TORR METALS INC — Interim / Quarterly Report 2021

Mar 31, 2021

DURO METALS INC.

Condensed Interim Financial Statements

For the three and nine months ended January 31, 2021 and 2020

Expressed in Canadian Dollars

(Unaudited)

To the shareholders of Duro Metals Inc:

The condensed interim financial statements of Duro Metals Inc. (the “Company”) for the three and nine months ended January 31, 2021 and 2020 have been compiled by management.

No audit or review of this information has been performed by the Company’s auditors.

DURO METALS INC. Interim Statements of Financial Position Expressed in Canadian Dollars

As at ASSETS Current Cash Goods and services tax receivable LIABILITIES Current Accounts payable and accrued liabilities EQUITY Share capital (note 3) Option and warrant reserve Deficit	January 31 April 30 2021 2020 (unaudited) $ 262,007 $ 332,922 1,075 1,492
	$ 263,082 334,414
	$ 320 $ 55,134
	394,302 394,302 70,200 70,200 (201,740) (185,222)
	262,762 279,280
	$ 263,082 334,414

Nature of operations and going concern (Note 1)

Approved by the Board of Directors on March 31, 2021

Director (signed by) “Sean Mager”

Director (signed by) “John Williamson”

The accompanying notes form an integral part of these financial statements

( unaudited )

Condensed Interim Statements of Loss and Comprehensive Loss Expressed in Canadian Dollars

DURO METALS INC.

For the	three months ended	three months ended	three months ended	January 31	nine months ended	nine months ended	nine months ended	January 31
		2021		2020		2021		2020
Expenses
Office and administration		3,174		4,417		10,234		4,522
Professional fees		4,938		24,782		10,975		36,189
Regulatory and filing fees		2,039		11,379		17,366		23,528
		(10,151)		(40,578)		(38,575)		(64,239)
Other
Recovery of professional fees		-		-		20,000		-
Interest income		380		970		2,057		1,969
Comprehensive income (loss) for the period	$	(9,771)	$	(39,608)	$	(16,518)	$	(62,270)
Basic and diluted income (loss) per common	share
	$	(0.00)	$	(0.01)	$	(0.00)	$	(0.02)
Basic and diluted weighted average
number of common shares outstanding		6,300,000		4,930,435		6,300,000		3,843,478

The accompanying notes form an integral part of these financial statements

DURO METALS INC. Condensed Interim Statements of Changes in Equity Expressed in Canadian Dollars

( unaudited )

Balance at April 30, 2019 Shares issued for cash Share issuance costs Share issuance costs – non-cash Net loss Balance at January 31, 2020 Options issued Net loss Balance at April 30, 2020 Net loss Balance at January 31, 2021	Share capital Option and warrant reserve Deficit Total equity $ 165,000 $ - $ (10,743) $ 154,257 300,000 - - 300,000 (57,198) - - (57,198) (13,500) 13,500 - - - - (62,270) (62,270)
	$ 394,302 $ 13,500 $ (73,013) $ 334,789 - 56,700 - 56,700 - - (112,209) (112,209)
	$ 394,302 $ 70,200 $ (185,222) $ 279,280 - - (16,518) (16,518)
	$ 394,302 $ 70,200 $ (201,740) $ 262,762

The accompanying notes form an integral part of these financial statements

DURO METALS INC. Condensed Interim Statements of Cash Flows Expressed in Canadian Dollars

( unaudited )

For the nine months ended Cash provided by (used in): Operating activities Net loss Changes in non-cash working capital: Goods and services tax receivable Prepayments and receivables Accounts payable and accrued liabilities Cash used in operating activities Financing activities Proceeds from issuance of share capital (note 3) Share issuance costs – cash Cash provided by financing activities Net increase (decrease) in cash Cash, beginning of period Cash, end of period	January 31 January 31 2021 2020 $ (16,518) $ (62,270) 417 (1,252) - 20,000 (54,814) 11,214
	(70,915) (32,308)
	- 300,000 - (57,198)
	- 242,802
	(70,915) 210,494 332,922 141,588
	$ 262,007 $ 352,082

During the three months ended January 31, 2021, the Company received interest totaling $380 (2020 - $970) related to operating activities.

The accompanying notes form an integral part of these financial statements

DURO METALS INC. Notes to the Condensed Interim Financial Statements For the three and nine months ended January 31, 2021 and 2020 Expressed in Canadian Dollars

( unaudited )

1. Nature of operations and going concern

Duro Metals Inc. (“Duro” or the “Company”) was incorporated under the Business Corporations Act (Alberta) on July 18, 2018. The Company’s head office is at 250 Southridge NW, Suite 300, Edmonton, Alberta, T6H 4M9. On December 12, 2019, the common shares of the Company were listed on the TSX Venture Exchange (“TSXV”) as a Capital Pool Company (“CPC”) under the trading symbol “DURO.P”.

The principal business of the Company will be the identification and evaluation of a Qualifying Transaction (“QT”) and once identified or evaluated, to negotiate an acquisition or participation in a business subject to receipt of shareholders’ approval, if required, and acceptance by regulatory authorities. The Company plans to focus on evaluating, acquiring, and exploring mineral properties with significant potential for advancement. The Company’s continuing operation as intended are dependent upon its ability to identify, evaluate and negotiate a QT. The QT will be subject to the approval of the Exchange and in case of a non-arm’s length transaction, of the majority of the Company’s minority shareholders. The Company is required to complete its QT on or before two years from the date the Company receives regulatory approval. Where a QT has been identified, additional funding may be required in order to complete the transaction; there is no assurance that the Company will be successful in obtaining any additional funding. If the Company does not complete a QT within two years from the date the Company’s common shares are listed for trading on the Exchange, the Exchange may suspend or de-list the Company’s common shares from trading.

These condensed interim financial statements have been prepared on the basis that the Company will continue as a going concern. The proposed business of the Company and the completion of a QT involves a high degree of risk and there is no assurance that the Company will identify an appropriate business for acquisition or investment, and even if so identified and warranted, it may not be able to finance such an acquisition or investment within the requisite time period. Additional funds will be required to enable the Company to pursue such an initiative and the Company may be unable to obtain such financing on terms which are satisfactory to it. Furthermore, there is no assurance that the business will be profitable. These factors indicate the existence of a material uncertainty that may cast doubt about the Company’s ability to continue as a going concern.

The recent outbreak of the coronavirus, also known as "COVID-19", has spread across the globe and is impacting worldwide economic activity. Conditions surrounding the coronavirus continue to rapidly evolve and government authorities have implemented emergency measures to mitigate the spread of the virus. The outbreak and the related mitigation measures may have an adverse impact on global economic conditions as well as on the Company’s business activities. The extent to which the coronavirus may impact the Company’s business activities will depend on future developments, such as the duration of the outbreak, travel restrictions, business disruptions, and the effectiveness of actions taken in Canada and other countries to contain and treat the disease. These events are highly uncertain and as such, the Company cannot determine their financial impact at this time.

2. Basis of presentation

These condensed interim financial statements of the Company comply with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and interpretations of the International Financial Reporting Interpretations Committee (“IFRIC”).

The principal accounting policies applied in the preparation of these condensed interim financial statements, including, International Accounting Standards (“IAS”) 34 interim financial reporting, are set as below. They do not include all of the information required for full annual financial statements and should be read in conjunction with the Company’s audited financial statements for the year ended April 30, 2020, which have been prepared with IFRS.

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DURO METALS INC. Notes to the Condensed Interim Financial Statements For the three and nine months ended January 31, 2021 and 2020 Expressed in Canadian Dollars

( unaudited )

These financial statements were authorized for issue by the Board of Directors of the Company on March 31, 2021.

These condensed interim financial statements are presented in Canadian Dollars, unless otherwise noted and have been prepared on a historical cost basis. The Canadian dollar is the functional and presentation currency of the Company.

The accounting policies applied in preparation of these condensed interim financial statements are consistent with those applied and disclosed in the Company’s financial statements for the year ended April 30, 2020, unless otherwise stated.

3. Share capital

a) Common shares

The Company’s articles authorize an unlimited number of common shares without par value and an unlimited number of preferred shares.

A summary of changes in common share capital in the period is as follows:

Balance at January 31, 2021 and April 30, 2020	Number of shares Amount 6,300,000 $ 394,302

Escrowed Common Shares.

Upon closing of the IPO, the 3,300,000 common shares of the Company outstanding at April 30, 2019 will be subject to a CPC Escrow Agreement. Under the CPC Escrow Agreement, 10% of the escrowed common shares will be released from escrow on the issuance of the Final Exchange Bulletin (the "Initial Release") and an additional 15% will be released on the dates that are 6 months, 12 months, 18 months, 24 months, 30 months and 36 months following the Initial Release. As of the date of these financial statements, 3,300,000 common shares remained in escrow.

b) Warrants

A summary of the warrants outstanding and exercisable is as follows:

			January 31, 2021				April 30, 2020
			Remaining				Remaining
	Exercise	Number of	contractual life		Exercise	Number of	contractual life
	Price	warrants	(years)		Price	warrants	(years)
$	0.10	270,000	0.8	$	0.10	270,000	1.6

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DURO METALS INC. Notes to the Condensed Interim Financial Statements For the three and nine months ended January 31, 2021 and 2020 Expressed in Canadian Dollars

( unaudited )

c) Stock options

The Company’s has a stock option plan (the “Plan”) for directors, officers, employees, and consultants. The Plan provides for the issuance of incentive options to acquire up to a total of 10% of the issued and outstanding common shares of the Company. The exercise price of each option shall not be less than the minimum prescribed amount allowed under the TSX. The options can be granted for a maximum term of 5 years with vesting provisions determined by the Company.

A summary of stock options outstanding and exercisable is as follows:

			January 31, 2021				April 30, 2020
			Remaining				Remaining
	Exercise	Number of	contractual life		Exercise	Number of	contractual life
	Price	options	(years)		Price	options	(years)
$	0.125	630,000	4.1	$	0.125	630,000	4.9

4. Financial instruments and risk management

Fair value of financial instruments

IFRS requires disclosures about the inputs to fair value measurements for financial assets and liabilities recorded at fair value, including their classification within a hierarchy that prioritizes the inputs to fair value measurement.

The three levels of hierarchy are:

• Level 1 - Quoted prices in active markets for identical assets or liabilities;

• Level 2 - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability,

• either directly (i.e. as prices) or indirectly (i.e. derived from prices); and

• Level 3 - Inputs for the asset or liability that are not based on observable market data.

The Company’s cash and cash equivalents are classified as Level 1, whereas accounts receivable and prepayments, and accounts payable and accrued liabilities are classified as Level 2. As at January 31, 2021, the Company believes that the carrying values of cash, accounts payable and accrued liabilities approximate their fair values because of their nature and relatively short maturity dates or durations.

Financial instruments risk

The Company is exposed in varying degrees to a variety of financial instrument related risks. The Board of Directors approves and monitors the risk management processes, inclusive of documented investment policies, counter party limits, and controlling and reporting structures. The type of risk exposure and the way in which such exposure is managed is provided as follows:

Credit risk

Credit risk is defined as the risk of loss associated with counterparty’s inability to fulfill its payment obligations. The maximum exposure to credit risk is the carrying amount of the Company’s financial assets.

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DURO METALS INC. Notes to the Condensed Interim Financial Statements For the three and nine months ended January 31, 2021 and 2020 Expressed in Canadian Dollars

( unaudited )

Liquidity risk

Liquidity risk is defined as the risk that the Company will not be able to settle its obligations as they come due. The Company has a planning and budgeting process in place to help determine the funds required to support the Company’s normal operating requirements on an ongoing basis. The Company ensures that there are sufficient funds available to meet its short-term business requirements by taking into account the anticipated cash expenditures for its exploration and other operating activities, and its holding of cash and cash equivalents. The Company will pursue further equity or debt financing as required to meet its commitments. There is no assurance that such financing will be available or that it will be available on favourable terms.

As at January 31, 2021, the Company’s financial liabilities consist of its accounts payable and accrued liabilities, which are all current obligations.

Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company’s exposure to foreign exchange risk is minimal.

Classification of financial instruments

Financial assets included in the statement of financial position are as follows:

		January 31		April 30
		2021		2020
Financial asset at amortized cost
Cash	$	262,007	$	332,922
	$	262,007	$	332,922
ancial liabilities included in the statement of financial position are as follows:
		January 31		April 30
		2021		2020
Non-derivative financial liabilities
Accounts payable and accrued liabilities	$	320	$	55,134
	$	320	$	55,314

Financial liabilities included in the statement of financial position are as follows:

Capital management

The Company monitors its equity as capital.

The Company’s objectives in managing its capital are to maintain a sufficient capital base to support its operations and to meet its short-term obligations and at the same time preserve inventor’s confidence and retain the ability to seek out and acquire new projects of merit. The Company is not exposed to any externally imposed capital requirements.

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DURO METALS INC. Notes to the Condensed Interim Financial Statements For the three and nine months ended January 31, 2021 and 2020 Expressed in Canadian Dollars

( unaudited )

5. Related party transactions

The Company did not incur any related party transaction during the period.

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