2nd Quarter Report for the period ended June 30, 2026 Financial Statements

(Canadian dollars except where noted)

(Unaudited)

(Expressed in Canadian dollars)

Nature of operations 1

Hume Kyle (signed) Director Sam Lee (signed) CEO and Director

(Unaudited)

(Expressed in Canadian dollars)

Three Months Ended June 30

Six Months Ended June 30

(Unaudited)

(Expressed in Canadian dollars)

(Unaudited)

(Expressed in Canadian dollars)

(Unaudited)

(Expressed in Canadian dollars)

1. NATURE OF OPERATIONS

   Northisle Copper and Gold Inc. together with its subsidiary, North Island Mining Corp. (collectively, "Northisle" or the "Company") is a Canadian exploration stage company which is focused on the exploration and development of its North Island Project on Vancouver Island.

   The Company is incorporated in British Columbia, Canada. Its head office is located at 520 - 1050 West Pender Street, Vancouver, British Columbia.

   The nature of the Company's operations requires significant expenditures for the acquisition, exploration, and evaluation of mineral properties. To date, the Company has not generated any revenue from mining operations and is considered to be in the exploration stage. The Company's operations have been primarily funded from equity financings. The Company will continue to require additional funding to maintain its ongoing exploration and evaluation programs, property maintenance payments, and operations.

2. BASIS OF PRESENTATION
   1. Compliance with International Financial Reporting Standards

      These condensed interim consolidated financial statements have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board ("IFRS Accounting Standards"), as applicable to the preparation of interim financial statements including International Accounting Standard ("IAS") 34, Interim Financial Reporting. Accordingly, they do not include all the information and notes to the consolidated financial statements required by IFRS Accounting Standards for annual financial statements and should be read in conjunction with the Company's most recent audited consolidated financial statements for the year ended December 31, 2025.

      These condensed interim financial statements were approved for issue by the Company's Board of Directors on August 19, 2026.

   2. IFRS Pronouncements Adopted

      Effective January 1, 2026, the Company adopted amendments to IFRS 9, Financial Instruments and IFRS 7, Financial Instruments: Disclosures related to the classification and measurement of financial instruments.

      The adoption of these amendments did not have a material impact on the Company's condensed interim consolidated financial statements.

      (Unaudited)

      (Expressed in Canadian dollars)

      Not yet adopted

      IFRS 18 - Presentation and Disclosure in Financial Statements

      In April 2024, the IASB issued IFRS 18, Presentation and Disclosure of Financial Statements (IFRS 18), which replaces IAS 1, Presentation of Financial Statements. IFRS 18 introduces a specified structure for the income statement by requiring income and expenses to be presented into the three defined categories of operating, investing and financing, and by specifying certain defined totals and subtotals. Where company-specific measures related to the income statement are provided, IFRS 18 requires companies to disclose explanations around these measures, which are referred to as management-defined performance measures. IFRS 18 also provides additional guidance on principles of aggregation and disaggregation which apply to the primary financial statements and the notes. IFRS 18 will not affect the recognition and measurement of items in the financial statements, nor will it affect which items are classified in other comprehensive income and how these items are classified. The standard is effective for reporting periods beginning on or after January 1, 2027, including for interim financial statements. Retrospective application is required, and early application is permitted. Management is currently assessing the effect of this new standard on our financial statements.

      As of June 30, 2026, there are no other IFRS or IFRIC interpretations with future effective dates that are expected to have a material impact on the Company.

   3. Critical accounting judgments, estimates and assumptions

      The preparation of these consolidated financial statements required management to make estimates, judgments and assumptions that affect the reported amounts and other disclosures in these consolidated financial statements. Estimates and the underlying 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 under different assumptions and conditions.

      Estimates and the 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.

      Critical estimates are estimates and assumptions made by management that may result in material adjustments to the carrying amount of assets and liabilities within the next financial year. Critical estimates used in the preparation of these consolidated financial statements include, among others, the impairment of carrying values of equipment and mineral property interests, and the determination of realizable amounts of deferred tax assets and liabilities.

      Critical accounting judgments are judgments about the application of accounting policies that have been identified as being complex or involving subjective judgments or assessments. Critical accounting judgments include the expected economic lives of equipment and the identification of potential indicators of impairment for exploration and evaluation assets.

      At each reporting period, management applies judgment in assessing whether there are any indicators of impairment relating to mineral property interests. If any such indicator exists, then an impairment test is performed by management. Indicators of impairment may include (i) the period during which the entity has the right to explore in the specific area has expired during the year or will expire in the

      (Unaudited)

      (Expressed in Canadian dollars)

      near future; (ii) substantive expenditure on further exploration for and evaluation of mineral resources in the specific area is neither budgeted nor planned; (iii) sufficient data exists to support that extracting the resources will not be technically feasible or commercially viable; and (iv) facts and circumstances suggest that the carrying amount exceeds the recoverable amount. As at June 30, 2026, management identified no impairment indicators and consequently, impairment testing was not required.

   4. Consolidation

These consolidated financial statements include the accounts of the Company and its 100% controlled subsidiary, North Island Mining Corp. (collectively, the "Company"). Control exists when the Company has the power, directly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities. All significant inter-company transactions and balances have been eliminated upon consolidation.

Cash equivalents were held in cashable guaranteed investment certificates with the interest rate of 2.55%, 2.54%, and 2.85%

1. OTHER ASSETS June 30, 2026 December 31, 2025

   Prepaid expenses 721,987 538,630

   GST receivable 295,506 302,481

   Interest receivable 1,021,877 152,244

   2,039,370 993,355
2. DEPOSITS June 30, 2026 December 31, 2025

   Reclamation deposits 232,175 232,175

   Security deposit on lease 30,201 -

   262,376 232,175

   (Unaudited)

   (Expressed in Canadian dollars)

   The Company entered into a new lease agreement for its head office premises located in Vancouver. In connection with the execution of the lease agreement, the Company paid a security deposit of $30,201, which has been recognized as a deposit (Note 7).

3. EQUIPMENT

   	Cost	Accumulated Depreciation	Carrying Amount
   DECEMBER 31, 2025	489,811	(191,842)	297,970
   Additions	45,510	(15,383)	30,127
   JUNE 30, 2026	535,321	(207,224)	328,097

4. RIGHT-OF-USE ASSET

   The Company leases vehicles under a lease agreement for three pickup trucks with total monthly payments of $4,952 for the 48-month term. which expires on May 15, 2028. The leased vehicles have been recorded as a Right-of-Use Asset and are amortized over the life of the lease (See Note 10).

   The Company leases a site office located at Port Hardy. The lease has a non-cancellable term of two years commencing on October 1, 2025, with monthly rental payments of $16,000 for the 24-month term.

   The Company entered into a lease agreement for its head office located at 520 - 1050 West Pender Street, Vancouver, British Columbia, comprising approximately 3,351 rentable square feet. The lease commenced on June 22, 2026 and expires on August 31, 2031. The lease includes fixed payments that escalate annually and provides for rent-free periods from June 22, 2026 to August 31, 2026, and during October 2026, October 2027 and October 2028.

   Operating costs, property taxes and other variable occupancy costs are excluded from the measurement of the lease liability as they do not constitute lease payments under IFRS 16 and are recognized in profit or loss as incurred. Based on the lease agreement, annual base rent ranges from $25.00 to $29.00 per rentable square foot over the lease term.

   Right-of-use Asset	Cost	Accumulated Depreciation	Carrying Amount
   DECEMBER 31, 2024	195,742	(32,624)	163,118
   Additions	350,262	(92,718)	257,543
   DECEMBER 31, 2025	546,004	(125,342)	420,662
   Additions	333,714	(117,330)	216,384
   JUNE 30, 2026	879,718	(242,672)	637,046

   (Unaudited)

   (Expressed in Canadian dollars)

5. MINERAL PROPERTY INTERESTS
   1. Mineral property costs

      North Island Property

      $

      December 31, 2024 and 2025 10,016,000

      Changes during the period -

      JUNE 30, 2026 10,016,000

      The North Island Copper Gold Project (the "Project") consists of a contiguous block of mineral claims located on northern Vancouver Island in British Columbia, Canada. The claims include the Hushamu, Red Dog, Northwest Expo and West Goodspeed copper gold porphyry deposits, as well as numerous additional identified porphyry exploration targets and occurrences.

      Certain claims (historically known as the Expo claims) are subject to a 10% net profits interest royalty currently held by Royal Gold, Inc. Should a production decision be made on the Expo claims, the Company is required to make a cash payment of $1,000,000 to Sirit Inc., or its successors, within 60 days of the production decision.

      Certain other claims underlying the Project are known as the Apple Bay claims. Should a production decision be made regarding the Apple Bay claims, the Company is required to pay $800,000 in cash or in shares to Electra Gold Ltd., or its successors ("Electra"). The payment method is at the election of the Company. Electra maintains a limited right to explore the Apple Bay claims for non-metallic minerals subject to certain conditions including approval by Northisle.

      Claims underlying the Red Dog and a portion of the West Goodspeed deposit are subject to a combined 3% net smelter return royalty, of which up to 2% can be repurchased at the option of the Company at any time for a cash payment of US$1,000,000 for each 1% repurchased.

   2. Mineral Property Expenditures

      	2026	2025	2026
      	$	$	$
      Amortization of equipment	63,708	12,234	127,416
      Community engagement	912,217	51,114	1,217,112
      Engineering	2,452,539	129,925	3,745,204
      Exploration and camp support	2,898,736	2,203,310	6,652,926
      Environmental and permitting	825,107	24,472	924,613
      Salary and wages	886,872	79,852	1,085,741
      TOTAL	8,039,179	2,500,907	13,753,012	3,121,068

      Three Months Ended June 30

      Six Months Ended June 30

      2025

      $

      24,468

      94,170

      276,324

      2,512,981

      57,106

      156,019

      Certain comparative amounts for 2025 have been reclassified to conform to the current year's presentation. The reclassifications relate solely to the allocation between subcategories and had no effect on the total reported balance or the statements of loss and comprehensive loss.

      (Unaudited)

      (Expressed in Canadian dollars)

6. FLOW-THROUGH PREMIUM LIABILITY

   The flow-through premium liability balance as at June 30, 2026, of $657,735 (December 31, 2025 -

   $2,476,497) arose in connection with the flow-through share offering the Company completed on August 8, 2025. The reported amount is the remaining balance of the premium from issuing the flow-through shares. The flow-through premium is recognized in the statement of loss based on the amount of qualifying flow-through expenditures incurred by the Company.

   On August 8, 2025, the Company completed a flow-through financing and recorded a flow through liability of $3,328,997 and committed to incur, on or before December 31, 2026, qualifying Canadian exploration expenses as defined under the Income Tax Act, Canada ("Qualifying CEE'') in the amount of $15,001,497. None of the Qualifying CEE will be available to the Company for future deduction from taxable income. As at June 30, 2026, the Company has a remaining commitment to incur Qualifying CEE of $2,963,957.

   Accordingly, the Company recognized a flow-through premium recovery of $733,833 and $1,818,762 during the three and six months ended June 30, 2026, respectively ($817,054 and $954,384 during the three and six months ended June 30, 2025, respectively).

7. LEASE LIABILITY

   On May 15, 2024, the Company entered into vehicle lease agreements, as described in Note 7. The vehicle lease agreements include an aggregate purchase option of $125,000 at the end of the lease term.

   On October 1, 2025, the Company entered into a lease agreement for a site office located at Port Hardy, as described in Note 7. There is no option to purchase the property included in the lease.

   On June 22, 2026, the Company entered into a lease agreement for its head office in Vancouver, as described in Note 7. There is no option to purchase the premises.

   Operating costs, property taxes and other variable occupancy costs are excluded from the measurement of lease liabilities as they do not constitute lease payments under IFRS 16 and are recognized in profit or loss as incurred.

   At the date of recognition, each lease liability was measured at the present value of the lease payments that were not paid as at that date. The lease payments are discounted using an annual interest rate of 8.99%. For the rented trucks, this is the contracted rate applicable to the lease agreement. For the rented offices, this rate reflects an estimate of the marginal cost of financing fixed assets available to the company. The continuity of the lease liability is presented in the table below.

   	JUNE 30, 2026	DECEMBER 31, 2025
   Opening balance	434,488	170,603
   Additions	333,714	350,262
   Principal repayments related to leases	(125,711)	(107,422)
   Interest expense	20,022	21,045
   	662,513	434,488
   Less: current portion of lease liability	(314,253)	(251,422)
   Non-current portion of lease liability	348,260	183,066

   (Unaudited)

   (Expressed in Canadian dollars)

   The remaining minimum future lease payments, excluding estimated operating costs, for the term of the lease are as follows:

   	YEAR	JUNE 30, 2026
   	2026	146,655
   	2027	281,054
   	2028	100,510
   	2029	91,594
   	2030	94,945
   	2031	64,786
   	Total minimum lease payments	779,544
   	Less imputed interest	(117,031)
   	Total lease obligation	662,513
   	Current portion of lease obligation	(314,253)
   	Non-current portion of lease liability	348,260
   11. SHARE CAPITAL

   1. Authorized share capital

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

   2. Financing

On March 6, 2026, the Company completed a brokered public offering, issuing 35,016,700 common shares at a price of $3.05 per common share for gross proceeds of $106,800,935. The Company also completed a brokered private placement, issuing 1,050,000 common shares at a price of $3.05 per common share for gross proceeds of $3,202,500. Issuance costs related to the brokered offerings totaled $5,695,452.

On March 6, 2026, the Company completed a non-brokered private placement, issuing 1,639,300 common shares at a price of $3.05 per common share for gross proceeds of $4,999,865.

On August 8, 2025, the Company completed a non-brokered private placement, issuing 4,762,000 common shares at a price of $1.05 per common share for gross proceeds of $5,010,105.

On August 8, 2025, the Company completed a brokered private placement, issuing 18,573,086 common shares at a price of $1.05 per common share and 9,338,000 flow-through shares at $1.61 per flow-through share for gross proceeds of $34,503,237. Issuance costs related to the private placement totaled $2,253,337. A flow-through premium liability of $3,328,997 was recognized (Note 9).

On April 15, 2025, the Company completed a non-brokered private placement, issuing 250,000 common shares at a price of $0.69 per common share for gross proceeds of $172,500. Issuance costs related to the private placement totaled $1,863.

(Unaudited)

(Expressed in Canadian dollars)

1. EQUITY INCENTIVE PLANS
   1. Stock Options Outstanding

      The Company has a stock option plan (the "Option Plan") that permits stock options to be granted for the purchase of up to 10% (less the number of outstanding RSUs and DSUs, defined below) of the issued and outstanding common shares of the Company to directors, officers, employees, and consultants. Stock options generally vest over a two year period from date of grant unless otherwise determined by the board of directors. As at June 30, 2026, the Company could issue an additional 22,150,565 stock options under the terms of the stock option plan.

      A summary of the Company's stock option activity is presented below:

      	Number of Stock options	Weighted average exercise price $
      DECEMBER 31, 2024	9,797,433	0.28
      Granted	1,965,000	0.81
      Exercised	(2,525,533)	0.24
      DECEMBER 31, 2025	9,236,900	0.40
      Granted	975,100	3.01
      Exercised	(694,131)	0.40
      Forfeited	(133,334)	1.23
      JUNE 30, 2026	9,384,535	0.66

      In relation to the stock options, the Company recognized an expense of $350,839 and $499,582 during the three and six month ended June 30, 2026, respectively ($387,805 and $447,023 during the three and six months ended June 30, 2025, respectively) in the statements of loss and comprehensive loss.

      Additionally, the Company derecognized $71,040 associated with stock options forfeited during the six months ended June 30, 2026.

      (Unaudited)

      (Expressed in Canadian dollars)

      Stock options outstanding and exercisable are as follows:

      Expiry Date	Exercise Price	Number of Stock options outstanding	Average remaining contractual life (years)	Number of stock options exercisable
      December 16, 2026	$0.29	1,491,000	0.46	1,491,000
      April 8, 2027	$0.40	200,000	0.77	200,000
      November 21, 2027	$0.175	2,307,100	1.39	2,307,100
      May 26, 2028	$0.18	403,500	1.91	403,500
      December 21, 2028	$0.40	1,921,500	2.48	1,921,500
      April 1, 2029	$0.50	150,000	2.76	150,000
      July 18, 2029	$0.475	239,334	3.05	159,556
      April 4, 2030	$0.69	1,360,335	3.76	906,890
      September 1, 2030	$1.26	357,333	4.18	119,111
      April 7, 2031	$3.03	841,333	4.77	280,444
      May 27, 2031	$2.90	42,600	4.91	14,200
      June 29, 2031	$2.90	70,500	5.00	23,500
      JUNE 30, 2026		9,384,535	2.34	7,976,801

      During the six months ended June 30, 2026, the Company granted 975,100 (year ended December 31, 2025 - 1,965,000) options to employees, directors and consultants. The fair value of each option granted is estimated on the date of grant using the Black-Scholes option pricing model. The weighted average assumption and resulting fair values for the grants are as follows:

      Inputs and assumptions	Six Months Ended June 30, 2026	Year Ended December 31, 2025
      Exercise price	$2.92	$0.98
      Market price	$2.85	$0.98
      Expected life of options (years)	5.0	5.0
      Expected stock price volatility	82%	93%
      Average risk-free interest rate	3.09%	2.52%
      Expected forfeiture rate	-	-
      Expected dividend yield	-	-
      FAIR VALUE PER OPTION GRANTED	$1.97	$0.69

      (Unaudited)

      (Expressed in Canadian dollars)

   2. Restricted Share Units

      The Company granted restricted share units ("RSUs") in accordance with the share unit plan approved at the Company's 2021 shareholders meeting. These RSUs vest in three equal tranches on the anniversary of the respective grant date and are promptly converted into common shares. These RSUs can be cash or equity-settled at the Company's discretion. The Company's RSUs are classified as equity instruments. This classification reflects the Company's stated policy of settling RSUs in ordinary shares, and the absence of a present obligation to settle in cash. RSUs are measured at the market price of the Company's shares on the date of grant. Under the share unit plan the Company has reserved an amount not exceeding 7,000,000 shares for the issuance of RSUs, deferred share unit ("DSUs"), and performance share units ("PSUs") and, when combined with the Option Plan, no more than 10% of the Company's outstanding shares on a rolling basis. As at June 30, 2026, the Company could issue an additional 3,661,600 RSUs under the terms of the share unit plan.

      A summary of the Company's RSU activity is presented below:

      	Number of shares issued or issuable on vesting
      DECEMBER 31, 2024	1,247,769
      RSUs Granted	623,000
      RSUs Converted to common shares	(708,801)
      DECEMBER 31, 2025	1,161,968
      RSUs Granted	304,000
      RSUs Converted to common shares	(479,433)
      JUNE 30, 2026	986,535

      In relation to RSUs, the Company recognized an expense of $172,826 and $259,944 during the three and six months ended June 30, 2026, respectively ($98,126 and $154,175 during the three and six months ended June 30, 2025, respectively) in the statements of loss and comprehensive loss.

      (Unaudited)

      (Expressed in Canadian dollars)

   3. Deferred Share Units

      Only non-executive directors of the Company are eligible for DSUs. Each DSU vests over twelve months and is redeemed upon a director ceasing to be a director of the Company. These DSUs can be cash or equity-settled at the Company's discretion. The Company's DSUs are classified as equity instruments. This classification reflects the Company's past practice and stated policy of settling DSUs in ordinary shares, and the absence of a present obligation to settle in cash. DSUs are measured at the market price of the Company's shares on the date of grant. Under the share unit plan the Company has reserved an amount not exceeding 7,000,000 shares for the issuance of RSUs, DSUs, and PSUs. As at June 30, 2026, the Company could issue an additional 5,422,300 DSUs under the terms of the share unit plan.

      A summary of the Company's DSU activity is presented below:

      	Number of shares issued or issuable on vesting
      DECEMBER 31, 2024	1,344,200
      DSUs Granted	52,000
      DSUs Converted to common shares	(357,800)
      DECEMBER 31, 2025	1,038,400
      DSUs Granted	94,500
      DSUs Converted to common shares	(357,800)
      DSUs forfeited	(26,000)
      JUNE 30, 2026	749,100

      In relation to DSUs, the Company recognized an expense of $21,905 and $38,061 during the three and six months ended June 30, 2026, respectively ($25,382 and $50,488 during the three and six months ended June 30, 2025, respectively) in the statements of loss and comprehensive loss.

      Additionally, the Company derecognized $32,760 associated with DSUs forfeited during the six months ended June 30, 2026.

      (Unaudited)

      (Expressed in Canadian dollars)

2. RELATED PARTY TRANSACTIONS Key Management Compensation

   The Company's related parties include its directors and officers, who are the key management of the Company. The remuneration of directors and officers during the periods presented was as follows:

   Salaries, bonuses and director fees Share-based compensation	2026 $ 554,333 406,621	2025 $ 239,435 480,117	2026 $ 1,105,420 643,380
   KEY MANAGEMENT COMPENSATION	960,954	719,552	1,748,800	998,863

   Three Months Ended June 30,

   Six Months Ended June 30,

   2025

   $

   439,350

   559,513

   The compensation of certain key management of the Company are allocated to mineral property expenditures.

   As at June 30, 2026, the Company had no outstanding balance of receivables or payables (2025 - $69,340 receivable) with its directors or key management personnel.

3. SEGMENTED INFORMATION

   The Company's operations are in one segment: the acquisition, exploration and development of mineral resource properties. All interest income is earned in Canada and all assets are held in Canada.

   The Company's Chief Operating Decision Maker ("CODM") is the Chief Executive Officer, who is responsible for allocating resources and assessing the performance of the Company's operations. The CODM reviews financial information on a consolidated basis for the purpose of making operating decisions and evaluating financial performance. Accordingly, the Company has determined that it has a single reportable segment.

4. CAPITAL MANAGEMENT

   The Company is a mineral exploration and development company focusing on advancing the North Island Project. Its principal source of funds is the issuance of securities. The Company considers capital to be equity attributable to common shareholders, comprised of share capital, contributed surplus, and deficit. It is the Company's objective to safeguard its ability to continue as a going concern so that it can continue to explore and develop its projects.

   The Company manages its capital structure based on the funds available for its operations and makes adjustments for changes in economic conditions, capital markets and the risk characteristics of the underlying assets. To maintain its objectives, the Company may attempt to issue new shares, seek debt financing, acquire or dispose of assets or change the timing of its planned exploration and development projects. There is no assurance that these initiatives will be successful.

   The Company monitors its cash position on a regular basis to determine whether sufficient funds are available to meet its short-term and long-term corporate objectives.

   (Unaudited)

   (Expressed in Canadian dollars)

   There has been no change in the Company's capital management practices during the period. The Company does not pay dividends. Neither the Company nor its subsidiary is subject to externally imposed capital requirements.

5. FINANCIAL INSTRUMENT RISK

   The Board of Directors has overall responsibility for the establishment and oversight of the Company's risk management framework. The Company has exposure to liquidity and credit risk from financial instruments. Financial instruments consist of cash and equivalents, including guaranteed investment certificates, certain other assets, reclamation bonds and accounts payable and accrued liabilities.

   1. Liquidity risk

      Liquidity risk is the risk that the Company will be unable to meet its financial obligations as they come due. The Company uses cash forecasts to ensure that there is sufficient cash on hand to meet short-term business requirements. The Company's accounts payable and accrued liabilities are all due in the short term. Cash is invested in highly liquid investments which are available to discharge obligations when they come due. The Company does not maintain a line of credit.

      At June 30, 2026, the Company had cash and cash equivalents of $125,805,187 (December 31, 2025

      - $32,504,353). The Company's financial liabilities consist of accounts payable and accrued liabilities and lease liabilities. All accounts payable and accrued liabilities are due within one year. Lease liabilities are due as per contractual obligations under the respective lease agreements.

      The following table summarizes the maturity profile of the Company's financial liabilities:

      	< 1 year $	1-3 years $	> 3years $	Total $
      Accounts payable and accrued liabilities	3,466,994	-	-	3,466,994
      Lease liabilities	314,253	259,204	206,087	779,544
      Total	3,781,247	259,204	206,087	4,246,538

      The Company assessed its liquidity risk as low as at June 30, 2026 as cash and cash equivalents are sufficient to meet obligations when they come due.

   2. Credit risk

      Financial instruments that potentially subject the Company to credit risk consist primarily of cash, cash equivalents, and reclamation deposits. These financial instruments are at risk to the extent that the institutions issuing or holding them cannot redeem amounts when they are due or requested. To limit its credit risk, the Company has adopted an investment policy which, among other things, sets out how such assets are to be managed. The carrying amount of financial assets recorded in the financial statements, net of any allowance for losses, represents the Company's maximum exposure to credit risk.

      (Unaudited)

      (Expressed in Canadian dollars)

   3. Market risk

The Company has assessed its exposure to market risk, including interest rate risk. Cash equivalents consist of short-term guaranteed investment certificates bearing fixed interest rates. Accordingly, changes in market interest rates would not have a significant impact on the Company's cash flows.