Silver X Mining Corp. - M&A Activity 2021

FORM 51-102F4

BUSINESS ACQUISITION REPORT

Item 1 Identity of Company

1.1 Name and Address of Company

Silver X Mining Corp. (the “ Company ”) Suite 1430 -800 West Pender Street Vancouver, British Columbia V6C 2V6

1.2 Executive Officer

Matt Roma, Chief Financial Officer Telephone No. +1 604 638 8063

Item 2 Details of Acquisition

2.1 Nature of Business Acquired

The Company acquired all of the issued ordinary shares (the " MMTP Shares ") of Mines and Metals Trading (Peru) PLC (“ MMTP ”), a silver mining company whose only material asset is the Nueva Recuperada silver-lead-zinc project, located in Huancavelica, Peru, pursuant to the terms of the business combination agreement between the Company and MMTP dated February 10, 2021 (the “ Acquisition ”).

2.2 Acquisition Date

June 23, 2021

2.3 Consideration

The Company acquired all of the issued MMTP Shares in exchange for common shares of the Company (each, a " Silver X Share ") at an exchange ratio of 28.828 Silver X Shares for each MMTP Share, resulting in an aggregate of 42,969,046 Silver X Shares being issued to MMTP shareholders at a deemed price of $0.60 per share. The Company also paid a finder's fee to an arm's length third party by issuing 1,250,000 Silver X Shares.

2.4 Effect on Financial Position

The Company does not have any plans or proposals for material changes in its business affairs or the affairs of MMTP that would have a significant effect on the financial performance and financial position of the Company.

2.5 Prior Valuations

No valuation opinion required by securities legislation or a Canadian exchange or market to support the consideration paid by Silver X for MMTP was obtained within the last 12 months by MMTP or the Company.

[Amended January 1, 2011]

ACTIVE_CA\ 47344885\2

2.6 Parties to Transaction

The Acquisition was between arms’ length parties and did not involve an informed person, associate or affiliate of the Company, as defined in section 1.1 of National Instrument 51-102 - Continuous Disclosure Obligations (“ NI 51-102 ”)

2.7 Date of Report

September 7, 2021

Item 3 Financial Statements and Other Information

As required by Part 8 of NI 51-102, the following financial statements of MMTP are included in this Business Acquisition Report:

(a) Consolidated Financial Statements as of December 31, 2020 and December 31, 2019, attached as Schedule “A” hereto, consisting of the independent auditor’s report, consolidated statements of financial position, consolidated statements of comprehensive loss, consolidated statements of changes in shareholders’ deficit, consolidated statements of cash flows and the notes to the consolidated financial statements; and
(b) Consolidated Interim Financial Statements as of March 31, 2021 and March 31, 2020, attached as Schedule “B” hereto, consisting of the consolidated statements of financial position, consolidated statements of comprehensive loss, consolidated statements of changes in shareholders’ deficit, consolidated statements of cash flows and the notes to the consolidated financial statements.

ACTIVE_CA\ 47344885\2

SCHEDULE “A”

Consolidated Financial Statements as of December 31, 2020 and December 31, 2019

[see attached]

[Amended January 1, 2011]

ACTIVE_CA\ 47344885\2

MINES & METALS TRADING (PERU) PLC

Consolidated financial statements as of December 31, 2020 and December 31, 2019, together with the independent auditor’s report

Content:

Independent Auditor’s Report Consolidated Statements of Financial Position Consolidated Statements of Comprehensive Loss Consolidated Statements of Changes in Shareholders’ Deficit Consolidated Statements of Cash Flows Notes to the Consolidated Financial Statements

SHIM & Associates LLP Chartered Professional Accountants Suite 970 – 777 Hornby Street Vancouver, B.C. V6Z 1S4 T: 604 559 3511 | F: 604 559 3501

S H I M

INDEPENDENT AUDITOR’S REPORT

To the Shareholders of Mines & Metals Trading (Peru) PLC

Opinion

We have audited the accompanying consolidated financial statements of Mines & Metals Trading (Peru) PLC (the “Company”), which comprise the consolidated statement of financial position as at December 31, 2020, and the consolidated statements of comprehensive loss, changes in shareholders’ deficit and cash flows for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

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

Basis for Opinion

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

Other Matter

The consolidated financial statements of the Company as at, and for the year ended December 31, 2019 were audited by another auditor who expressed an unmodified opinion on those statements on March 19, 2021.

Material Uncertainty Related to Going Concern

We draw attention to Note 1 of the consolidated financial statements, which indicates that a material uncertainty exists that may cast significant doubt on the Company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.

Other Information

Management is responsible for the other information.

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

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

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We are not aware of any other information at this time.

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

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

In preparing the consolidated financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company’s financial reporting process.

SHIM & Associates LLP Chartered Professional Accountants

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements

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

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

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the consolidated financial information of the entities or business activities within the Company to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

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

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

The engagement partner on the audit resulting in this independent auditor’s report is Dong H. Shim.

“SHIM & Associates LLP”

CHARTERED PROFESSIONAL ACCOUNTANTS

Vancouver, Canada 9 June 2021

MINES & METALS TRADING (PERU) PLC

Consolidated Statements of Financial Position

As of December 31, 2020 and 2019

(Expressed in Peruvian Soles)

Assets Note Current assets Cash and cash equivalents Trade accounts receivable Inventories 4 Other accounts receivable 5 Prepaid expenses 6 Income taxes receivable Total current assets Mining concessions, property, plant and equipment 7 Intangible Total assets Liabilities and Equity Liabilities Current liabilities Trade accounts payable 8 Financial obligations - current 9 Other accounts payable 10 Total current liabilities Financial obligations – long term 9 Convertible Debenture 9 Others Provisions Provision for environmental remediation 11 Total liabilities Shareholders’ Deficit Share capital 12 Subscriptions received in advance 12 Reserves Deficit Total shareholders’ deficit Total liabilities and shareholders’ deficit	December 31 2020 S/ 8,521,781 2,083,000 1,946,935 8,352,423 37,793 291,850 21,233,782 8,610,974 198,459 30,043,215 21,594,823 9,364,524 9,706,347 40,665,694 2,340,769 13,721,331 459,863 12,863,752 70,051,409 5,659,914 8,476,674 (138,888) (54,005,894) (40,008,194) 30,043,215	December 31 2019 S/ 1,541,835 868,608 1,455,317 4,512,309 523,194 145,739
		9,047,002 6,624,041 3,000
		15,674,043
		8,103,788 578,720 5,561,884
		14,244,394 3,712,692 12,207,832 169,698 12,657,412
		42,692,028
		3,315,838 - 1,232,930 (31,866,752)
		(27,317,984)
		15,674,043

Commitments and contingent liabilities (Note 16) and Subsequent events (Note 18)

Authorized and approved by the Board:

“Jose Maria Garcia” “Sebastian Wahl”

The accompanying notes are part of the consolidated financial statements.

MINES & METALS TRADING (PERU) PLC

Consolidated Statements of Comprehensive Loss For the years ended December 31, 2020 and 2019 (Expressed in Peruvian Soles)

Revenue Cost of goods sold Gross profit Administrative expenses Other operating expenses Selling expenses Operating loss Financial expenses, net Other income Exchange difference Net loss and comprehensive loss Net loss per common share – Basic and diluted Weighted average shares outstanding – Basic and diluted	Year ended December 31 2020 2019 S/ S/ 19,109,576 9,689,540 (21,361,129) (6,962,897) (2,251,553) 2,726,643 (6,764,019) (7,246,846) (11,460,190) (13,328,064) (477,391) (989,334) (20,953,153) (18,837,601) (3,364,194) (2,104,472) 2,703,838 365,770 (525,633) 105,709 (22,139,142) (20,470,594) (18.93) (17.77) 1,169,805 1,151,478	Year ended December 31 2020 2019 S/ S/ 19,109,576 9,689,540 (21,361,129) (6,962,897) (2,251,553) 2,726,643 (6,764,019) (7,246,846) (11,460,190) (13,328,064) (477,391) (989,334) (20,953,153) (18,837,601) (3,364,194) (2,104,472) 2,703,838 365,770 (525,633) 105,709 (22,139,142) (20,470,594) (18.93) (17.77) 1,169,805 1,151,478
		2,726,643 (7,246,846) (13,328,064) (989,334)
		(18,837,601) (2,104,472) 365,770 105,709
		(20,470,594)
		(17.77)
		1,151,478

The accompanying notes form part of the consolidated financial statements.

MINES & METALS TRADING (PERU) PLC

Consolidated Statements of Changes in Shareholders’ Deficit

For the years ended December 31, 2020 and 2019 (Expressed in Peruvian Soles)

Balance as of January 1,2019 Shares issued for cash Shares issued for services Equity portion of convertible debenture Shares issued settlement Accumulated Results Translation adjustment Net loss Balance as of December 31, 2019 Shares issued for services Shares issued settlement Subscriptions received Translation adjustment Net loss Balance as of December 31, 2020	Number of Shares 1,000,000 20,913 100,200 - 15,349 - - - 1,136,462 35,288 15,349 - 1,187,099	Share Capital S/ 433 848,875 1,809,500 - 657,030 - - - 3,315,838 1,633,544 710,532 - - - 5,659,914	Subscriptions Received in Advance S/ - - - - - - - - - - - 8,476,674 - - 8,476,674	Reserves S/ - - - 1,301,291 - - (68,361) - 1,232,930 - - - (1,371,818) - (138,888)	Deficit S/ (11,359,369) - - - - (36,789) - (20,470,594) (31,866,752) - - - - (22,139,142) (54,005,894)	Total S/ (11,358,936) 848,875 1,809,500 1,301,291 657,030 (36,789) (68,361) (20,470,594)
						(27,317,984) 1,633,544 710,532 8,476,674 (1,371,818) (22,139,142)
						(40,008,194)

The accompanying notes are part of the consolidated financial statements.

MINES & METALS TRADING (PERU) PLC

Consolidated Statements of Cash Flows

For the years ended December 31, 2020 and 2019 (Expressed in Peruvian Soles)

Operating activities Net loss Adjustments for non-cash items: Depreciation Finance expense Shares for services Changes in non-cash working capital: Trade and other accounts receivable Inventories Prepaid expenses Trade and other accounts payable Other provisions Net cash used in operating activities Investment activities Purchase of mining concessions, property, plant and equipment Other acquisitions Net cash used in investment activities Financial activities Subscriptions receivable in advance Increase in financial obligations Net cash provided by financing activities Effects of exchange difference Change in cash and cash equivalents for the year Cash and cash equivalents, beginning of year Cash and cash equivalents, end of year	December 2020 December 2019 S/ S/ (22,139,142) (20,470,594) 854,544 815,081 3,276,172 2,237,391 1,633,544 1,809,500 (5,200,617) (1,680,859) (491,618) (401,695) 485,401 175,953 17,635,498 4,959,925 290,165 169,698
	(3,656,053) (12,385,600)
	(2,546,796) (1,563,486) (490,140) (996)
	(3,036,936) (1,564,482)
	8,476,674 848,875 6,568,080 13,243,686
	15,044,754 14,092,561
	1,541,835 127,825 6,979,946 142,479 1,541,835 1,271,531
	8,521,781 1,541,835

The accompanying notes are part of the consolidated financial statements.

MINES & METALS TRADING (PERU) PLC Notes to the Consolidated Financial Statements As of December 31, 2020 and 2019 (Expressed in Peruvian Soles)

1. Identification and economic activity

(a) Identification

MINES & METALS TRADING (PERU) PLC (hereinafter “MMTP” or the “Company”), was established on February 22, 2018, being its legal domicile 12 Mount Havelock, Douglas, IM1 2QG, Isle of Man.

MINES & METALS TRADING (PERU) SAC (hereinafter the “Subsidiary”) was established on January 12, 2016 and commenced operations on February 8, 2017. It is a private company governed by the provisions of the Statute and the Peruvian Companies Law General. The legal address of the Subsidiary is Av. La Paz Nro. 1121, Miraflores, Lima, Peru.

MINING SENSE GOLD PERU SAC was incorporated on July 20, 2018. This company is another subsidiary of the Company governed by the provisions of the Statute and the Peruvian Companies Law General. The legal address of the Subsidiary is Av. La Paz Nro. 1121, Miraflores, Lima, Peru; however, it has not yet started operations.

CORONGO EXPLORACIONES SAC was acquired on March 3, 2020. This company is another subsidiary of the Company that is governed by the provisions of the Statute and the General Law of Public Limited Companies. The legal address of the Subsidiary is Calle Juan de Arona 670, San Isidro, Lima, Peru.

(b) Economic activity

The economic activity of the Company is through its subsidiary MINES & METALS TRADING (PERU) SAC, and involves all kinds of businesses in the mining sector, including the provision of related consulting services.

(c) Acquisition of Mining Unit “Recuperada”

In July 2017 the Company acquired from Compañia de Minas Buenaventura SAA (Buenaventura or the seller) the assets and liabilities of the Mining Unit Recuperada, located in the district of Corralpampa, department of Huancavelica in Peru.

(d) Going concern

The Company has incurred losses and negative operating cash flows since its inception. The Company incurred a net loss of S/22,139,142 (2019 – S/20,470,594) during the year ended December 31, 2020 and has an accumulated deficit of S/54,005,894 (December 31, 2019 – S/31,866,752). The ability of the Company to continue as a going concern in the short-term will depend upon, but not be limited to, obtaining additional financing and generating revenues sufficient to cover its operating costs. These conditions indicate the existence of a material uncertainty that may cast significant doubt about the Company’s ability to continue as a going concern.

Management is of the opinion that it will be in a position to raise ongoing financing as needed; however, there is no certainty that these and other strategies will be sufficient to permit the Company to continue as a going concern.

MINES & METALS TRADING (PERU) PLC Notes to the Consolidated Financial Statements As of December 31, 2020 and 2019 (Expressed in Peruvian Soles)

1. Identification and economic activity (continued)

(e) COVID-19 estimation uncertainty

Since March 31, 2020, the outbreak of the novel strain of coronavirus, specifically identified as “COVID-19”, has resulted in governments worldwide enacting emergency measures to combat the spread of the virus. These measures, which include the implementation of travel bans, self-imposed quarantine periods and physical distancing, have caused material disruption to business globally resulting in an economic slowdown. The duration and enduring impact of the COVID-19 outbreak is unknown at this time. It is not possible to reliably estimate the length and severity of these developments and the impact on the financial results and condition of the Company in future periods.

These consolidated financial statements were approved and authorized for issue by the Board of Directors of the Company on June 9, 2021.

2. Accounting policies

(a) Statement of compliance

The accompanying financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS), effective December 31, 2020 as issued by the International Accounting Standards Board (IASB). The accounting policies have been consistently applied in the reported period.

(b) Basis of presentation and consolidation

The consolidated financial statements comprise the financial statements of the Company and its three controlled subsidiaries as of December 31, 2020. The consolidated financial statements have been prepared on a historical cost basis except for certain financial assets measured at fair value. In addition, these consolidated financial statements have been prepared using the accrual basis of accounting, except for cash flow information.

The consolidated financial statements have been prepared on a historical costs basis and are presented in Peruvian Soles (“PEN”).

The preparation of the consolidated financial statements in compliance with IFRS requires that Management 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 or complexity, or areas where assumptions and estimates are significant to the financial statements include useful life and residual values of mining concessions and property, plant and equipment, impairment of long-lived assets, impairment of accounts receivable, valuation of provision for environmental remediation, current income tax, deferred income tax, and contingencies. Actual results may differ from these judgements, estimates, and assumptions.

Significant assumptions about the future and other sources of estimation uncertainty that management has made at the reporting date that could result in a material adjustment to the carrying amounts of assets and liabilities, in the event that actual results differ from those assumptions. Estimates and underlying assumptions are reviewed on an ongoing basis by the management and revisions to accounting estimates are recognized in the year in which the estimates are revised and in any future years affected.

MINES & METALS TRADING (PERU) PLC Notes to the Consolidated Financial Statements As of December 31, 2020 and 2019 (Expressed in Peruvian Soles)

2. Accounting policies (continued)

d) Going concern

The evaluation of the Company’s ability to continue as a going concern, to raise additional financing in order to cover its operating expenses and its obligations for the upcoming year requires significant judgment based on past experience and other assumptions including the probability that future events are considered reasonable according to the circumstances.

3. Summary of significant accounting principles

The significant accounting policies set out below are in effect in the consolidated financial statements for the years ended December 31, 2020 and 2019 have been applied consistently to all years presented in these consolidated financial statements unless otherwise indicated.

(a) Cash and cash equivalents

Cash and cash equivalents reported in the cash flows statement comprise cash in local financial institutions, cash and term deposits with maturity less than three months.

(b) Financial instruments

Classification

The Company classifies its financial assets in the following measurement categories:

those to be measured subsequently at fair value (either through other comprehensive income (“OCI”) or through profit or loss), and
those to be measured at amortized cost.

The classification depends on the Company’s business model for managing the financial assets and the contractual terms of the cash flows.

For assets measured at fair value, gains and losses will either be recorded in profit or loss or OCI. For investments in equity instruments that are not held for trading, this will depend on whether the group has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through other comprehensive income (“FVOCI”).

The Company reclassifies debt instruments when and only when its business model for managing those assets changes.

Recognition and derecognition

Regular way purchases and sales of financial assets are recognized on trade-date, the date on which the Company commits to purchase or sell the asset. Financial assets are derecognized when the rights to receive cash flows from the financial assets have expired or have been transferred and the Company has transferred substantially all the risks and rewards of ownership.

Measurement

At initial recognition, the Company measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss (“FVTPL”), transactions costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at FVTPL are expensed in profit or loss.

Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows are solely payment of principal and interest.

MINES & METALS TRADING (PERU) PLC Notes to the Consolidated Financial Statements As of December 31, 2020 and 2019 (Expressed in Peruvian Soles)

3. Summary of significant accounting principles (continued)

Debt instruments

Subsequent measurement of debt instrument depends on the Company’s business model for managing the asset and the cash flow characteristics of the asset. There are three measurement categories into which the Company classifies its debt instruments:

Amortized cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortized cost. Interest income from these financial assets is included in finance income using the effective interest rate method. Any gain or loss arising on derecognition is recognized directly in profit or loss and presented in other gains/(losses) together with foreign exchange gains and losses. Impairment losses are presented as a separate line item in the statement of profit or loss.
FVOCI: Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets’ cash flows represent solely payments of principal and interest, are measured at FVOCI. Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest income and foreign exchange gains and losses which are recognized in profit or loss. When the financial asset is derecognized, the cumulative gain or loss previously recognized in OCI is reclassified from equity to profit or loss and recognized in other gains/(losses). Interest income from these financial assets is included in finance income using the effective interest rate method. Foreign exchange gains and losses are presented in other gains/(losses) and impairment expenses are presented as separate line item in the statement of profit or loss.
FVTPL: Assets that do not meet the criteria for amortized cost or FVOCI are measured at FVTPL. A gain or loss on a debt investment that is subsequently measured at FVTPL is recognized in profit or loss and presented net within other gains/(losses) in the period in which it arises.

Equity instruments

The Company subsequently measures all equity investments at fair value. Where the Company’s management has elected to present fair value gains and losses on equity investments in OCI, there is no subsequent reclassification of fair value gains and losses to profit or loss following the derecognition of the investment. Dividends from such investments continue to be recognized in profit or loss as other income when the Company’s right to receive payments is established.

Changes in the fair value of financial assets at FVTPL are recognized in other gains/(losses) in the statement of profit or loss as applicable. Impairment losses (and reversal of impairment losses) on equity investments measured at FVOCI are not reported separately from other changes in fair value.

Impairment

The Company assesses on a forward looking basis the expected credit losses associated with its debt instruments carried at amortised cost and FVOCI. The impairment methodology applied depends on whether there has been a significant increase in credit risk.

Inventories are valued at the cost or net realizable value, whichever is less. The net realization value is the estimated sale price in the normal course of business, less the costs to put the inventories on sale condition and the marketing and distribution expenses. If the cost is greater than the net realizable value, the corresponding decrease in the result of the year is recognized in the item "cost of sales". The cost of inventories is determined using the weighted average method.

MINES & METALS TRADING (PERU) PLC Notes to the Consolidated Financial Statements As of December 31, 2020 and 2019 (Expressed in Peruvian Soles)

3. Summary of significant accounting principles (continued)

(d) Property, plant and equipment

This item is presented at acquisition cost, less accumulated depreciation and any accumulated impairment loss, if any. The initial cost of an asset classified in this category includes the purchase price, including import duties and non-refundable purchase taxes and any costs directly attributable to the asset for working conditions and use.

Residual values, useful life and depreciation method of the assets are reviewed and adjusted, if necessary, at the date of each statement of financial position.

When the carrying amount of an asset is greater than its estimated recoverable value, the corresponding loss is recorded. The cost and accumulated depreciation of assets retired or sold are removed from the respective accounts and the resulting gain or loss will affect the results of the year in which it occurs.

Depreciation is calculated using the straight line method based on the estimated useful lives as follows:

ollows:
	YEARS
Buildings and facilities	20
Machinery and equipment	7-10
Vehicles	5
Furniture and fixtures	10
Computer equipment	4

(e) Mining concessions

The mining concessions represent the ownership of the exploration and exploitation rights that the Subsidiary has over the mining properties that contain the acquired mineral reserves.

Mining concessions are presented at cost. In case the Subsidiary abandons said concessions, the associated costs are written off in the statement of income.

(f) Leases

At inception of a contract, the Company assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Company assesses whether the contract involves the use of an identified asset, whether the right to obtain substantially all of the economic benefits from use of the asset during the term of the arrangement exists, and if the Company has the right to direct the use of the asset. At inception or on reassessment of a contract that contains a lease component, the Company allocates the consideration in the contract to each lease component on the basis of their relative standalone prices.

As a lessee, the Company recognizes a right-of-use asset and a lease liability at the commencement date of a lease. The right-of-use asset is initially measured at cost, which is comprised of the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any decommissioning and restoration costs, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight line method from the commencement date to the earlier of the end of the lease term, or the end of the useful life of the asset. In addition, the right-of-use asset may be reduced due to impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

MINES & METALS TRADING (PERU) PLC Notes to the Consolidated Financial Statements As of December 31, 2020 and 2019 (Expressed in Peruvian Soles)

3. Summary of significant accounting principles (continued)

A lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by the interest rate implicit in the lease, or if that rate cannot be readily determined, the incremental borrowing rate. Lease payments included in the measurement of the lease liability are comprised of:

fixed payments, including in-substance fixed payments, less any lease incentives receivable;
variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;
amounts expected to be payable under a residual value guarantee;
exercise prices of purchase options if the Company is reasonably certain to exercise that option; and
payments of penalties for terminating the lease, if the lease term reflects the lessee exercising an option to terminate the lease.

The lease liability is measured at amortized cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, or if there is a change in the estimate or assessment of the expected amount payable under a residual value guarantee, purchase, extension or termination option. Variable lease payments not included in the initial measurement of the lease liability are charged directly to profit or loss.

The Company has elected not to recognize right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or less and leases of low-value assets. The lease payments associated with these leases are charged directly to profit or loss on a straight-line basis over the lease term.

(g) Impairment of non-financial assets

At the end of each reporting period, the Company’s assets are reviewed to determine whether there is any indication that those assets may be impaired. If such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment, if any. The recoverable amount is the higher of fair value less costs to sell and value in use. Fair value is determined as the amount that would be obtained from the sale of the asset in an arm’s length transaction between knowledgeable and willing parties. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount and the impairment loss is recognized in profit or loss for the period. For an asset that does not generate largely independent cash flows, the recoverable amount is determined for the cash generating unit to which the asset belongs.

Where an impairment loss subsequently reverses, the carrying amount of the asset (or cashgenerating unit) is increased to the revised estimate of its recoverable amount, but to an amount that 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. A reversal of an impairment loss is recognized immediately in profit or loss.

MINES & METALS TRADING (PERU) PLC Notes to the Consolidated Financial Statements As of December 31, 2020 and 2019 (Expressed in Peruvian Soles)

3. Summary of significant accounting principles (continued)

(h) Provisions

Provisions for environmental restoration, restructuring costs and legal claims are recognized when: the Company has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated. Provisions are not recognized for future operating losses.

Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to passage of time is recognized as interest expense.

(i) Revenue recognition

Revenues are recognized when all the risks and benefits inherent to ownership of the delivered good have been transferred, the economic benefits associated with the transaction are likely to flow to the Company and its Subsidiary and the amount of income can be measured reliably. The following specific criteria must be met to recognize an income:

Sale of zinc and lead concentrates Revenue from the sale of zinc and lead concentrates, together with the related sale cost, are recognized when the Company and its Subsidiary have delivered the concentrate in the place agreed with the client according to the contract, the client has accepted it and the collection of the accounts receivable is reasonably assured.
Consulting revenue Consulting revenue are recognized on an accrual basis and are recorded in the period in which the services are provided. Reasonableness of collection is considered when recording consulting revenue.

(j) Income tax

The tax expense for the period comprises current and deferred tax. Tax is recognized in the income statement, except to the extent that it relates to items recognized in other comprehensive income or directly in equity. In this case, the tax is also recognized in other comprehensive income or directly in equity, respectively.

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

Deferred income tax is recognized on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred tax liabilities are not recognized if they arise from the initial recognition of goodwill and deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled.

Deferred income tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized.

MINES & METALS TRADING (PERU) PLC Notes to the Consolidated Financial Statements As of December 31, 2020 and 2019 (Expressed in Peruvian Soles)

3. Summary of significant accounting principles (continued)

(k) Foreign currency translation

Functional and presentation currency

Items included in the financial statements of each of the Company’s entities are measured using the currency of the primary economic environment in which the entity operates (‘the functional currency’). The consolidated financial statements are presented in the PEN, which is also the functional currency of the subsidiaries. The functional currency of the Company is Canadian dollars.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are re-measured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in profit and loss.

(l) Compound financial instruments

Compound financial instruments issued by the Company comprise of a convertible debenture that can be converted to share capital at the option of the holder, and the number of shares to be issued does not vary with changes in their fair value. The liability component of a compound financial instrument is recognized initially at the fair value of the similar liability that does not have an equity conversion option. The equity component is recognized initially as the difference between the fair value of the compound financial instrument as a whole and the fair value of the liability component. Any directly attributable transaction costs are allocated to the liability and equity components in proportion to their initial carrying amounts. Subsequent to initial recognition, the liability component of a compound financial instrument is measured at amortized cost using the effective interest method. The equity component of a compound financial instrument is not remeasured subsequent to initial recognition except on conversion or expiry.

Financial liabilities are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the end of the reporting period.

(m) Loss per share

The Company presents basic and diluted loss per share data for its common shares. Basic loss per share is calculated by dividing the income or loss attributable to common shareholders of the Company by the weighted average number of common shares outstanding during the year. Diluted loss per share is determined by dividing the income or loss attributable to common shareholders by the weighted average number of common shares outstanding and for the effects of all dilutive potential common shares.

(n) Comparative figures

Certain comparative figures have been reclassified to conform to the financial statement presentation adopted in the current year.

MINES & METALS TRADING (PERU) PLC

Notes to the Consolidated Financial Statements As of December 31, 2020 and 2019

(Expressed in Peruvian Soles)

4. Inventories

The composition of the entry:

The composition of the entry:
Ore and concentrate Supplies Inventory in transit	2020 S/ 1,750,397 192,828 3,710 1,946,935	2019 S/ 1,251,179 200,428 3,710
		1,455,317

5. Other accounts receivable

The composition of the entry:

The composition of the entry:
Guarantee deposits (a) Value added tax (VAT) receivable (b) Rent guarantee Other (c)	2020 S/ 3,433,253 3,085,642 97,686 1,735,842 8,352,423	2019 S/ 2,853,525 339,833 89,478 1,229,473
		4,512,309

a) The amount corresponds to the guarantee for environmental remediation is in custody of AVLA Peru Compania de Seguros SA (AVLA) for the equivalent of USD$948,937, as of December 31, 2020 (2019 - USD$861,051).
b) Corresponds to the final balance of the VAT credit of the purchases made in the 2020 period.
c) The balance includes a balance receivable from Canadian publicly listed company, Zincore Metals Inc. (“Zincore”) (NEX trading symbol “ZNC.H”), in form of nine promissory notes in the principal amount of S/970,368 (USD$267,976) (2019 - S/920,176 (USD$272,126)) and accrued interest receivable of S/93,766 (USD$26,798) (2019 - S/49,697 (USD$14,996)). These notes are unsecured, bears interest at 10% per annum, and are due in six months and initially were extended by six months each. Zincore and the Company negotiated further extension detailed below.

Zincore is not a related party to the Company.

I. On January 15, 2019, the Company advanced an unsecured loan to Zincore for USD$25,000. The loan, which matures in 6 months on July 15, 2019, extended by 24 months to July 15, 2021, carries an interest rate of 10% compounded monthly. The loan principal and applicable accrued interest are to be repaid at maturity.
II. On February 15, 2019, the Company advanced an unsecured loan to Zincore for USD$10,000. The loan, which matures in 6 months on August 15, 2019, extended by 24 months to August 15, 2021, carries an interest rate of 10% compounded monthly. The loan principal and applicable accrued interest are to be repaid at maturity.
III. On February 27, 2019, the Company advanced an unsecured loan to Zincore for USD$10,000. The loan, which matures in 6 months on February 27, 2019, extended by 24 months to August 27, 2021, carries an interest rate of 10% compounded monthly. The loan principal and applicable accrued interest are to be repaid at maturity.

MINES & METALS TRADING (PERU) PLC Notes to the Consolidated Financial Statements As of December 31, 2020 and 2019 (Expressed in Peruvian Soles)

5. Other accounts receivable (continued)

IV. On March 21, 2019, the Company advanced an unsecured loan to Zincore for USD$10,000. The loan, which matures in 6 months on September 21, 2019, extended by 24 months to September 21, 2021, carries an interest rate of 10% compounded monthly. The loan principal and applicable accrued interest are to be repaid at maturity.
V. On June 26, 2019, the Company advanced an unsecured loan to Zincore for USD$50,000. The loan, which matures in 6 months on December 26, 2019, extended by 18 months to December 26, 2021, carries an interest rate of 10% compounded monthly. The loan principal and applicable accrued interest are to be repaid at maturity.
VI. On June 27, 2019, USD$82,800 were sent directly by the Company to pay for concession fees on behalf of Zincore. The loan, which matures in 6 months on December 27, 2019, extended by 18 months to June 27, 2021, carries an interest rate of 10% compounded monthly. The loan principal and applicable accrued interest are to be repaid at maturity.
VII. On July 19, 2019, the Company advanced an unsecured loan to Zincore for USD$50,000. The loan, which matures in 6 months on January 19, 2020, extended by 12 months to January 19, 2021, carries an interest rate of 10% compounded monthly. The loan principal and applicable accrued interest are to be repaid at maturity.
VIII. On August 21, 2019, USD$4,150 were sent directly by the Company to pay for legal fees on behalf of Zincore. The loan, which matures in 6 months on February 21, 2020, extended by 12 months to February 21, 2021, carries an interest rate of 10% compounded monthly. The loan principal and applicable accrued interest are to be repaid at maturity. On September 18, 2020, this loan was forgiven by the Company in exchange for the ownership of a dormant subsidiary of Zincore.
IX. On November 5, 2019, the Company advanced an unsecured loan to Zincore for USD$30,000. The loan, which matures in 6 months on May 5, 2020, extended by 12 months to May 5, 2021, carries an interest rate of 10% compounded monthly. The loan principal and applicable accrued interest are to be repaid at maturity.
X. On March 10, 2020 the Company advanced an unsecured loan to Zincore for USD$5,000. The loan, which matures in 6 months on September 10, 2020, extended by 6 months to March 10, 2021, carries an interest rate of 10% compounded monthly. The loan principal and applicable accrued interest are to be repaid at maturity.
XI. During the year ended December 31, 2019, USD$176 was sent directly by the Company to pay for tax on behalf of Zincore.
XII. During the year ended December 31, 2020, USD$936 was sent directly by the Company to settle debt on behalf of Zincore.

MINES & METALS TRADING (PERU) PLC

Notes to the Consolidated Financial Statements As of December 31, 2020 and 2019

(Expressed in Peruvian Soles)

6. Prepaid expenses

paid expenses
Premium guarantee of closure plan Accrual mining service Other	2020 S/ 9,920 - 27,873 37,793	2019 S/ 10,980 451,000 61,214
		523,194

7. Mining concessions, property, plant and equipment, net

For the year ended December 31, 2019

Cost Mining concessions Buildings and facilities Machinery and equipment Vehicles Furniture and fixtures Computer equipment Other equipment Construction in progress Accumulated depreciation Buildings and facilities Machinery and equipment Vehicles Furniture and fixtures Computer equipment Other equipment Net value	January 01 S/ 678,636 327,282 3,711,321 13,908 76,031 51,165 661,909 703,495 6,223,747 23,182 237,338 3,940 11,749 19,974 94,407 390,590 5,833,157	Additions S/ 368,157 83,778 270,527 - 37,745 25,398 188,908 802,970 1,777,483 16,364 703,745 2,782 8,734 14,319 69,137 815,081	Disposals S/ (28,300) - - - (6,947) - - (136,271) (171,518) - - - - - - -	December 31 S/ 1,018,493 411,060 3,981,848 13,908 106,829 76,563 850,817 1,370,194
				7,829,712
				39,546 941,083 6,722 20,483 34,293 163,544
				1,205,671
				6,624,041

Notes to the Consolidated Financial Statements As of December 31, 2020 and 2019 (Expressed in Peruvian Soles)

MINES & METALS TRADING (PERU) PLC

7. Mining concessions, property, plant and equipment, net (continued)

The movement of this entry during the period ended December 31, 2020 is as follows:

Cost Mining concessions Buildings and facilities Machinery and equipment Vehicles Vehicles in transit Furniture and fixtures Computer equipment Other equipment Construction in progress Accumulated depreciation Buildings and facilities Machinery and equipment Vehicles Furniture and fixtures Computer equipment Other equipment Net value	January 01 S/ 1,018,493 411,060 3,981,848 13,908 - 106,829 76,563 850,817 1,370,194 7,829,712 39,546 941,083 6,722 20,483 34,293 163,544 1,205,671 6,624,041	Additions S/ 815,708 60,659 220,367 - 61,169 20,347 7,100 63,243 2,196,582 3,445,175 21,220 710,987 2,782 12,250 20,545 86,760 854,544	Disposals S/ - - (29,860) - - - - - (573,838) (603,698) - - - - - - -	December 31 S/ 1,834,201 471,719 4,172,355 13,908 61,169 127,176 83,663 914,060 2,992,938
				10,671,189
				60,766 1,652,070 9,504 32,733 54,838 250,304
				2,060,215
				8,610,974

8. Trade accounts payable

The composition of the entry:

Vendors payable Fees payable	2020 S/ 21,494,131 100,692 21,594,823	2019 S/ 8,044,662 59,126
		8,103,788

The trade accounts payable are denominated in Soles and US dollars, representing local Peruvian suppliers, have no specific guarantees, current maturities and do not accrue interest.

Notes to the Consolidated Financial Statements As of December 31, 2020 and 2019

MINES & METALS TRADING (PERU) PLC

(Expressed in Peruvian Soles)

9. Financial obligations

Financial obligations
Rate Expiration Baker Steel Convertible Debenture (a) 30/06/2022 Financing obtained (b) 31/05/2021 Credit cards Banco Continental 40% 31/01/2021 Promissory notes BSAFI SAC (c) Loans payable and line of credit – third party Trafigura Perú SAC (d) 31/05/2022 Trust funds payable (e) Loans payable - third party financing (f) Presentation by maturity Current Non-current	2020 S/ 14,410,399 4,073,489 29,382 1,522,843 4,436,210 516,420 437,881	2019 S/ 12,207,832 - 21,985 1,085,712 2,212,667 556,735 414,313 16,499,244 2019 S/ 578,720 15,920,524 16,499,244	2019 S/ 12,207,832 - 21,985 1,085,712 2,212,667 556,735 414,313
	25,426,624 2020 S/ 9,364,524 16,062,100 25,426,624

a) During the year ended December 31, 2019, the Company issued S/13,274,171 in convertible debentures to Baker Steel Resources Trust Limited (“Baker Steel”), an arms-length lender. 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 USD$13.226 per share.

On inception, the Company allocated the total proceeds received between liability and equity components of the convertible debenture using the residual method, based on a discount rate of 14.24%, which is the estimated cost at which the Company could borrow similar debt without a conversion feature. The liability component with a fair value of S/11,972,880 on inception is measured at amortized cost and is accrued over the expected term to maturity using the effective interest method. The equity component had a fair value of S/1,301,291 as of December 31, 2020.

b) In March 2020 the company receive another loan from Baker Steel of USD$1,000,000. The term of the loan is for 1 year and bears a 15% interest rate.

MINES & METALS TRADING (PERU) PLC Notes to the Consolidated Financial Statements As of December 31, 2020 and 2019 (Expressed in Peruvian Soles)

9. Financial obligations (continued)

c) As of December 31, 2020, the Company has fifteen promissory notes in the principal amount of S1,498,540 (2019 – S/1,075,960) which is due to Blanco Sociedad Administradora de Fondos de Inversion SAC (“BSAFI”), a Peruvian financial institution. These notes are unsecured and bear interest at 1.76% per annum.
I. On December 23, 2019, the Company arranged a loan with BSAFI, for S/59,601. The loan, which matured in 90 days on March 22, 2020, carried an interest rate of 1.76% compounded monthly.
II. On December 23, 2019, the Company arranged a loan with BSAFI, for S/19,983. The loan, which matured in 90 days on March 22, 2020, carried an interest rate of 1.76% compounded monthly.
III. On January 2, 2020, the Company arranged a loan with BSAFI, for S/30,251. The loan, which matured in 90 days on April 1, 2020, carried an interest rate of 1.76% compounded monthly.
IV. On January 3, 2020, the Company arranged a loan with BSAFI, for S/123,486. The loan, which matured in 90 days on April 2, 2020, carried an interest rate of 1.76% compounded monthly.
V. On January 9, 2019, the Company arranged a loan with BSAFI, for S/45,831. The loan, which matured in 90 days on April 8, 2020, carried an interest rate of 1.76% compounded monthly.
VI. On January 9, 2019, the Company arranged a loan with BSAFI, for S/41,802. The loan, which matured in 90 days on April 8, 2020, carried an interest rate of 1.76% compounded monthly.
VII. On January 15, 2020, the Company arranged a loan with BSAFI, for S/8,249. The loan, which matured in 90 days on April 14, 2020, carried an interest rate of 1.76% compounded monthly.
VIII. On January 21, 2019, the Company arranged a loan with BSAFI, for S/96,122. The loan, which matured in 90 days on April 20, 2020, carried an interest rate of 1.76% compounded monthly.
IX. On January 24, 2020, the Company arranged a loan with BSAFI, for S/152,640. The loan, which matured in 90 days on April 23, 2020, carried an interest rate of 1.76% compounded monthly.
X. On February 6, 2020, the Company arranged a loan with BSAFI, for S/569,791. The loan, which matured in 90 days on March 22, 2020, carried an interest rate of 1.76% compounded monthly.
XI. On March 5, 2020, the Company arranged a loan with BSAFI, for S/196,991. The loan, which matured in 90 days on June 3, 2020, carried an interest rate of 1.76% compounded monthly.
XII. On March 18, 2020, the Company arranged a loan with BSAFI, for S/58,482. The loan, which matured in 90 days on June 15, 2020, carried an interest rate of 1.76% compounded monthly.
XIII. On March 18, 2020, the Company arranged a loan with BSAFI, for S/29,600. The loan, which matured in 90 days on June 15, 2020, carried an interest rate of 1.76% compounded monthly.

MINES & METALS TRADING (PERU) PLC Notes to the Consolidated Financial Statements As of December 31, 2020 and 2019 (Expressed in Peruvian Soles)

9. Financial obligations (continued)

XIV. On April 1, 2020, the Company arranged a loan with BSAFI, for S/41,355. The loan, which matured in 90 days on July 1, 2020, carried an interest rate of 1.76% compounded monthly.
XV. On April 7, 2020, the Company arranged a loan with BSAFI, for S/24,355. The loan, which matured in 90 days on July 7, 2020, carried an interest rate of 1.76% compounded monthly.

The Company was in the process of renegotiating the promissory notes to extend the payment dates.

d) On October 10, 2018, the Company arranged a loan with Trafigura Perú SAC (“Trafigura”), the customer of the Company, for S/3,285,150 (USD$1,000,000) bearing interest at 5.5% + Libor rate per annum, guaranteed by the movable assets of the Company and 7,000 metric tons of concentrated ore, with equal payments of USD$55,555 starting June 2019.

On June 15, 2020, the loan with Trafigura was replaced with a loan for S/4,849,600 (USD$1,400,000) bearing interest at 5.5% + Libor rate per annum, guaranteed by the movable assets of the Company and 7,500 metric tons of concentrated ore, with equal payments of USD$58,300 starting October 2020.

e) The Company arranged a revolving line of credit limited to a maximum of USD$750,000 with Trafigura Perú SAC, the customer of the Company, bearing interest at 5.5% + Libor rate per annum and guaranteed by the same assets indicated in part (c) above. The outstanding balance on this line of credit as of December 31, 2020 is S/516,420 (2019 – S/556,735).
f) Third party financing is comprised of the following loans:

Rate Expiration Loans Herr Gottfried Reiner Rottel 20% 09/06/2020 Loans from individuals 20% on average Various	2020 S/ 300,153 137,728 437,881	2019 S/ 274,893 139,420
		414,313

10. Other accounts payable

The composition of the entry:

The composition of the entry:
Salaries and social benefits Provisions Payroll taxes Other third-party accounts payable	2020 S/ 3,936,553 4,615,009 913,097 241,688 9,706,347	2019 S/ 2,870,688 2,043,600 398,656 248,940
		5,561,884

MINES & METALS TRADING (PERU) PLC Notes to the Consolidated Financial Statements As of December 31, 2020 and 2019 (Expressed in Peruvian Soles)

11. Provision for environmental remediation

Balance, beginning Financial cost Balance, ending

December 2020 S/ 12,657,412 206,340 12,863,752	December 2019 S/ 12,451,072 206,340
	12,657,412

a) The Company has included a provision for the future cost of remediation of the Recuperada mine site and related facilities. The remediation provision represents the present value of remediation costs which are expected to be incurred up to 2029, which is when the mine property is expected to cease operations. This provision has been determined based on a third-party plan commissioned by the Subsidiary and approved by the Peruvian Directorate General of Mining Environmental Affairs of the Ministry of Energy and Mines. Estimates used in the determination of the provision are reviewed regularly to take into account any material changes to the assumptions.
b) Environmental remediation liabilities (Approved by the Peruvian Ministry of Energy and Mines) assumed during July 2017 as part of the acquisition of Recuperada, are as follows:

Progressive closure Final closure Post closure	Amount Period S/ 2,305,709 Until 2020 8,415,057 2021-2024 1,639,360 5 years 12,360,126

Equity	Equity
a)	Share capital
		2020	2019
	Number of shares issued	1,187,099	1,136,462
	Share capital	S/ 5,659,914	S/ 3,315,838

Shares issued and transferred during the year ended December 31, 2020:

On May 4, 2020, the Company issued 35,288 common shares for a total value of S/ 1,633,544 in payment for services rendered by third parties.
On May 4, 2020, the Company issued 15,349 common shares to Baker Steel in settlement for accrued interest in the amount of S/ 710,532.
At December 31, 2020, the Company received S/ 8,476,674 related to a private placement that closed subsequent to December 31, 2020 (Note 18).

Shares issued and transferred during the year ended December 31, 2019:

On February 10, 2019, initial shareholders of the Company transferred 72,500 shares to seven individuals. Share capital and the number of shares issued remained unchanged as a result of this transaction.
On February 10, 2019, the Company issued additional 88,600 shares with no par value to the employees of the Company at no cost. The total number of shares issued increased to 1,088,600 while the share capital remained unchanged.
On April 30, 2019, the Company entered in the agreement with Martinez Contratistas e Ingenieria S.A. (MCEISA) where MCEISA is obligated to perform mining services valued at S/ 1,809,500 (USD$550,000) in exchange for 100,200 common shares of the Company issued with no par value. In the event in which the investor does not comply with the execution of the mining cervices for the stated amount, the Company has the right to acquire the shares back at no cost. As a result, the Company recorded a prepaid expense with a corresponding increase in share capital for the stated amount.

MINES & METALS TRADING (PERU) PLC Notes to the Consolidated Financial Statements As of December 31, 2020 and 2019 (Expressed in Peruvian Soles)

12. Equity (continued)

On June 30, 2019, the Company issued additional 20,913 shares to the investors for the total price of S/ 848,875 (USD$255,000).
On December 31, 2019, The Company arranged a settlement of accumulated interest payable on convertible debenture with Baker Steel Resources Trust Limited. The Company issued 15,349 no par value ordinary shares in return for a settlement of outstanding interest of S/657,030.

b) Distribution of dividends

According to current regulations, there are no restrictions on the payment of dividends abroad or repatriation of foreign investment.

13. Related party transactions

Remunerations and other expenses incurred with directors are as follows:

Remunerations Rent and other	2020 S/ 340,778 222,992 563,770	2019 S/ 2,035,381 698,967
		2,734,348

At December 31, 2020, total amount due to the directors was S/ 1,482,525 (2019 – S/ nil).

14. Tax status

The Company is incorporated in Isle of Man that has a standard zero rate for corporate tax. The Subsidiaries are subject to taxation in Peru. Peruvian tax authority has the power to review and, if applicable, make a new determination by the income tax and general sales tax calculated by the Subsidiary in the four years following the year of filing the tax return. The current rate of income tax is 29.5 percent.

Due to the uncertainty regarding future profitability, the Company does not recognize any future tax assets.

15. Financial instruments – financial risk

The commercial activities of the Company expose’s it to a variety of financial risks, which may adversely affect financial assets and liabilities of the Company and their future cash flows. The Company uses comprehensive risk management procedures to limit the risks inherent in the use of financial instruments. Risks include credit, foreign exchange, interest rate, liquidity, and market risks. The significant risks that the Company is exposed to are noted below:

MINES & METALS TRADING (PERU) PLC Notes to the Consolidated Financial Statements As of December 31, 2020 and 2019 (Expressed in Peruvian Soles)

15. Financial instruments – financial risk (continued)

a) Foreign exchange risk

The Company through its Subsidiary operates in Peru, its cash is held in Peru in US Dollars and its loan payables are carried in foreign currencies. The Company’s sales are invoiced and incurred in US Dollars. The Company also has vendors which charge fees in US Dollars. The Company mitigates the risk and exposure to exchange rate risk by periodically evaluating its net foreign exchange position. A 1% fluctuation in the foreign exchange rate between PEN and US dollars and PEN and Canadian dollar will result in a significant change in foreign exchange gain/loss. The Company does not enter into derivative financial instruments to mitigate foreign exchange risk.

b) Interest rate risk

Interest rate risk is the risk that future cash flows of a financial instrument fluctuate due to changes in market interest rates. The Company carries debt and loans payable which have fixed rates of interest except for the loan payable and revolving line of credit with Trafigura which bear interest at variable rates of interest.

c) Credit risk

Financial instruments that potentially subject the Company to a concentration of credit risk consist primarily of cash, accounts receivable, and sales taxes receivable. The Company limits its exposure to credit loss by placing its cash with high credit quality financial institutions. Management performs ongoing credit reviews of its customers, Trafigura, and establishes conservative credit policies to mitigate any risk. Historically, the Company did not have any exposure to credit risks.

d) Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company’s ability to continue as a going concern is dependent on management’s ability to raise required funding through future equity issuances and through short-term borrowing. 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.

e) Capital risk management

The Company manages its cash and common shares as capital. The Company’s objectives when managing capital are to safeguard the ability to continue as a going concern in order to provide returns to shareholders, benefits to interest groups and maintain an optimal structure that allows reducing the cost of capital. The Company and its Subsidiaries manage its capital structure and makes adjustments to face changes in the economic conditions of the market. The Company’s policy is to finance all its short and long-term projects with its own operational resources.

Management is in charge of risk management, and therefore identifies, evaluates and covers financial risks in close cooperation with the operating units.

MINES & METALS TRADING (PERU) PLC Notes to the Consolidated Financial Statements As of December 31, 2020 and 2019 (Expressed in Peruvian Soles)

16. Commitments and contingent liabilities

Commitments

The Company entered into various operating lease agreements with an annual cost of S/273,665 (USD$ 75,575) for the lease of administrative offices located at Av. La Paz, 1121 Miraflores, Lima, Peru ending in 2023 (terminated subsequent to December 31, 2020) and apartments for the directors of the Company.

Contingent liabilities

In the ordinary course of business, the Company may be contingently liable for litigation and claims with customers, suppliers and former employees. On an ongoing basis, the Company assess the likelihood of any adverse judgments or outcomes to these matters as well as potential ranges of probable costs and losses and a determination of the provision required, if any, for these contingencies is made after analysis of each individual issue. The Company has provided for no amount in respect of contingent liabilities in these financial statements.

As of December 31, 2020 and 2019, the Company was involved in labor claims with past employees. The opinion of management of the Company, and of its legal counsel, is that these legal actions will not result in significant additional liabilities affecting the operations of the Company or its Subsidiaries.

17. Economic dependence

During 2020, sales to the Subsidiary main customer, Trafigura, represented 100 percent (2019 – 100 percent) of total sales.

18. Subsequent events

Subsequent to December 31, 2020, the Company had the following subsequent events:

The Company completed a non-brokered private placement of 170,280 special warrants for the purpose of raising up to C$3,260,862 (Note 12). The special warrants have been subscribed at a subscription price of C$19.15 per special warrant, the holder of each special warrant will be entitled to be issued in exchange for each special warrant, without payment of additional consideration:
(a) at any time until the Qualification Deadline (as defined in the Special Warrant Certificate) one (1) ordinary share of no par value in the Company
(b) if a Going Public Transaction (as defined in the Special Warrant Certificate) has not been completed prior to the Qualification Deadline, 1.15 Ordinary Shares,
On February 21, 2021, the Company and Oro X Mining Corp. (“Oro X’) have signed a business combination agreement. Pursuant to the business combination agreement, Oro X will acquire 100%of the issued and outstanding shares of the Company, subject to TSX Venture Exchange acceptance.

Pursuant to the terms of the business combination agreement, Oro X will acquire all of the Company’s common shares as part of a merger of equals. Each MMTP share will be exchanged for 28.828 common shares of Oro X, resulting in an aggregate of approximately 42,969,000 Oro X shares to be issued to the MMTP shareholders pursuant to the transaction.

MINES & METALS TRADING (PERU) PLC Notes to the Consolidated Financial Statements As of December 31, 2020 and 2019 (Expressed in Peruvian Soles)

18. Subsequent events (continued)

The transactions contemplated by the business combination agreement are subject to, among other things: (i) the completion of a financing for minimum gross proceeds of C$14,000,000; (ii) the approval of MMTP shareholders; (iii) the receipt of all necessary consents, approvals, authorizations (including exchange approval) for the transaction; (iv) certain changes to the board of directors and management of Oro X; and (v) other conditions that are customary for a transaction of this type.

A termination fee of C$2,500,000 is payable by Oro X or the Company, as applicable, if the business combination agreement terminates under certain circumstances.

The company also anticipates paying a finder's fee consisting of 1,250,000 shares in connection with the transaction to an arm's-length third party.

SCHEDULE “B”

Consolidated Interim Financial Statements as of March 31, 2021 and March 31, 2020

[see attached]

[Amended January 1, 2011]

ACTIVE_CA\ 47344885\2

MINES & METALS TRADING (PERU) PLC

Consolidated financial statements as of March 31, 2021 and March 31, 2020

Content:

Consolidated statements of financial position

Consolidated statements of comprehensive loss

Consolidated statements of changes in shareholders’ deficit

Consolidated statements of cash flows

Notes to the consolidated financial statements

MINES & METALS TRADING (PERU) PLC

Condensed Interim Consolidated Statements of Financial Position As of March 31, 2021 and December 31, 2020

(Expressed in Peruvian Soles)

Assets Note Current assets Cash and cash equivalents Trade accounts receivable Inventories 4 Other accounts receivable 5 Prepaid expenses 6 Income taxes receivable Total current assets Mining concessions, property, plant and equipment 7 Intangible Total assets Liabilities and Equity Liabilities Current liabilities Trade accounts payable 8 Financial obligations - current 9 Other accounts payable 10 Total current liabilities Financial obligations – long term 9 Convertible Debenture 9 Others Provisions Provision for environmental remediation 11 Total liabilities Shareholders’ Deficit Share capital 12 Subscriptions received in advance 12 Reserves Deficit Total shareholders’ deficit Total liabilities and shareholders’ deficit	March 31 2021 S/ 2,511,474 1,237,715 1,613,979 9,523,376 178,047 573,744 15,638,335 12,092,071 198,459 27,928,865 26,267,109 9,489,990 8,638,249 44,395,348 1,811,338 14,370,633 452,215 12,863,752 73,893,286 6,028,447 8,476,674 (973,852) (59,495,690) (45,964,421) 27,928,865	December 31 2020 S/ 8,521,781 2,083,000 1,946,935 8,352,423 37,793 291,850
		21,233,782 8,610,974 198,459
		30,043,215
		21,594,823 9,364,524 9,706,347
		40,665,694 2,340,769 13,721,331 459,863 12,863,752
		70,051,409
		5,659,914 8,476,674 (138,888) (54,005,894)
		(40,008,194)
		30,043,215

Commitments and contingent liabilities (Note 16) and Subsequent events (Note 18)

The accompanying notes are part of the consolidated financial statements.

MINES & METALS TRADING (PERU) PLC

Condensed Interim Consolidated Statements of Comprehensive Loss

Three-months ended March 31, 2021 and 2020

(Expressed in Peruvian Soles)

Revenue Cost of goods sold Gross profit Selling expenses Administrative expenses Other operating expenses Operating loss Financial expenses, net Other income Exchange difference Net loss and comprehensive loss Net loss per common share – Basic and diluted Weighted average shares outstanding – Basic and diluted	March 2021 S/ 10,811,174 (7,718,659) 3,092,515 (113,897) (2,812,258) (4,496,109) (4,329,749) (818,597) 280,803 (622,253) (5,489,796) (4.69) 1,169,805	March 2020 S/ 2,521,914 (4,269,301)
		(1,747,387) (273,674) (1,134,216) (1,960,290)
		(5,115,567) (239,607) 1,010,563 (306,330)
		(4,650,941)
		(3.99)
		1,166,121

The accompanying notes form part of the consolidated financial statements.

MINES & METALS TRADING (PERU) PLC

Condensed Interim Consolidated Statements of Changes in Shareholders’ Deficit

Three-months ended March 31, 2021 and Year ended December 31, 2020 (Expressed in Peruvian Soles)

Number of Shares 1,136,462 35,288 15,349 -	Reserves S/ 1,232,930 - - - (1,371,818) -	Deficit S/ (31,866,752) - - - - (22,139,142) (54,005,894) - - (5,489,796)	Total S/ (27,317,984) 1,633,544 710,532 8,476,674 (1,371,818) (22,139,142) (40,008,194) 368,533 (834,964) (5,489,796)
1,187,099	(138,888)
7,348 - - 1,194,447	- (834,964) - (973,852)
		(59,495,690)	(45,964,421)

The accompanying notes are part of the consolidated financial statements.

MINES & METALS TRADING (PERU) PLC

Condensed Interim Consolidated Statements of Cash Flows

Three-months ended March 31, 2021 and March 31, 2020 (Expressed in Peruvian Soles)

Operating activities Net loss Adjustments for non-cash items: Depreciation Finance expense Shares for services Changes in non-cash working capital: Trade and other accounts receivable Inventories Prepaid expenses Trade and other accounts payable Other provisions Net cash used in operating activities Investment activities Purchase of mining concessions, property, plant and equipment Other acquisitions Net cash used in investment activities Financial activities Subscriptions receivable in advance Increase (decrease) in financial obligations Net cash (used in) provided by financing activities Effects of exchange difference Change in cash and cash equivalents for the period Cash and cash equivalents, beginning of the period Cash and cash equivalents, end of the period	March 2021 March 2020 S/ S/ (5,489,796) (4,650,941) 193,497 222,908 818,597 239,607 - - (719,251) (2,074,430) 332,956 (168,370) (140,254) (423,593) 3,604,189 4,761,257 (7,648) -
	(1,407,710) (2,093,562)
	(3,674,594) (3,298,616) - -
	(3,674,594) (3,298,616)
	- 156,452 (93,039) 4,833,708
	(93,039) 4,990,160
	(834,964) (427,397) (6,010,307) (829,415) 8,521,781 1,550,966
	2,511,474 721,551

The accompanying notes are part of the consolidated financial statements.

1. Identification and economic activity

(a) Identification

MINES & METALS TRADING (PERU) PLC (hereinafter “MMTP” or the “Company”), was established on February 22, 2018, being its legal domicile 12 Mount Havelock, Douglas, IM1 2QG, Isle of Man.

SAN ANTONIO MINING PERU SAC was acquired on February 19, 2020. This company is another subsidiary of the Company that is governed by the provisions of the Statute and the General Law of Public Limited Companies. The legal address of the Subsidiary is Av Paseo de la República 5665, Miraflores, Lima, Peru.

(b) Economic activity

(c) Acquisition of Mining Unit “Recuperada”

(d) Going concern

The Company has incurred losses and negative operating cash flows since its inception. The Company incurred a net loss of S/5,489,796 (2020 – S/4,650,941) during three Months ended March 31, 2021 and has an accumulated deficit of S/59,495,690 (December 31, 2020 – S/54,005,894). The ability of the Company to continue as a going concern in the short-term will depend upon, but not be limited to, obtaining additional financing and generating revenues sufficient to cover its operating costs. These conditions indicate the existence of a material uncertainty that may cast significant doubt about the Company’s ability to continue as a going concern.

MINES & METALS TRADING (PERU) PLC Notes to the Condensed Interim Consolidated Financial Statements As of March 31, 2021 and December 31, 2020 (Expressed in Peruvian Soles)

1. Identification and economic activity (continued)

(e) COVID-19 estimation uncertainty

(f) Business combination

On February 21, 2021, the Company and Silver X Mining Corp. have signed a business combination agreement. Pursuant to the business combination agreement, Silver X will acquire 100% of the issued and outstanding shares of the Company.

The transaction, if completed, is anticipated to be a fundamental acquisition for Silver X, as defined under the policies of the TSX Venture Exchange. The transaction is an arm's-length transaction and Silver X anticipates that shareholder approval from Silver X's shareholders will not be required. Pursuant to exchange policy, Silver X's common shares have been halted and will remain halted until all required documentation has been filed and accepted by the exchange and permission to resume trading has been granted.

Pursuant to the terms of the business combination agreement, Silver X will acquire all of the Company’s common shares as part of a merger of equals. Each MMTP share will be exchanged for 28.828 common shares of Silver X, resulting in an aggregate of approximately 42,969,000 Silver X shares to be issued to the MMTP shareholders pursuant to the transaction.

The transactions contemplated by the business combination agreement are subject to, among other things: (i) the completion of a financing for minimum gross proceeds of $14-million, as described as follows; (ii) the approval of MMTP shareholders; (iii) the receipt of all necessary consents, approvals, authorizations (including exchange approval) for the transaction; (iv) certain changes to the board of directors and management of Silver X, as described as follows; and (v) other conditions that are customary for a transaction of this type.

A termination fee of $2.5-million is payable by Silver X or the Company, as applicable, if the business combination agreement terminates under certain circumstances.

The company also anticipates paying a finder's fee consisting of 1.25 million shares in connection with the transaction to an arm's-length third party.

2. Accounting policies

(a) Statement of compliance

The accompanying financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS), effective March 31, 2021 as issued by the International Accounting Standards Board (IASB). The accounting policies have been consistently applied in the reported period.

MINES & METALS TRADING (PERU) PLC Notes to the Condensed Interim Consolidated Financial Statements As of March 31, 2021 and December 31, 2020 (Expressed in Peruvian Soles)

2. Accounting policies (continued)

(b) Basis of presentation and consolidation

The consolidated financial statements comprise the financial statements of the Company and its four controlled subsidiaries as of March 31, 2021. The consolidated financial statements have been prepared on a historical cost basis except for certain financial assets measured at fair value. In addition, these consolidated financial statements have been prepared using the accrual basis of accounting, except for cash flow information.

(c) Basis of measurement

The consolidated financial statements have been prepared on a historical costs basis and are presented in Peruvian Soles (“PEN”).

d) Going concern

3. Summary of significant accounting principles

The significant accounting policies set out below are in effect in the consolidated financial statements for three months ended March 31, 2021 and 2020 have been applied consistently to all years presented in these consolidated financial statements unless otherwise indicated.

(a) Cash and cash equivalents

Cash and cash equivalents reported in the cash flows statement comprise cash in local financial institutions, cash and term deposits with maturity less than three months.

MINES & METALS TRADING (PERU) PLC

Notes to the Condensed Interim Consolidated Financial Statements As of March 31, 2021 and December 31, 2020 (Expressed in Peruvian Soles)

3. Summary of significant accounting principles (continued)

(b) Financial instruments

Classification

The Company classifies its financial assets in the following measurement categories:

those to be measured subsequently at fair value (either through other comprehensive income (“OCI”) or through profit or loss), and
those to be measured at amortized cost.

The classification depends on the Company’s business model for managing the financial assets and the contractual terms of the cash flows.

The Company reclassifies debt instruments when and only when its business model for managing those assets changes.

Recognition and derecognition

Measurement

Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows are solely payment of principal and interest.

Debt instruments

Amortized cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortized cost. Interest income from these financial assets is included in finance income using the effective interest rate method. Any gain or loss arising on derecognition is recognized directly in profit or loss and presented in other gains/(losses) together with foreign exchange gains and losses. Impairment losses are presented as a separate line item in the statement of profit or loss.

Notes to the Condensed Interim Consolidated Financial Statements As of March 31, 2021 and December 31, 2020 (Expressed in Peruvian Soles)

MINES & METALS TRADING (PERU) PLC

3. Summary of significant accounting principles (continued)

FVOCI: Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets’ cash flows represent solely payments of principal and interest, are measured at FVOCI. Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest income and foreign exchange gains and losses which are recognized in profit or loss. When the financial asset is derecognized, the cumulative gain or loss previously recognized in OCI is reclassified from equity to profit or loss and recognized in other gains/(losses). Interest income from these financial assets is included in finance income using the effective interest rate method. Foreign exchange gains and losses are presented in other gains/(losses) and impairment expenses are presented as separate line item in the statement of profit or loss.
FVTPL: Assets that do not meet the criteria for amortized cost or FVOCI are measured at FVTPL. A gain or loss on a debt investment that is subsequently measured at FVTPL is recognized in profit or loss and presented net within other gains/(losses) in the period in which it arises.

Equity instruments

Impairment

(d) Property, plant and equipment

Residual values, useful life and depreciation method of the assets are reviewed and adjusted, if necessary, at the date of each statement of financial position.

MINES & METALS TRADING (PERU) PLC Notes to the Condensed Interim Consolidated Financial Statements As of March 31, 2021 and December 31, 2020 (Expressed in Peruvian Soles)

3. Summary of significant accounting principles (continued)

Depreciation is calculated using the straight line method based on the estimated useful lives as follows:

ollows:
	YEARS
Buildings and facilities	20
Machinery and equipment	7-10
Vehicles	5
Furniture and fixtures	10
Computer equipment	4

(e) Mining concessions

The mining concessions represent the ownership of the exploration and exploitation rights that the Subsidiary has over the mining properties that contain the acquired mineral reserves.

Mining concessions are presented at cost. In case the Subsidiary abandons said concessions, the associated costs are written off in the statement of income.

(f) Leases

MINES & METALS TRADING (PERU) PLC Notes to the Condensed Interim Consolidated Financial Statements As of March 31, 2021 and December 31, 2020 (Expressed in Peruvian Soles)

3. Summary of significant accounting principles (continued)

i. fixed payments, including in-substance fixed payments, less any lease incentives receivable;
ii. variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;
iii. amounts expected to be payable under a residual value guarantee;
iv. exercise prices of purchase options if the Company is reasonably certain to exercise that option; and
v. payments of penalties for terminating the lease, if the lease term reflects the lessee exercising an option to terminate the lease.

(g) Impairment of non-financial assets

MINES & METALS TRADING (PERU) PLC Notes to the Condensed Interim Consolidated Financial Statements As of March 31, 2021 and December 31, 2020 (Expressed in Peruvian Soles)

3. Summary of significant accounting principles (continued)

(h) Provisions

(i) Revenue recognition

vi. Sale of zinc and lead concentrates
Revenue from the sale of zinc and lead concentrates, together with the related sale cost, are recognized when the Company and its Subsidiary have delivered the concentrate in the place agreed with the client according to the contract, the client has accepted it and the collection of the accounts receivable is reasonably assured.
vii. Consulting revenue Consulting revenue are recognized on an accrual basis and are recorded in the period in which the services are provided. Reasonableness of collection is considered when recording consulting revenue.

(j) Income tax

Deferred income tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized.

MINES & METALS TRADING (PERU) PLC Notes to the Condensed Interim Consolidated Financial Statements As of March 31, 2021 and December 31, 2020 (Expressed in Peruvian Soles)

3. Summary of significant accounting principles (continued)

(k) Foreign currency translation

Functional and presentation currency

Transactions and balances

(l) Compound financial instruments

(m) Loss per share

(n) Comparative figures

Certain comparative figures have been reclassified to conform to the financial statement presentation adopted in the current year.

MINES & METALS TRADING (PERU) PLC

Notes to the Condensed Interim Consolidated Financial Statements As of March 31, 2021 and December 31, 2020

(Expressed in Peruvian Soles)

4. Inventories

The composition of the entry:

Ore and concentrate Supplies Inventory in transit	2021 S/ 1,211,544 398,725 3,710 1,613,979	2020 S/ 1,750,397 192,828 3,710 1,946,935

5. Other accounts receivable

The composition of the entry:

Other accounts receivable The composition of the entry:
Guarantee deposits (a) Value added tax (VAT) receivable (b) Rent guarantee Zincore Metals Inc.(c) Other (d)	2021 S/ 4,029,988 3,258,478 101,520 1,117,654 1,015,736 9,523,376	2020 S/ 3,433,253 3,085,642 97,686 1,064,134 671,708
		8,352,423

a) The amount corresponds to the guarantee for environmental remediation is in custody of AVLA Peru Compania de Seguros SA (AVLA) for the equivalent of USD$1,071,805, as of March 31, 2021 (2020 - USD$948,937).
b) Corresponds to the final balance of the VAT credit of the purchases made as of March, 2021.
c) The balance corresponds to the balance receivable from Canadian publicly listed company, Zincore Metals Inc. (“Zincore”) (NEX trading symbol “ZNC.H”), in form of nine promissory notes in the principal amount of S/1,005,981 (USD267,976) (2020 - S/970,368 (USD$267,976)) and accrued interest receivable of S/ 111,673 (USD29,748) (2020 - S/93,766 (USD$26,798)). These notes are unsecured, bears interest at 10% per annum, and are due in six months and initially were extended by six months each. Zincore and the Company negotiated further extension detailed below.

Zincore is not a related party to the Company.

I. On January 15, 2019, the Company advanced an unsecured loan to Zincore for USD$25,000. The loan, which matures in 6 months on July 15, 2019, extended by 24 months to July 15, 2021, carries an interest rate of 10% compounded monthly. The loan principal and applicable accrued interest are to be repaid at maturity.
II. On February 15, 2019, the Company advanced an unsecured loan to Zincore for USD$10,000. The loan, which matures in 6 months on August 15, 2019, extended by 24 months to August 15, 2021, carries an interest rate of 10% compounded monthly. The loan principal and applicable accrued interest are to be repaid at maturity.
III. On February 27, 2019, the Company advanced an unsecured loan to Zincore for USD$10,000. The loan, which matures in 6 months on February 27, 2019, extended by 24 months to August 27, 2021, carries an interest rate of 10% compounded monthly. The loan principal and applicable accrued interest are to be repaid at maturity.

Notes to the Condensed Interim Consolidated Financial Statements As of March 31, 2021 and December 31, 2020 (Expressed in Peruvian Soles)

MINES & METALS TRADING (PERU) PLC

5. Other accounts receivable (continued)

IV. On March 21, 2019, the Company advanced an unsecured loan to Zincore for USD$10,000. The loan, which matures in 6 months on September 21, 2019, extended by 24 months to September 21, 2021, carries an interest rate of 10% compounded monthly. The loan principal and applicable accrued interest are to be repaid at maturity.
V. On June 26, 2019, the Company advanced an unsecured loan to Zincore for USD$50,000. The loan, which matures in 6 months on December 26, 2019, extended by 18 months to December 26, 2021, carries an interest rate of 10% compounded monthly. The loan principal and applicable accrued interest are to be repaid at maturity.
VI. On June 27, 2019, USD$82,800 were sent directly by the Company to pay for concession fees on behalf of Zincore. The loan, which matures in 6 months on December 27, 2019, extended by 18 months to June 27, 2021, carries an interest rate of 10% compounded monthly. The loan principal and applicable accrued interest are to be repaid at maturity.
VII. On July 19, 2019, the Company advanced an unsecured loan to Zincore for USD$50,000. The loan, which matures in 6 months on January 19, 2020, extended by 12 months to January 19, 2021, carries an interest rate of 10% compounded monthly. The loan principal and applicable accrued interest are to be repaid at maturity.
VIII. On August 21, 2019, USD$4,150 were sent directly by the Company to pay for legal fees on behalf of Zincore. The loan, which matures in 6 months on February 21, 2020, extended by 12 months to February 21, 2021, carries an interest rate of 10% compounded monthly. The loan principal and applicable accrued interest are to be repaid at maturity. On September 18, 2020, this loan was forgiven by the Company in exchange for the ownership of a dormant subsidiary of Zincore.
IX. On November 5, 2019, the Company advanced an unsecured loan to Zincore for USD$30,000. The loan, which matures in 6 months on May 5, 2020, extended by 12 months to May 5, 2021, carries an interest rate of 10% compounded monthly. The loan principal and applicable accrued interest are to be repaid at maturity.
X. On March 10, 2020 the Company advanced an unsecured loan to Zincore for USD$5,000. The loan, which matures in 6 months on September 10, 2020, extended by 6 months to March 10, 2021, carries an interest rate of 10% compounded monthly. The loan principal and applicable accrued interest are to be repaid at maturity.
XI. During the year ended December 31, 2019, USD$176 was sent directly by the Company to pay for tax on behalf of Zincore.
XII. During the year ended December 31, 2020, USD$936 was sent directly by the Company to settle debt on behalf of Zincore.
d) The balance includes mainly advance payments and guarantee deposit from several vendors mainly for equipment leasing.

MINES & METALS TRADING (PERU) PLC

Notes to the Condensed Interim Consolidated Financial Statements As of March 31, 2021 and December 31, 2020

(Expressed in Peruvian Soles)

6. Prepaid expenses

Premium guarantee of closure plan Other	2021 S/ 124,465 53,582 178,047	2020 S/ 9,920 27,873 37,793

7. Mining concessions, property, plant and equipment, net

For the year ended December 31, 2020

Cost Mining concessions Buildings and facilities Machinery and equipment Vehicles Vehicles in transit Furniture and fixtures Computer equipment Other equipment Construction in progress Accumulated depreciation Buildings and facilities Machinery and equipment Vehicles Furniture and fixtures Computer equipment Other equipment Net value	January 01 S/ 1,018,493 411,060 3,981,848 13,908 - 106,829 76,563 850,817 1,370,194 7,829,712 39,546 941,083 6,722 20,483 34,293 163,544 1,205,671 6,624,041	Additions S/ 815,708 60,659 220,367 - 61,169 20,347 7,100 63,243 2,196,582 3,445,175 21,220 710,987 2,782 12,250 20,545 86,760 854,544	Disposals S/ - - (29,860) - - - - - (573,838) (603,698) - - - - - - -	December 31 S/ 1,834,201 471,719 4,172,355 13,908 61,169 127,176 83,663 914,060 2,992,938
				10,671,189
				60,766 1,652,070 9,504 32,733 54,838 250,304
				2,060,215
				8,610,974

Notes to the Condensed Interim Consolidated Financial Statements As of March 31, 2021 and December 31, 2020

MINES & METALS TRADING (PERU) PLC

(Expressed in Peruvian Soles)

7. Mining concessions, property, plant and equipment, net (continued)

The movement of this entry during the period ended March 31, 2021 is as follows:

Cost Mining concessions Buildings and facilities Machinery and equipment Vehicles Vehicles in transit Furniture and fixtures Computer equipment Other equipment Construction in progress Accumulated depreciation Buildings and facilities Machinery and equipment Vehicles Furniture and fixtures Computer equipment Other equipment Net value	January 01 S/ 1,834,201 471,719 4,172,355 13,908 61,169 127,176 83,663 914,060 2,992,938 10,671,189 60,766 1,652,070 9,504 32,733 54,838 250,304 2,060,215 8,610,974	Additions S/ 3,876 - 199,373 - - 11,126 - - 3,460,219 3,674,594 5,897 156,299 695 3,272 5,229 22,105 193,497	Disposals S/ - - - - - - - - - - - - - - - - -	March 31 S/ 1,838,077 471,719 4,371,728 13,908 61,169 138,302 83,663 914,060 6,453,157
				14,345,783
				66,663 1,808,369 10,199 36,005 60,067 272,409
				2,253,712
				12,092,071

8. Trade accounts payable

The composition of the entry:

Vendors payable Fees payable	2021 S/ 26,161,224 105,885 26,267,109	2020 S/ 21,494,131 100,692
		21,594,823

The trade accounts payable are denominated in Soles and US dollars, representing local Peruvian suppliers, have no specific guarantees, current maturities and do not accrue interest.

MINES & METALS TRADING (PERU) PLC

Notes to the Condensed Interim Consolidated Financial Statements As of March 31, 2021 and December 31, 2020

(Expressed in Peruvian Soles)

9. Financial obligations

Rate Expiration Baker Steel Convertible Debenture (a) 30/06/2022 Financing obtained (b) 31/05/2021 Credit cards Banco Continental 40% 15/04/2021 Promissory notes BSAFI SAC (c) Loans payable and line of credit – third party Trafigura Perú SAC (d) 31/05/2022 Trust funds payable (e) Loans payable - third party financing (f) Presentation by maturity Current Non-current	Rate Expiration Baker Steel Convertible Debenture (a) 30/06/2022 Financing obtained (b) 31/05/2021 Credit cards Banco Continental 40% 15/04/2021 Promissory notes BSAFI SAC (c) Loans payable and line of credit – third party Trafigura Perú SAC (d) 31/05/2022 Trust funds payable (e) Loans payable - third party financing (f) Presentation by maturity Current Non-current	2021 S/ 15,059,701 4,212,489 23,883 1,762,127 3,667,875 508,005 437,881	2020 S/ 14,410,399 4,073,489 29,382 1,522,843 4,436,210 516,420 437,881 25,426,624 2020 S/ 9,364,524 16,062,100 25,426,624	2020 S/ 14,410,399 4,073,489 29,382 1,522,843 4,436,210 516,420 437,881
		25,671,961		25,426,624
		2021 S/ 9,489,990 16,181,971 25,671,961

a) During the year ended December 31, 2019, the Company issued S/13,274,171 in convertible debentures to Baker Steel Resources Trust Limited (“Baker Steel”), an arms-length lender. 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 USD$13.226 per share.

b) In March 2020 the company receive another loan from Baker Steel of USD$1,000,000. The term of the loan is for 1 year and bears a 15% interest rate.
c) As of March 31, 2021, the Company has fifteen promissory notes in the principal amount of S/1,762,127 (2020 – S/1,498,540) which is due to Blanco Sociedad Administradora de Fondos de Inversion SAC (“BSAFI”), a Peruvian financial institution. These notes are unsecured and bear interest at 1.76% compounded monthly.

Notes to the Condensed Interim Consolidated Financial Statements As of March 31, 2021 and December 31, 2020 (Expressed in Peruvian Soles)

MINES & METALS TRADING (PERU) PLC

9. Financial obligations (continued)

I. On December 23, 2019, the Company arranged loans with BSAFI, for S/59,601 and S/19,983. The loans, which matured in 90 days on March 22, 2020, carried an interest rate of 1.76% compounded monthly.
II. On January 2, 2020, the Company arranged a loan with BSAFI, for S/30,251. The loan, which matured in 90 days on April 1, 2020, carried an interest rate of 1.76% compounded monthly.
III. On January 3, 2020, the Company arranged a loan with BSAFI, for S/123,486. The loan, which matured in 90 days on April 2, 2020, carried an interest rate of 1.76% compounded monthly.
IV. On January 9, 2019, the Company arranged loans with BSAFI, for S/45,831 and S/41,802. The loans, which matured in 90 days on April 8, 2020, carried an interest rate of 1.76% compounded monthly.
V. On January 15, 2020, the Company arranged a loan with BSAFI, for S/8,249. The loan, which matured in 90 days on April 14, 2020, carried an interest rate of 1.76% compounded monthly.
VI. On January 21, 2019, the Company arranged a loan with BSAFI, for S/96,122. The loan, which matured in 90 days on April 20, 2020, carried an interest rate of 1.76% compounded monthly.
VII. On January 24, 2020, the Company arranged a loan with BSAFI, for S/152,640. The loan, which matured in 90 days on April 23, 2020, carried an interest rate of 1.76% compounded monthly.
VIII. On February 6, 2020, the Company arranged a loan with BSAFI, for S/569,791. The loan, which matured in 90 days on March 22, 2020, carried an interest rate of 1.76% compounded monthly.
IX. On March 5, 2020, the Company arranged a loan with BSAFI, for S/196,991. The loan, which matured in 90 days on June 3, 2020, carried an interest rate of 1.76% compounded monthly.
X. On March 18, 2020, the Company arranged loans with BSAFI, for S/58,482 and S/29,600. The loans, which matured in 90 days on June 15, 2020, carried an interest rate of 1.76% compounded monthly.
XI. On April 1, 2020, the Company arranged a loan with BSAFI, for S/41,355. The loan, which matured in 90 days on July 1, 2020, carried an interest rate of 1.76% compounded monthly.
XII. On April 7, 2020, the Company arranged a loan with BSAFI, for S/24,355. The loan, which matured in 90 days on July 7, 2020, carried an interest rate of 1.76% compounded monthly.

The Company was in the process of renegotiating the promissory notes to extend the payment dates.

Notes to the Condensed Interim Consolidated Financial Statements As of March 31, 2021 and December 31, 2020 (Expressed in Peruvian Soles)

MINES & METALS TRADING (PERU) PLC

9. Financial obligations (continued)

d) On October 10, 2018, the Company arranged a loan with Trafigura Perú SAC (“Trafigura”), the customer of the Company, for S/3,285,150 (USD$1,000,000) bearing interest at 5.5% + Libor rate per annum, guaranteed by the movable assets of the Company and 7,000 metric tons of concentrated ore, with equal payments of USD$55,555 starting June 2019.

e) The Company arranged a revolving line of credit limited to a maximum of USD$750,000 with Trafigura Perú SAC, the customer of the Company, bearing interest at 5.5% + Libor rate per annum and guaranteed by the same assets indicated in part (d) above. The outstanding balance on this line of credit as of March 31, 2021 is S/508,005 (2020 – S/516,420).
f) Third party financing is comprised of the following loans:

Rate Expiration Loans Herr Gottfried Reiner Rottel 10% 09/06/2020 Loans from individuals 20% on average Various	2021 S/ 300,153 137,728 437,881	2020 S/ 300,153 137,728
		437,881

10. Other accounts payable

The composition of the entry:

Salaries and social benefits Provisions Payroll taxes Other third-party accounts payable	2021 S/ 3,489,629 4,273,958 396,085 478,577 8,638,249	2020 S/ 3,936,553 4,615,009 913,097 241,688
		9,706,347

MINES & METALS TRADING (PERU) PLC

Notes to the Condensed Interim Consolidated Financial Statements As of March 31, 2021 and December 31, 2020 (Expressed in Peruvian Soles)

11. Provision for environmental remediation

Balance, beginning Financial cost Balance, ending

March 2021 S/ 12,863,752 - 12,863,752	December 2020 S/ 12,657,412 206,340
	12,863,752

a) The Company has included a provision for the future cost of remediation of the Recuperada mine site and related facilities. The remediation provision represents the present value of remediation costs which are expected to be incurred up to 2029, which is when the mine property is expected to cease operations. This provision has been determined based on a third-party plan commissioned by the Subsidiary and approved by the Peruvian Directorate General of Mining Environmental Affairs of the Ministry of Energy and Mines. Estimates used in the determination of the provision are reviewed regularly to take into account any material changes to the assumptions.
b) Environmental remediation liabilities (Approved by the Peruvian Ministry of Energy and Mines) assumed during July 2017 as part of the acquisition of Recuperada, are as follows:

Progressive closure Final closure Post closure	Amount Period S/ 2,305,709 Until 2020 8,415,057 2021-2024 1,639,360 5 years 12,360,126

12. Equity

Share capital
	2021	2020
Number of shares issued	1,195,447	1,187,099
Share capital	S/ 6,028,447	S/ 5,659,914

Shares issued and transferred during the year ended March 31, 2021:

On March 31, 2021, the Company recognized as capital stock in favor of Baker Steel S/ 368,533 for the settlement of accrued interest.

Shares issued and transferred during the year ended December 31, 2020:

On May 4, 2020, the Company issued 35,288 common shares for a total value of S/ 1,633,544 in payment for services rendered by third parties.
On May 4, 2020, the Company issued 15,349 common shares to Baker Steel in settlement for accrued interest in the amount of S/ 710,532.
At December 31, 2020, the Company received S/ 8,476,674 related to a private placement that closed subsequent to December 31, 2020. The Company completed a non-brokered private placement of 170,280 special warrants for the purpose of raising up to C$3,260,862 (Note 12). The special warrants have been subscribed at a subscription price of C$19.15 per special warrant, the holder of each special warrant will be entitled to be issued in exchange for each special warrant, without payment of additional consideration:
(a) at any time until the Qualification Deadline (as defined in the Special Warrant Certificate) one (1) ordinary share of no par value in the Company

MINES & METALS TRADING (PERU) PLC Notes to the Condensed Interim Consolidated Financial Statements As of March 31, 2021 and December 31, 2020 (Expressed in Peruvian Soles)

(b) if a Going Public Transaction (as defined in the Special Warrant Certificate) has not been completed prior to the Qualification Deadline, 1.15 Ordinary Shares,

b) Distribution of dividends

According to current regulations, there are no restrictions on the payment of dividends abroad or repatriation of foreign investment.

13. Related party transactions

Remunerations and other expenses incurred with directors are as follows:

Remunerations Rent and other	2021 S/ 24,392 23,294 47,686	2020 S/ 340,778 222,992
		563,770

14. Tax status

Due to the uncertainty regarding future profitability, the Company does not recognize any future tax assets.

15. Financial instruments – financial risk

MINES & METALS TRADING (PERU) PLC Notes to the Condensed Interim Consolidated Financial Statements As of March 31, 2021 and December 31, 2020 (Expressed in Peruvian Soles)

15. Financial instruments – financial risk (continued)

a) Foreign exchange risk

b) Interest rate risk

c) Credit risk

d) Liquidity risk

e) Capital risk management

Management is in charge of risk management, and therefore identifies, evaluates and covers financial risks in close cooperation with the operating units.

MINES & METALS TRADING (PERU) PLC Notes to the Condensed Interim Consolidated Financial Statements As of March 31, 2021 and December 31, 2020 (Expressed in Peruvian Soles)

16. Commitments and contingent liabilities

Commitments

Contingent liabilities

As of March 31, 2021 and 2020, the Company was involved in labor claims with past employees. The opinion of management of the Company, and of its legal counsel, is that these legal actions will not result in significant additional liabilities affecting the operations of the Company or its Subsidiaries.

17. Economic dependence

During 2021, sales to the Subsidiary main customer, Trafigura, represented 100 percent (2020 – 100 percent) of total sales.

18. Subsequent events

a) On May 19, 2021, Silver X agreed to advance an US$120,000 bridge loan to the Company. The loan (“Loan”) will be secured through a pledge of all the shares of a wholly-owned Company´s subsidiary.

The maturity date (“Maturity Date”) is earlier of:

i) May 19, 2022, or

ii) 60 days from the termination of the Transaction.

The Loan is non-interest bearing except in the event of a default, judgment or the Loan reached its Maturity Date (together as “Termination Event”). At which point, MMTP will be charged interest on the Loan at 10% per annum, compounded monthly, beginning on the day of Termination Event.

b) On June 23, 2021, the Company completed the sale 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 shares for each MMTP Share, resulting in an aggregate of 42,969,046 Silver X shares being issued to MMTP shareholders (the “Transaction”). The Company also issued a finder’s fee of 1,250,000 Silver X shares to an arm’s-length third party. 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 shares and the related Escrowed Proceeds eased to Silver X.

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AI assistant

Silver X Mining Corp. — M&A Activity 2021

46499_rns_2021-09-07_148843f5-68bb-4a2e-b499-9241d7998ce8.pdf

FORM 51-102F4

BUSINESS ACQUISITION REPORT

Item 1 Identity of Company

1.1 Name and Address of Company

1.2 Executive Officer

Item 2 Details of Acquisition

2.1 Nature of Business Acquired

2.2 Acquisition Date

2.3 Consideration

2.4 Effect on Financial Position

2.5 Prior Valuations

2.6 Parties to Transaction

2.7 Date of Report

Item 3 Financial Statements and Other Information

SCHEDULE “A”

Consolidated Financial Statements as of December 31, 2020 and December 31, 2019

MINES & METALS TRADING (PERU) PLC

Content:

S H I M

INDEPENDENT AUDITOR’S REPORT

Opinion

Basis for Opinion

Other Matter

Material Uncertainty Related to Going Concern

Other Information

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

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements

“SHIM & Associates LLP”

CHARTERED PROFESSIONAL ACCOUNTANTS

MINES & METALS TRADING (PERU) PLC

Consolidated Statements of Financial Position

Authorized and approved by the Board:

MINES & METALS TRADING (PERU) PLC

MINES & METALS TRADING (PERU) PLC

MINES & METALS TRADING (PERU) PLC

Consolidated Statements of Cash Flows

1. Identification and economic activity

(a) Identification

(c) Acquisition of Mining Unit “Recuperada”

(d) Going concern

1. Identification and economic activity (continued)

2. Accounting policies

2. Accounting policies (continued)

d) Going concern

3. Summary of significant accounting principles

(b) Financial instruments

Classification

Recognition and derecognition

Measurement

3. Summary of significant accounting principles (continued)

Debt instruments

Equity instruments

Impairment

3. Summary of significant accounting principles (continued)

(e) Mining concessions

(f) Leases

3. Summary of significant accounting principles (continued)

3. Summary of significant accounting principles (continued)

(i) Revenue recognition

(j) Income tax

3. Summary of significant accounting principles (continued)

Transactions and balances

(l) Compound financial instruments

(m) Loss per share

(n) Comparative figures

4. Inventories

5. Other accounts receivable

5. Other accounts receivable (continued)

MINES & METALS TRADING (PERU) PLC

Notes to the Consolidated Financial Statements As of December 31, 2020 and 2019

6. Prepaid expenses

7. Mining concessions, property, plant and equipment, net

MINES & METALS TRADING (PERU) PLC

7. Mining concessions, property, plant and equipment, net (continued)

8. Trade accounts payable

MINES & METALS TRADING (PERU) PLC

9. Financial obligations

Silver X Mining Corp. M&A Activity 2021