Thunderstruck Resources Ltd. — Interim / Quarterly Report 2020

Aug 29, 2020

THUNDERSTRUCK RESOURCES LTD.

Condensed Consolidated Interim Financial Statements

Second Quarter June 30, 2020

(Expressed in Canadian Dollars) (Unaudited)

NOTICE OF NO AUDITOR REVIEW OF CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

In accordance with National Instrument 51-102 Part 4, subsection 4.3(3)(a), if an auditor has not performed a review of these condensed interim financial statements they must be accompanied by a notice indicating that these condensed interim financial statements have not been reviewed by the Company’s auditors.

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

THUNDERSTRUCK RESOURCES LTD. Condensed Consolidated Interim Statements of Financial Position (Unaudited - Expressed in Canadian Dollars)

AS AT

S AT
	June 30,	December 31,
	2020	2019
	$	$
ASSETS
Current assets
Cash	587,232	25,543
Amounts receivable	77,541	110,208
Prepaid expenses	**115,704 **	23,491
	780,477	159,242
Equipment (note 4)	54,085	73,284
Exploration advances and deposits	243,613	47,739
Exploration and evaluation asset(note 3)	1,698,388	1,570,810
Total Assets	2,776,563	1,851,075
LIABILITIES
Current Liabilities
Accounts payable and accrued liabilities (note 7)	138,967	528,966
Lease liability (note 5)	28,705	26,220
Exploration advance(note 3)	333,609	-
	**501,281 **	555,186
Lease liability (note 5)	2,279	16,410
	503,560	571,596
EQUITY
Share capital (note 6(b))	4,894,283	3,701,649
Obligation to issue shares	-	15,654
Subscription receivable (note 6(b))	(16,200)	-
Reserves (note 6(e))	671,645	594,572
Deficit	(3,276,725)	(3,032,396)
Total Equity	2,273,003	1,279,479
Total Equity and Liabilities	2,776,563	1,851,075

See accompanying notes to the condensed consolidated interim financial statements

Nature and continuance of operations (note 1) Subsequent events (note 10)

Approved by the Board of Directors and authorized for issue on August 28, 2020.

On behalf of the Board:

“Br ce Bradle ” “Brien Lundin” y y

(Director) (Director)

THUNDERSTRUCK RESOURCES LTD. Condensed Consolidated Interim Statements of Comprehensive Loss (Unaudited - Expressed in Canadian Dollars)

THUNDERSTRUCK RESOURCES LTD. Condensed Consolidated Interim Statements of Comprehensive Loss Unaudited - Expressed in Canadian Dollars)
Three Months Ended Three Months Ended Six Months Ended June 30, 2020 June30,2019 June 30, 2020	Six Months Ended June30,2019
$ $ $ EXPENSES Advertising and promotion 3,533 9,466 14,975) Automobile - 236 -) Consulting fees 16,657 20,031 31,924 Depreciation 225 - 449 Directors’ fees (note 7) 3,000 - 6,000 Management fees (note 7) 60,000 30,000 90,000) Office and miscellaneous 5,124 4,564 9,858) Professional fees 12,484 8,742 18,272) Rent (note 7) 2,362 1,500 4,725 Share-based compensation (note 6(e)) - 82,412 80,507 Shareholder communication 1,952 621 3,071 Telephone 1,127 1,857 2,682) Travel and accommodation 1,900 1,679 13,792) Trust and filingfees 7,150 13,507 14,293)	$ 26,384) 236) 32,031 - - 60,000) 7,687) 12,900) 3,000 82,412 11,354) 3,477) 9,179) 25,521)
Loss from operations (115,514) (174,615) (290,548) Operator fees recoveries (note 3) 22,451 - 55,240 Foreign exchange (7,589) (6,260) (7,315) Finance expense(note 5) (790) (894) (1,706)	(274,181) - (5,827) (894)
Net loss and comprehensive loss for theperiod (101,442) (181,769) (244,329)	(280,902)
Basic and diluted lossper common share $ (0.00) $ (0.00) $ (0.00)	$ (0.01)
Weighted average common shares outstanding 62,414,800 57,845,033 61,717,057	56,817,487c

See accompanying notes to the condensed consolidated interim financial statements

THUNDERSTRUCK RESOURCES LTD. Condensed Consolidated Interim Statements of Cash Flows (Unaudited - Expressed in Canadian dollars) FOR THE SIX MONTHS ENDED JUNE 30,

FOR THE SIX MONTHS ENDEDJUNE 30,
	2020	2019
Cash provided by (used for):	$	$
Operating activities
Loss for the period	(244,329)	(280,902)
Items not involving the use of cash:
Operator fees recoveries	(55,240)	-
Share-based compensation	80,507	82,412
Depreciation	449	-
Accrued interest expense	1,706	894
Unrealized foreign exchange	1,441	(1,221)
Changes in non-cash operating capital:
Amounts receivable	8,151	(23,182)
Prepaid expenses	(92,213)	(28,679)
Accountspayable and accrued liabilities	(80,492)	(5,790)
Cash used in operating activities	(380,020)	(256,468)
Investing activities
Exploration advances and deposits	(195,874)	1,867
Exploration advances received	567,196	363,300
Exploration and evaluation expenditures	(572,166)	(235,390)
Cash used in investing activities	(200,844)	129,777
Financing activities
Private placement – net of share issue costs	1,153,846	190,935
Subscriptions receivable	-	10,000
Options exercised	3,500	5,500
Leasepayments	(14,793)	(7,500)
Cashprovided by financing activities	1,142,553	198,935
Net cash used during the period	561,689	72,244
Cash, beginningof theperiod	25,543	36,950
Cash, end of the period	587,232	109,194

Supplementary disclosure:

At June 30, 2020, the Company had $48,038 (2019 - $129,410) in exploration expenditures in accounts payable and incurred depreciation expense of $18,750 (2019 - $10,192) through exploration expenditures.

See accompanying notes to the condensed consolidated interim financial statements

THUNDERSTRUCK RESOURCES LTD.

Condensed Consolidated Interim Statements of Changes in Equity (Unaudited - Expressed in Canadian dollars)

	Number of shares Share capital	Obligation to issue shares Subscription receivable Reserves	Deficit Total
December 31, 2018 Private placement Share issue costs Share-based compensation Subscriptions received Options exercised Net loss for the period	$	$ $ $	$ $
	54,611,167 3,499,806 3,183,585 205,931 - (14,996) - - - - 100,000 10,908 - -	- (10,000) 517,568 - - - - - - - - 82,412 - 10,000 - - - (5,408) - - -	(2,621,654) 1,385,720 - 205,931 - (14,996) - 82,412 - 10,000 - 5,500 (280,902) (280,902)
June 30, 2019	57,894,752 3,701,649	- - 594,572	(2,902,556) 1,393,665
Obligation to issue shares Net less for theperiod	- - - -	15,654 - - - - -	- 15,654 (129,840) (129,840)
December 31, 2019	57,894,752 3,701,649	15,654 - 594,572	(3,032,396) 1,279,479
Private placement Share issue cost Share-based compensation Options exercised Net loss for theperiod	20,823,207 1,216,235 - (30,535) - - 50,000 6,934 - -	(15,654) (16,200) - - - - - - 80,507 - - (3,434) - - -	- 1,184,381 - (30,535) - 80,507 - 3,500 (244,329) (244,329)
June 30, 2020	78,767,959 4,894,283	- (16,200) 671,645	(3,276,725) 2,273,003

See accompanying notes to the condensed consolidated interim financial statements

THUNDERSTRUCK RESOURCES LTD. Notes to the Condensed Consolidated Interim Financial Statements (Unaudited - Expressed in Canadian dollars) Six months ended June 30, 2020

1. NATURE AND CONTINUANCE OF OPERATIONS

Thunderstruck Resources Ltd. (the "Company") was incorporated under the British Columbia Business Corporations Act on October 27, 2011 and its principal activity is the acquisition and exploration of mineral properties.

The Company’s registered office address is Suite 2080 - 777 Hornby Street, Vancouver, BC V6Z 1S4 and its principal place of business is Suite 488 – 1090 West Georgia Street, Vancouver, BC V6E 3V7.

On May 1, 2015, Thunderstruck Limited was incorporated in Fiji as a wholly-owned subsidiary of Thunderstruck Resources Ltd.

The Company’s principal mineral property interest is a project located on the main island of Fiji. The Company is in the process of exploring this project and has yet to determine if the project contains economically recoverable mineral reserves. The Company’s continuing operations and the underlying value of the project is entirely dependent upon the existence of economically recoverable mineral reserves, the ability of the Company to obtain the necessary financing to complete the exploration and development of the project, obtaining the necessary permits to mine, future profitable production from any mine and any proceeds from the disposition of the project.

These condensed consolidated interim financial statements have been prepared assuming the Company will continue on a goingconcern basis. The Company has working capital of $279,196 as at June 30, 2020, no source of operating revenue, and is dependent upon the future receipt of equity financing to maintain its operations and to advance its current project. The ability of the Company to continue as a going-concern depends upon its ability to develop profitable operations and to continue to raise additional financing to maintain its working capital. At the present time, there are material uncertainties which cast significant doubt on the ability of the Company to continue as a going concern.

In March 2020 the World Health Organization declared coronavirus COVID-19 a global pandemic. This contagious disease outbreak, which has continued to spread, and any related adverse public health developments, has adversely affected workforces, economies, and financial markets globally, potentially leading to an economic downturn. It is not possible for the Company to predict the duration or magnitude of the adverse results of the outbreak and its effects on the Company’s business or ability to raise funds.

There can be no assurance that the Company will be able to continue to raise funds, in which case the Company may be unable to meet its obligations. Should the Company be unable to realize on its assets and discharge its liabilities in the normal course of business, the net realizable value of its assets may be materially less than the amounts recorded on the condensed consolidated interim statements of financial position.

2. SIGNIFICANT ACCOUNTING POLICIES

a) Statement of compliance

These condensed consolidated interim financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") applicable to the preparation of interim financial statement, including IAS 34, Interim Financial Reporting. Accordingly, these financial statements do not include all of the information and footnotes required by IFRS for complete financial statements for yearend reporting purposes. These financial statements should be read in conjunction with the Company’s financial statements for the year ended December 31, 2019, which have been prepared in accordance with IFRS as issued by the IASB.

The accounting policies applied by the Company in these financial statements are the same as those applied by the Company in its most recent annual financial statements for the year December 31, 2019 as filed on SEDAR at www.sedar.com.

b) Basis of measurement

These condensed consolidated interim financial statements have been prepared on a historical cost basis except for financial instruments classified at fair value through profit or loss, which are stated at their fair value. In addition, these condensed consolidated interim financial statements have been prepared using the accrual basis of accounting, except for the cash flow information

THUNDERSTRUCK RESOURCES LTD. Notes to the Condensed Consolidated Interim Financial Statements (Unaudited - Expressed in Canadian dollars) Six months ended June 30, 2020

2. SIGNIFICANT ACCOUNTING POLICIES (continued)

b) Basis of measurement (continued)

These condensed consolidated interim financial statements include the accounts of the Company and its 100% controlled entity, Thunderstruck Limited (a Fijian corporation) (“Thunderstruck Fiji”) and Thunderstruck Fiji’s 100% controlled entity, Aljen (Pacific) Limited (a Fijian corporation).

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

These condensed consolidated interim financial statements are presented in Canadian dollars, which is also all the entities’ functional currency.

c) Use of judgements and estimates

The preparation of these condensed consolidated interim financial statements requires management to use judgment in applying its accounting policies and estimates and assumptions about the future. Estimates and other judgments are regularly evaluated and are based on management’s experience and other factors, including expectations about future events that are believed to be reasonable under the circumstances. The following are the most significant accounting judgments and estimates that the Company has made in the preparation of these condensed consolidated interim financial statements.

Critical judgements in applying accounting policies:

The following are critical judgments that management has made in the process of applying accounting policies and that have the most significant effect on the amounts recognized in the financial statements:

• The determination that there are no pervasive indicators which would require an impairment provision in connection with the carrying value of the company’s exploration and evaluation assets.

• The determination that the Company will continue as a going-concern for the next year.

Key sources of estimation uncertainty:

Significant assumptions about the future and other sources of estimation uncertainty that management has made at the financial position 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 assumptions made, relate to, but are not limited to, the following:

Share-based payments

The Company measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. Equity-settled transactions with non-employees are recorded at the fair value of the service provided, where this is readily determinable. In other instances, they are recorded at the fair value of the equity instruments issued. Estimating fair value for share-based payment transactions requires determining the most appropriate valuation model, which is dependent on the terms and conditions of the grant. This estimate also requires determining the most appropriate inputs to the valuation model including the expected life of the share-based award, volatility and dividend yield and making assumptions about them.

Deferred tax assets

The Company estimates the expected manner and timing of the realization or settlement of the carrying value of its assets and liabilities and applies the tax rates that are enacted or substantively enacted on the estimated dates of realization or settlement.

THUNDERSTRUCK RESOURCES LTD. Notes to the Condensed Consolidated Interim Financial Statements (Unaudited - Expressed in Canadian dollars) Six months ended June 30, 2020

3. EXPLORATION AND EVALUATION ASSETS

	Fijian VMS
	Project,Fiji
	$
Balance, December 31, 2018	1,387,800
Assay	9,695
Camp costs	142,239
Community relations	2,170
Depreciation (note 4)	28,990
Development	411,374
Field office	125,910
Geological	436,293
Management	69,927
Recoveries	(1,091,817)
Supplies	48,229
Balance, December 31, 2019	1,570,810
Assay	5,899
Camp costs	36,999
Community relations	26,887
Depreciation (note 4)	18,750
Development	29,154
Field office	57,551
Geological	31,156
Management	37,451
Recoveries	(153,831)
Supplies	37,562
Balance, June 30, 2020	1,698,388

Fijian Project, Island of Viti Levu, Fiji

On August 4, 2016, the Company entered into a Share Sale Agreement (the “Agreement”) to acquire all of the issued and outstanding shares of Aljen (Pacific) Limited (“Aljen”), a private Fijian company holding legal title to portfolio of base metal and gold properties located on the island of Viti Levu, Fiji (the “Properties”).

Pursuant to the Agreement, the Company paid cash of AUD$158,000 plus VAT and issued 450,000 common shares of the Company. The Company is required to issue a further 1,000,000 common shares of the Company in the event the Company or its successors either a) identify indicated mineral resources (or better and as prepared in compliance with NI 43-101) containing a minimum of 250,000 ounces of gold or 3,000,000 tonnes of copper, zinc or silver on the Properties; or b) completes a prefeasibility study on the Properties.

The Company is satisfied that evidence of title to the property is adequate and acceptable to prevailing Fijian standards with respect to the current stage of exploration on this property. Although the Company is unaware of any defects in title to its property, no guarantee can be made that none exist.

Joint Venture with Japan Oil, Gas and Metals National Corporation

On February 28, 2019, the Company signed a Letter Agreement (the "Agreement") with Japan Oil, Gas and Metals National Corporation ("JOGMEC"), whereby JOGMEC has the option to earn a 70% ownership interest in a wholly owned subsidiary to be established by the Company under the laws of Fiji ("FijiSub"). Upon completion of the option, JOGMEC will have an indirect interest in the Korokayiu Property (the "Mineral Licence") in Fiji, currently held 100% by Thunderstruck Fiji. Thunderstruck Fiji will transfer the Mineral License to FijiSub as soon as is practicably possible.

THUNDERSTRUCK RESOURCES LTD. Notes to the Condensed Consolidated Interim Financial Statements (Unaudited - Expressed in Canadian dollars) Six months ended June 30, 2020

3. EXPLORATION AND EVALUATION ASSETS (continued)

Joint Venture with Japan Oil, Gas and Metals National Corporation (continued)

The Agreement grants JOGMEC the option to earn a 70% ownership interest by funding CDN$3,500,000 of exploration through March 31, 2022, subject to acceleration at JOGMEC's discretion.

In order to earn a 70% interest, JOGMEC must complete the exploration requirement as follows:

• 1) Term 1 Program: CDN$900,000 during the period commencing on February 28, 2019 (the “Effective Date”) and ending March 31, 2020. During fiscal 2019, the Term 1 Program was amended to increase funding. During the Term 1 Program, the Company received $1,449,589. The Term 1 Program funding has completed.

• 2) Term 2 Program: CDN$1,100,000, amended to CDN$1,300,000, for the period commencing April 1, 2020, and ending March 31, 2021. During the Term 2 Program, the Company received $279,157. Subsequent to June 30, 2020, the Company received $169,870 toward the Term 2 Program.

• 3) Term 3 Program: CDN$1,500,000 during the period commencing April 1, 2021, and ending March 31, 2022.

During the period ended June 30, 2020, the Company recognized a recovery of $153,831 (2019 - $174,192) against exploration and evaluation assets and operator income of $55,240 (2019 - $Nil) related to the JOGMEC funding. As at June 30, 2020, the Company had been advanced $333,609 (December 31, 2019 - $Nil) to be applied against future expenditures.

Investment in the Mineral Licence will be on a pro-rata basis after JOGMEC has fulfilled its funding obligation.

During the JOGMEC option period, the Company will be the operator for all operations and will be responsible for the preparation, conduct and oversight of prospecting operations, and the hiring of any third party consultants.

4. EQUIPMENT

				Right-of-use
				assets
		Computer	Vehicle	(Vehicle)		Total
Cost
Balance, December 31, 2018	$	- $	26,968 $	-	$	26,968
Additions		3,000	13,436	63,993		80,429
Balance, December 31, 2019 and
June 30,2020	$	3,000$	40,404 $	63,993	$	107,397
Accumulated Depreciation
Balance, December 31, 2018	$	- $	4,673 $	-	$	4,673
Depreciation		450	8,421	20,569		29,440
Balance, December 31, 2019		450	13,094	20,569		34,113
Depreciation		449	5,037	13,713		19,199
Balance,June 30,2020	$	899$	18,131 $	34,282	$	53,312
Net Book Value
Balance, December 31, 2019	$	2,550 $	27,310 $	43,424	$	73,284
Balance,June 30,2020	$	2,101$	22,273 $	29,711	$	54,085

THUNDERSTRUCK RESOURCES LTD. Notes to the Condensed Consolidated Interim Financial Statements (Unaudited - Expressed in Canadian dollars) Six months ended June 30, 2020

5. LEASE LIABILITY

The following is a continuity schedule of lease liability for the periods presented:

		June 30,	December 31,
		2020	2019
Balance, beginning of the period	$	42,630 $	-
Lease additions in the period		-	63,993
Accrued finance expense		1,706	3,147
Foreign exchange		1,441	(2,397)
Leasepayments		(14,793)	(22,113)
Balance,end of theperiod	$	30,984$	42,630
Current (less than one year)	$	28,705 $	26,220
Long-term		2,279	16,410
Balance, end of the period	$	30,984 $	42,630

The Company entered into a lease on a vehicle in Fiji (note 4) in the period and has applied an incremental borrowing rate of 8.95%.

6. SHARE CAPITAL

a) Authorized share capital

At June 30, 2020, the authorized share capital consisted of an unlimited number of common shares without par value and an unlimited number of preferred shares with no par value.

b) Issued share capital

For the Six Months Ended June 30, 2020

On January 7, 2020, the Company completed a private placement totalling 3,315,707 units at a $0.05 per unit, for gross proceeds of $165,785, of which $15,564 had been received as at December 31, 2019, with each unit consisting of one common share and one-half of one share purchase warrant. Each warrant entitles the holder to purchase a further common share at a price of $0.10 per share until January 5, 2023.

On June 24, 2020, the Company completed a private placement totalling 17,507,500 units at a $0.06 per unit, for gross proceeds of $1,050,450, of which $16,200 was received until subsequent to June 30, 2020. Each unit consists of one common share and one share purchase warrant. Each warrant entitles the holder to purchase a further common share at a price of $0.10 per share until June 24, 2025. The Company paid a total of $11,520 in finders’ fees and incurred other share issuance costs of $7,500.

For the Year Ended December 31, 2019

On January 28, 2019, the Company completed a private placement totalling 1,692,000 units at $0.06 per unit for total gross proceeds of $101,520, with each unit consisting of one common share and one-half of one share purchase warrant. Each whole warrant is exercisable to acquire one common share for $0.15 per share for a period of 3 years.

On March 15, 2019, 100,000 stock options were exercised at $0.055 per share, for gross proceeds of $5,500. As a result of this transaction, a further $5,408 was reclassified from Reserves to Share capital

THUNDERSTRUCK RESOURCES LTD. Notes to the Condensed Consolidated Interim Financial Statements (Unaudited - Expressed in Canadian dollars) Six months ended June 30, 2020

6. SHARE CAPITAL (continued)

b) Issued share capital (continued)

For the Year Ended December 31, 2019 (continued)

On April 4, 2019, the Company completed a private placement totalling 1,491,585 units at $0.07 per unit for total gross proceeds of $104,411, with each unit consisting of one common share and one-half of one share purchase warrant. Each whole warrant is exercisable to acquire one common share for $0.15 per share for a period of 3 years.

c) Share purchase options

The Company has established a stock option plan for its directors, officers and technical consultants under which the Company may grant options from time to time to acquire a maximum number of common shares of up to 10% of the issued and outstanding Common Shares. The exercise price of each option granted under the plan shall be determined by the Board of Directors. Options may be granted for a maximum term of ten years from the date of the grant, are non-transferable and expire within 90 days of termination of employment or holding office as director or officer of the Company. Unless otherwise stated, the options fully vest when granted.

The following is a summary of the changes in the Company’s outstanding stock options:

	June 30, 2020	June 30, 2020	December	31, 2019
		Weighted		Weighted
	Number of	Average	Number of	Average
	Options	Exercise Price	Options	Exercise Price
		$		$
Balance, beginning of the period	4,655,000)	0.08)	5,200,000)	0.08)
Granted	1,100,000)	0.08)	1,200,000)	0.07)
Exercised	(50,000)	0.07	(100,000)	0.06
Expired/Forfeited	(150,000)	0.10)	(1,645,000)	0.07)
Balance,end of theperiod(1)	5,555,000)	0.07)	4,655,000)	0.08)

(1) At June 30, 2020, the weighted-average remaining contractual life of stock options outstanding is 7.84 years (December 31, 2019 – 7.67 years).

Summary of stock options outstanding and exercisable at June 30, 2020:

Number Outstanding	Exercise
and Exercisable	Price	ExpiryDate
	$
180,000	0.05	September 22, 2025
1,150,000	0.085	August 26, 2026
300,000	0.10	April 13, 2027
375,000	0.09	September 6, 2027
1,100,000	0.09	March 13, 2028
200,000	0.055	October 9, 2028
1,150,000	0.07	April 5, 2029
1,100,000	0.075	January30,2030
5,555,000

THUNDERSTRUCK RESOURCES LTD. Notes to the Condensed Consolidated Interim Financial Statements (Unaudited - Expressed in Canadian dollars) Six months ended June 30, 2020

6. SHARE CAPITAL (continued)

d) Share purchase warrants

The following is a summary of the changes in the Company’s outstanding warrants:

	June 30,	2020	2020	December	31, 2019
			Weighted		Weighted
	Number of		Average	Number of	Average
	warrants		Exercise Price	warrants	Exercise Price
			$		$
Balance, beginning of the period	28,705,127		0.14	32,539,085	0.13
Granted	19,165,354		0.10	1,591,792	0.15
Expired		-	-	(5,425,750)	0.11
Balance,end of theperiod	47,870,481		0.12	28,705,127	0.14

Summary of warrants outstanding at June 30, 2020:

Number	Exercise
Outstanding	Price	ExpiryDate
	$
3,097,000	0.10	July 22, 2020(1)
9,397,500	0.15	September 6, 2020(2)(3)
280,000	0.15	September 6, 2020(3)
2,500,000	0.10	September 22, 2020(4)
2,000,000	0.10	February 28, 2021
5,375,000	0.15	March 13, 2021(3)
2,262,000	0.15	May 25, 2021(3)
1,250,000	0.15	October 9, 2021(3)
951,835	0.15	November 9, 2021(3)
846,000	0.15	January 28, 2022(3)
745,792	0.15	April 5, 2022(3)
1,657,854	0.10	January 5, 2023(3)
17,507,500	0.10	June24,2025
47,870,481

(1) 2,697,000 exercised subsequent to the period ended June 30, 2020. The remaining 400,000 expired unexercised subsequent to period end.

(2) Extended the expiry date subsequent to the period ended June 30, 2020. The new expiry date will provide a two year extension to expire on September 6, 2022. The warrants continue to be exercised at their original exercise price. The amendment to the terms of the warrants is subject to the approval of the TSX-V.

(3) The warrants are subject to an accelerated exercise provision such that if the closing price of the Company’s common shares exceeds $0.25 per share for a period of 20 consecutive trading days, the Company may give notice of the acceleration of the warrants’ terms to a period of 30 days following such notice.

(4) 2,500,000 exercised subsequent to the period ended June 30, 2020.

THUNDERSTRUCK RESOURCES LTD. Notes to the Condensed Consolidated Interim Financial Statements (Unaudited - Expressed in Canadian dollars) Six months ended June 30, 2020

6. SHARE CAPITAL (continued)

e) Share-based payment reserve

During the period ended June 30, 2020, the Company granted the following options:

 1,100,000 options with a fair value of $80,507, or $0.0732 per option.

During the year ended December 31, 2019, the Company granted the following options:

• 1,200,000 options with a fair value of $82,412, or $0.0687 per option.

The following weighted average assumptions were used for the Black Scholes valuation of stock options granted:

	June 30,2020	December 31,2019
Risk-free interest rate	1.32%	1.70%
Expected life	10 years	10 years
Expected volatility	140.98%	146.45%
Dividend rate	0.00%	0.00%

7. RELATED PARTY TRANSACTIONS

Key management personnel compensation:

	2020	2019
	$	$
Consulting fees	1,782(1)	15,000(2)
Directors’ fees	6,000	-
Management fees(3)	90,000	60,000
Rent(4)	4,725	3,000
Share-based compensation	80,507	75,545
Total key management compensation	183,014	153,545

(1) Consulting fee include fees for the CFO.

(2) Consulting fee include fees for a company where the former CFO is an associate.

(3) Management fees include fees for the CEO.

(4)

Expenses paid on behalf of the CEO or to a company owned by the CEO per the CEO’s consulting agreement.

As at June 30, 2020, the Company owes various directors and officers of the Company $11,453 (December 31, 2019 - $103,551) for administrative expenses and professional fees provided. All amounts are included in accounts payable and accrued liabilities.

8. CAPITAL MANAGEMENT

The Company’s primary objective for managing its capital structure is to maintain financial capacity for the purpose of sustaining the future development of the business and maintaining investor, creditor and market confidence.

The Company considers its capital structure to include shareholders’ equity and working capital. To effectively manage its resources and minimize risks, the Company prepares annual expenditure budgets that are updated as necessary depending on factors including success of programs and general industry conditions. In the event that adjustments to the capital structure are necessary, the Company may consider issuing additional equity, raising debt or revising its capital investment programs.

The Company’s share capital is not subject to any external restrictions. The Company has not paid or declared any dividends since the date of incorporation, nor are any currently contemplated. There have been no changes to the Company’s approach to capital management during the period.

THUNDERSTRUCK RESOURCES LTD. Notes to the Condensed Consolidated Interim Financial Statements (Unaudited - Expressed in Canadian dollars) Six months ended June 30, 2020

9. FINANACIAL INSTRUMENT RISKS

Financial instruments

The Company’s financial instruments are exposed to the following risks:

Credit Risk

The Company’s primary exposure to credit risk is the risk of illiquidity of cash, amounting to $587,232 at June 30, 2020 (December 31, 2019 - $25,543). As the Company’s policy is to limit cash holdings to instruments issued by major Canadian banks, the credit risk is considered by management to be negligible.

Liquidity Risk

Liquidity risk is the risk that the Company will not be able to pay financial instrument liabilities as they come due. The Company’s liquidity risk from financial instruments is its need to meet operating accounts payable requirements. The Company is working to meet its capital requirements to satisfy its obligations. Liquidity will be managed through its Agreement (note 3) and additional financing through debt and/or equity as available.

Foreign Exchange Risk

The Company’s has engaged a number of vendors in the pursuit of mineral exploration activities in Fiji. As such, the Company is exposed to some foreign currency risk. Fluctuations in the exchange rate between the Canadian dollar and Fijian dollar may have an adverse effect on the Company’s business and costs to proceed with preferred vendors. The Company may reduce its foreign currency risk as needed by substituting Canadian vendors as required. Foreign currency risk is considered low relative to the overall financial operating plan.

Interest Rate Risk

The Company has been exposed to interest rate risk on its cash. The majority of these deposits have been in discounted instruments with pre-determined fixed yields. Interest rate movements will affect the fair value of these instruments so the Company manages maturity dates of these instruments to match cash flow needs, enabling realization at no loss in almost all cases. At June 30, 2020, the Company maintained all of its cash balance on deposit in chequing accounts with a major Canadian bank and a major Fijian bank.

Fair Value of Financial Instruments

The Company’s cash, amounts receivable, exploration advances, accounts payable and accrued liabilities are carried at amortized cost and approximate fair value due to their short-term nature.

10.SUBSEQUENT EVENTS

Subsequent to the period ended June 30, 2020, the Company:

• a) Issued 5,197,000 common shares for warrants that were exercised for gross proceeds of $519,700 (note 6(d)).

• b) Extended the expiry date of an aggregate of 9,397,500 outstanding share purchase warrants. The subject warrants were originally issued on September 6, 2017 with an original expiry date of three years. The new expiry date will provide a two year extension to expire on September 6, 2022. The warrants continue to be exercised at their original exercise price. The amendment to the terms of the warrants is subject to the approval of the TSX-V (note 6(d)).