Viscount Mining Corp. — Audit Report / Information 2020

Dec 29, 2020

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CONSOLIDATED FINANCIAL STATEMENTS

August 31, 2020

(Expressed in Canadian Dollars)

INDEPENDENT AUDITOR’S REPORT

To the Shareholders of Viscount Mining Corp.

Opinion

We have audited the accompanying consolidated financial statements of Viscount Mining Corp. (the “Company”), which comprise the consolidated statements of financial position as at August 31, 2020 and 2019, and the consolidated statements of loss and comprehensive loss, changes in shareholders’ equity, and cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the Company as at August 31, 2020 and 2019, and its financial performance and its cash flows for the years then ended in accordance with International Financial Reporting Standards (“IFRS”).

Basis for Opinion

We conducted our audits 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 consolidated 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 in our audits is sufficient and appropriate to provide a basis for our opinion.

Other Information

Management is responsible for the other information. The other information obtained at the date of this auditor's report includes Management’s Discussion and Analysis.

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.

We obtained Management’s Discussion and Analysis prior to the date of this auditor’s report. 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 have nothing to report in this regard.

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 consolidated 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.

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 skepticism 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 consolidated 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 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 Glenn Parchomchuk.

“DAVIDSON & COMPANY LLP”

Vancouver, Canada

Chartered Professional Accountants

December 29, 2020

VISCOUNT MINING CORP.

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(Expressed in Canadian dollars)

		As at	As at
		August 31, 2020	August 31, 2019
	Notes	$	$
ASSETS
Current assets
Cash	3	4,264,224	24,432
Amounts receivable andprepaid expenses	4	28,750	19,232
		4,292,974	43,664
Reclamation bond		24,172	21,450
Exploration and evaluationproperties	5	3,874,688	3,197,211
Total Assets		8,191,834	3,262,325
LIABILITIES
Current liabilities
Trade payables and accrued liabilities	6	285,216	321,461
Loans payable	7	40,000	250,000
Amounts due to relatedparties	8	114,033	306,084
Total Liabilities		439,249	877,545
SHAREHOLDERS’ EQUITY
Share capital	9	16,657,488	10,464,337
Subscriptions receivable		(76,500)	-
Reserves	9	3,022,847	1,668,839
Accumulated deficit		(11,851,250)	(9,748,396)
Total shareholders’ equity		7,752,585	2,384,780
Total Shareholders’ Equity and Liabilities		8,191,834	3,262,325

Nature and Continuance of Operations (Note 1) Commitments and Contingency (Note 11) Events Occurring After the Reporting Date (Note 15)

These consolidated financial statements are authorized for issuance by the Board of Directors on December 29, 2020

On behalf of the Board:

“Jim MacKenzie”

Director “William Macdonald” Director

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

VISCOUNT MINING CORP.

CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS (Expressed in Canadian dollars)

(Expressed in Canadian dollars)
		Year	Year
	Notes	August 31, 2020	August 31, 2019
		$	$
Expenses
Bank charges and fees		2,038	2,546
Consulting and payroll	8	623,938	469,172
Insurance		46,299	53,009
Legal and accounting	8	127,351	115,799
Office and miscellaneous		10,092	16,493
Promotion		119,918	214,665
Share-based payments	8,9	1,061,117	179,535
Transfer agent and filing fees		19,542	23,185
Travel		2,559	2,799
Total expenses		(2,012,854)	(1,077,203)
Net loss		(2,012,854)	(1,077,203)
Foreign exchange gain/(loss)		22,827	(14,009)
Interest andpenalties	7	(112,827)	(6,600)
Net loss and comprehensive loss for the year		(2,102,854)	(1,097,812)
Loss per share, basic and diluted		(0.04)	(0.02)
Weighted average number of common shares
outstanding, basic and diluted		56,203,279	51,862,201

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

VISCOUNT MINING CORP. CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in Canadian dollars)

Cash flows used in operating activities Net loss for the year Adjustments for non-cash items: Interest expense Share-based payments Foreign Exchange Changes in operating assets and liabilities: Increase (decrease) in amounts receivable and prepaid expenses Increase in due to related parties Increase(decrease)in tradepayables and accrued liabilities	Year Ended Year Ended
	August 31, 2020 August 31, 2019 $ $
	(2,102,854) (1,097,812)
	100,000 - 1,061,117 179,535 22,827 2,730 (9,518) 12,271 146,108 219,821 (145,201) 220,596
	(927,521) (462,859)
Cash flows used in investing activities Reclamation Bond Exploration and evaluationproperties expenditures	(2,722) - (509,593) (351,829)
	(512,315) (351,829)
Cash flows from financing activities
Issuance of common shares Issuance of common shares-warrants exercised Proceeds from Loans Loans repaid	5,423,730 626,131 795,200 - 94,700 382,500 (404,700) (194,500)
Shares isssued costs	(229,302) -
	5,679,628 814,131
Increase/(Decrease) in cash Cash, beginning ofyear	4,239,792 (557) 24,432 24,989
Cash, end ofyear	4,264,224 24,432
Supplemental Cash Flow Information(Note 10) Cash paid for interest Cash paid for income taxes	100,000 - - -

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

VISCOUNT MINING CORP.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY FOR THE YEAR ENDED AUGUST 31, 2020

(Expressed in Canadian dollars)

		Number of	Share	Warrant	Option	Subscriptions	Subscriptions
	Notes	Shares	Capital	Reserve	Reserve	Receivable		Deficit		Total
			$	$	$	$		$		$
Balance – August 31, 2018		49,993,629	9,726,932	228,633	1,246,587		-	(8,650,584)		2,551,568
Common shares issued for private placement	8	3,762,500	752,500	-	-		-		-	752,500
Common shares issued for exploration and evaluation properties	5, 9	85,000	21,250	-	-		-		-	21,250
Share issue costs	9	-	(36,345)	7,976	-		-		-	(28,369)
Warrants issued for exploration and evaluation properties	9	-	-	6,108	-		-		-	6,108
Share based payments	9	-	-	-	179,535		-		-	179,535
Net loss for theyear		-	-	-	-		-	(1,097,812)		(1,097,812)
Balance - August 31, 2019		53,841,129	10,464,337	242,717	1,426,122		-	(9,748,396)		2,384,780
Common shares issued for private placement	9	23,958,333	5,750,000	-	-	(24,000)			-	5,726,000
Common shares issued for exploration and evaluation properties	5, 9	994,000	263,570	-	-		-		-	263,570
Exercise of warrants	9	2,422,000	847,700	-	-	(52,500)			-	795,200
Share issue costs	9	-	(668,119)	292,891	-		-		-	(375,228)
Share based payments		-	-	-	1,061,117		-		-	1,061,117
Net loss for theyear		-	-	-	-		-	(2,102,854)		(2,102,854)
Balance - August 31, 2020		81,215,462	16,657,488	535,608	2,487,239	(76,500)		(11,851,250)		7,752,585

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

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VISCOUNT MINING CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS August 31, 2020 (Expressed in Canadian Dollars)

1. Nature and Continuance of Operations

Viscount Mining Corp. (the “Company”) was incorporated under the British Columbia Business Corporations Act on October 26, 2011. The Company’s registered office is located at 409 - 221 W. Esplanade, North Vancouver BC, V7M 3J3. The Company is listed on the TSX Venture Exchange (TSXV”) and trades under the symbol “VML”.

The Company is an exploration stage company, and its principal business activity is natural resource exploration, focusing on resources located in the states of Nevada and Colorado in the USA. Mining and exploration involve a high degree of risk and there can be no assurance that current exploration programs will result in profitable mining operations. The Company has no source of revenue and has significant cash requirements to conduct its planned exploration, meet its administrative overhead and maintain its resource interests.

The Company had cash of $4,264,224 at August 31, 2020 (August 31, 2019 - $24,432) and working capital of $3,853,725 (August 31, 2019 deficit - $833,881), but management cannot provide assurance that the Company will ultimately achieve profitable operations or become cash flow positive, or raise additional debt and/or equity capital. For the year ended August 31, 2020, the Company had no source of operating revenues, incurred an operating loss of $2,102,854 (2019 - $1,097,812) and, as at that date, had an accumulated deficit of $11,851,250 (August 31, 2019 deficit of - $9,748,396).

Management has assessed that this working capital is sufficient for the Company to continue as a going concern beyond one year. If the going concern assumption were not appropriate for these consolidated financial statements it would be necessary to restate the Company’s assets and liabilities on a liquidation basis.

In March 2020 the World Health Organization declared the 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.

The recoverability of the Company’s investment in and expenditures on resource properties is dependent on several factors, including the discovery of economically recoverable reserves, the ability of the Company to obtain the necessary financing to complete the development of these properties, and future profitable production or proceeds from disposition of resource interests.

2. Significant Accounting Policies

Statement of Compliance

The consolidated financial statements of the Company, including comparatives, have been prepared in accordance with and using accounting policies in full compliance 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”), effective for the Company’s reporting for the year ended August 31, 2020.

Basis of Preparation

These consolidated financial statements have been prepared on the historical cost basis except for financial instruments classified as fair value through profit and loss. In addition, these financial statements have been prepared using the accrual basis of accounting, except for the cash flow information. The presentation and functional currency of the Company and its subsidiaries is the Canadian dollar.

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

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VISCOUNT MINING CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS August 31, 2020 (Expressed in Canadian Dollars)

Basis of Consolidation

The Company’s consolidated financial statements include the accounts of the Company and its subsidiaries. A subsidiary is an entity (including a special purpose entity) controlled by the Company, where control is achieved by the Company having the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Company controls another entity. A subsidiary is fully consolidated from the date on which control is obtained by the Company and is de-consolidated from the date that control ceases.

The following subsidiaries have been consolidated for all dates presented within these financial statements, and are wholly owned: Viscount Mining Resources Ltd., Viscount Nevada Holdings Ltd. (“Viscount Nevada”) and Viscount Colorado Holdings Ltd. (“Viscount Colorado”).

All significant inter-company transactions, balances, income and expenses are eliminated on consolidation.

Significant Accounting Judgments, Estimates and Assumptions

The preparation of the Company’s consolidated financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the reported amounts of assets, liabilities and contingent liabilities at the date of the consolidated financial statements and reported amounts of income and 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. However, actual outcomes can differ from these estimates.

Information about critical estimates and judgments in applying accounting policies that have the most significant risk of causing material adjustment to the carrying amounts of assets and liabilities recognized in the consolidated financial statements within the next financial year are discussed below:

Recoverability of Capitalized Exploration and Evaluation Expenditures

The application of the Company’s accounting policy for exploration and evaluation expenditures requires judgment in determining whether it is likely that future economic benefits will flow to the Company and the maintenance of good standing of the mineral titles, which may be based on assumptions about future events or circumstances. Estimates and assumptions made may change if new information becomes available. If, after the expenditures are capitalized, information becomes available suggesting that the recovery of the expenditures is unlikely, the amount capitalized is written off in profit or loss in the year the new information becomes available.

Share-based payments

The fair value of share options granted is measured using the Black-Scholes option pricing model. Measurement inputs include the share price on the measurement date, exercise price of the option, expected volatility, expected life of the options, expected dividends and the risk-free interest rate. These estimates will impact the amount of share-based payments recognized. When stock options are exercised, the cash proceeds along with the amount previously recorded as share-based payment reserves are recorded as share capital.

Income taxes

Related assets and liabilities are recognized for the estimated tax consequences between amounts included in the financial statements and their tax base using substantively enacted future income tax rates. Timing of future revenue streams and future capital spending changes can affect the timing of any temporary differences and, accordingly, affect the amount of the deferred tax asset or liability calculated at a point in time.

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VISCOUNT MINING CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS August 31, 2020 (Expressed in Canadian Dollars)

Cash and Cash Equivalents

Cash and cash equivalents include highly liquid investments with original maturities of three months or less.

Exploration and evaluation properties

Once a license to explore an area has been secured, all direct costs related to the acquisition, exploration and evaluation of mineral property interests are capitalized as exploration and evaluation properties on a property by property basis. At such time that technical feasibility and commercial viability of extracting a mineral resource has been determined for a property, the capitalized exploration and evaluation costs are transferred and capitalized into property, plant and equipment. The Company records expenditures on exploration and evaluation activities at cost.

Proceeds received from a partial sale or option of any interest in a property are credited against the carrying value of the property. When the proceeds exceed the carrying costs, the excess is recorded in profit or loss in the period the excess is received. When all of the interest in a property is sold, subject only to any retained royalty interests which may exist, the accumulated property costs are de-recognized, with any gain or loss included in profit or loss in the period the transfer takes place. No initial value is assigned to any retained royalty interest.

When entitled, the Company records mineral exploration tax credits or incentive grants on an accrual basis and as a reduction of the carrying value of the properties.

Management assesses the exploration and evaluation assets for impairment at least annually and whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The assessment is based on the development program, the nature of the mineral deposit, commodity prices and the Company’s intentions and ability for development of the undeveloped property. If, after management review, it is determined that the carrying amount of a mineral property is impaired, that property is written down to its estimated recoverable amount. The recoverable amount of an asset is determined as the higher of its fair value less costs to sell and its value in use. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.

Provision for decommissioning and restoration

The Company recognizes provisions for statutory, contractual, constructive or legal obligations associated with the reclamation of mineral properties in the year in which it is probable that an outflow of resources will be required to settle the obligation and when a reliable estimate of the amount can be made. Initially, a provision for a decommissioning liability is recognized based on expected cash flows required to settle the obligation and discounted at a pre-tax rate specific to the liability. The capitalized amount is depreciated on the same basis as the related asset. Following the initial recognition of the decommissioning liability, the carrying amount of the liability is increased for the passage of time and adjusted for changes to the current market-based discount rate and the amount or timing of the underlying cash flows needed to settle the obligation. The increase in the provision due to passage of time is recognized as interest expense. Significant judgments and estimates are involved in forming expectations of the amounts and timing of future closure and reclamation cash flows. As at August 31, 2020 and 2019, the Company had no known restoration, rehabilitation or environmental liabilities related to its mineral properties.

Financial instruments

(i) Financial assets

The Company classifies its financial assets in the following categories: at fair value through profit or loss (“FVTPL”), at fair value through other comprehensive income (“FVTOCI”) and at amortized cost. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of financial assets at initial recognition. A financial asset is measured at amortized cost if it is held within a business model whose objective is to hold assets and collect contractual

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VISCOUNT MINING CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS August 31, 2020 (Expressed in Canadian Dollars)

cash flows, its contractual terms give rise on specified dates that are solely payments of principle and interest on the principle amount outstanding, and it is not designated as FVTPL. Equity instruments that are held for trading are classified as FVTPL. For other equity instruments, the Company can make an irrevocable election (on an instrument by-instrument basis) on the day of acquisition to designate them as at FVTOCI.

Financial assets at FVTPL

Financial assets carried at FVTPL are initially recorded at fair value and transaction costs are expensed in the profit or loss. Realized and unrealized gains and losses arising from changes in the fair value of the financial asset held at FVTPL are included in the statement of loss and comprehensive loss in the period in which they arise. The Company’s cash is classified as FVTPL.

Financial assets at FVTOCI

Investments in equity instruments at FVTOCI are initially recognized at fair value plus transaction costs. Subsequently they are measured at fair value, with gains and losses arising from changes in fair value recognized in other comprehensive income. There is no subsequent reclassification of fair value gains and losses to profit or loss following the derecognition of the investment. None of the Company’s financial assets are classified as FVTOCI.

Financial assets at amortized cost

Financial assets at amortized cost are initially recognized at fair value and subsequently carried at amortized cost less any impairment. They are classified as current assets or non-current assets based on their maturity date. The Company’s financial assets at amortized cost comprise reclamation bonds.

Financial assets are derecognized when they mature or are sold, and substantially all the risks and rewards of ownership have been transferred. Gains and losses on derecognition of financial assets classified as FVTPL or amortized cost are recognized in the statement of loss and comprehensive loss. Gains or losses on financial assets classified as FVTOCI remain within accumulated other comprehensive income.

(ii) Financial liabilities

The Company classifies its financial liabilities as subsequently measured at amortized cost which include trade payables and accrued liabilities, loans payable, and amounts due to related parties. The Company derecognizes a financial liability when its contractual obligations are discharged or cancelled, or they expire.

(iii) Impairment of financial assets

The Company recognizes a loss allowance for expected credit losses on financial assets that are measured at amortized cost. At each reporting date, the loss allowance for the financial asset is measured at an amount equal to the lifetime expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition. If at the reporting date, the financial asset has not increased significantly since initial recognition, the loss allowance is measured for the financial asset at an amount equal to twelve month expected credit losses. For trade receivables the Company applies the simplified approach to providing for expected credit losses, which allows the use of a lifetime expected loss provision. Impairment losses on financial assets carried at amortized cost are reversed in subsequent periods if the amount of the loss decreases and the decrease can be objectively related to an event occurring after the impairment was recognized. Given the nature and balances of the Company’s receivables the Company has no material loss allowance as at August 31, 2020 and 2019.

Per Share Information

Basic income (loss) per share amounts are calculated by dividing the profit or loss attributable to shareholders of the Company by the weighted average number of shares outstanding during the period. Diluted income/loss per share amounts are determined by adjusting the profit or loss attributable to common shareholders and the weighted average number of common shares outstanding for the effects of all dilutive potential common shares, which consist of warrants and stock options (Note 9).

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VISCOUNT MINING CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS August 31, 2020 (Expressed in Canadian Dollars)

Share capital

Common shares are classified as equity. Transaction costs directly attributable to the issue of common shares and share options are recognized as a deduction from equity, net of any tax effects. Common shares issued for consideration other than cash, are valued based on their market value at the date the shares are issued.

The Company has adopted a residual value method with respect to the measurement of shares and warrants issued as private placement units. The residual value method first allocates value to the more easily measurable component based on fair value and then the residual value, if any, to the less easily measurable component. The Company considers the fair value of common shares issued in a private placement to be the more easily measurable component and the common shares are valued at their fair value, as determined by the closing quoted bid price on the announcement date. The balance, if any, is allocated to the attached warrants. Any fair value attributed to the warrants is recorded as reserves.

Share-based Payments

Share-based payments to employees are measured at the fair value of the instruments issued and recognized over the vesting periods. Share-based payments to non-employees are measured at the fair value of goods or services received or the fair value of the equity instruments issued, if it is determined the fair value of the goods or services cannot be reliably measured, and are recorded at the date the goods or services are received. The corresponding amount is recorded to the stock options reserve. The fair value of options is determined using the Black-Scholes Option Pricing Model which incorporates all market vesting conditions. The number of shares and options expected to vest is reviewed and adjusted at the end of each reporting period such that the amount recognized for services received as consideration for the equity instruments granted shall be based on the number of equity instruments that will eventually vest. When options are cancelled or expire, the initial recorded value is left in reserves.

Related Party Transactions

Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control, related parties may be individuals or corporate entities. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties.

Income Taxes

Income tax comprises current and deferred tax. Income tax is recognized in the statement of loss and comprehensive loss except to the extent that it relates to items recognized directly in equity or other comprehensive income (loss), in which case the income tax is also recognized directly in equity or other comprehensive income (loss).

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted, or substantively enacted, at the end of the reporting period, and any adjustment to tax payable in respect of previous years.

Current tax assets and current tax liabilities are only offset if a legally enforceable right exists to set off the amounts, and the Company intends to settle on a net basis, or to realize the asset and settle the liability simultaneously.

Deferred tax is based on all temporary differences at the statement of financial position date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized. Such deferred tax assets and liabilities are not recognized if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

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VISCOUNT MINING CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS August 31, 2020 (Expressed in Canadian Dollars)

The carrying amount of deferred tax assets is reviewed at each statement of financial position date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilized.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realized or the liability is settled, based on the tax rates that have been enacted or substantively enacted at the statement of financial position date.

Foreign Currencies

The Company’s reporting currency and the functional currency of all of its operations and its subsidiaries is the Canadian dollar as this is the principal currency of the economic environment in which it operates.

Foreign currency transactions are translated into the presentation currency using the exchange rates prevailing at the date of the transaction. Foreign currency monetary items are translated at the period-end exchange rate. Non-monetary items measured at historical cost continue to be carried at the exchange rate at the date of the transaction. Non-monetary items measured at fair value are reported at the exchange rate at the date when fair values were determined.

Exchange differences arising on the translation of monetary items or on settlement of monetary items are recognized in profit or loss in the period in which they arise, except where deferred in equity as a qualifying cash flow or net investment hedge.

New and revised standards and interpretations

Accounting policies used in the preparation of these financial statements are consistent with those described in the Company’s audited annual financial statements for the year ended August 31, 2019, except for the following change to IFRS, which were adopted as at September 1, 2019:

IFRS 16, Leases: This new standard eliminates the classification of leases as either operating leases or finance leases and introduces a single lessee accounting model which requires the lessee to recognize assets and liabilities for all leases, except those that are nominal in value or with a term shorter than 12 months. The Company did not have any leases as at August 31, 2019, therefore the adoption of IFRS 16 did not have a material impact on the Company’s consolidated financial statements.

There are no other IFRS or IFRIC Interpretations that are not yet effective that would be expected to have a material impact on the Company.

3. Cash

	As at	As at
	August 31, 2020	August 31, 2019
	$	$
Denominated in Canadian dollars	4,256,232	3,269
Denominated in US dollars	7,992	21,163
	4,264,224	24,432

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VISCOUNT MINING CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS August 31, 2020 (Expressed in Canadian Dollars)

4. Amounts Receivable and Prepaid Expenses

Amounts receivable and prepaid expenses consist of the following:

	As at	As at
	August 31, 2020 August 31, 2019
	$	$
Goods and Services Tax receivable	5,640	2,000
Other receivable	-	1,057
Prepaid insurance,marketingand travel expenses	23,110	16,175
	28,750	19,232

Amounts receivable are non-interest bearing, unsecured and have settlement dates within one year.

5. Exploration and Evaluation Properties

Exploration and evaluation expenditures by project for the years ended August 31, 2020 and August 31, 2019 are as follows:

are as follows:
	For the	For the
	Year ended	Year ended
	August 31, 2020	August 31, 2019
	$	$
Balance beginning of year	3,197,211	2,738,445
Property acquisitions	583,542	190,987
Staking new claims and claim maintenance	88,733	90,354
Consulting (Note 8)	16,598	76,369
Drilling and other	334	115,130
Recoveries	(11,730)	(14,074)
Total	3,874,688	3,197,211

A summary of the changes in the Company’s exploration and evaluation properties for the years ended August 31, 2020 and 2019 are as follows:

	As at	As at
	August 31, 2020	August 31, 2019
	$	$
Nevada Properties
Acquisition and exploration costs	2,126,778	2,056,268
Recoveries	(787,575)	(787,575)
Colorado properties
Acquisition and exploration costs	2,578,826	1,960,129
Recoveries	(43,341)	(31,611)
Total	3,874,688	3,197,211

• A. Nevada Properties , described collectively as the Cherry Creek Project, is focused on exploration in the immediate vicinity of an area commonly known as the Cherry Creek Mining District, located approximately 50 miles north of the town of Ely, in White Pine County, Nevada.

• B. Colorado Properties described collectively as Silver Cliff.

On August 13, 2014, the Company entered into an option agreement (the “Silver Cliff Agreement”) with David C. and Debra J. Knight Living Trust (the “Owner”), whereby the Owner has agreed to grant an option to the Company to acquire an undivided 100% interest in the Silver Cliff project

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VISCOUNT MINING CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS August 31, 2020 (Expressed in Canadian Dollars)

(the “Silver Cliff Property”), effective September 15, 2014. Pursuant to the agreement, as amended, the Company agreed to the following:

• 1) Issuing to the Owner 200,000 shares and 200,000 warrants (issued)

• 2) Payments made on behalf of the Owner for claim rental fees due to the U.S. Bureau of Land Management (“BLM”).

  • 3) Making payments to the Owner in the aggregate amount of US$3,000,000. As of August 31, 2020, US$190,000 has been paid, including US$105,000 paid in fiscal 2020. Remaining option payments are as follows:

    • a. US$100,000 on the seventh anniversary, September 15, 2021;

    • b. US$100,000 on the eight anniversary, September 15, 2022;

    • c. US$100,000 on the ninth anniversary, September 15, 2023;

    • d. US$100,000 on the tenth anniversary, September 15, 2024;

    • e. US$150,000 on the eleventh anniversary, September 15, 2025;

    • f. US$200,000 on the twelfth anniversary, September 15, 2026; and

    • g. Paying the remaining outstanding balance of the required US$3,000,000.

• 4) The Company entered into a series of amending agreements in fiscal 2020 to delay the fifth anniversary payment. Pursuant to these amendments the Company issued 949,000 common shares valued at $253,670 and paid cash of US$5,000.

• 5) Royalty payments to the Owner of 2% of the net smelter returns (“NSR”) and issuance of an additional 550,000 shares and 550,000 warrants upon the commencement of commercial production.

• 6) The Company agreed to issue Kingsmere Mining Ltd a finder’s fee of 500,000 shares. As of August 30, 2020, 150,000 shares have been issued, including 45,000 shares issued in fiscal 2020. Remaining shares will be issued as follows:

   - a. 50,000 shares on the sixth anniversary, September 15, 2020 (issued subsequently);
  
   - b. 50,000 shares on the seventh anniversary, September 15, 2021;
  
   - c. 75,000 shares on the eighth anniversary, September 15, 2022;
  
   - d. 75,000 shares on the ninth anniversary, September 15, 2023;
  
   - e. 100,000 shares on the tenth anniversary, September 15, 2024.
  

• 7) In fiscal 2017 the Company increased its land holding at the Silver Cliff project by signing a series of mineral lease agreements. As of August 31, 2020 US$292,600 has been paid including US$74,000 in fiscal 2020. Remaining option payments are as follows:

   - a. US$87,500 on the fourth anniversary, between May 12 and June 5, 2021;
  
   - b. US$91,500 on the fifth anniversary, between May 12 and June 5, 2022;
  
   - c. US$96,000 on the sixth anniversary, between May 12 and June 5, 2023;
  
   - d. US$111,500 on the seventh anniversary, between May 12 and June 5, 2024;
  
   - e. US$146,730 on the eighth anniversary, between May 12 and June 5, 2025;
  
   - f. US$198,040 on the ninth anniversary, between May 12 and June 5, 2026;
  
   - g. US$1,208,000 on the tenth anniversary, between May 12 and June 5, 2027.
  

6. Trade Payables and Accrued Liabilities

Trade payables and accrued liabilities are non-interest bearing, unsecured and have settlement dates within one year.

7. Loans payable

During fiscal 2020, the Company borrowed $40,000 from the Government of Canada under a COVID relief program. On November 4, 2020, the Company repaid the loan net of forgiveness of $10,000.

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VISCOUNT MINING CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS August 31, 2020 (Expressed in Canadian Dollars)

During fiscal 2019, the Company borrowed $250,000 from a third party. The loan was due on demand, unsecured and bore no interest. The loan was repaid in August 2020 and the parties agreed on a bonus interest payment of $100,000.

During fiscal 2019, the Company repaid $62,000 to the Company’s Chairman and borrowed and repaid $132,500 from related parties. The loans were unsecured and did not bear interest.

8. Related Party Transactions

On August 31, 2020, the balance due to related parties, who are officers, directors and/or shareholders, was $114,033 (August 31, 2019 - $306,084). Amounts owing relate to consulting services and advances on behalf of the Company provide by the related parties or by companies they controlled and for loans to the Company by related parties.

The key management personnel compensation for the year ended August 31, 2020 and 2019, are summarized as follows:

rized as follows:
	August 31, 2020	August 31, 2019
	$	$
Chief Financial Officer	72,000	72,000
Directors/Managers	400,000	345,600
Director/Chief Geologist	-	54,868
Director Legal fees	4,436	2,914
Stock based compensation	639,734	159,657
	1,116,170	635,039

During the year ended August 31, 2020, no related party consulting fees were capitalized in exploration and evaluation properties (2019 – $54,868). Consulting fees of $48,000 (2019 -$20,000) were paid or accrued to related parties – other.

9. Share Capital

A. Authorized

On August 31, 2020, the authorized share capital consists of an unlimited number of common shares without par value and without special rights or restrictions attached and an unlimited number of preferred shares without par value and with special rights or restrictions.

B. Issued and Outstanding

On August 31, 2020, the total issued, and outstanding share capital was 81,215,462 common shares with no par value (August 31, 2019 – 53,841,129).

Share capital transactions of the Company during the year ended August 31, 2020 and 2019 are summarized as follows:

• a) On August 5, 2020, the Company closed its non-brokered private placement and issued 23,958,333 units of the Company at a price of $0.24 per unit for gross proceeds of $5,750,000 of which $302,270 was paid for through a reduction of accounts payable and $24,000 remains receivable. Each unit consists of one common share of the Company and one share purchase warrant. Each warrant entitles the holder thereof to acquire one additional share at a price of $0.32 for a term of two years. In connection with the closing, the Company paid cash commissions of $375,228 and issued 1,539,687 finder’s warrants with a fair value of $292,891, using the Black Scholes valuation methodology assuming a risk-free interest rate of 0.27% per annum, an expected life of 2 years, volatility of 84.99%, and no expected dividend. The finder’s warrants have the same terms as the unit warrants.

• b) The Company entered into extension agreements related to the Silver Cliff property (Note 5) whereby the Company issued 949,000 common shares valued at $253,670 during the year to extend payments due on the Colorado properties

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VISCOUNT MINING CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS August 31, 2020 (Expressed in Canadian Dollars)

• c) On December 2, 2019, the Company issued 45,000 common shares valued at $9,900 to Kingsmere Mining Ltd. in accordance with the Finders Fees agreement between the Company and Kingsmere (Note 5).

• d) In August 2020, 2,422,000 $0.35 warrants were exercised for gross proceeds of $847,700 of which $52,500 remains receivable.

• e) On January 22, 2019, the Company closed a non-brokered private placement raising gross proceeds of $752,500 from the issuance and sale of 3,762,500 units at a price of $0.20 per unit of which $98,000 was paid for through a reduction of accounts payable. Each unit consists of one common share of the Company and one share purchase warrant. Each warrant will entitle the holder thereof to purchase one additional common share of the Company for a period of 2 years from the closing date at an exercise price of $0.35 per share. The Company paid finders fees of $19,600 and issued 73,500 finders warrants related to the private placement valued at $7,976. The warrants were valued using the Black Scholes valuation methodology with the warrants having the terms described above and assuming a risk-free interest rate of 1.5% per annum, an expected life of 2 years, volatility of 86.55%, and no expected dividend.

• f) On September 10, 2018, in accordance with the Silver Cliff Agreement, 85,000 common shares valued at $0.25 per common share for a total value of $21,250 were issued.

D. Warrants

The following is a summary of the changes in the Company’s share purchase warrants for the year ended August 31, 2020 and 2019:

	August 31, 2020	August 31, 2020	August 31, 2019	August 31, 2019
	Number of	Weighted	Number of	Weighted
	Warrants	average	Warrants	average
	Outstanding	exercise price	Outstanding	exercise price
		$		$
Outstanding, beginning of year	8,986,000	0.35	5,150,000	0.35
Exercised warrants	(2,422,000)	0.35	-	-
Expired warrants	(2,628,000)	0.35	(50,000)	0.40
Warrants issued	25,498,020	0.32	3,886,000	0.35
Outstanding,end ofyear	29,434,020	0.32	8,986,000	0.35

The following table summarizes information regarding share purchase warrants outstanding on August 31, 2020 and August 31, 2019:

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VISCOUNT MINING CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS August 31, 2020 (Expressed in Canadian Dollars)

		August 31, 2020		August 31, 2019
		Number of		Number of
		Warrants		Warrants
	Exercise	Outstanding and	Exercise	Outstanding
Expiry Date	Price	Exercisable	Price	and Exercisable
	$		$
September 15, 2019	0.59	-	0.59	50,000
August 29, 2020	0.35	-	0.35	5,000,000
September 15, 2020	0.28	50,000	0.28	50,000
January 22, 2021	0.35	3,836,000	0.35	3,836,000
August 5, 2022	0.32	25,498,020	-	-
September 15, 2023	0.25	50,000	0.25	50,000
	0.32	29,434,020	0.35	8,986,000

E. Stock Option Plan

On April 4, 2012, the Company adopted a stock option plan (the “Plan”) that allows the Company to issue options to certain directors, officers, employees and consultants of the Company. Options issued under the Plan shall not exceed 10% of the shares issued and outstanding at the time of granting of the options. Options granted under the Plan may have a maximum term of ten years. Stock options granted under the Plan may be subject to vesting terms, which may be imposed at the discretion of the directors.

• a) On August 5, 2020, 250,000 five-year options were issued at an exercise price of $0.40 were issued for services. The options were valued at $41,758 using the Black Scholes valuation methodology assuming a risk-free interest rate of 0.27% per annum, an expected life of 2 months, volatility of 84.99%, and no expected dividend.

• b) On August 31, 2020, 3,800,000 five-year options were issued at an exercise price of $0.40 to officers, directors and consultants. The options were valued at $1,056,952, using the Black Scholes valuation methodology assuming a risk-free interest rate of 0.37% per annum, an expected life of 5 years, volatility of 179.37%, and no expected dividend.

• c) On January 22, 2019, 971,000 five-year options were issued at an exercise price of $0.22 to officers, directors and consultants. The options were valued at $163,875, using the Black Scholes valuation methodology assuming a risk-free interest rate of 1.89% per annum, an expected life of 5 years, volatility of 99.67%, and no expected dividend.

The following is a summary of the changes in the Company’s stock options for the year ended August 31, 2020 and 2019:

	August 31, 2019 August 31, 2020
	Number of Options Outstanding Weighted average exerciseprice Number of Options Outstanding Weighted average exerciseprice
Outstanding, beginning of year Cancelled/Expired Exercised Granted	$ $ 4,220,800 0.30 3,505,000 0.32 (1,770,000) 0.57 (255,200) 0.20 - - - - 4,050,000 0.40 971,000 0.22
Outstanding,end ofyear	6,500,800 0.29 4,220,800 0.30

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VISCOUNT MINING CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS August 31, 2020 (Expressed in Canadian Dollars)

The following table summarizes information regarding stock options outstanding and exercisable as at August 31, 2020 and 2019:

		August 31, 2020		August 31, 2019
		Number of		Number of
	Exercise	Options	Exercise	Options
Expiry Date	Price $	Outstanding	Price $	Outstanding
October 28, 2019	-	-	0.57	200,000
December 1, 2019	-	-	0.20	300,000
January 5, 2020	-	-	0.20	1,125,000
July 7, 2020	-	-	0.20	100,000
July 21, 2020	-	-	0.20	45,000
November 12, 2020	0.50	50,000	0.50	50,000
December 15, 2020	0.50	75,000	0.50	75,000
February 9, 2021	0.53	100,000	0.53	100,000
April 27, 2021	0.51	50,000	0.51	50,000
August 8, 2021	0.62	255,000	0.62	255,000
September 8, 2021	0.57	180,000	0.57	180,000
April 17, 2022	0.36	50,000	0.36	50,000
October 26, 2022	0.20	19,800	0.20	19,800
March 15, 2023	0.32	500,000	0.32	500,000
June 15, 2023	0.30	200,000	0.30	200,000
January 22, 2024	0.22	971,000	0.22	971,000
August 5, 2020	0.40	250,000	-	-
August 20, 2025	0.40	3,800,000	-	-
Outstandingoptions	0.38	6,500,800	0.30	4,220,800
Exercisable options	0.38	6,250,800	0.30	4,220,800

10. Supplemental Cash Flow Information

Included in trade payables and accrued liabilities on August 31, 2020 was $94,999 (August 31, 2019 - $139,796) incurred on exploration and evaluation expenditures and nil (2019 - $50,889) in due to related parties.

During the year ended August 31, 2020, 994,000 common shares valued at $263,570 were issued for exploration and evaluation properties (year August 31, 2019 – 85,000 shares valued at $21,250) and no warrants were issued for exploration and evaluation properties (2019 – 50,000 valued at $6,108).

The Company issued warrants for share issue costs valued at $292,891 (2019 - $7,976). As part of a private placement, $302,270 was paid for through a reduction of accounts payable (2019 - $98,000), and $76,500 remains in subscriptions receivable for shares issued.

Additionally, $145,926 of share issue costs remain in accounts payable (2019 $nil).

11. Commitments and Contingency

The Company is committed to making cash payments, incurring exploration expenditures and/or issuing common shares pursuant to its exploration and evaluation property agreements (Note 5).

12. Financial Risk Management

• (a) Overview

The Company has exposure to credit risk, liquidity risk, foreign currency risk, and market risk from its use of financial instruments.

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VISCOUNT MINING CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS August 31, 2020 (Expressed in Canadian Dollars)

This note presents information about the Company’s exposure to each of these risks, the Company’s objectives, policies and processes for measuring and managing risk, and the Company’s management of capital.

The Board of Directors has overall responsibility for the establishment and oversight of the Company's risk management framework.

(b) Credit Risk

Credit risk is the risk of potential loss to the Company if the counterparty to a financial instrument fails to meet its contractual obligations. The Company’s credit risk is primarily attributable to its liquid financial assets including cash. The Company limits its exposure to credit risk on liquid financial assets through investing its cash with high-credit quality financial institutions.

The carrying value of the Company’s financial instruments represent the maximum exposure to credit risk.

(c) 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 endeavors to ensure that there is sufficient capital in order to meet short term business requirements, after taking into account cash flows from operations and the Company's holdings of cash. The Company’s cash is currently invested in business and savings accounts with high-credit quality financial institutions which are available on demand by the Company for its programs. At August 31, 2020, the Company had a cash balance of $4,264,224, to settle current liabilities of $439,249. All of the Company’s financial liabilities have contractual maturities of less than 30 days and are subject to normal trade terms.

(d) Market Risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.

(e) Interest Rate Risk

The Company is subject to interest rate risk with respect to its investments in cash. However, the Company does not hold any interest-bearing debt. The Company’s current policy is to invest cash at floating rates of interest and cash reserves are to be maintained in cash in order to maintain liquidity, while achieving a satisfactory return for shareholders. Fluctuations in interest rates when cash balances mature impact interest income earned.

• (f) Foreign Currency Risk

Aa at August 31, 2020, the Company’s expenditures are in Canadian dollars and US dollars, any future equity raised is expected to be predominantly in Canadian dollars. The Company’s foreign currency risk relates to cash of US$4,675 denominated in US dollars and accounts payable in US dollars of US$72,156. At August 31, 2020, assuming that all other variables remain constant, a 1% depreciation or appreciation of the Canadian dollar against the US dollar would result in an increase/decrease of approximately $983 in the Company’s pre-tax income or loss.

(g) Capital Management

The Company’s policy is to maintain a strong capital base so as to maintain investor and creditor confidence and to sustain future development of the business. The capital structure of the Company consists of equity, comprising share capital, net of accumulated deficit. The Company manages the capital structure and makes adjustments to it in light of changes in the economic conditions and the risk characteristics of the underlying assets. The Company manages its capital structure through the issuance of new shares, acquisition or disposition of assets or adjustment of cash. The Company does not have any major capital expenditures committed for the coming year. Management reviews the

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VISCOUNT MINING CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS August 31, 2020 (Expressed in Canadian Dollars)

capital structure on a regular basis to ensure that the above-noted objectives are met. There were no changes in the Company’s approach to capital management during the year. The Company is not subject to any externally imposed capital requirements.

• (h) Fair Value

The Company considers that the carrying amount of all its financial assets and financial liabilities in the consolidated financial statements approximates their fair value due to the demand nature or shortterm maturity of these instruments.

The following table provides an analysis of the Company’s financial instruments that are measured subsequent to initial recognition at fair value, grouped into Level 1 to 3 based on the degree to which the inputs used to determine the fair value are observable.

• Level 1 fair value measurements are those derived from quoted prices in active markets for identical assets or liabilities.

• Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1, that are observable either directly or indirectly.

• Level 3 fair value measurements are those derived from valuation techniques that include inputs that are not based on observable market data.

August 31, 2020	Level 1	Level 2	Level 3
	$	$	$
Financial assets at fair value
Cash	4,264,224	-	-
Total	4,264,224	-	-
August 31, 2019	Level 1	Level 2	Level 3
	$	$	$
Financial assets at fair value
Cash	24,432	-	-
Total	24,432	-	-

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VISCOUNT MINING CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS August 31, 2020 (Expressed in Canadian Dollars)

13. Segmented Information

The Company’s only business activity is exploration and evaluation of exploration and evaluation properties. This activity is carried out in the USA.

The breakdown of geographic area for the for the year ended August 31, 2020 and 2019 is as follows:

Year ended August 31, 2020	Canada	USA	Total
	$	$	$
Net loss	2,102,854	-	2,102,854
Current assets	4,292,974	-	4,292,974
Reclamation bond	-	24,172	24,172
Exploration and evaluationproperties	-	3,874,688	3,874,688
Total assets	4,292,974	3,898,860	8,191,834
Year ended August 31, 2019	Canada	USA	Total
	$	$	$
Net loss	1,097,812	-	1,097,812
Current assets	43,664	-	43,664
Reclamation bond	-	21,450	21,450
Exploration and evaluationproperties	-	3,197,211	3,197,211
Total assets	43,664	3,218,661	3,262,325

14. Income Taxes

A reconciliation of income taxes at statutory rates with the reported taxes is as follows:

	2020	2019
	$	$
Loss for theyear	(2,102,854)	(1,097,812)
Expected income tax (recovery)	(568,000)	(296,000)
Permanent differences	284,000	49,000
Share issue costs	(101,000)	(8,000)
Change in unrecognized deductable temporarydifferences	385,000	255,000
Deferred tax expense(recovery)	-	-

The significant components of the Company’s deferred tax assets that have not been included on the consolidated statement of financial position are as follows:

	2020	2019
	$	$
Deferred tax assets
Exploration and evaluation assets	85,000	94,000
Property and equipment	1,000	1,000
Share issue costs	90,000	25,000
Non-capital losses available for futureperiods	2,681,000	2,352,000
	2,857,000	2,472,000
Unrecognized deferred tax assets	(2,857,000)	(2,472,000)
Net deferred tax assets	-	-

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VISCOUNT MINING CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS August 31, 2020 (Expressed in Canadian Dollars)

The significant components of the Company’s temporary differences, unused tax credits and unused tax losses that have not been included on the consolidated statement of financial position are as follows:

	**2020 **	Expiry Date	**2019 **	Expiry Date
	$	Range	$	Range
Temporary Differences
Exploration and evaluation assets	312,000	No expiry date	347,000	No expiry date
Property and equipment	4,000	No expiry date	4,000	No expiry date
Share issue costs	94,000	2040-2043	94,000	2039-2042
Non-capital losses available for
future periods	9,930,000	2031-2040	8,712,000	2032-2039

Tax attributes are subject to review, and potential adjustment, by tax authorities.

15. Events Occurring after the Reporting Date

• a) Option and warrant holders exercised 117,000 options and 475,000 warrants between $0.22 and $0.35 for total proceeds of $183,490.

• b) Granted 400,000 Stock options exercisable at a price of $0.40 for a period of five years.

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