Terreno Resources Corp. — Interim / Quarterly Report 2022

Nov 15, 2021

TERRENO RESOURCES CORP.

Financial Statements (Expressed in Canadian Dollars) For the six months ended September 30, 2021 and 2020

	Contents
Statementsof Financial Position	3
Statements of Comprehensive loss	4
Statements of ShareholdersEquity (Deficiency)	5
Statements of Cash Flows	6
Notes to the FinancialStatements	7-17

NOTICE TO READER

The accompanying unaudited condensed interim financial statements of Terreno Resources Corp. (the "Company") have been prepared by and are the responsibility of management. The unaudited condensed interim financial statements have not been reviewed by the Company's auditors.

TERRENO RESOURCES CORP. Statements of Financial Position As at September 30, 2021 and March 31, 2021 (Expressed in Canadian Dollars)

	Notes	September 30, 2021		March 31, 2021
		(Unaudited)		(Audited)
Assets
Current
Cash		$	167,404	$153,370
Prepaid and receivables	5		87,800	20,516
			255,204	173,886
Total Assets		$	255,204	$173,886
Liabilities and Shareholders' equity
Current liabilities
Accounts payable and accrued liabilities	6 & 7	$	59,072	$118,096
			59,072	118,096
Shareholders' equity
Share capital	8		9,600,557	9,444,057
Shares to be issued	8		20,000	-
Warrant reserve	9		2,794,427	2,675,427
Share option reserve	8		2,995,843	2,995,843
Deficit			(15,214,695)	(15,059,537)
			196,132	55,790
Total Liabilities and Shareholders' equity		$	255,204	$173,886

Refer to Note 2 for the Significant Going Concern Uncertainty

Refer to Note 16 for Subsequent Events

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

Approved on behalf of the Board

George A. Brown

Director

Joseph Del Campo

Director

TERRENO RESOURCES CORP. Condensed Statements of Comprehensive Loss For the six months ended September 30, 2021 and 2020 (Expressed in Canadian Dollars)

			Three months endedSeptember 30,		Six months endedSeptember 30,
	Notes		2021	2020	2021	2020
Operating expenses
General and administrative expenses	10	$	41,224	40,330	83,575	66,866
Exploration and evaluation expenditures	11		30,426	50,678	71,660	54,428
Loss from operations			(71,650)	(91,008)	(155,235)	(121,294)
Foreign exchange gain			77	-	77	-
Net loss for the period		$	(71,573)	(91,008)	(155,158)	(121,294)
Total comprehensive loss for the period		$	(71,573)	(91,008)	(155,158)	(121,294)
Loss per share
Basic and diluted			(0.00)	(0.00)	(0.00)	(0.00)
Weighted average number of common shares outstanding
Basic and diluted			52,160,419	39,876,593	51,862,599	38,364,358

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

TERRENO RESOURCES CORP. Statements of Shareholders' Equity (Deficiency) For the six months ended September 30, 2021 and 2020 (Expressed in Canadian Dollars)

	Share capital	Shares to beissued	Warrant reserve	Share optionreserve	Deficit	TotalShareholders'equity (deficiency)
Balance as at March 31, 2021	$9,444,057 $	-	$2,675,427 $	2,995,843 $	(15,059,537) $	55,790
Net loss for the period	-	-	-	-	(155,158)	(155,158)
Total comprehensive loss for the period	-	-	-	-	(155,158)	(155,158)
Issuance of common shares and warrantson a private placement	156,500	20,000	119,000		-	295,500
	156,500	20,000	119,000	-	-	295,500
Balance as at September 30, 2021	$9,600,557 $	20,000 $	2,794,427 $	2,995,843 $	(15,214,695) $	196,132
Balance as at March 31, 2020	$8,896,046 $	-	$2,481,838 $	2,916,643 $	(14,447,626) $	(153,099)
Net loss for the period	-	-	-	-	(121,294)	(121,294)
Total comprehensive loss for the period	-	-	-	-	(121,294)	(121,294)
Issuance of common shares and warrants ina private placement	261,267	-	198,733	-	-	460,000
	261,267	-	198,733	-	-	460,000
Balance as at September 30, 2020	$9,157,313 $	-	$2,680,571 $	2,916,643 $	(14,568,920) $	185,607

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

(Expressed in Canadian Dollars) TERRENO RESOURCES CORP. Statements of Cash Flows For the six months ended September 30, 2021 and 2020

		Six months ended
	Notes		September 30,2021		September 30,2020
Cash flows from operationsNet loss for the period		$	(155,158) $		(121,294)
Changes in non-cash working capital balances	15		(126,308)		(135,465)
Net cash used in operating activities			(281,466)		(256,759)
Financing activites
Issuance of shares and warrants on private placement basis	8		295,500		460,000
Cash provided by financing activities			295,500		460,000
Increase in cash			14,034		203,241
Cash, beginning of period			153,370		19,041
Cash, end of period		$	167,404	$	222,282

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

1. Description of Business and Nature of Operations:

Terreno Resources Corp. (the "Company" or "Terreno") is a listed issuer on the TSX Venture Exchange trading on the NEX board. It was incorporated under the Alberta Business Corporations Act on April 18, 1995 and continued into the Province of British Columbia on November 21, 2007. The Company's registered office is located at Suite 1102, 44 Victoria Street, Toronto, Ontario M5C 1Y2.

The Company is focused on acquisition, exploration and development of mineral properties.

In January 2018, Terreno signed a definitive property option agreement with an Ontario private company under which Terreno may earn a sixty percent (60%) interest in the Las Cucharas Gold & Silver Project in Mexico. The Las Cucharas Project consists of seventeen (17) concessions covering slightly over four thousand four hundred forty-five (4,445) hectares.

The unaudited condensed interim financial statements ("interim financial statements") as at and for the six months ended September 30, 2021 and 2020 were approved by the Board of Directors on November 15, 2021.

2. Significant going concern uncertainty:

These interim financial statements have been prepared on a going concern basis which contemplates the realization of assets and the payment of liabilities in the ordinary course of business. The Company has a history of operating losses and as at September 30, 2021 has an accumulated deficit of $15,214,695 (March 31, 2021 - $15,059,537).

These risks include, but are not limited to, dependence on key individuals, and the ability to secure adequate financing to meet the minimum capital required to successfully continue as a going concern.

In the event that future financings are not successfully completed, the Company may not have sufficient cash and cash flow to meet its operating requirements. The ability of the Company to continue as a going concern is dependent on securing additional financings through issuing additional equity or debt instruments. While the Company believes in the viability of its strategy and, in its ability to raise additional funds for the Company to continue as a going concern, there can be no assurances to that effect. These material uncertainties may cast significant doubt upon the Company's ability to continue as a going concern.

These interim financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. Such adjustments, if required, could be material to the financial statements.

COVID-19

The Company's operations could be significantly adversely affected by the effects of a widespread global outbreak of a contagious disease, including the recent outbreak of respiratory illness caused by COVID-19. The Company cannot accurately predict the impact COVID-19 will have on its operations and the ability of others to meet their obligations with the Company, including uncertainties relating to the ultimate geographic spread of the virus, the severity of the disease, the duration of the outbreak, and the length of travel and quarantine restrictions imposed by governments of affected countries.

2. Significant going concern uncertainty (continued):

In addition, a significant outbreak of contagious diseases in the human population could result in a widespread health crisis that could adversely affect the economies and financial markets of many countries, resulting in an economic downturn that could further affect the Company's operations and ability to finance its operations. The Company would be adversely affected by the loss of services of key personnel and restrictions on cross border trade.

3. Basis of preparation:

(a) Statement of Compliance:

These interim financial statements, including comparative balances, have been prepared using accounting policies consistent with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") and IFRS Interpretations Committee (IFRIC) applicable to the preparation of interim financial statements, including IAS 34, Interim Financial Reporting.

These interim financial statements do not include all the information required for full annual financial statements and they should be read in conjunction with the annual consolidated financial statements for the year ended March 31, 2021 and the notes to the financial statements.

(b) Basis of Presentation:

These interim financial statements have been prepared using the historical cost basis, except for certain financial instruments which have been measured at fair value. All monetary references expressed in these notes are references to Canadian dollar amounts ("$") except as otherwise noted.

(c) Critical accounting judgments, estimates and assumptions:

The preparation of these interim financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of assets, liabilities and contingent liabilities at the date of the interim financial statements and reported amounts of expenses during the reporting period. Estimates and assumptions are continuously evaluated and are based on management's experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Uncertainty about these judgments, estimates and assumptions could result in outcomes that could require a material adjustment to the carrying amount of the asset or liability affected in future periods. Below is a list of the critical accounting judgements, estimates and assumptions (excluding going concern which is disclosed in Note 2):

i. Determination of functional currency:

The functional currency of each of the Company's entities is measured using the currency of the primary economic environment in which that entity operates.

The functional currency for the Company is the Canadian Dollar.

3. Basis of preparation (continued):

ii. Deferred tax assets:

The assessment of the probability of future taxable income in which deferred tax assets can be utilized is based on the Company's future planned activities as supported by budgets that have been approved by the Board of Directors. Management also considers the tax rules of the various jurisdictions in which the Company operates. Should there not be a forecast of taxable income that indicates the probable utilization of a deferred tax asset or any portion thereof, the Company does not recognize the deferred tax asset.

iii. Share-based payments:

The Company uses the Black-Scholes option pricing model to calculate stockbased compensation expense and warrant values. The Black-Scholes model requires seven key inputs to determine a value for an option: risk free interest rate, exercise price, market price at date of issue, expected dividend yield, expected life, forfeiture rate and expected volatility. Certain of the inputs are estimates which involve considerable judgment and are, or could be, affected by significant factors that are out of the Company's control.

4. Summary of significant accounting policies:

New standards adopted

IFRS 3, Business Combinations ("IFRS 3")

Amendments to IFRS 3, issued in October 2018, provide clarification on the definition of a business. The amendments permit a simplified assessment to determine whether a transaction should be accounted for as a business combination or as an asset acquisition. The amendments are effective for transactions for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after January 1, 2020. The adoption of the amendments had no impact on the Company's financial statements.

IAS 1, Presentation of Financial Statements ("IAS 1")

Amendments to IAS 1, issued in October 2018, provide clarification on the definition of material and how it should be applied. The amendments also align the definition of material across IFRS and other publications. The amendments are effective for annual periods beginning on or after January 1, 2020 and are required to be applied prospectively. The adoption of the amendments had no impact on the Company's financial statements.

Future Accounting Pronouncements

Certain pronouncements were issued by the IASB or the IFRIC that are mandatory for accounting periods commencing on or after April 1, 2021. Many are not applicable or do not have a significant impact to the Company and have been excluded.

5. Prepaids and receivables:

The Company's prepaid expenses and other receivables consisted of the following:

		March 31,
	2021	2021
	$	$
Prepaid expenses	87,500	20,216
Miscellaneous Receivable	300	300
Total	87,800	20,516

6. Accounts payable and accrued liabilities:

	September 30,	March 31,
	2021	2021
	$	$
Prepaid expenses	87,500	20,216
Miscellaneous Receivable		300300
Total	87,800	20,516
Accounts payable and accrued liabilities:
	September 30,	March 31,
	2021	2021
	$	$
Trade payables		8,15828,798
Accrued liabilities (i)	50,914	89,298
Total	59,072	118,096
performance of individuals and market trends.During the six months ended Septemberfollowing transactions with	Related party transactions with key management personnel:All transactions with key management personnel have occurred in the normal course ofoperations and are recorded at the exchange amount, which is the amount of considerationestablished and agreed to by the related parties.In accordance with IAS 24, key management personnel are those persons having authorityand responsibility for planning, directing and controlling the activities of the Companydirectly or indirectly, including any directors (executive and non-executive) ofThe remuneration of key executives is determined by the board having regard to the30,2021key management personnel:	and 2020the Company entered into the
Type of service	Nature of relationship	20212020
Consulting fees	Officers	$61,320
For the six months ended September$19,320(2020-At September 30, 2021, accounts payable and accrued liabilities included $7,312	30, 2021, $42,000relating to the consulting fees are included in general and administration expenses and$6,330) is included in exploration and evaluation expenditures.	(2020-$42,000) of the cost

(i) Accounts payable and accrued liabilities includes $7,312 (March 31, 2021 - $22,725) payable to officers of the Company for unpaid remuneration. (Refer to note 7).

7. Related party transactions with key management personnel:

All transactions with key management personnel have occurred in the normal course of operations and are recorded at the exchange amount, which is the amount of consideration established and agreed to by the related parties.

In accordance with IAS 24, key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Company directly or indirectly, including any directors (executive and non-executive) of the Company. The remuneration of key executives is determined by the board having regard to the performance of individuals and market trends.

During the six months ended September 30, 2021 and 2020 the Company entered into the following transactions with key management personnel:

Type of service	Nature of relationship	2021	2020
		$	$
Consulting fees	Officers	61,320	48,330

For the six months ended September 30, 2021, $42,000 (2020 - $42,000) of the cost relating to the consulting fees are included in general and administration expenses and $19,320 (2020 - $6,330) is included in exploration and evaluation expenditures.

At September 30, 2021, accounts payable and accrued liabilities included $7,312 (March 31,

8. Share capital:

Authorized:

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

Issued:

Share capital:

	Shares	Amount
	#	$
Balance at March 31, 2020	36,835,506	8,896,046
Private placement	10,126,000	285,101
Exercise of warrants	1,000,000	91,310
Exercise of options	600,000	51,600
Property acquisition	3,000,000	120,000
Balance at March 31, 2021	51,561,506	9,444,057
Private placement	5,510,000	156,500
Balance at September 30, 2021	57,071,506	9,600,557

• (i) In September 2020, the Company completed a private placement of 9,200,000 units at a price of $0.05 per unit. Each unit consisted of a common share and one share purchase warrant. The share purchase warrants were exercisable at $0.07 and expired one year from the closing date of September 1, 2020. A senior officer and director of the Company subscribed for 1,500,000 units under the financing. The $75,000 subscription price was netted against the payables due to the officer and director. An additional 324,039 units were subscribed by two directors of the Company and 480,000 units were subscribed by an officer. The Company issued 126,000 common shares and 126,000 non transferable warrants as finders' fees at a combined value of $6,300. The warrants were exercisable at $0.07 for a period of 12 months.
• (ii) In February 2021, the Company issued 3,000,000 shares (at a fair value of $120,000) due on the third anniversary of the property option agreement for the Las Cucharas Gold & Silver Project. See note 11.
• (iii) In March 2021, the Company completed a private placement of 800,000 units at a price of $0.05 per unit. Each unit consisted of a common share and one share purchase warrant. The share purchase warrants are exercisable at $0.07 and expire on March 18, 2022, one year from the closing date.
• (iv) In March 2021, the Company received $70,000 for 1,000,000 warrants exercised at $0.07 per common share. The exercised share purchase warrants were previously estimated using the Black-Scholes option pricing model to have a fair value of $21,310.

Share capital (continued):

• (v) In March 2021, an officer exercised 600,000 options at $0.05 per common share. The $30,000 exercise price was netted against the payables due to the officer. The share options were previously estimated using the Black-Scholes option pricing model to have a fair value of $21,600.
• (vi) In September 2021, the Company completed the first tranche of a private placement of 5,510,000 units at a price of $0.05 per unit. Each unit consisted of a common share and one share purchase warrant. The share purchase warrants are exercisable at $0.06 and expire one year from the closing date of September 20, 2021. A senior officer and director of the Company subscribed for 600,000 units under the financing. The $30,000 subscription price was netted against the payables due to the officer and director. An additional 360,000 units were subscribed by an officer of the Company.

As at September 30, 2021, an additional $20,000 in subscriptions was received. This was included in the second tranche of the private placement. See Note 16.

Stock Option plan:

The Company grants incentive stock options to eligible directors, officers, and consultants as permitted pursuant to the Company's Stock Option Plan approved by the shareholders. The aggregate number of common shares which may be subject to option at any one time may not exceed 10% of the issued common shares of the Company as of that date. Each of the stock options granted vest immediately on the date of grant and have a term of five years. If the option holder ceases to be qualified to receive options from the Company those options expire in 90 days.

a) Stock options:

A summary of the status of the Company's stock options outstanding as at September 30, 2021, and changes during the periods then ended is presented below:

	Number ofoptions	Weightedaverage exerciseprice
		$
Balance at March 31, 2020	900,000	0.06
Expired	(650,000)	0.07
Exercised	(600,000)	0.05
Granted	2,800,000	0.05
Balance at March 31, 2021 and September 30, 2021	2,450,000	0.05
In December 2020, the Company granted 2,800,000 options to seven officers and directorsof the Company. The options were exercisable at a price of $0.05 for a period of three yearsexpiring on December 31, 2023.
All options vested immediately on the date of grant.
The grant date fair value of the stock options granted was $0.036Black-Scholes option pricing model.		per option using the

8. Share capital (continued):

For the purpose of the calculation, the following assumptions were used: share price $0.04; risk free interest rate 0.25%; expected dividend yield 0%; expected volatility 195%; and expected life 3 years.

Volatility was estimated based on the historical volatility of the Company for the same time frame as the expected contractual life of the stock options.

During the six months ended September 30, 2021, no stock options were granted.

As at September 30, 2021, the Company has 2,450,000 stock options vested and outstanding. The options have a weighted average remaining life of 2.09 years.

Outstandingoptions	Exercise price	Number ofvested options	Expiry date
250,000	$0.05	250,000	May 31, 2022
2,200,000	$0.05	2,200,000	December 31, 2023
2,450,000		2,450,000

Details of outstanding options:

These stock options are expensed over the options' vesting periods in the statements of comprehensive loss and credited to share option reserve.

9. Warrant reserve:

A summary of the status of the Company's warrants as at September 30, 2021 and 2020, and the changes during the periods then ended is presented below:

	Number ofwarrants	Weightedaverage exerciseprice
		$
Balance at March 31, 2020	4,500,000	0.05
Issued	10,126,000	0.07
Exercised	(1,000,000)	(0.07)
Expired	(4,500,000)	(0.05)
Balance at March 31, 2021	9,126,000	0.07
Issued	5,510,000	0.06
Expired	(8,326,000)	(0.07)
Balance at September 31, 2021	6,310,000	0.06

9. Warrant reserve (continued):

On September 1, 2020 the Company completed a non-brokered private placement of 9,200,000 units at a price of $0.05 per unit. An additional 126,000 units were issued as finders' fees. Each unit was comprised of one common share and one share purchase warrant. Each full purchase warrant entitled the holder to acquire one additional common share for a period of one year at a price of $0.07. The fair value of the share purchase warrants was estimated at $198,733 using the Black-Scholes option pricing model with the assumptions as presented below.

On March 18, 2021 the Company completed a non-brokered private placement of 800,000 units at a price of $0.05 per unit. Each unit was comprised of one common share and one share purchase warrant. Each full purchase warrant entitles the holder to acquire one additional common share for a period of one year at a price of $0.07. The fair value of the share purchase warrants was estimated at $16,166 using the Black-Scholes option pricing model with the assumptions as presented below.

On September 20, 2021 the Company completed a non-brokered private placement of 5,510,000 units at a price of $0.05 per unit. Each unit was comprised of one common share and one share purchase warrant. Each full purchase warrant entitles the holder to acquire one additional common share for a period of one year at a price of $0.06. The fair value of the share purchase warrants was estimated at $119,000 using the Black-Scholes option pricing model with the assumptions as presented below.

Black-Scholes assumptions	Warrants issued	Warrants issued	Warrants issued
used	September 20, 2021	September 1, 2020	March18, 2021
Expected volatility	260%	260%	213%
Expected dividend yield	0%	0%	0%
Risk-free interest rate	0.45%	0.27%	0.27%
Expected life of warrants	1 year	1 year	1 year
Share price on date of issue	$0.045	$0.045	$0.055

Valuation assumptions for warrants issued:

10. General and Administrative expenses:

	Three months ended September 30,		Six months ended September 30,
	2021	2020	2021	2020
	$	$	$	$
Consulting fees	21,000	21,000	42,000	42,000
Office and general	8,502	11,001	23,751	11,093
Professional fees	4,000	3,445	8,000	6,945
Shareholder relations and communications	7,722	4,884	9,824	6,828
	41,224	40,330	83,575	66,866

11. Exploration and evaluation expenditures:

In January 2018, Terreno signed a definitive property option agreement with an Ontario private company under which Terreno may earn a sixty percent (60%) interest in the Las Cucharas Gold & Silver Project in Mexico.

The Las Cucharas Project consists of seventeen (17) concessions covering slightly over four thousand four hundred forty-five (4,445) hectares. Terreno may earn a sixty percent interest by incurring exploration expenditures and by issuing Terreno common shares as follows:

• Two million common shares within 10 days of TSX Venture Exchange acceptance of the property acquisition (issued).

• Two and a half million common shares on each of the first and second anniversary of the option agreement (issued).

• Three million common shares on the third anniversary of the option agreement (issued). See note 8.

• Five million shares on the fourth anniversary of the option agreement within five (5) days of the transfer of a sixty percent (60%) interest in the concession titles. Written notice has been provided to the private Ontario company and also to Maverix Metals Inc. that the $700,000 of cumulative exploration expenditures have been completed and requesting the transfer of the concessions from the Mexican subsidiary of Maverix Metals Inc. to the Mexican subsidiary of the Ontario private company. Maverix Metals Inc., through its Mexican subsidiary, are the owners of the concessions who have optioned them to the private Ontario company.

• Cumulative exploration expenditures of $700,000 by October 31, 2021, including $200,000 by October 31, 2019 and $450,000 by October 31, 2020 have all been completed.

• The property option, once earned and exercised, will make the Las Cucharas Project subject to a three percent (3%) net smelter return (NSR) royalty payable to Maverix Metals Inc. (TSX: MMX).

As at September 30, 2021, Terreno has incurred exploration and evaluation expenditures of $1,286,122. This includes 10,000,000 common shares issued under the option agreement for a consideration of $420,000.

In March 2021, the Company signed an Amendment Agreement with the Ontario private company under which the Company has the option to earn the remaining 40% interest in the Las Cucharas Project in exchange for 20,000,000 additional common shares subject to regulatory approval. The Company may earn an additional 10% interest for each of four payments of 5,000,000 shares. These four share issues of 5,000,000 common shares each are due annually after the transfer of titles under the original property option.

11. Capital management:

The Company includes the following in its capital:

	September 30,2021	March 31,2021
	$	$
Share capital	9,600,557	9,444,057
Warrants	2,794,427	2,675,427
Share option reserve	2,995,843	2,995,843
Deficit	(15,214,695)	(15,059,537)
	196,132	55,790

The Company's objectives when managing capital are:

• (a) To maximize any income it may receive from available cash without significantly increasing the principal at risk by making investments in high credit quality issuers; and
• (b) To maintain a flexible capital structure which optimizes the cost of capital at acceptable levels of risk.

The Company manages its capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of its underlying assets. The Company maintains or adjusts its capital level to enable it to meet its objectives by:

• realizing proceeds from the disposition of its investments;
• raising capital through equity financings;

The Company is not subject to any capital requirements imposed by a regulator. To date, the Company has not declared any cash dividends to its shareholders. The Company's management is responsible for the management of capital and reviews its capital management approach on an ongoing basis through the preparation of annual expenditure budgets, which are updated regularly to take into account factors such as successful financings to fund activities, changes in property holdings and related obligations and exploration activities and believes that this approach, given the relative size of the Company, is reasonable.

13. Financial instruments:

These assets represent a small portion of the Company's overall business. However, the use of financial instruments can expose the Company to several risks. A discussion of the Company's use of financial instruments and their associated risks is provided below:

(a) Liquidity risk: Liquidity risk is the risk that the Company will have sufficient cash resources to meet its financial obligations as they come due. As at September 30, 2021, the Company has outstanding liabilities of $59,072 (March 31, 2021 - $118,096) and working capital of $196,132 (March 31, 2021 – $55,790). The Company's liquidity and operating results may be adversely affected if the Company's access to the capital market is hindered, whether as a result of downturn in stock market conditions generally or related to matters specific to the Company.

13. Financial instruments (continued):

The Company generates cash flow primarily from its financing activities. The Company has cash of $167,404. The Company will need to obtain additional financing. There is no assurance that financing will be available from any source, that it will be available on terms acceptable to the Company, or that any future offering of securities will be successful. If additional funds are raised through the issuance of equity securities, there may be a significant dilution in the value of the Company's outstanding common stock. The Company could suffer adverse consequences if it is unable to obtain additional capital which would cast substantial doubt on its ability to continue its operations and growth. See note 2.

• (b) Currency risk: Currency risk is the risk that the fair value of, or future cash flows from, the Company's financial instruments will fluctuate because of changes in foreign exchange rates. The Company is exposed to currency fluctuations as some amounts of its liabilities are denominated in U.S. dollars. The Company has not entered into any foreign currency contracts to hedge this exposure. The risk is not significant for the current financial reporting period.
• (c) Credit risk: Credit risk is the risk of loss associated with a counter-party's inability to fulfill its payment obligations. The Company's credit risk is minimal as it has its cash deposited with highly rated financial institutions.

14. Commitments and obligations:

The cumulative exploration expenditure requirements for the Las Cucharas Gold & Silver Project in Mexico were completed during the year ended March 31, 2021.

15. Changes in non-working capital:

	For the six months ended
	September 30,	September 30,
	2021	2020
	$	$
Prepaid and receivables	(67,284)	(50,325)
Accounts payable and accrued liabilities	(59,024)	(85,140)
Total	(126,308)	(135,465)

16. Subsequent events:

A second tranche of 1,900,000 units for gross proceeds of $95,000 was closed in November 2021. This included 300,000 units subscribed to by a director and officer.