Zonte Metals Inc. — Interim / Quarterly Report 2021

Jun 24, 2021

ZONTE METALS INC.

CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD ENDED APRIL 30, 2021

(Canadian dollars) (Unaudited)

Prepared by Management – see Notice to Reader

NOTICE TO READER

Under National Instrument 51-102, Part 4, subsection 4.3 (3) (a), if an auditor has not performed a review of the condensed interim financial statements, they must be accompanied by a notice to this effect. These unaudited condensed interim financial statements have been prepared by management of the Company. The Company’s independent auditors have not audited, reviewed or otherwise attempted to verify the accuracy or completeness of these financial statements. Readers are cautioned that these statements may not be appropriate for their intended purposes

(signed) “ Terry Christopher” President & Chief Executive Officer

(signed) “ Brian MacEachen ” Chief Financial Officer

Zonte Metals Inc.

Condensed Interim Statements of Financial Position

(Unaudited)
(Canadian dollars)	30-Apr	31-Jan
	2021	2021
ASSETS	$	$
Current assets:
Cash and cash equivalents	480,402	550,141
Prepaids and other receivable	11,627	58,722
	492,029	608,863
Non-current assets:
Property and equipment	21,361	23,439
Exploration and evaluation assets(note 5)	4,572,738	4,407,266
TOTAL ASSETS	5,086,128	5,039,568
LIABILITIES
Current liabilities:
Accounts payable and accrued liabilities (note 6)	39,795	31,147
Amounts due to relatedparty (note 10)	13,800	13,800
	53,595	44,947
Due to relatedparty (note 10)	1,159,426	1,138,733
	1,213,021	1,183,680
SHAREHOLDERS' EQUITY
Share capital (note 7)	6,878,584	6,778,584
Warrants (note 8)	34,195	34,195
Contributed surplus	1,600,114	1,600,114
Deficit	(4,639,786)	(4,557,005)
TOTAL EQUITY	3,873,107	3,855,888
	5,086,128	5,039,568

Going Concern (Note 2)

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

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Zonte Metals Inc.

Condensed Interim Statements of Profit (Loss) and Comprehensive Income (Loss)

(Unaudited)		For the	three
(Canadian dollars)		months ended
	30-Apr		30-Apr
		2021	2020
	$		$
Operating expenses:
Management and consulting fees	54,156		38,758
Office & general		460	652
Transfer agent, listing & filing fees		6,767	7,571
Insurance		2,438	2,219
Communications		3,541	1,290
Investor relations &
shareholder communications		3,830	905
Legal & audit		5,198	4,400
Depreciation		2,078	2,078
General exploration and due diligence		3,512	1,290
Part XII.6 Tax		-	2,336
Stock based compensation		-	12,166
	81,980		73,665
Finance income (expenses):
Interest income		142	7,274
Gain on revaluation and accretion expense on
long-term relatedpartybalances(note 10)		(943)	(10,497)
		(801)	(3,223)
Loss before deferred income tax recovery	82,781		76,888
Deferred income tax recovery		-	112,451
Netprofit(loss)and comprehensive income(loss)	(82,781)		35,563
Income(loss) per share - basic and diluted		(0.00)	0.00
Weighted average outstanding shares
‑basic and diluted	59,228,781		57,498,850

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

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Zonte Metals Inc.

Condensed Interim Statements of Changes in Equity (Deficiency)

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(Unaudited)
(Canadian dollars) Number of Contributed
shares Share capital Warrants surplus Deficit Total
Balance - February 1, 2020 57,209,961 6,500,560 194,428 1,484,832 (4,642,962) $ 3,536,858
Net loss and comprehensive loss for the period - - - - 35,563 35,563
Stock-based compensation - - - 12,166 - 12,166
Transactions with owners, recognized directly in equity:
Issue of shares for property 400,000 126,000 - - - 126,000
Balance - April 30, 2020 57,609,961 6,626,560 194,428 1,496,998 (4,607,399) 3,710,587
Balance - May 1, 2020 57,609,961 6,626,560 194,428 1,496,998 (4,607,399) 3,710,587
Net loss and comprehensive loss for the period 50,394 50,394
Stock-based compensation 9,282 9,282
Transactions with owners, recognized directly in equity:
Exercise of stock options 1,175,000 152,024 - (66,399) - 85,625
Expiry of warrants (160,233) 160,233 -
Issue of shares for property - - - - - -
Balance - January 31, 2021 58,784,961 6,778,584 34,195 1,600,114 (4,557,005) 3,855,888
Balance - February 1, 2021 58,784,961 6,778,584 34,195 1,600,114 (4,557,005) 3,855,888
Net profit and comprehensive income for the period (82,781) (82,781)
- -
Stock-based compensation
Transactions with owners, recognized directly in equity:
Issue of shares for property 500,000 100,000 100,000
Balance - April 30, 2021 59,284,961 6,878,584 34,195 1,600,114 (4,639,786) 3,873,107
The accompanying notes are an integral part of these condensed interim financial statements.
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Zonte Metals Inc.

Condensed Interim Statements of Cash Flows

(Unaudited)

(Unaudited)
(Canadian dollars)	For the months	three ended
	30-Apr	30-Apr
	2021	2020
Operating Activities:
Net profit (loss) and comprehensive income (loss)for the period	(82,781)	35,563
Adjustments for:
Depreciation	2,078	2,078
Stock-based compensation	-	12,166
Deferred Income tax recovery	-	(112,451)
Interest income	(142)	(7,274)
Deferral of related party salaries	19,750	19,750
Gain on revaluation and accretion expense on
long-term related party balances (note 10)	943	10,497
Changes in items of working capital:
Prepaids and accounts receivable	47,095	167,238
Accountspayable and accrued liabilities	9,692	(32,798)
	(3,365)	94,769
Financing Activities:
	-	-
Investing Activities:
Purchases of and expenditures on
exploration & evaluation assets	(66,516)	(422,590)
Interest income	142	7,274
	(66,374)	(415,316)
Change in cash and cash equivalents	(69,739)	(320,547)
Cash and cash equivalents, opening	550,141	1,877,804
Cash and cash equivalents, closing	480,402	1,557,257

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

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Zonte Metals Inc. Notes to the Condensed Interim Financial Statements For the period ended April 30, 2021 (Unaudited) (Canadian dollars)

1. Nature of Business

Zonte Metals Inc. (the “Company”) is a company incorporated and domiciled in Canada. The address of the Company’s registered office is 20 Fielding Ave, Dartmouth, Nova Scotia, B3B 1E1. The Company’s common shares are listed on the TSX Venture Exchange (the “Exchange”) under the trading symbol ZON. The Company is a mineral exploration company engaged in locating and acquiring high quality projects and exploring for gold and has not yet determined whether its exploration and evaluation assets contain mineral reserves that are economically recoverable.

2. Going Concern and Basis of Presentation

Going Concern

The Company's continuing operations and the underlying value and recoverability of the amounts shown for exploration and evaluation assets are 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 its exploration property interests, and on future profitable production or proceeds from the disposition of the exploration property interests. To date, the Company has not earned any revenue.

These condensed interim financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which assumes continuity of operations and realization of assets and settlement of liabilities and commitments in the normal course of business as they become due. In assessing whether the going concern assumption is appropriate, management takes into account all available information about the future, which is at least, but is not limited to, twelve months from the end of the reporting period. Management is aware, in making its assessment, of material uncertainties related to events or conditions that may cast significant doubt upon the entity’s ability to continue as a going concern, as described in the following paragraph. These financial statements do not reflect the adjustments to the carrying values of assets and liabilities and the reported expenses and statement of financial position classifications that would be necessary were the going concern assumption inappropriate. These adjustments could be material.

The Company is in the exploration stage and is subject to the risks and challenges similar to other companies in a comparable stage of exploration. These risks include, but are not limited to, dependence on key individuals, successful exploration results and the ability to secure adequate financing to meet the minimum capital required to successfully complete the project and continue as a going concern. For the three months ended April 30, 2021, the Company incurred a loss before deferred income tax recovery of $0.1 million (2020 - $0.1 million) and as at April 30, 2021 had an accumulated deficit of approximately $4.6 million (January 31, 2021 - $4.6 million). The Company has no income or cash flows from operations and at April 30, 2021 had working capital of $438,434 (January 31, 2021 $563,916). The ability of the Company to fulfill its commitments, meet its planned business objectives and continue as a going concern is dependent upon the ability of the Company to raise additional financing and upon successful results from its mineral property acquisitions and exploration activities. There is no assurance that these initiatives will be successful.

Statement of compliance

These condensed interim financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) applicable to the preparation of interim financial statements, including IAS 34, Interim Financial Reporting (“IAS 34”).

These condensed interim financial statements should be read in conjunction with the Company’s financial statements for the year ended January 31, 2021. The policies applied in these condensed interim financial statements are consistent with the policies disclosed in Notes 4 and 5 of the financial statements for the year ended January 31, 2021.

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Zonte Metals Inc. Notes to the Condensed Interim Financial Statements For the period ended April 30, 2021 (Unaudited) (Canadian dollars)

The condensed interim financial statements were authorized for issue by the Board of Directors on June 24, 2021.

Basis of Presentation

These unaudited condensed interim financial statements have been prepared on the historical cost basis, except for share-based payments measured at fair value. Items included in the financial statements are measured using the Canadian dollar which is the currency of the primary economic environment in which the Company operates (the “functional currency”). The financial statements are presented in Canadian dollars.

Use of Estimates and Judgments

The preparation of financial statements requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, and revenue and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and further periods if the review affects both current and future periods.

3. Significant Accounting Policies

These condensed interim financial statements have been prepared using the same policies and methods of computation as the annual financial statements of the Company for the year-ended January 31, 2021. Refer to note 4, Summary of Significant Accounting Policies , and note 6, Financial Instruments and fair values , of the Company’s annual financial statements for the year-ended January 31, 2021 for information on the accounting policies as well as new accounting standards not yet effective.

4. Capital Management

The Company’s capital structure consists of share capital, warrants and contributed surplus, which at April 30, 2020 totalled $8.4 million (January 31, 2021 - $8.3 million). The Company’s objective when managing capital is to maintain adequate levels of funding to support the acquisition and exploration of resource properties and maintain the necessary corporate and administrative functions to facilitate these activities. This is done primarily through equity financing. Future financings are dependent on market conditions, and there can be no assurance the Company will be able to raise funds in the future.

The Company invests all capital that is surplus to its immediate operational needs in short-term, highly-liquid, highgrade financial instruments. There were no changes to the Company’s approach to capital management during the period. The Company is not subject to externally imposed capital requirements.

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Zonte Metals Inc. Notes to the Condensed Interim Financial Statements For the period ended April 30, 2021 (Unaudited) (Canadian dollars)

5. Exploration and evaluation assets

The following is a summary of exploration and evaluation expenditures for the periods ended April 30, 2021 and January 31, 2021:

January 31, 2021:
	Wings Point McConnel's Jest Cross Hill Total $ $ $
Beginning balance, February 1, 2020 Additions during the period: Acquisition costs Assays & analysis Consulting fees Drilling Exploration support Field supplies Geophysics Transportation & travel Refund of Security Deposits	446,697 1,115,667 1,429,546 2,991,910 15,795 - 126,000 141,795 11,543 297 106,065 117,905 - - 47,318 47,318 87,525 - 508,460 595,985 28,512 - 329,538 358,050 605 1,105 17,606 19,316 - - 56,360 56,360 1,660 - 84,417 86,077
	145,640 1,402 1,275,764 1,422,806 - - (7,450) (7,450)
	145,640 1,402 1,268,314 1,415,356
Ending balance, January 31, 2021	592,337 1,117,069 2,697,860 4,407,266
Beginning balance, February 1, 2021 Additions during the period: Acquisition costs Consulting fees Exploration support Field supplies Transportation & travel	592,337 1,117,069 2,697,860 4,407,266 - - 125,000 125,000 10,285 - 250 10,535 - - 26,884 26,884 255 - 1,850 2,105 - - 948 948
	10,540 - 154,932 165,472
Ending balance, April 30, 2021	602,877 1,117,069 2,852,792 4,572,738

Wings Point

The Wings Point Project (the “Project”) consists of four mineral exploration licenses covering 344 claims and an area of approximately 8,600 hectares located in the Province of Newfoundland and Labrador in Canada. The Company’s interests in the Project are summarized as follows:

Name Wings Point North Wings Point Extension Wings Point Extension	Claims 30 111 203	Hectares 750 2,775 5,075	Ownership interest
			Direct Direct Direct

The Company acquired a 100% interest in the Wings Point North claims pursuant to an option agreement amended on June 27, 2014 (the "Wings Point North Option"). The Wings Point North claims are covered by Newfoundland Exploration License 016270M which consists of 30 Mineral Exploration claims covering 750 hectares and are subject to a 3% Net Smelter Royalty ("NSR") on production from the Wings Point North License, two-thirds of

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Zonte Metals Inc. Notes to the Condensed Interim Financial Statements For the period ended April 30, 2021 (Unaudited) (Canadian dollars)

which can be bought back by the Company for $2,000,000.

Pursuant to the Wings Point North Option agreement, if the Company is able to identify one million ounces of gold, in the Measured and Indicated categories of a NI 43-101report, within the Wings Point North License, an additional 300,000 common shares of the Company will be issued and $6,638 finders' fees will be paid and if the Company is able to identify two million ounces of gold, in the Measured and Indicated categories of a NI 43-101 report, within the Wings Point North License, an additional 400,000 common shares of the Company will be issued and $8,850 finders' fees will be paid.

The Wings Point Extension and Wings Point East were staked by the Company and are not subject to the NSR arising from the Wings Point North Option Agreement.

McConnell’s Jest Project

The McConnell's Jest Project ("MJ Project") is located in the Yukon Territory about 65 km northeast of the town of Mayo and is comprised of 172 contiguous quartz claims covering approximately 3,371 hectares. During June 2019, the Company amended the terms of the MJ Project option agreement (The “MJ Option Agreement”) wherein it agreed to make a final payment of $25,000 and issued 83,333 common shares in order to complete its acquisition of a 100% interest in the property. The following are the amended terms pursuant to which the Company acquired its 100% interest:

• Making aggregate cash payments of $125,000;

• Issuing 1,583,333 common shares of the Company; and

• Granting a 3% NSR on production from the MJ Project, two-thirds of which can be bought back by the Company for $2,000,000.

The MJ Option Agreement was subject to a 10% Finder's Fee of which 10% was payable in cash and 90% in common shares. A total of $1,250 and 217,318 common shares were paid to the Finder.

Cross Hills Project

The Cross Hills Project (“Cross Hills”) is located on the island portion of Newfoundland and Labrador, approximately 20 kilometres from the town of Terrenceville and is comprised of 486 claims covering approximately 12,150 hectares, including 90 claims optioned from the property vendor and 396 claims staked by the Company. The Company has earned a 100% interest in the Project pursuant to an option agreement (“the Cross Hill Agreement”) which required it to:

• Make aggregate cash payments of $55,000 over a three-year period of which, the final $25,000 was paid in February 2021;

• Issue 1,500,000 common shares of the Company over a three-year period of which the final 500,000 common shares were issued in February, 2021; and

• Granting a 3% NSR on production from the Cross Hills Project, two-thirds of which can be bought back by the Company for $2,000,000.

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Zonte Metals Inc. Notes to the Condensed Interim Financial Statements For the period ended April 30, 2021 (Unaudited)

(Canadian dollars)

6. Accounts payable and accrued liabilities

Trade payables Accrued expenses	April 30 2021 $ 13,572 26,223 39,795	January 31 2021 $ 20,743 10,404	January 31 2021 $ 20,743 10,404
			31,147

7. Share capital

Authorized

The Company has authorized an unlimited number of common shares without par value.

Issued and outstanding

Balance at February 1, 2020 Transactions in the period Exercise of stock options Issue of shares for property (i) Balance at January 31, 2021 Balance at February 1, 2021 Transactions in the period Issue of shares for property (i) Balance at April 30, 2021	Number # Amount $ 57,209,961 6,500,560 1,175,000 152,024 400,000 126,000
	58,784,961 6,778,584
	58,784,961 6,778,584 - - 500,000 100,000
	59,284,961 6,878,584

• i) Pursuant to the Cross Hill Option Agreement, the Company issued 400,000 common shares at a price of $0.315 per share in February 2020 and 500,000 shares at a price of $0.20 in February 2021. These transactions have been capitalized to their respective exploration and evaluation assets.

8. Warrants

The following is a summary of warrant activity for the periods ended April 30, 2020 and January 31, 2020:

Balance at February 1, 2020 Transactions in the Period: Expired Balance at January 31, 2021 Balance at February 1, 2021 Transactions in the Period: Balance at April 30, 2021	Number # Amount $ Weighted average exercise price $
	3,114,712 194,428 0.39 (2,236,277) (160,233) 0.40
	878,485 34,195 0.35
	878,485 34,195 0.35 - - -
	878,485 34,195 0.35

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Zonte Metals Inc. Notes to the Condensed Interim Financial Statements For the period ended April 30, 2021 (Unaudited) (Canadian dollars)

The following is a summary of warrants outstanding at April 30, 2021:

Description 2019 Warrants 2019 Finders Warrants Notes: i. See_Note 11ii. Subsequent event_.	Exercise Number Price 578,968 $0.35 299,517 $0.35	Expiry Date (see note) June 20, 2021(i) June 20, 2021(i)

9. Stock options

The Company has adopted a stock option plan pursuant to which it may from time to time, at its discretion, and in accordance with Exchange requirements, grant to directors, officers and technical consultants, options (collectively, the "Stock Options") to purchase common Shares, exercisable for a period of up to five years from the date of grant, provided that the number of common shares reserved for issuance does not exceed 10% of the Company’s issued and outstanding common shares. The number of common shares reserved for issuance to any individual director or officer will not exceed 5% of the issued and outstanding common shares in any 12-month period, and the number of common shares reserved for issuance to all technical consultants will not exceed 2% of the issued and outstanding common shares in any 12-month period. Stock Options may be exercised until the earlier of 5-years following the date of grant and 90 days following cessation of an optionee's position with the Company.

The following is a summary of stock option activity for the periods ended April 30, 2021 and January 31, 2021:

Balance at February 1, 2020 Transactions during the period: Exercised Expired Balance at January 31, 2021 Balance at February 1, 2021 Transactions during the period: Balance at April 30, 2021	Number of options Weighted average exercise price 4,955,000 $0.20 (1,175,000) $0.07 (700,000) $0.17 3,080,000 $0.26
	3,080,000 $0.26 - -
	3,080,000 $0.26

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Zonte Metals Inc. Notes to the Condensed Interim Financial Statements For the period ended April 30, 2021 (Unaudited)

(Canadian dollars)

As at April 30, 2021, the Company has outstanding stock options entitling the holders to acquire common shares as follows:

			Weighted
			average
Weighted average	Number of	Number	contractual
exercise price	options	exercisable	life
$	#	#	$
0.28	1,225,000	1,225,000	0.8
0.205	1,080,000	1,080,000	1.7
0.29	775,000	775,000	2.7
0.26	3,080,000	3,080,000	1.6

As at April 30, 2021, 2,850,996 options remained available for future grants under the plan (January 31, 2021 – 2,798,496 (see Note 11i. Subsequent Event) ).

10. Related party transactions

Each of the President and Chief Executive Officer (“CEO”) and the Chief Financial Officer (“CFO”) have contractually agreed to an interest free long-term deferral of a portion of their salary or fees and have also voluntarily agreed to an interest free short-term deferral of a further portion of their salary or fees. The salary deferral component extends to a date to be mutually agreed upon between the CEO, the CFO and the Board of Directors and may be settled through a combination of cash and shares. The salary deferral components owed are considered to be interest-free loans provided to the Company.

Included in amounts due to related parties at April 30, 2021 is $881,725 (January 31, 2021 - $867,975) payable to the CEO related to a long-term deferral agreement and included in long-term liabilities

Included in amounts due to related parties at April 30, 2020 is $347,050 (January 31, 2021 - $341,050) payable to the CFO, including $333,250 (January 31, 2021 - $327,250) related to a long-term deferral agreement and included in long-term liabilities and $13,800 (January 31, 2021 - $13,800) related to current amounts due and included in current liabilities.

The amounts subject to the long-term deferral agreement are not expected to be paid within the next 12 months. Accordingly, these amounts have been re-measured to reflect the fair value based on an expected May 2022 repayment and has resulted in a gain on revaluation of amounts due to related parties, net of accretion expense, of $943 during the period (2020 $10,497). The difference between the carrying value and the principal value of amounts due to related parties will be accreted as an expense over the expected term of the deferrals using the effective interest rate method with an implied interest rate of 5%.

11. Subsequent Events

The following events occurred subsequent to the period:

• i. On May 27, 2021, 2,250,000 Stock options were issued to Officers, Directors and consultants of the Company.

• ii. On June 20, 2021, 878,485 Warrants with an exercise price of $0.35 expired.

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