222
Acquisition of MMTP (note 5)	42,969,046	24,350,207	-	-	-	-	-	-	24,350,207
MMTP Finder shares (note 5)	1,250,000	708,380	-	60,871	-	-	-	-	769,251
Convertible debenture (note 13)	-	-	-	-	148,459	-	-	-	148,459
Private placement, net (note 15)	23,649,286	10,346,307	-	-	-	-	-	-	10,346,307
Shares for debt	593,536	197,830	-	-	-	-	-	-	197,830
Share-basedpayments(note 15)	-	-	3,759,164	-	-	-	-	-	3,759,164
Balance, September 30, 2021	115,747,997	$ 57,695,468	$ 5,829,713	$ 1,403,097	$ 148,459	-	$ 1,287,723	**$ (25,958,567) **	$ 40,405,893
Balance, March 1, 2020	4,282,318	$ 10,897,303	$ 1,220,929	$ 1,263,863	-	$ 30,174	541,572	$ (14,395,909)	$ (442,068)
Net loss for the period	-	-	-	-	-	-	-	(885,924)	(885,924)
(Loss) gain on translation of
foreign operations	-	-	-	-	-	-	37,321	-	37,321
Private placement, net	7,500,000	1,003,382	-	20,325	-	-	-	-	1,023,707
Warrant exercised	2,106,734	311,490	-	-	-	(30,174)	-	-	281,316
Acquisition of mineral properties	6,000,000	1,027,556	-	-	-	-	-	-	1,027,556
Share-basedpayments	-	-	290,780	-	-	-	-	-	290,780
Balance, August 31, 2020	**19,889,052 **	**$ 13,239,731 **	$ 1,511,709	$ 1,284,188	-	-	$ 578,893	$ (15,281,833)	$ 1,332,688

See accompanying notes to the condensed consolidated interim financial statements

3

SILVER X MINING CORP. CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOW (Unaudited – Prepared by Management) (Expressed in US Dollars)

		Four months	Three months	Seven months	Six months
		ended	ended	ended	ended
	Note	Sept. 30, 2021	Aug. 31, 2020	Sept. 30, 2021	Aug. 31, 2020
CASH PROVIDED BY (USED IN):
OPERATING ACTIVITIES
Net loss for the period		$ (6,884,411)	$ (794,320)	$ (7,748,794)	$ (885,924)
Items not affecting cash:
Amortization		-	-	-	1,682
Share-based payments	15, 16	3,469,072	290,780	3,759,164	290,780
Finance Cost – ARO		12,165	-	12,165	-
Finance Cost – interest		272,301	-	272,301	-
Transaction cost	5	769,251	-	769,251	-
Foreign exchange		5,239	(2,920)	6,063	(2,920)
		(2,356,382)	(506,460)	(2,929,849)	(596,382)
Changes in non-cash working capital
items:
Other receivables and prepaid		309,411	(414,320)	207,605	(413,060)
Accounts payable and accrued
liabilities		782,162	113,629	783,809	162,215
Inventory		156,711	(287,793)	156,711	(298,155)
Net cash outflow from operating
activities		(1,108,098)	(1,094,944)	(1,781,724)	(1,145,382)
FINANCING ACTIVITIES
Proceeds from exercise of warrants	15	916,693	175,479	1,131,769	281,316
Proceeds from exercise of options	15	42,222	-	42,222	-
Proceeds (net of share issuance cost)
from private placement	15	(650,015)	1,023,707	10,346,307	1,023,707
Loanpayment		(255,814)	-	(255,814)	-
Net cash flow from financing
activities		53,086	1,199,186	11,264,484	1,305,023
INVESTING ACTIVITIES
MMTP Cash	5	138,466	-	138,466	-
Pre-production revenue	10	2,884,034	-	2,884,034	-
Pre-production expenses	10	(4,751,883)	-	(4,751,883)	-
Exploration and evaluation asset –
acquisition	8	-	(71,706)	-	(71,706)
Purchase of PP&E	9	(227,318)	-	(227,318)	-
Net cash outflow from investing
activities		(1,956,701)	(71,706)	(1,956,701)	(71,706)
FX impact on cash		(567,338)	2,393	(212,938)	4,190
Net change in cash		(3,579,051)	34,929	7,313,121	92,125
Cash, beginning ofperiod		12,088,179	92,082	1,196,007	34,886
Cash, end of period		$ 8,509,128	$ 127,011	$ 8,509,128	$ 127,011

Supplemental cash flow information (note 20)

See accompanying notes to the condensed consolidated interim financial statements

7

SILVER X MINING CORP. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED) For the seven months ended September 30, 2021 and six months ended August 31, 2020 (Expressed in US Dollars)

1. CORPORATE INFORMATION

Silver X Mining Corp. (the “Company”) was incorporated under the Business Corporations Act of British Columbia on June 4, 2009.

The Company’s principal business activities are directed towards the exploration and development of mineral properties in the Americas.

The address of the Company’s corporate office and principal place of business is Suite 1430 – 800 West Pender Street, Vancouver, BC, V6C 2V6.

2. BASIS OF PREPARATION

Statement of Compliance with International Financial Reporting Standards (“IFRS”)

These unaudited condensed interim consolidated financial statements have been prepared in accordance with IAS 34 – Interim Financial Reporting as issued by the International Accounting Standards Board (“IASB”). Accordingly, certain disclosures included in annual financial statements prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the IASB have been condensed or omitted and these unaudited condensed consolidated interim financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended February 29, 2021.

Other than as stated below, these unaudited condensed interim consolidated financial statements follow the same accounting policies and methods of applications as the most recent audited consolidated financial statements of the Company.

The Company’s interim results are not necessarily indicative of its results for a full year.

The preparation of consolidated financial statements in compliance with IFRS requires management to make certain critical accounting estimates. It also requires management to exercise judgment in applying the Company’s accounting policies. The areas involving a higher degree of judgment of complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 4.

Change in Presentation Currency

Change in presentation currency Effective March 1, 2020, the Company changed its presentation currency from Canadian Dollars (“CAD”) to U.S. Dollars (“USD”) to better reflect the Company’s business activities. In making this change in presentation currency to USD, the Company followed the guidance in IAS 21 The Effects of Changes in Foreign Exchange Rates and have applied the change retrospectively, as if the USD had always been the Company’s presentation currency, as follows:

• Assets and liabilities have been translated into the USD at the rate of exchange prevailing at the respective reporting dates;

• The consolidated statements of loss and comprehensive loss were translated at the average exchange rates for the respective reporting periods, or at the exchange rates prevailing at the applicable transaction date;

• Equity transactions have been translated at the exchange rate prevailing at the date of the transactions; and;

• Exchange differences arising on translation were recorded in accumulated other comprehensive loss in shareholders’ equity.

8

SILVER X MINING CORP. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED) For the seven months ended September 30, 2021 and six months ended August 31, 2020 (Expressed in US Dollars)

The exchange rates used were as follows:

USD/CADexchange rate	Feb. 28, 2021	Feb. 28, 2020
Closing at thereporting date	1.2685	1.3429
Averagerateforthe year	1.3343	1.32565

Change in Fiscal Year-end

The Company has changed its fiscal year-end from February 28 to December 31, resulting in a 10 month transition year from March 1, 2021 to December 31, 2021. The reason for the change was to be consistent with its operating subsidiary’s year end and general practice in the mining industry.

Going Concern and Continuance of Operations

These consolidated interim financial statements have been presented on the basis that the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. Realization values may be substantially different from the carrying values shown and these consolidated financial statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Company be unable to continue as a going concern. At September 30, 2021, the Company had an accumulated deficit of $25,958,567 (February 29, 2021 - $18,209,773, March 1, 2020 – $14,395,909) since inception, and the Company’s working capital deficit was $5,204,504 (February 29, 2021 – $1,097,949) working capital, March 1, 2020 – $443,821). The Company is expected to incur further losses in the development of its business.

The Company’s ability to continue as a going concern is dependent upon its ability to obtain the necessary capital to meet its obligations and repay its liabilities arising from normal business operations when they come due. While the Company has been successful in securing financings in the past, there is no assurance that it will be able to do so in the future.

COVID-19

The recent outbreak of the novel coronavirus COVID-19, which was declared a pandemic by the World Health Organization on March 11, 2020, has led to adverse impacts on the Canadian and global economies, disruptions of financial markets, and created uncertainty regarding potential impacts to the Corporation. The extent to which the COVID-19 pandemic impacts the Corporation’s business, results of operations and financial condition will depend on future developments, which are highly uncertain and cannot be predicted, including, but not limited to the duration, spread, severity, and impact of the COVID-19 pandemic, the effects of the COVID-19 pandemic on the Corporation’s suppliers and vendors and the remedial actions and stimulus measures adopted by local and federal governments, and to what extent normal economic and operating conditions can resume. The management team is closely following the progression of COVID-19 and its potential impact on the Corporation. Even after the COVID-19 pandemic has subsided, the Corporation may experience adverse impacts to its business as a result of any economic recession or depression that has occurred or may occur in the future. Therefore, the Corporation cannot reasonably estimate the impact at this time our business, liquidity, capital resources and financial results.

9

SILVER X MINING CORP. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED) For the seven months ended September 30, 2021 and six months ended August 31, 2020 (Expressed in US Dollars)

Basis of Consolidation

The interim consolidated financial statements include the accounts and results of operations of the Company and its wholly owned subsidiaries listed in the following table below.

A subsidiary is an entity in which the Company has control, directly or indirectly, where control is defined as the power to govern the financial and operating policies of an enterprise to obtain benefits from its activities. All material intercompany transactions and balances have been eliminated on consolidation.

Name of Parent	Place of **Incorporation **	Functional Currency	Sept. 30, 2021 Ownership	Feb. 28, 2021 Ownership
Silver X MiningCorp.	Canada	CAD	N/A - Parent	N/A - Parent
Name of Subsidiary
Mines &MetalsTrading (Peru)PLC	Isle of Man	USD	100%	Nil
Recuperada SAC	Peru	USD	100%	Nil
San AntonioMiningPeru SAC	Peru	SOL	100%	Nil
Mining Sense GoldPeru SAC	Peru	SOL	100%	Nil
MineraTangana SAC	Peru	SOL	100%	Nil
CorongoExploraciones SAC	Peru	SOL	100%	Nil
Western Pacific Resources (U.S.) Corp.	USA	USD	100%	100%
Quilla Canada Mining Corp.	Canada	CAD	100%	100%
Talla CanadaMining Corp.	Canada	CAD	100%	100%
Greengold CanadaMining Corp.	Canada	CAD	100%	100%
QuillaMining SAC	Peru	SOL	100%	100%
Corporacion MineraTalla SAC	Peru	SOL	100%	100%
Green Gold Resources	Ecuador	USD	100%	100%

The functional currency of each entity is measured using the currency of the primary economic environment in which that entity operates. The consolidated financial statements are presented in United States dollar, which is the Company’s reporting currency. The functional currency of the Company and its subsidiaries are noted in the table above.

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the date of the transaction. Foreign currency monetary items are translated at the period-end exchange rate. Non-monetary items measured at historical cost continue to be carried at the exchange rate at the date of the transaction. Non-monetary items measured at fair value are reported at the exchange rate at the date when fair values were determined. Exchange differences arising on the translation of monetary items or on settlement of monetary items are recognized in the statement of loss and comprehensive loss in the period in which they arise. Exchange differences arising on the translation of non-monetary items are recognized in other comprehensive income into the extent that gains and losses arising on those nonmonetary items are also recognized in other comprehensive income. Where the non-monetary gain or loss is recognized in profit or loss, the exchange component is also recognized in profit or loss.

10

SILVER X MINING CORP. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED) For the seven months ended September 30, 2021 and six months ended August 31, 2020 (Expressed in US Dollars)

3. SIGNIFICANT ACCOUNTING POLICIES

Business combination

Acquisitions of subsidiaries and businesses are accounted for using the acquisition method in accordance with IFRS 3, Business Combinations. The cost of an acquisition is measured as the sum of the consideration transferred, measured at the acquisition date fair value and the amount of any non-controlling interest in the acquiree. Non-controlling interests that are present ownership interests and entitle their holders to a proportionate share of the Company’s net assets in the event of liquidation may be initially measured either at fair value or at the non-controlling interests’ proportionate share of the recognized amounts of the acquiree’s identifiable net assets. The choice of measurement basis is made on a transaction-bytransaction basis. The excess of: (i) total consideration transferred by the Company, measured at fair value, including contingent consideration, and (ii) the non-controlling interests in the acquiree, over the acquisition date fair value of net assets acquired, is recorded as goodwill. Acquisition costs incurred are expensed. Goodwill arising on an acquisition is recognized as an asset and initially measured at cost. Goodwill is not amortized; rather it is tested annually for impairment or at any time during the year that an indicator of impairment is identified.

Inventories

Finished goods ore are valued at the lower of average production cost and net realizable value. Finished goods must be refined offsite to return saleable metals. Net realizable value is the amount estimated to be obtained from sale of the inventory in the normal course of business, less any anticipated costs to be incurred prior to its sale. The production cost of inventories is determined on a weighted average basis and includes cost of raw materials, direct labour, mine-site overhead and depreciation and depletion of mine properties and plant and equipment.

Consumable supplies and spare parts expected to be used in production are valued at the lower of weighted average cost or net realizable value, which includes the cost of purchase as well as transportation and charges to bring them to their existing location and condition.

A write-down of inventory is recognized as an expense in profit or loss in the period the write-down occurs. Reversal of any write-down of inventory, arising from an increase in net realizable value, is recognized in profit or loss as a reduction in the amount of inventories recognized as an expense in the period in which the reversal occurs.

Mineral Properties

i) Mines under construction and development costs:

When technical feasibility and economic viability of projects have been determined and the decision to proceed with development has been approved, the expenditures related to construction are capitalized as mines under construction and classified as a component of mine properties, plant and equipment. Costs associated with the commissioning of new assets, in the pre-commercial period before they are operating in the way intended by management, are capitalized, net of any preproduction revenues. Commercial production is deemed to have occurred when management determines certain production parameters are met.

ii) Mine properties:

Once a mineral property has been brought into commercial production as intended by management, costs of any additional work on that property are expensed as incurred, except for large development programs, which will be deferred and depleted over the remaining useful life of the related assets. Mine properties include deferred stripping costs and decommissioning, and restoration costs related to the reclamation of mine properties. Mine properties are derecognized upon disposal, or impaired when no future economic

11

SILVER X MINING CORP. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED) For the seven months ended September 30, 2021 and six months ended August 31, 2020 (Expressed in US Dollars)

benefits are expected to arise from continued use of the asset. Any gain or loss on disposal of the asset, determined as the difference between the proceeds received and the carrying amount of the asset is recognized in profit or loss.

Costs of producing mine properties are depreciated and depleted on the unit-of-production basis using estimated proven and probable reserves. Depreciation or depletion is recorded against the mine property only upon the commencement of commercial production.

Exploration expenditures are expensed as incurred at mine properties, unless the nature of the expenditures are to convert mineral resources into mineral reserves or in the absence of a mineral resource estimate, are to define areas to be included in the mine plan. Any amounts deferred in this regard are depreciated based on the unit-of-production method.

Mine properties are recorded at cost, net of accumulated depreciation and depletion and accumulated impairment losses and are not intended to represent future values.

Recovery of capitalized costs is dependent on successful development of economic mining operations or the disposition of the related mineral property.

Decommissioning and Restoration

The Company is subject to various governmental laws and regulations relating to the protection of the environment. The environmental regulations are continually changing and are generally becoming more restrictive.

Decommissioning and restoration obligations encompass legal, statutory, contractual or constructive obligations associated with the retirement of a long-lived tangible asset (for example, mine or site reclamation costs) that results from the acquisition, construction, development and/or normal operation of a long-lived asset. The retirement of a long-lived asset is reflected by an other-than-temporary removal from service, including sale of the asset, abandonment or disposal in some other manner.

The present value of a liability for decommissioning and restoration is recorded in the period in which the obligation first arises. The Company records the estimated present value of future cash flows associated with site closure and reclamation as a long-term liability and increases the carrying value of the related assets for that amount. Over time, the liability is increased to reflect an interest element in the estimated future cash flows (accretion expense) considered in the initial measurement of fair value. The capitalized cost is depleted or depreciated on either the unit-of-production basis or the straight-line basis, as appropriate. The Company's estimates of its provision for decommissioning and restoration obligations could change as a result of changes in regulations, changes to the current market-based discount rate, the extent of environmental remediation required, and the means of reclamation or cost estimates. Changes in estimates are accounted for in the period in which these estimates are revised.

Impairment of Non-Financial Assets

For the purposes of assessing impairment, the recoverable amount of an asset, which is the higher of its fair value less costs to sell and its value in use, is estimated. If it is not possible to estimate the recoverable amount of an individual asset, the asset is included in the cash-generating unit to which it belongs and the recoverable amount of the cash generating unit is estimated. As a result, some assets are tested individually for impairment, and some are tested at the cash-generating unit level. A cash-generating unit is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or group of assets.

Intangible assets with an indefinite useful life and intangible asset not yet available for use are also tested for impairment at least annually. All other individual assets or cash-generating units are tested for impairment whenever events or changes in circumstances indicate that the asset is impaired such as decreases in metal prices, an increase in operating costs, a decrease in mineable reserves or a change in foreign exchange rates. The Company also considers net book value of the asset, the ongoing costs

12

SILVER X MINING CORP. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED) For the seven months ended September 30, 2021 and six months ended August 31, 2020 (Expressed in US Dollars)

required to maintain and operate the asset, and the use, value and condition of the asset.

An impairment loss is recognized for the amount by which the asset's or cash-generating unit's carrying amount exceeds its recoverable amount. To determine the value-in-use, management estimates expected future cash flows from each asset or cash-generating unit and determines a suitable interest rate in order to calculate the present value of those cash flows. Future cash flows used in the determination of value in use are estimated based on expected future production, recoverability of reserves, commodity prices, operating costs, reclamation costs and capital costs. Management estimates of future cash flows are subject to risks and uncertainties. It is reasonably possible that changes in estimates could occur which may affect the recoverable amounts of assets, including the Company’s investments in mineral properties.

Fair value is determined with reference to discounted estimated future cash flow analysis or on recent transactions involving dispositions of similar properties.

An impairment loss for a cash-generating unit is first allocated to reduce the carrying amount of any goodwill allocated to that cash-generating unit. Any remaining impairment loss is allocated on a pro rata basis to the other assets in the cash-generating unit. All assets are subsequently reassessed for indications that an impairment loss previously recognized may no longer exist or may have decreased. An impairment charge is reversed if the cash-generating unit’s recoverable amount exceeds its carrying amount. Where an impairment loss subsequently reverses, the carrying amount of the asset (cash generating unit) is increased to the revised estimate of its recoverable amount, however only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (or cash generating unit) in prior years.

Adoption of New Accounting Standards and Amendments

A number of new standards, and amendments to standards and interpretations, were not yet effective for the period ended September 30, 2021, and have not been early adopted in preparing these consolidated financial statements. These new standards, and amendments to standards and interpretations were either not applicable or are not expected to have material impact on the company’s consolidated financial statements.

4. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS

The preparation of financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

The Company’s management makes judgments in its process of applying the Company’s accounting policies in the preparation of its consolidated financial statements. In addition, the preparation of the financial data requires that the Company’s management make assumptions and estimates of the effects of uncertain future events on the carrying amounts of the Company’s assets and liabilities at the end of the reporting period and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates as the estimation process is inherently uncertain. Estimates are reviewed on an ongoing basis based on historical experience and other factors that are considered to be relevant under the circumstances. Revisions to estimates and the resulting effects on the carrying amounts of the Company’s assets and liabilities are accounted for prospectively.

Significant judgments in applying accounting policies

The critical judgments that the Company’s management has made in the process of applying the Company’s accounting policies, apart from those involving estimations, that have the most significant effect on the amounts recognized in the Company’s consolidated financial statements are as follows:

13

SILVER X MINING CORP. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED) For the seven months ended September 30, 2021 and six months ended August 31, 2020 (Expressed in US Dollars)

(i) Impairment of assets

The carrying value of property, plant and equipment, exploration and evaluation properties and the Company’s mineral property is reviewed each reporting period to determine whether there is any indication of impairment. If the carrying amount of an asset exceeds its recoverable amount, the asset is impaired and an impairment loss is recognized in profit or loss. The assessment of fair values, including those of the cash-generating units, require the use of estimates and assumptions for recoverable production, long-term commodity prices, discount rates, foreign exchange rates, future capital requirements and operating performance. Changes in any of the assumptions or estimates used in determining the fair value of assets could impact the impairment analysis.

(ii) Economic recoverability and probability of future economic benefits of exploration and development costs

Management has determined that acquisition costs incurred which have been capitalized are economically recoverable. Management uses several criteria in its assessments of economic recoverability and probability of future economic benefit including geologic and metallurgic information, history of conversion of mineral deposits to proven and probable reserves, scoping and feasibility studies, accessible facilities, existing permits and life of mine plans.

(iii) Functional currency

The functional currency for each of the Company’s subsidiaries, joint ventures and investments in associates, is the currency of the primary economic environment in which the entity operates. The Company has determined the functional currency of each entity is either the Peruvian SOL, Canadian Dollar, or US Dollar (see note 2 for more details). Determination of functional currency may involve certain judgments to determine the primary economic environment and the Company reconsiders the functional currency of its entities if there is a change in events and conditions which determined the primary economic environment.

(iv) Commencement of commercial production

Costs associated with the commissioning of new assets, in the pre-commercial period before they are operating in the way intended by management, are capitalized, net of any pre-production revenues. Commercial production is deemed to have occurred when management determines that, amongst other items, the completion of operational commissioning of major mine components has been reached, operating results, which includes the grade and volume of material mined, are being achieved consistently for a period of time, and there are indicators that these operating results will continue, all of which involve management judgments.

Key sources of Estimation Uncertainty

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

(i) Mineral resource estimation

The carrying value and recoverability of mineral properties requires management to make certain estimates, judgments and assumptions about each project. Management considers the economics of the project, including the latest resources prices and the long-term forecasts, and the overall economic viability of the project. The determination of mineral resources also requires the use of estimates. The Company estimates its mineral resources based on information compiled by Qualified Persons as defined in accordance with Canadian Securities Administrators National Instrument 43-101, Standards for Disclosure of Mineral Projects. There are numerous uncertainties inherent in estimating mineral resources and assumptions that are valid at the time of estimation may change significantly when new information becomes available. Changes in the

14

SILVER X MINING CORP. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED) For the seven months ended September 30, 2021 and six months ended August 31, 2020 (Expressed in US Dollars)

forecasted prices of commodities, exchange rates, production costs or recovery rates may change the economic status of resources and may result in changes to resource estimates.

(ii) Depreciation and depletion

Plants and other facilities used directly in mining activities are depreciated using the units-of-production (“UOP”) method over a period not to exceed the estimated life of the ore body based on recoverable ounces to be mined from estimated resources. Mobile and other equipment are depreciated, net of residual value, on a straight-line basis, over the useful life of the equipment to the extent that the useful life does not exceed the related estimated life of the mine based on estimated recoverable resources.

The calculation of the UOP rate, and therefore the annual depreciation and depletion expense, could be materially affected by changes in the underlying estimates. Changes in estimates can be the result of actual future production differing from current forecasts of future production, expansion of mineral reserves through exploration activities, differences between estimated and actual costs of mining and differences in gold price used in the estimation of mineral reserves.

Significant judgment is involved in the determination of useful life and residual values for the computation of depreciation and depletion and no assurance can be given that actual useful lives and residual values will not differ significantly from current assumptions.

(iii) Inventories

Expenditures incurred, and depreciation and depletion of assets used in mining and processing activities are deferred and accumulated as the cost of ore in stockpiles, ore on leach pads, in-process and finished metal inventories. These deferred amounts are carried at the lower of average cost or net realizable value (“NRV”). Write-downs of ore in stockpiles, ore in-process and finished metal inventories resulting from NRV impairments are reported as a component of current period costs. The primary factors that influence the need to record write-downs include prevailing and long-term metal prices and prevailing costs for production inputs such as labour, fuel and energy, materials and supplies, as well as realized ore grades and actual production levels.

(iv) Decommissioning and restoration provision

The Company assesses its provision for reclamation and remediation on an annual basis or when new material information becomes available. Mining and exploration activities are subject to various laws and regulations governing the protection of the environment. In general, these laws and regulations are continually changing and the Company has made, and intends to make in the future, expenditures to comply with such laws and regulations. Accounting for reclamation and remediation obligations requires management to make estimates of the future costs the Company will incur to complete the reclamation and remediation work required to comply with existing laws and regulations at each mining operation and exploration and development property. Actual costs incurred may differ from those amounts estimated. Also, future changes to environmental laws and regulations could increase the extent of reclamation and remediation work required to be performed by the Company. Increases in future costs could materially impact the amounts charged to operations for reclamation and remediation. The provision represents management’s best estimate of the present value of the future reclamation and remediation obligation. The actual future expenditures may differ from the amounts currently provided.

(v) Share-based payments

‐ Share-based payments are determined using the Black Scholes option pricing model based on estimated fair values of all share ‐ based awards at the date of grant and is expensed to profit or loss over each award’s ‐ vesting period. The Black Scholes option pricing model utilizes subjective assumptions such as expected price volatility and expected life of the option. Changes in these input assumptions can significantly affect the fair value estimate.

For asset acquisitions, contingent share consideration is an estimate of the fair value of the contingent amounts expected to be payable in the future. The fair value is based on number of contingent shares, the share price of the Company on the date of acquisition and management’s expectations of probability.

15

SILVER X MINING CORP. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED) For the seven months ended September 30, 2021 and six months ended August 31, 2020 (Expressed in US Dollars)

(vi) Contingencies

Due to the size, complexity and nature of the Company’s operations, various legal and tax matters are outstanding from time to time. In the event that management’s estimate of the future resolution of these matters’ changes, the Company will recognize the effects of the changes in its consolidated financial statements on the date such changes occur.

(vii) Deferred taxes

In assessing the probability of realizing income tax assets recognized, management makes estimates related to expectations of future taxable income, expected timing of reversals of existing temporary differences and the likelihood that tax positions taken will be sustained upon examination by applicable tax authorities. Estimates of future taxable income are based on forecasted cash flows from operations and the application of existing tax laws in each jurisdiction. Forecasted cash flows from operations are based on life of mine projections internally developed and reviewed by management. The likelihood that tax positions taken will be sustained upon examination by applicable tax authorities is assessed based on individual facts and circumstances of the relevant tax position evaluated in light of all available evidence. Where applicable tax laws and regulations are either unclear or subject to ongoing varying interpretations, it is reasonably possible that changes in these estimates can occur that materially affect the amounts of income tax assets recognized. At the end of each reporting period, the Company reassesses unrecognized income tax assets.

5. BUSINESS COMBINATION – MMTP

On June 23, 2021, the Company acquired the Nueva Recuperada silver-lead-zinc project through the business combination of MMTP.

The Company issued 42,969,046 common shares to acquire all outstanding shares of MMTP. The total fair value of the consideration was $24,350,207.

The Company issued 1,250,000 common shares (fair value of $708,380) and 316,848 share purchase warrants (fair value of $60,871) as finder’s fee and non-cash transaction costs. In addition, the Company incurred $173,559 of legal and other direct transaction costs. The total of $942,810 of transaction costs are recorded as finance cost for period ended September 30, 2021.

The purchase price allocation is as follows:

		Total
Consideration – 42,969,046 common shares(note 15)	$	24,350,207
Fair value of assets and liabilities acquired
Cash		138,466
Inventory		468,073
Trade and other receivables		3,162,736
Prepaid		10,244
Property, plant and equipment		4,194,474
Development property		43,637,642
Accounts payables and accruals		(10,591,239)
Convertible debenture		(4,000,000)
Debenture		(3,026,245)
Asset retirement obligations		(3,283,676)
Deferred tax liabilities		(6,360,268)
Fair value of net assets acquired	$	24,350,207

16

SILVER X MINING CORP. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED) For the seven months ended September 30, 2021 and six months ended August 31, 2020 (Expressed in US Dollars)

6. TRADE AND OTHER RECEVIABLES

		Sept. 30,		Feb. 28,		March 1,
		2021		2021		2021
Trade receivables		110,310		-		-
Supplier advances		318,723		-		-
Reclamation bond		835,154		-		-
Other		487,579		-		-
Tax receivables – Peru		1,024,517		-		-
Tax receivables - Canada		60,480		9,756		9,205
	$	2,836,763	$	9,756	$	9,205
Non-current		(835,154)		-		-
Current		2,001,609		9,756		9,205

7. INVENTORY

As at September 30, 2021, the Company had $311,362 (February 28, 2021 - $nil) of consumable inventory and supplies.

8. EXPLORATION AND EVALUATION ASSETS

The Company has capitalized the following acquisition costs of its mineral property interests during the seven months ended September 30, 2021:

		Ecuador		Peru
		Property		Properties		Total
		(a)		(b)
Balance,March 1,2020	$	-	$	-	$	-
Share issuance – acquisition cost		1,027,556		2,973,520		4,001,076
Cash component – acquisition		-		1,500,000		1,500,000
cost (b)
Other acquisition costs		71,706		80,495		152,201
Foreign exchange impact		47,164		191,615		238,779
Balance February 28, 2021	$	1,146,426	$	4,745,630	$	5,892,056
Foreign exchange impact		34,723		143,735		178,458
Balance September 30, 2021	$	1,181,149	$	4,889,365	$	6,070,514

a) Julian Property, Ecuador

On January 27, 2020, the Company entered into an asset purchase agreement (the “Asset Purchase Agreement”) with Green Oil S.A. (“Green Oil”) with respect to the acquisition by the Company from Green Oil of certain mineral claims located in Ecuador known as the Julian Property. The Julian Property is located in the Province of Azuay in the canton of Oña.

On June 11, 2020, the Company acquired the Julian Property through the issuance of 6,000,000 common shares valued at $1,027,556, to Green Oil and its nominees. The Company also paid direct transaction costs of $71,706.

b) Coriorcco & Las Antas Property, Peru

On October 8, 2020, the Company purchased the option rights to acquire a 100% interest in the Coriorcco property and up to an 85% legal and beneficial interest in the Las Antas property located in Peru.

17

SILVER X MINING CORP. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED) For the seven months ended September 30, 2021 and six months ended August 31, 2020 (Expressed in US Dollars)

As consideration for the acquisition of the option rights, the Company paid cash of $1,500,000, issued 7,050,000 common shares and paid a finder’s fee with 629,836 common shares, with a grand total value of $2,973,520.

The Coriorcco property is subject to a 1% net smelter royalty.

Coriorcco Option Agreement

Under the Coriorcco Option Agreement, the Company will have the right to acquire a 100% interest in the Coriorcco property by making a payment of $3,000,000 plus general sales tax and granting a production royalty to the underlying concession holder (the “Coriorcco Royalty”).

The Coriorcco Royalty can be repurchased for $1,000,000 (the “Buy-Back Right”) prior to the fifth anniversary of the Coriorcco Option Agreement. Every year following the fifth anniversary of the Coriorcco Option Agreement, the cost of the Buy-Back Right increases by 10%.

If the Company exercises its option to acquire the Coriorcco property, Silver X will grant to Titan Minerals a 1% net smelter royalty (the “NSR”) over the Coriorcco property.

Additionally, as part of the amending agreement, the Company will pay $190,000 (upon completion of registering the amended agreement with the Peruvian Public Registry, which had not occurred as at September 30, 2021 and will be required to pay up to $850,000 (in cash or shares at the Company’s option) based on the size of the mineral resource (in the measured and indicated category) that is established on the Coriorcco property in a technical report prepared in accordance with National Instrument 43-101 on the following conditions:

• $350,000 if a measured and indicated resource of 500,000 to 999,999 ounces of gold is established;

• $450,000 if a measured and indicated resource of 1,000,000 to 1,499,999 ounces of gold is established; or

• • $850,000 if a measured and indicated resource in excess of 1,500,000 ounces of gold is established

The Company is required to commence small scale mining by April 2022 with the option to extend a further twelve months to April 2023 by incurring $200,000 in exploration expenditures.

EXPLORATION EXPENDITURES

		Ecuador	Peru	Other		Total
Geological consulting		-	204,467	-		204,467
Concessionpayments		24,183	77,819	-		102,002
Legal		-	11,397	-		11,397
Other		-	1,000	-		1,000
Seven months ended	$	24,183	$ 294,683 $	-	$	318,866
September 30, 2021

		Ecuador		Peru		Other	Total
Geological consulting		54,318			-	26,354	80,672
Six months ended August	$	54,318	$		- $	26,354 $	80,672
31, 2021

18

SILVER X MINING CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED) For the seven months ended September 30, 2021 and six months ended August 31, 2020 (Expressed in US Dollars)

9. PROPERTY AND EQUIPMENT

COST		As at Mar. 1, 2020 and Feb		Acquisition – MMTP	Purchases	As at September
		28, 2021				30, 2021
Building and facilities		-		136,677	-	136,677
Machinery and equipment		-		723,886	5,405	729,291
Vehicles		-		21,970	-	21,970
Furniture and fixtures		-		33,890	820	34,710
Computer equipment		-		6,926	924	7,850
Other equipment		-		199,856	-	199,856
Plant – construction inprogress		-		3,071,270	220,169	3,291,439
	$	-	$	4,194,475 $	227,318 $	4,421,793

ACCUMULATED		As at Mar. 1, 2020 and Feb		Depreciation	As at September 30,
DEPRECIATION		28, 2021			2021
Building and facilities		-		1,672	1,672
Machinery and equipment		-		40,389	40,389
Vehicles		-		2,343	2,343
Furniture and fixtures		-		995	995
Computer equipment		-		1,903	1,903
Other equipment		-		5,815	5,815
	$	-	$	**53,117$ **	53,117

		Net
		carrying
		value
Opening balance, March 1, 2020, February 28, 2021	$	-
Building and facilities		135,005
Machinery and equipment		688,902
Vehicles		19,627
Furniture and fixtures		33,715
Computer equipment		5,947
Other equipment		194,041
Plant – construction inprogress		3,291,439
As at September 30, 2021	$	4,368,675

19

SILVER X MINING CORP. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED) For the seven months ended September 30, 2021 and six months ended August 31, 2020 (Expressed in US Dollars)

10. Development property

		Total
Opening balance, March 1, 2020, February 28, 2021	$	-
MMTP business combination – development property acquired		43,637,642
Accrued development cost reversal		(574,782)
Pre-production operating cost – capitalized		3,080,146
Pre-production operating general and administration –		457,535
capitalized
Pre-production operating exploration		1,214,202
Pre-production amortization – capitalized		53,117
Pre-production revenue		(2,884,034)
As at September 30, 2021	$	44,983,827

11. Accounts payables and accrued liabilities

		Sept. 30,		Feb. 28,		March 1,
		2021		2021		2020
Trade payable		7,906,225		264,788		490,213
Accrued liabilities		2,428,744		-		-
Payroll liabilities		763,395		-		-
	$	11,098,364	$	264,788	$	490,213

12. DEBENTURE

			Foreign
COST	Acquisition – MMTP	Repayment	exchange and other	As at September 30, 2021
Trafigura Peru SAC (i)(ii)	1,346,684	(52,488)	(148,459)	1,145,737
BSAFI SAC (i)(iii)	531,533	(203,326)	(24,923)	303,284
Baker Steel Resources Trust	1,000,000	-	-	1,000,000
Limited (“Baker Steel”)(i)(iv)
Other(i)(v)	148,028	-	(33,093)	114,935
	3,026,245	$ (255,814) $	(206,475) $	2,563,956

• i) As at March 1, 2020 and February 28, 2021, the debenture balance was $nil. ii) On June 23, 2021, the Company acquired a $1,346,684 (SOL 5,275,223) loan with Trafigura Peru SAC from the MMTP business combination. The loan bears an interest at 5.5% + Libor per annum. This loan is guaranteed by the movable assets of the Company and 7,500 metric tons of concentrated ore. The loan matures on November 2022 and is considered non-current.

• iii) On June 23, 2021, the Company acquired a $531,533 (SOL 2,082,272) unsecured loan with Blanco Sociedad Adminstradora de Fondos de Inversion SAC (“BSAFI SAC”) from the MMTP business combination. The loan bears an interest at 1.5% monthly. The loan is due as at September 30, 2021 and the Company is in the process of renegotiating repayment terms.

• iv) On June 23, 2021, the Company acquired a $1,000,000 loan with Baker Steel from the MMTP business combination. The loan bears an interest of 15% per annum and is due on demand. Subsequent to September 30, 2021, the loan was settled through the issuance of the Company’s common shares (see note 22).

• v) On June 23, 2021, the Company acquired a $148,123 (SOL 421,853) loan with a private lender.

20

SILVER X MINING CORP. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED) For the seven months ended September 30, 2021 and six months ended August 31, 2020 (Expressed in US Dollars)

The loan bears an interest of 5% per annum. The loan is due as at September 30, 2021 and the Company is in the process of renegotiating repayment terms.

13. CONVERTIBLE DEBENTURE

		Total
Opening balance, March 1, 2020, February 28, 2021	$	-
MMTP business combination – convertible debenture acquired		4,000,000
Reclassification – equity portion		(148,459)
Finance cost – accretion expense		37,114
As at September 30, 2021	$	3,888,655

On June 23, 2021, the Company acquired a convertible debenture from the business combination with MMTP. The debenture is with Baker Steel. The convertible debenture bears a 10% interest rate and is convertible in whole or in part at any time up to and including the maturity date of June 30, 2022 into common shares of the Company at $0.4677 per share.

On inception, the Company allocated the total proceeds received between liability and equity component of the convertible debenture using the residual method, based on a discount rate of 14.24%.

14. ASSET RETIREMENT OBLIGATION

		Total
Opening balance, March 1, 2020, February 28, 2021	$	-
MMTP business combination – asset retirement obligation		3,283,676
acquired
Foreign exchange impact		(153,974)
Finance cost – accretion expense		12,165
As at September 30, 2021	$	3,141,868

The Company included a provision for the future cost of remediation of the development property. The carrying balance represents the present value of the remediation cost which are expected to be incurred up to year 2029. The provision has been determined based on a third-party plan commissioned by the Company and approved by the Peruvian Directorate General of Mining Environmental Affairs of the Ministry of Energy and Mines.

15. SHARE CAPITAL AND RESERVES

The Company is authorized to issue an unlimited number of common shares without par value.

Current period ended September 30, 2021

• a) On June 23, 2021, the Company completed the acquisition of all the issued ordinary shares of MMTP in exchange for common shares of Silver X at an exchange ratio of 28.828 Silver X common shares for each MMTP Share, resulting in an aggregate of 42,969,046 Silver X common shares (fair value of $24,350,207) being issued to MMTP shareholders (the "Transaction") (note 5). The Company also issued a finder's fee of 1,250,000 Silver X shares (fair value of $708,380) to an arm's-length third party.

• b) As part of the closing of the Transaction, pursuant to a private placement financing completed on April 16, 2021, 23,649,286 Subscription Receipts were converted into 23,649,286 Silver X common shares and the related Escrowed Proceeds were released to Silver X. Gross proceeds received was

• $11,654,040 with share issuance cost of $1,307,733 (non-cash portion was $417,563), resulting in net

21

SILVER X MINING CORP. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED) For the seven months ended September 30, 2021 and six months ended August 31, 2020 (Expressed in US Dollars)

proceeds of $10,346,307.

• c) On August 18, 2021, 593,536 common shares were issued for the settlement of approximately $197,830 of accrued interest (up to June 30, 2021) on the $1,000,000 Baker Steel debenture (see note 12).

• d) On September 1, 2021, 200,000 common shares were issued in relation to the exercise of options with an exercise price of C$0.27 for total proceeds of $42,222.

• e) For the seven months period ended, the Company issued 4,117,100 common shares from warrants exercised. Total proceeds received were $1,131,769.

Warrants

The continuity of warrants for the years presented are as follows:

	Number of	Weighted average
	warrants	exercise price
Outstanding warrants, February 29, 2020	2,106,734	C$0.20
Granted	4,273,350	C$0.35
Exercised	(2,262,984)	C$0.21
Outstanding warrants, February 28, 2021	4,117,100	C$0.35
Granted	1,783,756	C$0.61
Exercised	(4,117,100)	C$0.35
Outstanding warrants, September 30, 2021	1,783,756	C$0.61

As at September 30, 2021, warrants enabling the holders to acquire common shares are as follows:

		Weighted average	Weighted average
Expiry date	Number of warrants	remaining life inyears	exercise price
December 29,2022	316,848	1.25	C$0.665
June 23,2023	1,466,908	1.73	C$0.60
	1,783,756	1.64	C$0.61

As at February 28, 2021, warrants enabling the holders to acquire common shares are as follows:

		Weighted average	Weighted average
Expiry date	Number of warrants	remaining life inyears	exercise price
June 11,2021	4,117,100	0.28	C$0.35
	4,117,100	0.28	C$0.35

On June 23, 2021, in connection with the completion of the Transaction, the Company assumed the obligations of MMTP and issued 316,848 warrants pursuant to existing MMTP finder’s warrants, which are exercisable at C$0.665 per share at any time prior to December 29, 2022. The fair value of the warrants were estimated at $60,871. The Company used the Black-Scholes pricing model to establish the fair value of the warrants by applying the following assumptions:

Expected stock price volatility	69.4%
Expected life of warrants	1.5 years
Risk free interest rate	0.42%
Expected dividend yield	0%
Exercise price	C$0.665

In addition, the Company issued 1,466,908 broker warrants to the agents of the private placement financing.

22

SILVER X MINING CORP. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED) For the seven months ended September 30, 2021 and six months ended August 31, 2020 (Expressed in US Dollars)

Each broker warrant is exercisable at C$0.60 per share at any time prior to June 23, 2023. The fair value of the broker warrants were estimated at $417,563. The Company used the Black-Scholes pricing model to establish the fair value of the broker warrants by applying the following assumptions:

Expected stock price volatility	87.2%
Expected life of warrants	2.0 years
Risk free interest rate	0.42%
Expected dividend yield	0%
Exercise price	C$0.60

Options

Option Plan

The Company has a share purchase option plan (“the Plan”), which allows the Company to issue options to directors, officers, employees, and consultants of the Company. The maximum aggregate number of securities reserved for issuance is 10% of the number of common shares issued and outstanding. Options granted under the Plan may have a maximum term of ten years. Vesting restrictions may be imposed at the discretion of the directors.

Share Purchase Options

The continuity of share purchase options for the years presented is as follows:

	Number of	Weighted average
	options	exercise price
Outstanding options, February 29, 2020	39,625	C$ 7.41
Granted	2,575,000	C$ 0.38
Cancelled	(84,625)	C$ 2.73
Expired	(5,000)	C$15.20
Outstanding options, February 28, 2021	2,525,000	C$ 0.38
Granted	6,975,000	C$ 0.60
Exercised	(200,000)	C$ 0.27
Cancelled	(150,000)	C$0.27
Outstanding options, September 30, 2021	9,150,000	C$ 0.55

As at September 30, 2021, options enabling the holders to acquire common shares are as follows:

			Weighted	Weighted
Expiry date	Number of	Number of	average	average
	options	vested options	remaining life	exercise
			inyears	price
June 24, 2025	1,500,000	1,500,000	3.73	C$ 0.27
November 2, 2025	675,000	506,250	4.09	C$ 0.70
June 21, 2026	4,500,000	4,500,000	4.73	C$ 0.60
August 23,2026	2,475,000	1,237,500	4.90	C$ 0.60
	9,150,000	7,743,750	4.56	C$ 0.55

23

SILVER X MINING CORP. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED) For the seven months ended September 30, 2021 and six months ended August 31, 2020 (Expressed in US Dollars)

As at February 28, 2021, options enabling the holders to acquire common shares are as follows:

			Weighted	Weighted
Expiry date	Number of	Number of	average	average
	options	vested options	remaining life	exercise
			inyears	price
June 24, 2025	1,850,000	1,337,500	4.32	C$ 0.27
November 2,2025	675,000	337,500	4.68	C$ 0.70
	2,525,000	1,675,000	4.42	C$ 0.38

On June 21, 2021, the Company granted 4,500,000 stock options with an exercise price of $0.60 to the Company’s management, directors and service providers. The options vested immediately upon grant. The fair value of the options were estimated at at $2,418,947 on the date of grant using the Black-Scholes option pricing model, with the following assumptions:

Expected stock price volatility	234%
Expected life of options	5.0 years
Risk free interest rate	0.97%
Expected dividend yield	0%
Exercise price	C$0.60

On August 23, 2021, the Company granted 2,475,000 stock options with an exercise price of $0.60 to the Company’s management, directors and service providers. The options have a 12-month vesting provision. The fair value of the options were estimated at $710,150 on the date of grant using the Black-Scholes option pricing model, with the following assumptions:

Expected stock price volatility	230%
Expected life of options	5.0 years
Risk free interest rate	0.82%
Expected dividend yield	0%
Exercise price	C$0.60

For the four and seven months ended September 30, 2021, the share-based compensation expense related to options was $3,171,925 and $3,328,539 (2020 - $290,780 and $290,780).

Restricted Share Units (“RSU”)

On July 8, 2020, the Company adopted the RSU Plan. The RSU Plan is a fixed plan which reserves for issuance of maximum of 2,000,000 common shares. RSUs issued are to be settled through common shares only.

On November 2, 2020, 1,750,000 restricted share units (“RSUs”) were awarded to officers and directors pursuant to the Company’s restricted share unit plan. 50% of the RSUs vest on November 2, 2021 and the remaining 50% on November 2, 2022.

As at September 30, 2021, there were 1,750,000 RSUs outstanding (February 28, 2021: 1,750,000)

For the four and seven months ended September 30, 2021, share-based compensation expense related to RSUs was $297,147 and 430,625 (2020 - $Nil and $Nil).

There were no RSUs granted for the period ended September 30, 2021 and 2020.

24

SILVER X MINING CORP. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED) For the seven months ended September 30, 2021 and six months ended August 31, 2020 (Expressed in US Dollars)

16. RELATED PARTY TRANSACTIONS

The Company’s related parties with transactions during the seven months ended September 30, 2021 and six months ended August 31, 2021, consist of directors, officers and the following companies with common directors:

Relatedparty	Nature of transactions
J Dare Consulting Ltd. (Director)	Director fees
Roma Capital Corp. (Director, Officer)	Consulting fees
JR Management Corp. (Director)	Consulting fees
A15 Capital Corp. (Director, Officer)	Consulting fees
Vihren Management LTD. (Officer)	Consulting fees
Ordago Ou (Director, Officer)	Consulting fees
Oscrow Capital Pty Ltd. (Director)	Director fees
Green Oil S.A.(Director)	Consultingfees

As at September 30, 2021, the Company had $747,000 outstanding in accounts payables and accrued liabilities (February 29, 2021 - $22,993, March 1, 2020 - $nil) associated with related parties.

i) Key Management Compensation

Key management personnel are persons responsible for planning, directing, and controlling the activities of the Company, and include certain directors and officers. Key management compensation, including amounts discussed above, is comprised of:

		Seven		Six
		months		months
		ended		ended
		September		August
		30, 2021		31, 2020
Salaries and benefits	$	65,452	$	14,828
Consulting fees		283,995		148,658
Directors' fees		18,037		4,448
Share basedpayment		2,332,187		160,000
	$	2,699,671	$	327,934

25

SILVER X MINING CORP. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED) For the seven months ended September 30, 2021 and six months ended August 31, 2020 (Expressed in US Dollars)

17. SEGMENTED INFORMATION

The Company operates in a two reportable operating segment, being the exploration and development of mineral properties. For the seven months ended September 30, 2021, the mineral property interests are located in Ecuador and Peru.

September 30, 2021	Canada – Corporate	Ecuador and other	Peru	Total
Cash and cash equivalents Inventory Receivables Prepaid	6,552,590 - 62,153 335,068	- - - -	1,956,538 311,362 1,939,456 43,667	8,509,128 311,362 2,001,609 378,735
	6,949,811	-	4,251,023	11,200,834
Exploration and evaluation assets Development property Equipment Receivable – non current	- - -	1,181,149 - - -	4,889,365 44,983,827 4,368,675 835,154	6,070,514 44,983,827 4,368,675 835,154
Total assets	6,949,811	1,181,149	59,328,044	67,459,004
Net loss – seven months ended September 30, 2021	6,815,695	24,183	908,915	7,748,794
August 31, 2020	Canada – Corporate	Ecuador and other	Peru	Total
Cash and cash equivalents Inventory Receivables Prepaid	127,011 - 33,290 196,895	- - - -	- - - -	127,011 - 33,290 196,895
	357,196	-	-	357,196
Exploration and evaluation assets Development property Equipment Receivable – non current	- - 206,953	1,131,958 - - -	- - - -	1,131,958 - - 206,953
Total assets	564,149	1,313,958	-	1,696,107
Net loss – six months ended August 31, 2021	805,252	80,672	-	885,924

26

SILVER X MINING CORP. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED) For the seven months ended September 30, 2021 and six months ended August 31, 2020 (Expressed in US Dollars)

18. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

In common with all other businesses, the Company is exposed to risks that arise from its use of financial instruments. This note describes the Company’s objectives, policies and processes for managing those risks and the methods used to measure them. Further quantitative information in respect of these risks is presented throughout these consolidated financial statements.

General Objectives, Policies and Processes

The Board of Directors has overall responsibility for the determination of the Company’s risk management objectives and policies and, whilst retaining ultimate responsibility for them, it has delegated the authority for designing and operating processes that ensure the effective implementation of the objectives and policies to the Company’s management. The Board of Directors receives periodic reports through which it reviews the effectiveness of the processes put in place and the appropriateness of the objectives and policies it sets.

The overall objective of the Board is to set policies that seek to reduce risk as far as possible without unduly affecting the Company’s competitiveness and flexibility.

The Company’s risk exposure and the impact on the Company’s financial instruments are summarized below:

Credit Risk

Credit risk is the risk of an unexpected loss if a customer or third party to a financial instrument fails to meet its contractual obligations. The Company’s credit risk is primarily attributable to its cash and other receivables. The Company limits exposure to credit risk by maintaining its cash with large financial institutions. The Company does not have cash invested in asset-based commercial paper.

Liquidity Risk

Liquidity risk is the risk that the Company will not be able to meet its obligations as they become due. The Company’s approach to managing liquidity risk is to ensure that it will have sufficient liquidity to meet liabilities when due. The Company manages its liquidity risk by forecasting cash flows from operations and anticipating any investing and financing activities. Management and the Board of Directors are actively involved in the review, planning and approval of significant expenditures and commitments. The Company is exposed to liquidity risk.

Commodity Price Risk

Market risk is the risk that the fair value of, or future cash flows from, the Company’s financial instruments will significantly fluctuate due to changes in market prices. The value of financial instruments can be affected by changes in interest rates, foreign currency rates and other market prices. Management closely monitors commodity prices, individual equity movements and the stock market to determine the appropriate course of action to be taken by the Company.

Foreign Currency Risk

The Company’s operations in Canada, Peru, Ecuador and the United States creates exposure to foreign currency fluctuation. Some of the Company’s operating expenditures are incurred in Peruvian SOL or Canadian Dollar, and the fluctuation of foreign currencies with the US dollar will have an impact upon the profitability of the Company and may also affect the value of the Company’s financial assets and liabilities. The Company has not entered into any agreements or purchased any instruments to hedge possible currency risks.

27

SILVER X MINING CORP. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED) For the seven months ended September 30, 2021 and six months ended August 31, 2020 (Expressed in US Dollars)

The Company’s financial assets and liabilities in various currencies as at September 30, 2021 are set out in the following table:

September 30, 2021	Canadian Dollar	US Dollar	Peruvian SOL	Total
Cash and cash equivalents Receivables	6,409,899 62,153	142,691 -	1,956,538 2,774,610	8,509,128 2,836,763
	6,472,052	142,691	4,731,148	11,345,891
Accounts payables and accruals Convertible debenture Debenture	(454,308) - -	- (3,888,655) (1,000,000)	(10,644,056) - (1,563,956)	(11,098,364) (3,888,655) (2,563,956)
Net asset (liabilities)	6,017,744	(4,745,964)	(7,476,864)	(6,205,084)

The Company’s financial assets and liabilities in various currencies as at February 28, 2021 are set out in the following table:

February 28, 2021	Canadian Dollar	US Dollar	Peruvian SOL	Total
Cash and cash equivalents Receivables	1,160,649 9,756	35,358 -	- -	1,196,007 9,756
	1,170,405	35,358	-	1,205,763
Accounts payables and accruals	(264,788)	-	-	(264,788)
Net asset (liabilities)	905,617	35,358	-	940,975

The Company’s financial assets and liabilities in various currencies as at March 1, 2020 are set out in the following table:

March 1, 2020	Canadian Dollar	US Dollar	Peruvian SOL	Total
Cash and cash equivalents Receivables	34,886 9,205	- -	- -	34,886 9,205
	44,091	-	-	44,091
Accounts payables and accruals	(490,213)	-	-	(490,213)
Net asset (liabilities)	(446,122)	-	-	(446,122)

The Company’s reported results will be affected by fluctuations in the Canadian dollar to US Dollar and Peruvian SOL to US Dollar exchange rate. As at September 30, 2021, a 10% appreciation of the Canadian Dollar relative to the US Dollars would have decreased net financial assets by approximately $601,744 (February 28, 2021 - $90,562, March 1, 2020 - $(44,612)). A 10% depreciation of the US Dollar relative to the Canadian Dollar would have had the equal but opposite effect. A 10% appreciation of the US Dollar relative to the Peruvian SOL would have decreased net financial assets by approximately $747,686 (February 28, 2021 - $nil, March 1, 2020 - $nil) and a 10% depreciation of the Peruvian SOL would have had an equal but opposite effect. The Company has not entered into any agreements or purchased any instruments to hedge possible currency risk.

28

SILVER X MINING CORP. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED) For the seven months ended September 30, 2021 and six months ended August 31, 2020 (Expressed in US Dollars)

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.

As at September 30, 2021, an 1% change in market interest rates would result in no material change in value of the assets or liabilities of the Company.

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, currency risk, or equity price risk. The Company is not exposed to any other price risk.

Determination of Fair Value

When applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability.

The carrying amounts for cash, receivables, accounts payable and accrued liabilities and due to related parties’ approximate fair values due to their short-term nature. Due to the use of subjective judgments and uncertainties in the determination of fair values these values should not be interpreted as being realizable in an immediate settlement of the financial instruments.

Fair Value Hierarchy

Financial instruments that are measured subsequent to initial recognition at fair value are grouped in Levels 1 to 3 based on the degree to which the fair value is observable:

Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities;

Level 2 – Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly; and

Level 3 – Inputs that are not based on observable market data.

19. CAPITAL MANAGEMENT

The Company’s objective when managing capital is to safeguard the Company’s ability to continue as a going concern in order to advance its mineral property and pursue growth opportunities. The Company defines its capital as shareholders’ equity. The Company manages its capital structure and makes adjustments to it to effectively support the acquisition and exploration of mineral properties.

The property in which the Company currently has an interest is in the exploration and development stage; as such, the Company is dependent on external financing to fund its activities. In order to pay for limited property care and maintenance and general administrative costs, the Company will spend its existing capital resources. The Company will continue to assess new properties and seek to acquire an interest in additional properties if it feels there is sufficient geologic or economic potential and if it has adequate financial resources to do so.

29

SILVER X MINING CORP. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED) For the seven months ended September 30, 2021 and six months ended August 31, 2020 (Expressed in US Dollars)

Management reviews its capital management approach on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable. The Company monitors its cash, investments, common shares, and stock options as capital. There have been no changes to the Company’s approach to capital management during the seven months ended September 30, 2021. The Company’s investment policy is to hold cash in interest-bearing bank accounts or highly liquid short-term interestbearing investments with maturities of one year or less and which can be liquidated at any time without penalties. The Company is not subject to externally imposed capital requirements and does not have exposure to asset-backed commercial paper or similar products.

The Company does not expect its current capital resources to be sufficient to cover its operating costs through the next twelve months and as such, will need to obtain additional capital resources. Actual funding requirements may vary from those previously planned due to a number of factors, including the progress of the Company’s business activities and economic condition.

20. SUPPLEMENTAL CASH FLOW INFORMATION

		Four	Three	Seven	Six
		months	months	months	months
		ended	ended	ended	ended
		Sept. 30,	Aug.31,	Sept. 30,	Aug. 31,
		2021	2020	2021	2020
Acquisition of exploration and	$	- $	1,207,556 $	- $	1,207,556
evaluation assets – common
shares issuance
MMTP – receivables (i)		3,162,735	-	3,162,735	-
MMTP – inventory (i)		468,073	-	468,073	-
MMTP – prepaid (i)		10,244	-	10,244	-
MMTP – development		43,637,642	-	43,637,642	-
property (i)
MMTP – equipment (i)		4,194,474	-	4,194,474	-
MMTP – accounts payables		10,591,239	-	10,591,239	-
and accrued liabilities (i)
MMTP – convertible		4,000,000	-	4,000,000	-
debenture (i)
MMTP – debenture (i)		3,026,245	-	3,026,245	-
MMTP – asset retirement		3,283,676	-	3,283,676	-
obligation (i)
MMTP – deferred tax		6,360,268	-	6,360,268	-
liabilities (i)
Shares for debt		197,830	-	197,830	-

(i) Assets and liabilities acquired from the MMTP business combination (note 5)

30

SILVER X MINING CORP. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED) For the seven months ended September 30, 2021 and six months ended August 31, 2020 (Expressed in US Dollars)

21. CHANGE IN PRESENTATION CURRENCY

For comparative purposes, the consolidated statements of financial position as at March 1, 2020 and February 28, 2021 includes adjustments to reflect the change in the accounting policy resulting from the change in presentation to the U.S. Dollar. The amounts previously reported in Canadian Dollars as shown below have been translated into U.S. Dollars at March 1, 2020 and February 28, 2021 exchange rates (Note 2). The effect of the translation is as follows:

As at March 1, 2020

	Previously	Previously	Translated
	Reported		(USD $)
	(CAD $)
Current Assets	$	62,300	$ 46,392
Non-current Assets		2,354	1,753
Total Assets	$	64,654	$ 48,145
Current Liabilities	$	658,306	$ 490,213
Non-current Liabilities		-	-
Total Liabilities	$	658,306	$ 490,213

As at February 28, 2021

	Previously	Previously
	Reported (CAD $)		Translated (USD $)
Current Assets	$	1,728,632	$ 1,362,737
Non-current Assets		7,474,073	5,892,056
Total Assets	$	9,202,705	$ 7,254,793
Current Liabilities	$	335,884	$ 264,788
Non-current Liabilities		-	-
Total Liabilities	$	335,884	$ 264,788

For comparative purposes, the consolidated statements of loss and comprehensive loss for the three and six months ended August 31, 2020 includes adjustments to reflect the change in accounting policy resulting from the change in presentation currency to the U.S Dollar. The amounts previously reported in Canadian Dollars as shown below have been translated into U.S. Dollars at the average exchange rate for the period. The effect of the translation is as follows:

31

SILVER X MINING CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED) For the seven months ended September 30, 2021 and six months ended August 31, 2020 (Expressed in US Dollars)

Three and six months ended August 31, 2020

	Three months ended	Three months ended	Six months ended	Six months ended
	August	31, 2020	August 31, 2020
	Previously	Translated	Previously	Translated
	Reported	(USD $)	Reported	(USD $)
	(CAD $)		(CAD $)
Exploration expenditures	$ (51,329)	$ (38,220)	$ (110,732)	$ (80,672)
General and administrative expenses	(1,019,421)	(759,067)	(1,088,159)	(808,190)
Loss before undernoted items	(1,070,750)	(797,287)	(1,198,891)	(888,861)
Other items	(3,984)	(2,967)	(3,943)	(2,937)
Net loss for the year	$ (1,066,766)	$ (794,320)	$ (1,194,948)	$ (885,924)
(Loss) gain on translation of foreign operations	-	24,013	-	37,231
Comprehensive loss for theperiod	$ (1,066,766)	$ (770,307)	$ (1,194,848)	$ (848,603)

22. SUBSEQUENT EVENT

• a) On November 8, 2021, the Company issued 5,296,882 common shares for the settlement of $1,000,000 debt (see note 5), accrued interest and arrangement fees with a combined value of $1,341,488. The common shares were issued at a deemed price of C$0.315 per share to Baker Steel.

32