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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<!-- Field: Rule-Page --><div style="width: 100%"><div style="border-top: Black 4pt solid; font-size: 1pt; border-bottom: Black 1.5pt solid">&#160;</div></div><!-- Field: /Rule-Page -->

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 18pt"><b>UNITED
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 18pt"><b>SECURITIES
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 12pt"><b>Washington,
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="border-bottom: black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Province
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(Jurisdiction
    of incorporation or organization)</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="border-bottom: black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>One
    First Canadian Place, <span id="xdx_90D_edei--EntityAddressAddressLine1_c20220101__20221231_zBXreJIe9ene"><ix:nonNumeric contextRef="From2022-01-01to2022-12-31" name="dei:EntityAddressAddressLine1">100 King Street West</ix:nonNumeric></span>, <span id="xdx_907_edei--EntityAddressAddressLine2_c20220101__20221231_z1d38KXo4Vkg"><ix:nonNumeric contextRef="From2022-01-01to2022-12-31" name="dei:EntityAddressAddressLine2">Suite 3400</ix:nonNumeric></span>, <span id="xdx_903_edei--EntityAddressAddressLine3_c20220101__20221231_z921t64Hhiye"><ix:nonNumeric contextRef="From2022-01-01to2022-12-31" name="dei:EntityAddressAddressLine3">Toronto</ix:nonNumeric></span>, <span id="xdx_904_edei--EntityAddressCityOrTown_c20220101__20221231_zPT8U3pECYsl"><ix:nonNumeric contextRef="From2022-01-01to2022-12-31" name="dei:EntityAddressCityOrTown">Ontario</ix:nonNumeric></span>, <span id="xdx_900_edei--EntityAddressCountry_c20220101__20221231_zGLBcxikleCh"><ix:nonNumeric contextRef="From2022-01-01to2022-12-31" format="ixt-sec:countrynameen" name="dei:EntityAddressCountry">Canada</ix:nonNumeric></span> <span id="xdx_902_edei--EntityAddressPostalZipCode_c20220101__20221231_zl7ATPT5DOkj"><ix:nonNumeric contextRef="From2022-01-01to2022-12-31" name="dei:EntityAddressPostalZipCode">M5X 1A4</ix:nonNumeric></span></b></span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(Address
    of principal executive offices)</span></td></tr>
  </table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Securities
registered or to be registered pursuant to Section 12(b) of the Act.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="border-bottom: black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; vertical-align: top; width: 49%; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Title
    of each class</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; width: 2%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; vertical-align: top; width: 49%; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Name
    of each exchange on which registered</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">None</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">None</span></td></tr>
  </table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Securities
registered or to be registered pursuant to Section 12(g) of the Act. <b>Common Shares</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Securities
for which there is a reporting obligation pursuant to Section 15(d) of the Act. <b>None</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Indicate
the number of outstanding shares of each of the issuer&#8217;s classes of capital or common shares as of the close of the period
covered by the annual report:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in; margin-top: 0pt; margin-bottom: 0pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="xdx_909_edei--EntityCommonStockSharesOutstanding_iI_c20221231_zyC89MsM2nVh"><ix:nonFraction name="dei:EntityCommonStockSharesOutstanding" contextRef="AsOf2022-12-31" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">116,534,474</ix:nonFraction></span>
inclusive of the conversion of the outstanding Series 1 Convertible Preferred Shares</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9744;
Yes &#9746; <span id="xdx_90A_edei--EntityWellKnownSeasonedIssuer_c20220101__20221231_zSAzORiyX7S8"><ix:nonNumeric contextRef="From2022-01-01to2022-12-31" name="dei:EntityWellKnownSeasonedIssuer">No</ix:nonNumeric></span></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section
13 or 15(d) of the Securities Exchange Act of 1934.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9744;
Yes &#9746; <span id="xdx_90F_edei--EntityVoluntaryFilers_c20220101__20221231_z2ueipXlQfuj"><ix:nonNumeric contextRef="From2022-01-01to2022-12-31" name="dei:EntityVoluntaryFilers">No</ix:nonNumeric></span></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9746;
<span id="xdx_90B_edei--EntityCurrentReportingStatus_c20220101__20221231_zwzoWDNSfrt3"><ix:nonNumeric contextRef="From2022-01-01to2022-12-31" name="dei:EntityCurrentReportingStatus">Yes</ix:nonNumeric></span> &#9744; No</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Indicate by check mark whether the registrant
has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (&#167;232.405
of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right">&#9746;
<span id="xdx_90E_edei--EntityInteractiveDataCurrent_c20220101__20221231_zzJdzoM6Boce"><ix:nonNumeric contextRef="From2022-01-01to2022-12-31" name="dei:EntityInteractiveDataCurrent">Yes</ix:nonNumeric></span> &#9744; No</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth
company. See the definitions of &#8220;large accelerated filer,&#8221; &#8220;accelerated filer,&#8221; and &#8220;emerging growth company&#8221;
in Rule 12b-2 of the Exchange Act.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 25%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Large
    accelerated filer &#9744;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 25%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Accelerated
    filer &#9744;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 25%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span id="xdx_90A_edei--EntityFilerCategory_c20220101__20221231_zKN3lGJhw0vb"><ix:nonNumeric contextRef="From2022-01-01to2022-12-31" format="ixt-sec:entityfilercategoryen" name="dei:EntityFilerCategory">Non-accelerated
    filer</ix:nonNumeric></span> &#9746;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 25%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Emerging
    growth company <span id="xdx_907_edei--EntityEmergingGrowthCompany_c20220101__20221231_zCaAWoUD62jh"><ix:nonNumeric contextRef="From2022-01-01to2022-12-31" format="ixt:booleanfalse" name="dei:EntityEmergingGrowthCompany">&#9744;</ix:nonNumeric></span></span></td></tr>
  </table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant
has elected not to use the extended transition period for complying with any new or revised financial accounting standards&#8224; provided
pursuant to Section 13(a) of the Exchange Act. &#9744;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8224;
The term &#8220;new or revised financial accounting standard&#8221; refers to any update issued by the Financial Accounting Standards
Board to its Accounting Standards Codification after April 5, 2012.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Indicate by check mark whether the registrant has
filed a report on and attestation to its management&#8217;s assessment of the effectiveness of its internal control over financial
reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b) by the registered public accounting firm that prepared or
issued its audit report. &#9744;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">If securities are registered pursuant to Section 12(b)
of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of
an error to previously issued financial statements. &#9744;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Indicate by check mark whether any of those error
corrections are restatements that required a recovery analysis of incentive based received by any of the registrant&#8217;s executive
officers during the relevant recovery period pursuant to &#167;240.10D-1(b). &#9744;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Indicate by check mark which basis of accounting the
registrant has used to prepare the financial statements included in this filing:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 20%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">U.S.
    GAAP &#9744;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 60%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span id="xdx_903_edei--DocumentAccountingStandard_c20220101__20221231_zBn8bgGN85ga"><ix:nonNumeric contextRef="From2022-01-01to2022-12-31" name="dei:DocumentAccountingStandard">International Financial Reporting Standards</ix:nonNumeric></span></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 20%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Other
    &#9744;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">as
    issued by the International Accounting Standards Board &#9746;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  </table>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If &#8220;Other&#8221; has been checked in response to the previous question,
indicate
by check mark which financial statement item the registrant has elected to follow.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9744;
Item 17 &#9744; Item 18</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
this is an annual report, indicate by check mark whether the registrant is a shell company as defined in Rule 12b-2 of the Exchange Act.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9744;
Yes &#9746; <span id="xdx_909_edei--EntityShellCompany_c20220101__20221231_z5gwkU1DtKtf"><ix:nonNumeric contextRef="From2022-01-01to2022-12-31" format="ixt:booleanfalse" name="dei:EntityShellCompany">No</ix:nonNumeric></span></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Unless
otherwise indicated, all references herein are expressed in Canadian dollars and United States currency is stated as &#8220;US$&#8221;.</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<!-- Field: Rule-Page --><div style="width: 100%"><div style="border-top: Black 1.5pt solid; font-size: 1pt; border-bottom: Black 4pt solid">&#160;</div></div><!-- Field: /Rule-Page -->

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>


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    <div style="break-before: page; margin-top: 6pt"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font-size: 10pt"><tr style="vertical-align: top; text-align: left"><td style="width: 100%">&#160;</td></tr></table></div>
    <!-- Field: /Page -->

<p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS</b>&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">This
annual report on Form 20-F (&#8220;Annual Report&#8221;) of Premium Nickel Resources Ltd. (&#8220;PNRL&#8221; or the &#8220;Company&#8221;)contains forward-looking statements, meaning statements that reflect the Company&#8217;s current
expectations and views of future events and future financial performance. These forward-looking statements are made under the applicable
safe-harbor provisions of United States and Canadian securities laws. In some cases, you can identify forward-looking statements by terminology
such as &#8220;estimate&#8221;, &#8220;project&#8221;, &#8220;believe&#8221;, &#8220;anticipate&#8221;, &#8220;intend&#8221;, &#8220;expect&#8221;,
&#8220;plan&#8221;, &#8220;predict&#8221;, &#8220;may&#8221;, &#8220;should&#8221;, &#8220;potential&#8221;, or &#8220;continue&#8221;,
the negative thereof or other variations thereon or comparable terminology. These forward-looking statements include, but are not limited
to, statements about: anticipated assay results; the ability of exploration results (including
drilling) to accurately predict mineralization; the significance of exploration (including drilling) results; the objectives of the first
phase of drilling; the ability of the Company to prepare a PEA on its Selebi mine in Botswana; the ability of the Company to transition
to underground resource drilling at the Selebi mine; the ability of assay results to indicate mine horizons and mineralization, at all,
including beyond the limits of legacy production; the ability of the Company to use exploration drifts; the ability of the Company to
verify historic data; the potential for establishing a mineral resource estimate on the Selebi deposit at depth; the Company&#8217;s ability
to re-characterize the historic work on the Selebi mine; the potential for continuity and significant mineralization expansion of the
Selebi mine; the potential of the Selebi mine, in general, including related infrastructure; the veracity of previously unsampled core;
the Company&#8217;s ability to identify additional mineral resources; and the business and prospects of the Company.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Such
forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance
or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by
such forward-looking statements. There can be no assurance that the forward-looking statements will prove to be accurate as actual results
and future events could differ materially from those anticipated in such statements.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Known
and unknown risks, uncertainties and other factors include, but are not limited to, those discussed under &#8220;Risk Factors&#8221;
in this Annual Report, other reports the Company files with the U.S. Securities and Exchange Commission and Canadian securities regulators, and
the following: the Company largely relies on financing to maintain and continue operations; the Company is dependent on the business
and technical expertise of its management team; and the Company relies on one mineral project for the majority of its potential future
revenues.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Table
of Contents:</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Part
    I</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><a href="#b_001">ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS</a></b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: right">1</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><a href="#b_002">ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE</a></b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: right">1</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><a href="#b_003">ITEM 3. KEY INFORMATION</a></b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: right">1</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><a href="#b_004">ITEM 4. INFORMATION ON THE COMPANY</a></b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: right">8</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><a href="#b_005">ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS</a></b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: right">14</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><a href="#b_006">ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES</a></b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: right">25</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><a href="#b_007">ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS.</a></b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: right">29</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><a href="#b_008">ITEM 8. FINANCIAL INFORMATION</a></b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: right">31</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><a href="#b_009">ITEM 9. THE OFFER AND LISTING</a></b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: right">33</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><a href="#b_010">ITEM 10. ADDITIONAL INFORMATION</a></b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: right">35</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><a href="#b_011">ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK</a></b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: right">53</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><a href="#b_012">ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES</a></b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: right">53</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Part
    II</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><a href="#b_013">ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES</a></b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: right">53</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><a href="#b_014">ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS</a></b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: right">53</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><a href="#b_015">ITEM 15. CONTROLS AND PROCEDURES</a></b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: right">53</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><a href="#b_017">ITEM 16. A. Audit Committee Financial Expert</a></b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: right">54</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><a href="#b_018">ITEM 16. B. Code of Ethics</a></b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: right">55</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><a href="#b_019">ITEM 16. C. Principal Accounting Fees and Services</a></b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: right">55</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><a href="#b_020">ITEM 16. D. Exemption From the Listing Standards for Audit Committees</a></b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: right">56</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><a href="#b_021">ITEM 16. E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers</a></b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: right">56</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><a href="#b_022">ITEM 16. F. Change in the Registrant&#8217;s Certifying Accountant</a></b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: right">56</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif"><b><a href="#b_023">ITEM 16. G. Corporate Governance</a></b></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: right">56</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><a href="#b_024">ITEM 16. H. Mine Safety Disclosure</a></b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: right">56</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><a href="#b_025">ITEM 16. I. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections</a></b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: right">56</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><a href="#b_026">ITEM 16. J. Insider Trading Policies</a></b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: right">56</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Part
    III</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><a href="#b_027">ITEM 17. FINANCIAL STATEMENTS</a></b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: right">56</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><a href="#b_028">ITEM 18. FINANCIAL STATEMENTS</a></b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: right">56</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: White">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><a href="#b_029">ITEM 19. EXHIBITS</a></b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: right">57</td></tr>
  </table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b></b></span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="b_001"></span>ITEM
1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>A.
</b>Not applicable.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>B.
</b>Not applicable.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>C.
</b>The name of the Company&#8217;s auditor is MNP LLP for the year ending December 31, 2022. MNP LLP, an accounting firm registered with the
Canadian Public Accountability Board, became the Company&#8217;s auditors on December 5, 2022. MNP LLP&#8217;s address is Suite 800, 1600 Carling
Avenue, Ottawa, Ontario K1Z 1G3. From January 1, 2020 to August 31, 2022, the Company&#8217;s auditors were Dale Matheson Carr-Hilton Labonte
LLP. Their address is 1500 &#8211; 1140 West Pender St., Vancouver, BC V6E 4G1.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="b_002"></span>ITEM
2. OFFER STATISTICS AND EXPECTED TIMETABLE</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="b_003"></span>ITEM
3. KEY INFORMATION</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>A. </b>[Reserved]</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>B.
</b>Not required.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>C.
</b>Not required.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>D.
Risk factors.</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
business of the Company entails significant risks, and an investment in the securities of the Company should be considered highly speculative.
An investment in the securities of the Company should only be undertaken by persons who have sufficient financial resources to enable
them to assume such risks. The following is a general description of all material risks, which can adversely affect the business and
in turn the financial results, ultimately affecting the value of an investment the Company. T<span style="background-color: white">he risks and uncertainties set out below are not the only ones the Company
is facing. There are additional risks and uncertainties that the Company does not currently know about or that the Company currently considers
immaterial which may also impair the Company&#8217;s business operations and cause the price of the common share&#8217;s, without par value of
the Company (the &#8220;<b>Common Shares</b>&#8221;) to decline. If any of the following risks actually occur, the Company&#8217;s business
may be harmed and the Company&#8217;s financial condition and results of operations may suffer significantly. Additionally, investors
should not interpret the disclosure of a risk to imply that the risk has not already materialized.</span></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company largely relies on financing to maintain and continue operations</span></p>

<p style="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company&#8217;s ability to continue will largely be reliant on its continued attractiveness to equity investors and its ability to
obtain additional financing to maintain and grow operations. Should the Company require additional capital to continue its
operations, failure to raise such capital could result in the Company going out of business, which may result in investors losing all or a significant portion of
their investment in the Company. There can be no assurance that
additional capital or other types of financing will be available if needed or that, if available, the terms of such financing will
be favourable to the Company.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">From
time to time, the Company may issue new shares, seek debt financing, dispose of assets, or enter into transactions to acquire assets
or shares of other corporations. These transactions may be financed wholly or partially with debt, which may temporarily increase the
Company&#8217;s debt levels above industry standards.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company is dependent on the business and technical expertise of its management team</span></p>

<p style="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company is dependent on the business and technical expertise of its management team. If the Company is unable to retain key members of
its management team, if it is unable to rely on this business and technical expertise, or if any of the expertise is inadequately performed,
the business, financial condition and results of the operations of the Company could be materially adversely affected until such time
as the expertise could be replaced.</span></p>

<p style="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>The
Company depends on key personnel to operate its business effectively in the mineral mining industry</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company&#8217;s success largely depends upon
on the performance of the directors and officers and the Company&#8217;s continuing ability to attract and retain highly qualified personnel.
The loss of the services of these persons, or the failure to attract highly qualified personnel in the future, may have a material adverse
effect on the Company&#8217;s business and prospects. Moreover, the Company&#8217;s competitors may hire and gain access to the expertise of former
employees, or former employees may compete with us. There is no assurance that the Company will be successful in attracting, integrating,
motivating, and retaining key personnel or that former employees will not compete with the Company in the future. If the Company is unable
to retain key personnel and attract additional qualified personnel as and when needed, the Company&#8217;s business may be adversely affected.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
market price of the Common Shares may be volatile</span></p>

<p style="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
price of the Common Shares may be affected by global macroeconomic developments and market perceptions of the
attractiveness of particular industries and location of assets, which may increase the volatility of share prices. The price of the Common Shares will also be affected by the Company&#8217;s financial condition or
results of operations as reflected in its liquidity position and earnings reports.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Other
factors unrelated to the Company&#8217;s operations and performance that may have an affect on the price of the Common Shares include, but are not limited to:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" border="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt">
<tr style="vertical-align: top">
    <td style="width: 0.25in">&#160;</td>
  <td style="text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
  <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the lessening in trading volume and general market interest
in the Company&#8217;s securities may affect an investor&#8217;s ability to trade significant numbers of shares;</span></td></tr>

<tr style="vertical-align: top">
    <td>&#160;</td>
  <td style="text-align: justify">&#160;</td>
  <td style="text-align: justify">&#160;</td></tr>
<tr style="vertical-align: top">
    <td>&#160;</td>
  <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
  <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the size of the Company&#8217;s public float may limit the
ability of some institutions to invest in the Company&#8217;s securities;</span></td></tr>

<tr style="vertical-align: top">
    <td>&#160;</td>
  <td style="text-align: justify">&#160;</td>
  <td style="text-align: justify">&#160;</td></tr>
<tr style="vertical-align: top">
    <td>&#160;</td>
  <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
  <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">rumors and market speculation involving us or other companies in our industry<span style="font-family: Times New Roman, Times, Serif; font-size: 12pt">;</span></span></td></tr>
<tr style="vertical-align: top">
    <td>&#160;</td>
  <td style="text-align: justify">&#160;</td>
  <td style="text-align: justify">&#160;</td></tr>
<tr style="vertical-align: top">
    <td>&#160;</td>
  <td style="text-align: justify">&#9679;</td>
  <td style="text-align: justify">the public&#8217;s reaction to our press releases, other public announcements,
and filings with the U.S. Securities and Exchange Commission (the &#8220;SEC&#8221;);</td></tr>
<tr style="vertical-align: top">
    <td>&#160;</td>
  <td style="text-align: justify">&#160;</td>
  <td style="text-align: justify">&#160;</td></tr>
<tr style="vertical-align: top">
    <td>&#160;</td>
  <td style="text-align: justify">&#9679;</td>
  <td style="text-align: justify">changes in the financial projections we may provide to the public or our
failure to meet these projections;</td></tr>
<tr style="vertical-align: top">
    <td>&#160;</td>
  <td style="text-align: justify">&#160;</td>
  <td style="text-align: justify">&#160;</td></tr>
<tr style="vertical-align: top">
    <td>&#160;</td>
  <td style="text-align: justify">&#9679;</td>
  <td style="text-align: justify">actual or anticipated developments in our business, our competitors&#8217;
businesses or the competitive landscape generally;</td></tr>
<tr style="vertical-align: top">
    <td>&#160;</td>
  <td style="text-align: justify">&#160;</td>
  <td style="text-align: justify">&#160;</td></tr>
<tr style="vertical-align: top">
    <td>&#160;</td>
  <td style="text-align: justify">&#9679;</td>
  <td style="text-align: justify">actual or anticipated changes in applicable laws or regulations;</td></tr>
<tr style="vertical-align: top">
    <td>&#160;</td>
  <td style="text-align: justify">&#160;</td>
  <td style="text-align: justify">&#160;</td></tr>
<tr style="vertical-align: top">
    <td>&#160;</td>
  <td style="text-align: justify">&#9679;</td>
  <td style="text-align: justify">actual or perceived privacy or data security incidents; and</td></tr>
<tr style="vertical-align: top">
    <td>&#160;</td>
  <td style="text-align: justify">&#160;</td>
  <td style="text-align: justify">&#160;</td></tr>
<tr style="vertical-align: top">
    <td>&#160;</td>
  <td style="text-align: justify">&#9679;</td>
  <td style="text-align: justify">risks related to the organic and inorganic growth of our business and the
timing of expected business milestones, including those related to announced or completed acquisitions of businesses, products, services,
or technologies by us or our competitors.</td></tr>
</table>


<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
a result of any of these factors and others, the market price of the Company&#8217;s shares at any given point in time may not accurately
reflect the Company&#8217;s long-term value. Securities class action litigation has been brought against companies following
periods of volatility in the market price of their securities. The Company may in the future be the target of similar litigation, which could result in substantial costs and damages and divert management&#8217;s attention and
resources.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company relies on one mineral project for the majority of its potential future revenues</span></p>

<p style="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company&#8217;s flagship Selebi mine in Botswana includes two shafts,
the Selebi and Selebi North shafts (together, the &#8220;Selebi Mine&#8221;) and related infrastructure such as rail, power and roads (together
with the Selebi Mine, the &#8220;Selebi Assets&#8221;). <span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Selebi Mine is the Company&#8217;s only material property and accounts for the majority of the
Company&#8217;s potential for future generation of revenue. Any adverse development affecting the progress or exploration of the
Selebi Mine, including but not limited to, unusual and unexpected geologic formulations, seismic activity, rock bursts, cave-ins,
flooding and other conditions involved in the drilling and removal of material, any of which could result in damage to, or
destruction of, mines and other producing facilities, damage to life or property, environmental damage, hiring suitable personnel
and engineering contractors, or securing supply agreements on commercially suitable terms, may have a material adverse effect on the
Company&#8217;s financial performance and results of operations.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>

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<p style="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Company&#8217;s business and financial condition may be significantly
impacted by volatility
of commodity prices, and particularly volatility in the prices of nickel, copper and cobalt</span></p>

<p style="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
development of the Company&#8217;s material property, the Selebi Mine (and any of the Company&#8217;s portfolio
of mineral projects) is dependent on the future prices of minerals and metals, particularly the prices of nickel, copper and cobalt, which are sold in
an active global market and traded on commodity exchanges, such as the London Metals Exchange and the New York Mercantile Exchange. Should any of the Company&#8217;s
properties eventually enter commercial production, the Company&#8217;s profitability will be significantly affected by changes in the
market prices of minerals and metals.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Base
and precious metals prices are subject to significant fluctuations, which can be material and occur over short periods of time and
which are affected by numerous factors, all of which are beyond the Company&#8217;s control. Such factors include, but are not
limited to, actual and expected macroeconomic and political conditions, interest and exchange rates, inflation or deflation, foreign
exchange rate, levels of supply and demand, speculative trading, the costs of and levels of base and precious metals production, the
availability and costs of substitutes, input costs, inventory levels, investments by commodity funds and other actions of
participants in the commodity markets. The effect of these factors on the prices of base and precious metals, and therefore the
economic viability of any of the Company&#8217;s exploration projects, cannot be accurately determined.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In particular, nickel, copper and cobalt prices have fluctuated widely,
particularly in recent years, driven in part due to renewable energy and clean technology applications. Consequently, the economic viability
of the Selebi Mine cannot be accurately predicted and may be adversely affected by fluctuations in commodity prices. Fluctuations in commodity
prices and future price declines could cause the development of (and any future commercial production from) the Company&#8217;s properties to
be impracticable or uneconomical.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As such, the Company may
determine that it is not economically feasible to commence commercial production at some or all of its properties, which could have
a material adverse impact on the Company&#8217;s financial condition and results of operations. In such a circumstance, the Company
may also curtail or suspend some or all of its exploration and development activities.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company&#8217;s ownership rights and boundaries of its resource properties may be subject to loss or dispute</span></p>

<p style="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">There
is no assurance that the rights of ownership and other rights in concessions to be held by the Company are not subject to loss or dispute,
particularly because such rights may be subject to prior unregistered agreements or transfers or other land claims and may be affected
by defects and adverse laws and regulations which have not been identified by the Company. There is no guarantee that title to the properties
will not be challenged or impugned. The Company&#8217;s property interest may be subject to prior unregistered agreements or transfers
or native land claims and title may be affected by undetected defects.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">All
of the Company&#8217;s current mineral projects will be at their exploration stages, which involves significant risks, and there is no assurance that
such projects will develop into economically viable operating mines</span></p>

<p style="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company&#8217;s projects are each in their exploration stage. The exploration of mineral deposits involves significant financial
risks over a prolonged period of time, which may not be eliminated even through a combination of careful evaluation, experience and
knowledge. Substantial expenses are required to establish mineral resources and mineral
reserves through drilling, to develop metallurgical processes to extract metal from ore and to develop the mining and processing facilities
and infrastructure at any site chosen for mining. No assurance can be given that minerals will be discovered in sufficient quantities
to justify commercial operation or that the funds required for development can be obtained on a timely basis.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Development
of the Company&#8217;s properties will occur only after obtaining satisfactory exploration results. Few properties that are explored
are ultimately developed into economically viable operating mines. There is no assurance that the Company&#8217;s mineral exploration
activities will result in the discovery of a body of commercial ore on its exploration properties. Several years may pass between the
discovery and development of commercial mineable mineralized deposits.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Most
exploration projects do not result in the discovery of commercially-mineralized deposits. The commercial viability of exploiting any
precious or base-metal deposit is dependent on a number of factors including infrastructure, mineral markets and processing equipment, and governmental regulations, including
those relating to environment, taxes, royalties, allowable production and import and export of minerals. Depending on the price of minerals produced, the Company may determine
that it is impractical to commence or continue commercial production. No assurance can be given that minerals will be discovered of sufficient
quality, size and grade on any of the Company&#8217;s properties to justify a commercial operation.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Exploration
projects also face significant operational risks including but not limited to an inability to obtain access rights to properties, accidents,
equipment breakdowns, labour disputes (including work stoppages and strikes), impact of health epidemics and other outbreaks of communicable
diseases and other unanticipated interruptions.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The operation, development and exploration of the Company&#8217;s properties
is subject to substantial governmental
regulation, including environmental regulations, and any future adverse changes in
such regulation may adversely impact the Company&#8217;s business and results of operations</span></p>

<p style="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Operations,
development and exploration on the Company&#8217;s properties will be affected to varying degrees by: (i) government regulations
relating to such matters as environmental protection, health, safety and labor; (ii) mining law reform; (iii) restrictions on
production, price controls, and tax increases; (iv) maintenance of claims; (v) tenure; and (vi) expropriation of property. There is
no assurance that future changes in such regulation, if any, will not adversely affect the Company&#8217;s operations. Changes in
such regulation could result in additional expenses and capital expenditures, limitations on availability of capital, competition,
reserve uncertainty, potential conflicts of interest, title risks, dilution, and restrictions and delays in operations, the extent
of which cannot be predicted.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company is at the exploration stage on all of its properties. Exploration on the Company&#8217;s properties requires responsible
best-exploration practices to comply with the Company&#8217;s policies, government regulations, and maintenance of claims and tenure.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
any of the Company&#8217;s projects advance to the development stage, those operations will also be subject to various laws concerning
development, production, taxes, labour standards, environmental protection, mine safety and other matters. In addition, new laws governing
operations and activities of mining companies could have a material adverse impact on any project in the mine development stage that
the Company may possess.</span></p>

<p style="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Additionally,
environmental legislation is evolving in a manner which requires stricter standards and enforcement, increased fines and penalties
for non-compliance, more stringent environmental assessments of proposed properties and a heightened degree of responsibility for
companies and their officers, directors and employees. There is no assurance that future changes in environmental regulations, if
any, will not adversely affect the Company&#8217;s operations. The cost of compliance with changes in governmental regulations has
the potential to preclude entirely the economic development of a property. The Company will adopt environmental practices designed
to ensure that it will comply with or exceed all environmental regulations currently applicable to it. All of the Company&#8217;s
activities will be in compliance in all material respects with applicable environmental legislation.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Changes
in tax legislation or accounting rules could affect the profitability of the Company</span></p>

<p style="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Changes
to, or differing interpretation of, taxation laws in Canada, Barbados, Botswana or any of the countries in which the Company&#8217;s
assets or relevant contracting parties are located, could result in some or all of the Company&#8217;s profits being subject to
additional taxation. No assurance can be given that new taxation rules or accounting policies will not be enacted or that existing
rules will not be applied in a manner which could result in the Company&#8217;s profits being subject to additional taxation or
which could otherwise have a material adverse effect on the Company&#8217;s profitability, results of operations, financial
condition and the trading price of the Company&#8217;s securities. In addition, the introduction of new tax rules or accounting
policies, or changes to, or differing interpretations of, or application of, existing tax rules or accounting policies, such as the
International Financial Reporting Standards (&#8220;IFRS&#8221;), could make acquiring additional resource properties by the Company
less attractive to counterparties. Such changes could adversely affect the Company&#8217;s ability to acquire new assets or make
future investments.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>The Company
currently reports its financial results under IFRS, which differs in certain significant respects from U.S. GAAP</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Currently,
the Company reports its financial statements under IFRS. There have been and there may in the future be certain significant differences
between IFRS and U.S. generally accepted accounting principles (&#8220;<b>U.S. GAAP</b>&#8221;), including differences related to
revenue recognition, share-based compensation expense, income tax and earnings per share. As a result, the Company&#8217;s financial information and
reported earnings for historical or future periods could be significantly different if they were prepared in accordance with U.S.
GAAP. In addition, the Company does not intend to provide a reconciliation between IFRS and U.S. GAAP unless it is required under applicable
law. As a result, you may not be able to meaningfully compare the Company&#8217;s financial statements under IFRS with those of companies that
prepare financial statements under U.S. GAAP.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>As
a foreign private issuer, the Company is subject to different U.S. securities laws and rules than a U.S. domestic issuer, which may
limit the information publicly available to U.S. investors</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company is a &#8220;foreign private issuer&#8221;, under applicable U.S. federal securities laws, and is, therefore, not subject
to the same requirements that are imposed upon U.S. domestic issuers by the SEC. Under the Securities Exchange Act of 1934, as amended
(the &#8220;US Exchange Act&#8221;), the Company is subject to reporting obligations that, in certain respects, are less detailed
and less frequent than those of U.S. domestic reporting companies. As a result, the Company does not file the same reports that a
U.S. domestic issuer would file with the SEC, although the Company is required to file with or furnish to the SEC the continuous
disclosure documents that it is required to file in Canada under Canadian securities laws. In addition, the Company&#8217;s officers,
Directors, and principal shareholders are exempt from the reporting and short-swing profit recovery provisions of Section 16 of the U.S.
Exchange Act. Therefore, the Company&#8217;s shareholders may not know on as timely a basis as with U.S. domestic issuers when the
Company&#8217;s officers, Directors, and principal shareholders purchase or sell Common Shares, as the reporting periods under the
corresponding Canadian insider reporting requirements are longer. As a foreign private issuer, the Company is exempt from the rules
and regulations under the U.S. Exchange Act related to the furnishing and content of proxy statements. The Company is also exempt
from Regulation FD, which prohibits issuers from making selective disclosures of material non-public information. While the Company
complies with the corresponding requirements relating to proxy statements and disclosure of material non-public information under Canadian
securities laws, these requirements differ from those under the U.S. Exchange Act and Regulation FD and shareholders should not expect
to receive the same information at the same time as such information is provided by U.S. domestic companies. In addition, the Company
may not be required under the U.S. Exchange Act to file annual and quarterly reports with the SEC as promptly as U.S. domestic companies
whose securities are registered under the U.S. Exchange Act. In addition, as a foreign private issuer, the Company has the option
to follow certain Canadian corporate governance practices, except to the extent that such laws would be contrary to U.S. securities laws,
and provided that the Company discloses the requirements it is not following and describes the Canadian practices it follows instead.
The Company has elected to follow home country practices in Canada with regard to certain corporate governance matters. As a result,
the Company&#8217;s shareholders may not have the same protections afforded to shareholders of U.S. domestic companies that are subject
to all corporate governance requirements.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p>

<p style="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Inability
of the Company to realize the expected business synergies arising from the RTO</span></p>

<p style="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Achieving
the benefits of the reverse takeover transaction (the &#8220;RTO&#8221;) completed on August
3, 2022 between former TSX Venture Exchange (the &#8220;TSXV&#8221;) listed company, North American Nickel Inc. (&#8220;NAN&#8221;) and
private Canadian company Premium Nickel Resources Corporation (&#8220;PNRC&#8221;) depends in part on the ability of the Company to effectively capitalize on its scale, to realize the anticipated
capital, as well as operating and financial synergies, to profitably sequence the growth prospects of its asset base and to maximize
the potential of its improved growth opportunities and capital funding opportunities. A variety of factors, including those risk factors
set forth in this Annual Report on Form 20-F may adversely affect the ability of the Company to achieve the anticipated benefits of the
RTO.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company does not have established mineral resources or reserves</span></p>

<p style="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company is a junior resource company focused primarily in the exploration and subsequent development of the Selebi Mine located in Botswana.
The Company&#8217;s properties have no established mineral resources or mineral reserves at this time. The historical South African Code for the Reporting of Exploration Results, Mineral Resources
and Mineral Reserves compliant
resource (the &#8220;Historic SAMREC Resource&#8221;) that was calculated for the Selebi Mine in 2016 is considered to be historical
in nature has not been prepared in accordance with NI 43-101 and should not be relied upon as a current mineral resource estimate. While
management believes that the Historic SAMREC Resource could be indicative of the presence of mineralization on the Selebi deposit, a
qualified person has not completed sufficient work to classify the historical mineral estimate as a current mineral resource estimate
and the Company is not treating the historical mineral estimates as current mineral resource estimate.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">There
is no assurance that any of the Company&#8217;s projects can be mined profitably. Accordingly, it is not assured that the Company will
realize any profits in the short to medium term, if any at all. Any profitability in the future from the business of the Company will be
dependent upon development and commercially mining an economic deposit minerals, which in itself is subject to numerous risk factors.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
exploration and development of mineral deposits involves a high degree of financial risk over a significant period of time that even
a combination of management&#8217;s careful evaluation, experience and knowledge may not eliminate. Few properties that are explored
are ultimately developed into producing mines. Major expenses may be required to establish resources and reserves by drilling and to
construct mining and processing facilities at a particular site. It is impossible to ensure that current work programs of the Company
will result in profitable commercial mining operations. The profitability of the Company&#8217;s operations will be, in part, directly
related to the cost and success of its work programs, which may be affected by a number of factors, including, but not limited to market conditions, availability of funding,
regularity environment, exploration success, geopolitical risk and availability of skilled labour. Substantial expenditures are required
to establish mineral reserves that are sufficient to support commercial mining operations and there is no guarantee that such commercial mining operations will be profitable once established.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company is exposed to financial risk relating to its financial instruments and as a result of foreign currency
exchange rate fluctuations</span></p>

<p style="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company is also exposed to risks relating to its financial instruments and foreign currency. It is anticipated that the Company will
operate in Canada, Greenland and Botswana and undertake transactions denominated in foreign currencies such as United States dollars,
Euros, Danish Krones and the Botswanan Pula, and consequently is exposed to exchange rate risks. The Company will also be exposed to
equity price risk and the movements in individual equity prices or general movements in the level of the stock market may potentially
have an adverse impact on the Company&#8217;s earnings. The Company closely monitors individual equity movements and the stock market
to determine the appropriate course of action to be taken.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company is subject to additional risks by doing business outside of Canada</span></p>

<p style="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font: normal 10pt Times New Roman, Times, Serif">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Selebi Mine, which is the Company&#8217;s only material property, is located in Botswana. The
Company&#8217;s operations outside North America could subject the Company to a variety of additional risks that may negatively
impact its business and operations including any of the following: changes in rules and regulations (including required royalties); failure
of local parties to honour contractual relations; delays in obtaining or the inability to obtain necessary governmental permits; opposition
to mining from environmental or other non-governmental organizations; limitations on foreign ownership; limitations on the repatriation
of earnings; economic or tax policies; tariffs and trade barriers; regulations related to customs and import/export matters; longer payment
cycles; tax issues; currency fluctuations and exchange controls; rates of inflation; challenges in collecting accounts receivable; cultural
and language differences; employment regulations; crimes, strikes, riots, civil disturbances, terrorist attacks and wars; and deterioration
of political relations with Canada or other governments or sanctions imposed by Canada or other governments. There will also be currency
exchange risks in connection with the operations of the Company&#8217;s foreign mineral assets, including the Selebi Mine.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition, Botswana is considered an emerging market. Emerging market investments generally pose a greater degree of risk than investments
in more mature market economies because the economies in the developing world are more susceptible to destabilization resulting from
domestic and international developments. Further, the current or a future government may adopt substantially different policies, take
arbitrary action which might halt exploration or production, re-nationalize private assets or cancel contracts, or cancel mining or exploration
rights, any of which could result in a material and adverse effect on the Company&#8217;s results of operations and financial condition.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company may face risks related to health epidemic and other outbreaks of communicable diseases</span></p>

<p style="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company may face risks related to health epidemics and other outbreaks of communicable diseases, which could significantly disrupt
its operations and may materially and adversely affect its business and financial conditions. While the COVID-19 outbreak no longer
remains a salient risk for the Company, COVID-19 has in the past led to a large number of temporary business closures, travel bans, self-imposed
quarantine periods, and physical distancing, all of which have contributed to a general reduction in consumer activity and material disruptions to
businesses globally resulting in an economic slowdown. Public health crises can result in volatility and disruptions in the supply and demand
for Ni-Cu-Co and other metals and minerals, global supply chains and financial markets, as well as declining trade and market
sentiment and reduced mobility of people, all of which could affect commodity prices, interest rates, credit ratings, credit risk,
share prices and inflation, which could have an adverse effect on the demand for Ni-Cu-Co and the Company&#8217;s future
prospects.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition, such health crises may be a threat to maintaining a skilled workforce in the mining industry in Botswana and could be a challenge
to the Company&#8217;s operations. The Company could lose members of its workforce or see its workforce man-hours reduced or incur increased
medical costs as a result of these health risks, which could have a material and adverse effect on the Company&#8217;s future cash flows,
earnings, results of operations and financial condition.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">There
can be no assurance that the Company&#8217;s personnel will not be impacted by these pandemic diseases and ultimately see its workforce
productivity reduced or incur increased medical costs / insurance premiums as a result of these health risks.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition, the re-emergence of COVID-19 could adversely affect global economies and financial markets resulting in an economic downturn
that could have an adverse effect on the demand for precious metals and the Company&#8217;s future prospects.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Since
certain of the Company&#8217;s officers and directors are located in Canada and outside the United States, it may be difficult to enforce any United
States judgment for claims brought against such officers and directors</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company is organized under the laws of the Province of Ontario, Canada and certain of the Company&#8217;s officers and directors are residents of Canada.
While a cross border treaty exists between the United States and Canada relating to the enforcement of foreign judgments, the enforcement
process is cumbersome and, in some cases, has prevented the enforcement of judgments. As a result, while actions may be brought in Canada,
it may be impossible to affect service of process within the United States on the Company&#8217;s officers and directors or to enforce
against these persons any judgments in civil and commercial matters, including judgments under United States federal securities laws.
In addition, a Canadian court may not permit an original action in Canada or enforce in Canada a judgment of a United States court based
on civil liability provisions of United States federal securities laws.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>There
is substantial doubt as to whether the Company will continue operations. If the Company discontinues operations, you could lose your investment.</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company&#8217;s consolidated financial statements have been prepared on the going concern basis, which assumes that the Company will
be able to realize its assets and discharge its liabilities in the normal course of business. However, as at December 31, 2022, the
Company has not generated significant revenue or cash flow from operations since inception. As at December 31, 2022, the Company had
a working capital deficiency of $6,024,026 and an accumulated deficit of $78,092,605. The Company anticipates that it will incur increased
expenses and there is a risk that the Company will not realize sufficient revenues to offset those expenses. The Company&#8217;s ability to continue its
operations is dependent on obtaining additional financing and generating future revenues, and no assurance can be given that the Company will
successfully be able to do so. Accordingly, the Company&#8217;s consolidated financial statements contain disclosure regarding management&#8217;s substantial doubt about the Company&#8217;s ability to continue as a going concern. Importantly, the inclusion in the Company&#8217;s
consolidated financial statements of a going concern reference may negatively impact the Company&#8217;s ability to raise future financing and
achieve future revenue. The reference regarding the substantial doubt about The Company&#8217;s ability to continue as a going concern will be
removed only when, in the opinion of management, revenues have reached a level that is able to sustain the Company&#8217;s business
operations, or the Company has raised substantial additional funds through the Company&#8217;s financing efforts.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>The
Company may lose its foreign private issuer status in the future, which could result in significant additional costs and expenses to
the Company</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
order to maintain its status as a foreign private issuer, a majority of the Common Shares must be either directly
or indirectly owned by non-residents of the U.S. unless the Company also satisfies one of the additional requirements necessary to
preserve this status. The Company may in the future lose its foreign private issuer status if a majority of its Common Shares are
held in the U.S. and if the Company fails to meet the additional requirements necessary to avoid loss of its foreign private issuer
status. The regulatory and compliance costs under U.S. federal securities laws as a U.S. domestic issuer may be significantly more than
the costs incurred as a Canadian foreign private issuer. If the Company is not a foreign private issuer, it would not be eligible
to use the Multijurisdictional Disclosure System (&#8220;MJDS&#8221;) or other foreign issuer forms and would be required to file periodic
and current reports and registration statements on U.S. domestic issuer forms with the SEC, which are more detailed and extensive than
the forms available to a foreign private issuer, and would be required to file financial statements prepared in accordance with United
States generally accepted accounting principles. In addition, the Company may lose the ability to rely upon exemptions from Nasdaq
corporate governance requirements that are available to foreign private issuers.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>The
Company may not be able to raise funds in the future to continue its operations</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">While
the Company may have been successful in raising funds in the past, there is no guarantee that future fundraising efforts will be successful
or that the funds raised will be sufficient to meet the Company&#8217;s needs.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b></b></span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="b_004"></span>ITEM
4. INFORMATION ON THE COMPANY</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>A.
History and development of the Company.</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company, formerly NAN, resulted from the closing of the RTO whereby PNRC and 1000178269 Ontario Inc., a wholly-owned subsidiary of NAN,
amalgamated by way of a triangular amalgamation under the Business Corporations Act (Ontario) (the &#8220;OBCA&#8221;) on August 3, 2022.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">NAN
was incorporated on September 23, 1983 under the name Widescope Resources Inc., and following a series of name changes ultimately changed
its name to North American Nickel Inc. effective April 19, 2010. NAN&#8217;s principal business activity was the exploration of natural
resource properties in Greenland, Canada and Morocco. Prior to the RTO, the common shares of NAN were listed and posted for trading on
the TSXV under the symbol &#8220;NAN&#8221;. In connection with the RTO, the Company completed (i) a share consolidation of the Company&#8217;s issued and outstanding
Common Shares, <span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">on the basis of one (1) post-consolidation Common Share for every five (5) pre-consolidation common shares issued and outstanding effective July 27, 2022, (ii) a continuation from under
the <i>Business Corporations Act </i>(British Columbia) to under the OBCA and changed its name to &#8220;Premium Nickel Resources Ltd.&#8221;
effective July 29, 2022, and (iii) changed its stock exchange ticker symbol from &#8220;NAN&#8221; to &#8220;PNRL&#8221; at the resumption
of trading subsequent to the RTO.</span></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Prior
to the RTO, PNRC was a private corporation existing under the OBCA which seeks to evaluate, acquire, improve and reopen, assuming economic
feasibility, a combination of certain assets of BCL Limited (&#8220;BCL&#8221;) and Tati Nickel Mining Company (&#8220;TNMC&#8221;) that
were in liquidation in Botswana.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company&#8217;s source of funding was mainly equity financing. The Maniitsoq property in Greenland was owned by NAN prior to the RTO
and the Company spent an aggregate of $63M on the project since 2012. Upon the closing of the RTO, The Company has switched its focus
to development of its Botswana assets. During the year ended December 31, 2022, the Company incurred $28.7M
on its Botswana assets.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that
file electronically with the SEC at http://www.sec.gov. The Company&#8217;s website address is <span style="text-decoration: underline"><span style="text-decoration: underline">www.premiumnickelresources.ca.</span> </span> <span style="background-color: white">Nothing on the Company&#8217;s website and the information contained on, or
that can be accessed through, such website shall be deemed to be incorporated by reference herein unless indicated otherwise, and is
not considered part of, this Annual Report on Form 20-F.</span></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>B.
Business overview</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">PNRL&#8217;s
global strategy is to identify high quality nickel-copper-cobalt-platinum group elements (&#8220;<b>Ni-Cu-Co-PGE</b>&#8221;) projects
and acquire opportunities that offer high prospectivity in mining friendly jurisdictions located in low-risk countries with supportive
foreign investment and resource legislation as well as rule-of-law. The current portfolio includes global projects in Botswana, Greenland,
Canada and Morocco, with the projects in Botswana being the Company&#8217;s significant assets.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">Currently,
the Company&#8217;s principal business activity is the exploration and development of <span style="background-color: white">its </span>
flagship asset, the Ni-Cu-Co sulphide <span style="background-color: white">Selebi M</span>ine in Botswana and, separately, the
Company&#8217;s Selkirk Ni-Cu-Co-PGE sulphide mine (the &#8220;Selkirk Mine&#8221;), also in Botswana. </span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white"><i>Summary
of Activities </i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">The
Selebi and Selkirk deposits are permitted with 10-year mining licenses and benefit from significant local infrastructure. PNRL concluded
the 2022 exploration and drilling program at the Selebi Mine in January 2023. This initial drilling program was focused on an area at
the western down dip edge of the Historic SAMREC Resource estimate. The primary objective of this first phase of surface drilling and
borehole electromagnetics (&#8220;BHEM&#8221;) program at Selebi was to provide the Company with the relevant information to demonstrate
that the mine horizons could be well mineralized beyond the limits of legacy production, and to support the transition to underground
resource drilling at both the Selebi North and Selebi deposits.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">The
BHEM data acquired as of the date of this report demonstrates that there are multiple sizable anomalies detected on the northern extension
of the Selebi Mine. Additionally, the results of the drilling, in conjunction with the BHEM program, have provided compelling evidence
that the Selebi and Selebi North deposits are part of a large mineralized system, with multiple mineralized horizons present across the
three kilometre area between the Selebi historical mine workings to the south and the Selebi North historic mine workings to the north.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">The
Company sees significant potential for expanding Historic SAMREC Resource. In 2023, PNRL is planning to undertake a combination of resource
and continued exploration drilling at the Selebi Mine to demonstrate the size potential of the Selebi Mine mineral system and ultimately
establish a maiden mineral resource estimate prepared in accordance with NI 43-101 </span>as <span style="background-color: white">well
as completing a preliminary economic assessment. The exploration drilling will be on-going, and the resource drilling at the Selebi Mine
is expected to start underground from the Selebi North shaft. Upon completion of the underground development program at Selebi North,
the Company will shift its development work three kilometres south to the Selebi area with the intention of utilizing a combination of
surface and underground drilling methods</span>.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">Concurrently,
PNRL will continue its work at the Selkirk Mine and its surrounding prospecting licenses, which is the Company&#8217;s second asset in
Botswana, located approximately 75 kilometres north of the Selebi Mine. The focus of this work will be to understand the legacy work
done by previous owners, which had advanced Selkirk to a bankable feasibility study for redevelopment as an open-pit mine. The Company
plans to include drilling, geoscience, and metallurgical work to support a mineral resource estimate prepared under NI 43-101. Additionally,
the Company is pursuing an alternative ore processing and tailings management strategy to those used in previous economic studies</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Disclosure
regarding the Company&#8217;s mineral properties, including with respect to mineral reserve and mineral resource estimates included in
this Annual Report, was prepared in accordance with NI 43-101. NI 43-101 is a rule developed by the Canadian Securities Administrators
that establishes standards for all public disclosure an issuer makes of scientific and technical information concerning mineral projects.&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
accordance with NI 43-101, the terms &#8220;mineral reserve&#8221;, &#8220;proven mineral reserve&#8221; and &#8220;probable mineral
reserve&#8221; are Canadian mining terms as defined in accordance with NI 43- 101 and the Canadian Institute of Mining, Metallurgy and
Petroleum (&#8220;CIM&#8221;) - CIM Definition Standards on Mineral Resources and Mineral Reserves (the &#8220;CIM Definition Standards&#8221;),
adopted by the CIM Council, as amended.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
SEC adopted amendments to its disclosure rules (the &#8220;SEC Modernization Rules&#8221;) to modernize the mineral property disclosure
requirements for issuers whose securities are registered with the SEC under the U.S. Exchange Act, which are codified in Regulation S-K
subpart 1300. Under the SEC Modernization Rules, the historical property disclosure requirements for mining registrants included in SEC
Industry Guide 7 have been replaced. As a foreign private issuer under United States securities laws that files its Annual Report on
Form 20-F with the SEC pursuant to the multi-jurisdictional disclosure system (&#8220;MJDS&#8221;), the Company is not required to provide
disclosure on its mineral properties under the SEC Modernization Rules and will continue to provide disclosure under NI 43-101 and the
CIM Definition Standards.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
SEC Modernization Rules include the adoption of terms describing mineral reserves and mineral resources that are substantially similar
to the corresponding terms under the CIM Definition Standards. As a result of the adoption of the SEC Modernization Rules, the SEC now
recognizes estimates of &#8220;measured mineral resources&#8221;, &#8220;indicated mineral resources&#8221; and &#8220;inferred mineral
resources&#8221;. In addition, the SEC has amended its definitions of &#8220;proven mineral reserves&#8221; and &#8220;probable mineral
reserves&#8221; to be substantially similar to the corresponding CIM Definition Standards.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Shareholders
resident in the United States are cautioned that while terms are substantially similar to CIM Definition Standards, there are differences
in the definitions and standards under the SEC Modernization Rules and the CIM Definition Standards. Accordingly, there is no assurance
any mineral reserves or mineral resources that the Company may report as &#8220;proven reserves&#8221;, &#8220;probable reserves&#8221;,
&#8220;measured mineral resources&#8221;, &#8220;indicated mineral resources&#8221; and &#8220;inferred mineral resources&#8221; under
NI 43-101 will be the same as the reserve or resource estimates prepared under the standards adopted under the SEC Modernization Rules.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Shareholders
resident in the United States are also cautioned that while the SEC now recognizes &#8220;measured mineral resources&#8221;, &#8220;indicated
mineral resources&#8221; and &#8220;inferred mineral resources&#8221;, investors should not assume that any part or all of the mineralisation
in these categories will ever be converted into a higher category of mineral resources or into mineral reserves. Mineralisation described
using these terms has a greater amount of uncertainty as to their existence and feasibility than mineralisation that has been characterized
as reserves. Accordingly, investors are cautioned not to assume that any &#8220;measured mineral resources&#8221;, &#8220;indicated mineral
resources&#8221;, or &#8220;inferred mineral resources&#8221; on the Company&#8217;s projects are or will be economically or legally
mineable.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Further,
&#8220;inferred resources&#8221; have a greater amount of uncertainty as to their existence and as to whether they can be mined legally
or economically. Therefore, shareholders resident in the United States are also cautioned not to assume that all or any part of the inferred
resources exist. In accordance with Canadian rules, estimates of &#8220;inferred mineral resources&#8221; cannot form the basis of feasibility
or other economic studies, except in limited circumstances where permitted under NI 43-101.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Accordingly,
information contained in this Annual Report containing descriptions of mineral deposits may not be comparable to similar information
made public by United States companies subject to the reporting and disclosure requirements under the United States federal securities
laws and the rules and regulations thereunder. Shareholders resident in the United States are urged to consider closely the disclosure
on technical terminology in this Annual Report.</span></p>



<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white"><i>Corporate
Social Responsibility</i></span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">PNRL
is committed to conducting its business in a socially responsible and sustainable manner, with a focus on environmental stewardship,
health and safety, community engagement, and ethical conduct. The Company has established policies and procedures to ensure compliance
with applicable laws and regulations, as well as industry standards for responsible mining. PNRL recognizes the importance of stakeholder
engagement and works closely with local communities, indigenous groups, and other stakeholders to ensure their concerns and perspectives
are heard and addressed.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>C.
Organizational structure</b></span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following corporate structure chart sets out details of the direct and indirect ownership of the principal subsidiaries of the Company.</span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><img src="form20-f_001.jpg" alt="" style="height: 300pt; width: 468pt" /></span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span style="text-decoration: underline">Notes</span>:</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(1)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Premium
    Nickel Resources Proprietary Limited owns the Selebi Mine.</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(2)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Premium
    Nickel Group Proprietary Limited owns the Selkirk mine.</span></td></tr>
  </table>
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>D.
Property, plant and equipment.</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Selebi
Mine, Botswana</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Selebi Mine was acquired on January 31, 2022 through an asset purchase agreement with the liquidator of BCL. The Selebi Mine is comprised
of a single mining license covering an area of 11,504 hectares located near the town of Selebi Phikwe, approximately 150 kilometres southeast
of the city of Francistown, and 410 kilometres northeast of the national capital Gaborone. The Selebi Mine includes two shafts (Selebi
and Selebi North with a total combined capacity of 5,100 tons per day)) as well as all related surface (rail, power and roads) and underground
infrastructures. The Selebi deposit began production in 1980 and Selebi North began production in 1990. Mining terminated at both operations
in 2016 due to a failure in the separate Phikwe smelter processing facility and was subsequently placed under liquidation in 2017.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">At
the time of liquidation, Historic SAMREC Resource compliant mineral resources within the Selebi Mine were reported as <i>in-situ</i>
and depleted for mining as of December 31, 2016<span style="background-color: white">.</span> These historical measured and indicated
mineral resources used a nickel equivalent (NiEq)<sup>1</sup> cut-off grade of 0.4% and were estimated to total 17.83 Mt at grades of
0.87% Ni and 1.42% Cu containing 155, 000 tonnes (t) Ni and 253,000 t Cu. Historical inferred mineral resources were estimated to total
15.34 Mt at grades of 0.71% Ni and 0.89% Cu containing 109,000 t Ni and 136,000 t Cu. Nickel and copper prices used were US$8.00/lb Ni
and US$3.00/lb Cu, respectively. This estimate, which has not been prepared in accordance with NI 43-101, is considered to be historical
in nature and should not be relied upon. However, management believes that it could be indicative of the presence of mineralization on
the Selebi Mine property. A qualified person has not completed sufficient work to classify the historical mineral estimate as a current
mineral resource estimate and the Company is not treating the historical mineral estimates as a current mineral resource estimate. Readers
are cautioned that mineral resources are not mineral reserves and do not have demonstrated economic viability. As of the date of this report, the Company considers the Selebi Mine as
its only material property within the meaning of NI 43-101.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><sup>1
</sup>The NiEq cut-off grade was based on a ratio of nickel and copper prices where NiEq = %Ni + (Cu price/Ni price)*%Cu.</span></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Exploration
and Development Activities</i></span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company initiated a drilling program in March 2022, with holes targeting the area down plunge of Selebi Mine workings. Concurrent with
the drill program, data compilation and verification continued. The program of re-opening historic holes that began in October 2021 is
ongoing and up to three drills have been cleaning historic holes to facilitate the collection of new gyro and BHEM geophysical data.
Collars of drillholes have been located using a differential Global Positioning System (&#8220;DGPS&#8221;). An initial downhole program
of televiewer and physical property logging has also been completed to support the creation of a structural model. Level plans were digitized,
and after significant effort, the Company now has a 3D model of the Selebi and Selebi North underground infrastructure. The gathering
of geological information to build a 3D model is ongoing. Information from handwritten drill logs was merged into the BCL drill hole
database, and the historic core is being re-logged.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of December 31, 2022, Mitchell Drilling completed a total of 14,627.36 metres. To date, a total of eight new holes and the extension
of one historic hole have reached target depth and intersected mineralized amphibolite; assay results from 477 core samples in seven
of these holes have been received from ALS Chemex laboratories in South Africa and results have been released. A total of 38 historic
holes have been opened and surveyed with gyro. BHEM surveys have been completed in 44 new and historic holes. Collars of 241 historic
holes have been located using DGPS and coordinates collected at another 105 sites where evidence of drilling was found, but no drill
hole was seen. Televiewer and physical property surveys have been completed in five holes.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
results from the drilling and geophysical surveys indicate that there is structural thickening at the western down-dip extent of the
mineralized amphibolite, and drilling continues in this area to define the plunge and extent of this mineralization.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">During
the year ended December 31, 2022, the Company incurred $28,046,746 in acquisition and exploration expenditures on the Selebi Assets (December
31, 2021 - $3,099,926).</span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Outlook
&#8211; Exploration and Development </i></span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
proposed work plan for the Selebi Mine includes underground drilling at Selebi North and the surface/underground diamond drilling
program at Selebi, expected to commence in July 2023. Drilling will be ongoing for up to 15 months, with the specific objective of
delivering a mineral resource estimate prepared in accordance with NI 43-101 for the Selebi Mine. During that time, data compilation
and verification efforts will continue, with additional hole re-openings, downhole gyro, BHEM and televiewer surveys, digitization
of historic data, re-logging of historic core and updating of the 3D geological and structural model. In addition to this work,
additional metallurgical samples will be collected and sent for detailed studies. The underground infrastructure at Selebi North
will be upgraded to support the underground drilling program as well as improve health &amp; safety.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Selkirk
Mine, Botswana</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Selkirk Mine was acquired in August 2022 through an asset purchase agreement with the Liquidator of TNMC. The Selkirk property consists
of a single mining licence covering an area of approximately 14.6 square kilometres and four prospecting licenses cover 126.7 square
kilometres. The project is situated 28 kilometres south-east of the town of Francistown, and 75 kilometres north of the Selebi Mine.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Exploration
and Development Activities</i></span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company has been carrying out due diligence on the Selkirk Mine since 2021. The results of the data verification efforts include examination
and sampling of mineralized drill core, sampling from underground workings, collecting DGPS coordinates of drill collars and quality
assessment of information in databases.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">During
the Selkirk core review, five unsampled HQ sized core (63.5 millimeters) holes, drilled immediately prior to the closure of operations
by TNMC were identified. These five holes were taken to the core processing facility at Phikwe, where they were sampled in approximately
1 metre intervals, bagged and sent for assays. A total of 56 samples from DSLK278 used for metallurgical testing were analyzed at SGS
Canada for nickel and copper and pulps were sent to ALS in Vancouver for a full suite of analyses. The remaining 1010 core samples were
sent to ALS Global in Johannesburg for analyses. Results were reported in Q3 and Q4, 2022.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Company
geologists also examined underground workings and confirmed continuous visible sulphides along an exploration drift extending 144 metres
across the interpreted primary sulphide horizon, in a southwestern direction from the previous mining operations. PNRL collected and
submitted twenty 10-kilogram grab samples from this exploration drift for assay to determine the variability in the grade of the mineralization.
In November, the Company released results of the exploration drift sampling.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Additionally,
the Company completed a concept level metallurgical study to assess if readily marketable copper and nickel concentrates could be produced
and, if so, at what metal recovery levels. The Selkirk test program was carried out at SGS Canada in Lakefield, Ontario and followed
a similar program conducted on samples from the Selebi Mine, which demonstrated potential for these metallurgical objectives to be achieved.
The source of the material was previously unsampled HQ sized drill core from 2016 drill hole DSLK278, positioned 50m from historic mine
workings. Highlights of the metallurgical study include: the ability to produce salable market nickel and copper concentrates, nickel
concentrate grade of 10% nickel and 6% copper, copper concentrate grade of 33% copper, 0.32% nickel, recoveries of 63% nickel, 85% copper,
concentrates clean of deleterious elements and with low (&lt;1%) MgO levels, and attractive amounts of PGE present in the concentrates
(36.0 g/t Pd in copper concentrate, 9.0 g/t Pd in nickel concentrate).</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company filed a voluntarily technical report, prepared in accordance with NI 43-101 for the Selkirk Mine on April 12,
2023. As of the date of this report, the Company does not consider the Selkirk Mine to be a property material to the Company
within the meaning of NI 43-101.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">During
the year ended December 31, 2022, the Company incurred $677,310 in acquisition and due diligence expenditures on the Selkirk assets (December
31, 2021 - $nil).</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Outlook
&#8211; Exploration and Development </i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company currently anticipates that a work plan will be proposed for the Selkirk Mine re-development that will include drilling to better
define the existing resources and search for additional resources, develop a 3D geological and structural model, and complete additional
metallurgical studies focused on improving recoveries.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Maniitsoq
Nickel-Copper-PGM Project, Southwest Greenland</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Maniitsoq project is centred on the 75 kilometre by 15 kilometre Greenland Norite Belt which hosts numerous high-grade nickel-copper
sulphide occurrences associated with mafic and ultramafic intrusions. The property is located 100 kilometres north of Nuuk, the capital
of Greenland and is accessible year-round either by helicopter or by boat from Nuuk or Maniitsoq, the latter located on the coast approximately
15 kilometres to the west. The Company acquired the Maniitsoq project in 2011 due to its potential for the discovery of significant magmatic
sulfide deposits in a camp-scale belt. The Maniitsoq property consists of three exploration licences, Sulussagut No. 2011/54 and Ininngui
No. 2012/28 comprising 2,689 and 296 square kilometres, respectively and the Carbonatite property No. 2018/21 (63 square kilometres),
and a prospecting licence, No. 2020/05, for West Greenland. The Greenland properties have no mineral resources or reserves.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
three licences, 2011/54, 2012/28 and 2018/31 have sufficient accrued work credits to keep the property in good standing until December
2023, at which time a reduction in the size of the property will be required. Prospecting licence 2011/54 expired in December 31, 2022
and the Company has applied for its renewal. The prospecting licence is in effect until December 31, 2024.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Exploration
and Development Activities </i></span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">No
exploration work was carried out in Greenland in 2022. Remaining targets were reviewed and prioritized in preparation for a
potential field program in 2023.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Prior
to the closing of RTO on August 3, 2022, the Maniitsoq property had a book value of $36,692,516. As the <span style="letter-spacing: -0.1pt">RTO </span> is accounted for
as a capital transaction with NAN being identified as the accounting acquiree, the net assets of NAN should be measured at fair value.
Upon the completion of the RTO, the Company has switched its focus to development of the Botswana assets with the result that limited
resources (management time, capital etc.) have since been allocated or will be allocated to the Greenland assets. Management believes
that facts and circumstances exist to suggest that the carrying amount of the Maniitsoq property at August 3, 2022 exceeds its fair value.
As a result, the carrying value of the Greenland assets has been reduced to nil as of August 3, 2022, for a total impairment of $36,692,516.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">From
August 3<span style="letter-spacing: -0.1pt">, 2022</span> to December 31, 2022, the Company spent an additional $48,001 in acquisition and exploration expenditures on the Maniitsoq property,
which is comprised of the Sulussugut, Ininngui, Carbonatite and 2020/05 licenses. These expenditures were recorded as general exploration
expense in the consolidated statements of comprehensive loss.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Canadian
Nickel Projects - Sudbury, Ontario </b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Post
Creek Property</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Post Creek property is located 35 kilometres east of Sudbury in Norman, Parkin, Alymer and Rathburn townships and consists of 73 unpatented
mining claim cells in two separate blocks, covering a total area of 912 hectares held by the Company. The Company acquired the property
through an option agreement in April 2010, subsequently amended in March 2013. As at the date of this Annual Report, the Company holds a 100%
interest in the Post Creek property and is obligated to pay advances on a net smelter returns royalty (&#8220;NSR&#8221;) of $10,000 per annum, which will be deducted from any
payments to be made under the NSR.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Post Creek property lies adjacent to the Whistle Offset Dyke Structure which hosts the past&#8211;producing Whistle Offset and Podolsky
Cu-Ni-PGM mines. Post Creek lies along an interpreted northeast extension of the corridor containing the Whistle Offset Dyke and Footwall
deposits account for a significant portion of all ore mined in the Sudbury nickel district and, as such, represent favourable exploration
targets. Key lithologies are Quartz Diorite and metabreccia related to offset dykes and Sudbury Breccia associated with Footwall rocks
of the Sudbury Igneous Complex which both represent potential controls on mineralization.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">No
exploration work was completed in 2022 on the Post Creek Property. The claims have sufficient work credits to keep them in good standing
until 2025.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Halcyon
Property</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Halcyon property is located 35 kilometres northeast of Sudbury in the Parkin and Aylmer townships, and consists of 63 unpatented mining
cells for a total of 864 hectares. Halcyon is adjacent to the Post Creek property and is approximately 2 kilometres north of the producing
Podolsky Mine of FNX Mining. The property was acquired through an option agreement and as at the date of this Annual Report, the Company holds
a 100% interest in the Halcyon property and is obligated to pay advances on the NSR of $8,000 per annum, which will be deducted from
any payments to be made under the NSR.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">No
exploration work was completed on the Halcyon Property in 2022. The claims are in good standing through 2025.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Quetico
Property</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Quetico property is located within the Thunder Bay mining district of Ontario and consists of 99 claim cells in two blocks. Cells were
acquired to assess (i) <span style="background-color: white">the Quetico Sub-province corridor, which hosts intrusions with Ni-Cu-Co-PGM
mineralization related to a late 2690 Ma Archean magmatic event, and (ii). the Neoproterozoic (1100 Ma MCR) magmatic event and related
intrusions.</span></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">No
work was carried out on the Quetico property in 2022. all  99 claims were expire in April 2023.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Immediately
prior to completion of the RTO, total book value of the Canadian assets was $2,535,873 which has been written off effective as at August
3, 2022, the closing date of the RTO as the Company has switched its focus to development of the Botswana assets with the result that
limited management time and capital resources have been allocated or will be allocated to the Canada assets. During the period from August
3<span style="letter-spacing: -0.1pt">, 2022</span> to December 31, 2022, the Company incurred an additional $21,739 in exploration and license related expenditures for the Canadian properties
and the expenditures were recorded as general exploration expense in the consolidated statements of comprehensive loss.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>High
Atlas Project </i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
High Atlas property includes four permits acquired in December 2021 and one permit acquired in February 2022. The property is located
in the high Atlas Mountains of Morocco. Jurassic aged troctolitic and gabbroic intrusions occur at the margin of a significant trans-lithospheric
structure over a strike length greater than 100 kilometres. The intrusions are host to three major nickel-copper occurrences and another
ten minor occurrences. There is no modern geophysical coverage and no drilling on the property.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">No
exploration work was carried out in 2022.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
exploration and license related expenditures for the project is recorded as property investigation expense in the consolidated statements
of comprehensive loss. The Company has spent $nil on the project during the period from August 3<span style="letter-spacing: -0.1pt">, 2022</span> to December 31, 2022.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="b_005"></span>ITEM
5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS</b></span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>The
following discussion and analysis should be read in conjunction with the financial statements and notes thereto included herein.</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Overview</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company is an international mineral exploration and resource development company listed on the TSXV and trading under the symbol PNRL.
The Company&#8217;s principal business activity is the exploration and development of PNRL&#8217;s flagship asset, the Selebi Ni-Cu-Co
sulphide mine in Botswana. In addition, the Company&#8217;s project pipeline is also includes the Selkirk Ni-Cu-Co-PGE sulphide mine also located in Botswana.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>A.
Operating Results</b></span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Going
Concern</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company&#8217;s consolidated financial statements have been prepared on a going concern basis, which presumes that
the Company will continue realizing its assets and discharging its liabilities in the normal course of business for the foreseeable future.
The Company has incurred significant operating losses and negative cash flows from operations since inception. To date, the Company has
financed its operations primarily through the public offering and private placement of its securities, consisting of Common Shares and
warrants, and convertible debt. For the twelve-month period ended December 31, 2022, the Company incurred a net loss of $36.4 million
and negative working capital deficiency of $6.0 million, and had an accumulated deficit of $78.1 million as of December 31, 2022. Furthermore,
as at December 31, 2022, the Company&#8217;s current liabilities and expected level of expenses for the next twelve months exceed cash
on hand of $5.2 million and its total current liabilities exceed its total current assets. Accordingly, the Company is required to actively
manage its liquidity and expenses and payments of payables are not being made as the amounts become due for certain suppliers.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of the date the consolidated financial statements for the twelve-month period ended December 31, 2022, the available cash balance is
expected to be sufficient to operate the business for the next six months under the current business plan. The Company requires
funding in the very near term in order to continue its operations. If the Company is unable to obtain funding in the near-term, it
may have to cease operations and liquidate its assets.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">These
conditions cast substantial doubt about the Company&#8217;s ability to continue as a going concern.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">As at December 31,
2022, the Company had $5,162,991 in available cash (December 31, 2021&#8212; $1,990,203). There are no sources of operating cash flows.
Given the Company&#8217;s current financial position and the ongoing exploration and evaluation expenditures, the Company will need to
raise additional capital through issuances of equity or other available financing alternatives to continue funding its operating, exploration
and evaluation activities, and eventual development of mineral properties. Although the Company has been successful in its past fund-raising
activities, there is no assurance as to the success of future fundraising efforts or as to the sufficiency of funds raised in the future.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and
classification of liabilities that might be necessary should the going concern basis not be valid. These adjustments could be material.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company is an exploration and development stage entity and has not yet achieved profitable operations. The Company has shown losses for
the past several years. These losses result largely from having no revenue and significant exploration and administrative expenses related
to operations.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Year
Ended December 31, 2022 and December 31, 2021</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company incurred a net loss of $36,410,469 in the 2022 fiscal year (&#8220;FY2022&#8221;) compared to a net loss of $9,359,605 in the
2021 fiscal year (&#8220;FY2021&#8221;) , resulting in an increased loss of $27,050,864 (year-over-year). The net loss in FY 2022 was
mainly driven by a loss on the RTO transaction of $29,174,415, and also to the following events:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The share-based payment
    expenses were $7,731,117 and were $6,469,226 higher compared to $1,261,891 in FY 2021 due to the revaluation of the vesting options
    upon completion of the RTO transaction.</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Corporate and administrative
    expenses were $3,317,039 and were higher by $2,752,373 compared to $564,666 incurred in FY 2021. Activities related to undertaking
    the RTO were the key contributing factors to higher costs in FY 2022.</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Management fees were $2,418,984
    in FY 2022 and were higher by $1,743,983 compared to $675,001 in FY 2021. This increase is a direct result of increased operational
    activities in Botswana following the purchase of the Selebi Assets and the Selkirk Mine, expansion of consultancy management in support
    of the re-development of the Selebi Assets as well as activities in Barbados, which did not exist during FY 2021.</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Advisory and consultancy
    fees were $1,895,004 and were higher by $1,537,024 compared to $357,980 incurred in FY 2021. Higher fees were due to activities related
    to the closing of Selebi and Selkirk acquisitions in January and August 2022, respectively.</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Interest and bank charges
    were $93,937 in FY 2022 and were higher by $91,426 compared to $2,511 in FY 2021. Higher interest costs relate to lease interest
    that commenced in August 2022 and did not exist in FY 2021.</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Interest expense was $416,703
    in FY 2022 compared to interest expense of $nil in FY 2021. The interest was a result of bridge loan financing.</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Depreciation expense was
    $96,543 during FY 2022 compared to $nil in FY 2021.</span></td></tr>
  </table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: -0.25in">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
higher loss in FY 2022 was partially offset by the following lower expenditures in FY 2022 compared to FY 2021:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The 15% warrant held by
    NAN was cancelled upon the completion of the RTO, resulting in a reversal of the fair value of the 15% warrant by $8,974,901 compared
    to a fair value increase of $6,345,310 recorded in FY 2021</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Foreign exchange gain totaled
    $143,777 and was higher by $157,088 compared to $13,311 loss in FY 2021.</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Due diligence related expenditures
    totaled $18,039 in FY 2022 and were lower by $120,896 compared to $138,935 costs in FY 2021. Higher costs in FY 2021 resulted from
    commencing capitalization of these costs in late FY 2021 upon the Company being awarded exclusivity to acquire the assets.</span></td></tr>
  </table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Twelve
Months Ended December 31, 2021, and December 31, 2020</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company incurred a net loss of $9,408,511 FY 2021 compared to a net loss of $3,859,729 in FY 2020 resulting in an increased loss of $5,548,782
(year-over-year). The higher loss in FY 2021 was due to the following events with warrant fair value and share-based payment being the
most significant:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in">&#9679;</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Valuation
                                            of warrant resulted in fair value of $6,345,310 in FY 2021 and was higher by $3,715,719 compared
                                            to $2,629,591 fair value in FY 2020.</span></td></tr>
<tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#9679;</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Share-based
                                            payment resulting stock options issuance was $1,261,891 in FY 2021 compared to $nil amount
                                            in FY 2020. There were no stock options issued during FY 2020.</span></td></tr>
<tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#9679;</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Corporate
                                            and administrative costs of $564,666 during FY 2021 were higher by $433,683 compared to $130,983
                                            expenses during FY 2020. Increased corporate and administrative expenses during FY 2021 were
                                            consistent and directly related to increased activities in due diligence process in connection
                                            with the acquisition of certain assets in Botswana, the key activity in 2021. The key costs
                                            that increased in FY 2021 within the corporate and administrative category mainly related
                                            to legal fees, accounting and tax consultancy, investor relations and administrative fees.
                                            </span></td></tr>
<tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#9679;</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Management
                                            fees were $675,001 in FY 2021 and were higher by $463,116 compared to $211,885 costs in FY
                                            2020.</span></td></tr>
<tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#9679;</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Advisory
                                            and consultancy were $357,980 in FY 2021 and were higher by $353,835 compared to $4,145 in
                                            FY 2020.</span></td></tr>
<tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#9679;</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Exchange
                                            differences on translation of foreign operations were $48,906 in FY 2021 compared to $nil
                                            amount in FY 2020. Foreign operations in Botswana and Barbados commenced during FY 2021.</span></td></tr>
<tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#9679;</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Foreign
                                            exchange loss totaled $13,311 during FY 2021 and was higher by $10,586 compared to $2,725
                                            loss in FY 2020. The higher loss in FY 2021 was due to increased volume in transactions denominated
                                            in foreign currencies.</span></td></tr></table>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
higher loss in FY 2021 was offset by the following lower expenditures in FY 2021 compared to FY 2020:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in">&#9679;</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Due
                                            diligence related expenditures totaled $877,844 in FY 2020 and were lower by $738,909 compared
                                            to $138,935 costs in FY 2021. Higher costs in FY 2020 resulted from commencing capitalization
                                            of these costs in early 2021 upon the Company being awarded exclusivity to acquire the assets
                                            and started to incur cost directly association with the acquisition.</span></td></tr>
<tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#9679;</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Interest
                                            and bank charges were slightly lower by $45 in FY 2021 of $2,511 compared to $2,556 in FY
                                            2020.</span></td></tr></table>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>


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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>B.
Liquidity and Capital Resources</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As of December 31, 2022, the Company had a working capital deficiency of $6,024,026 (December 31, 2021 &#8211; $1,558,011 positive working
capital) and reported an accumulated deficit of $78,092,605 (FY 2020 - $13,482,624). The Company will require additional funds to continue
its planned operations and meet its obligations.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
at December 31, 2022, the Company had $5,162,991 in available cash (December 31, 2021&#8212; $1,990,203). There are no sources of operating
cash flows. Given the Company&#8217;s current financial position and the ongoing exploration and evaluation expenditures, the Company
will need to raise additional capital through issuances of equity or other available financing alternatives to continue funding its
operating, exploration and evaluation activities, and eventual development of mineral properties. Although the Company has been successful
in its past fund-raising activities, there is no assurance as to the success of future fundraising efforts or as to the sufficiency of
funds raised in the future.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
noted, these conditions raise substantial doubt about the Company&#8217;s ability to continue as a going concern. The financial statements
do not include any adjustment that might arise from that uncertainty. Note 1 in the consolidated financial statements includes an explanatory paragraph regarding
the Company&#8217;s ability to continue as a going concern.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="letter-spacing: -0.1pt">In
April 2022, PNRC completed a non-brokered private placement of 8,865,619 shares at a price of US$2.00 per share for gross proceeds
of $22,388,599 (US$17,731,238). In connection with the private placement, the Company has paid to eligible finders
(&#8220;Finders&#8221;) (i) cash commission equal to 6% of the gross proceeds raised from subscribers introduced to the Company by
such Finders, being an aggregate of $1,535,727, and (ii) a number of <span style="letter-spacing: -0.1pt">Common Shares </span> equal to 6% of the units attributable to the
Finders under the private placement, being an aggregate of 70,548 shares with total value of $176,398 at the offer price of the
private placement.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In April 2022, NAN completed a private placement offering of 21,118,000
subscription receipts (the &#8220;<b>Subscription Receipts</b>&#8221;) at a price of $0.48 per Subscription Receipt (in each case, prior
to giving effect to the Company&#8217;s 5:1 consolidation of its Common Shares), including the partial exercise of the agents &#8216;option, for total
gross proceeds of $10,136,640. Upon the closing of the RTO on August 3, 2022, the Subscription Receipts were converted into 4,223,600
Common Shares (post-consolidation), and the net subscription proceeds were released from escrow and delivered to the Company.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
November 25, 2022, the Company closed a $7 million bridge loan financing from Pinnacle Island LP with net proceeds of $6,740,000. The
bridge loan is evidenced by the issuance of a promissory note by the Company to the lender with a principal amount of $7 million and
bears interest at a rate of 10% per annum, calculated monthly and initially payable on February 22, 2023, being the maturity date of
the Promissory Note. The Company extended the maturity to March 22, 2023 and subsequently to November 24, 2023.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">During
FY 2022 year, the Company received additional cash inflow of $569,399 from exercised warrants and $723,076 from exercised options.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
February 24, 2023, the Company closed a brokered private placement offering under which 4,437,184 Common Shares were issued
at a price of $1.75 per share for gross proceeds of $7,765,072.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>C.
Research and development, patents and licenses, etc.</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>D.
Trend information</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The major trends affecting the
Company and its business include: the impact of commodity prices and demand for nickel, copper and cobalt; volatility in capital markets;
globalization of commodity supplies; critical metals supply chain stabilization; increasing domestic expectations surrounding in-country
ores and concentrates; and moves to increasing alternative energy solutions in an effort to reduce carbon footprints.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Impact
of Inflation</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company believes that inflation had minimal effect on costs related to its exploration activities in the 12 months ending December 31,
2022.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Quantitative
and Qualitative Disclosures about Market Risk</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</span></p>


<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>


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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>E.
Critical Accounting Estimates</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Basis
of preparation and accounting policies</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
consolidated financial statements have been prepared under the historical cost convention, modified by the revaluation of any financial
assets and financial liabilities where applicable. The preparation of financial statements in conformity with IFRS requires the use of
certain critical accounting estimates. It also requires management to exercise judgment in the process of applying the Company&#8217;s
accounting policies. These areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant
to the consolidated financial statements, are disclosed in Note 3 of the audited annual financial statements for the years ended December 31, 2022 and 2021.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Basic
of consolidation</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
consolidated financial statements include the financial statements of the Company and its wholly-owned subsidiaries (collectively, the &#8220;Group&#8221;). All
intercompany transactions, balances, income and expenses are eliminated upon consolidation.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Effective
August 3, 2022, NAN completed the 100% acquisition of the outstanding shares of PNRC (Note 4 of the consolidated financial statements). As the shareholders of PNRC obtained
control of the Company through the exchange of their shares of PNRC for shares of NAN, the acquisition of PNRC has been accounted
for in the consolidated financial statements as a reverse takeover. Consequently, the consolidated statements of comprehensive loss and
cash flows reflect the results from the operations and cash flows of PNRC, the legal subsidiary, for the year ended December 31,
2022 and 2021, combined with those of NAN, the legal parent, from the acquisition on August 3, 2022 to December 31, 2022, in
accordance with IFRS for reverse takeovers. The comparative balance sheet reflects the balance
sheet of PNRC as at December 31, 2021.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Foreign
currency translation</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company&#8217;s functional and presentation currency is the Canadian dollar. Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the date of the transaction. Foreign currency monetary items are translated at the year-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.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Exchange
differences arising on the translation of monetary items or on settlement of monetary items are recognized in profit or loss in the statement
of comprehensive loss in the period in which they arise, except where deferred in equity as a qualifying cash flow or net investment
hedge.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Exchange
differences arising on the translation of non-monetary items are recognized in other comprehensive income in the statement of comprehensive
loss to the extent that gains and losses arising on those non-monetary items are also recognized in other comprehensive income. Where
the non-monetary gain or loss is recognized in profit or loss, the exchange component is also recognized in profit or loss.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Foreign
operations</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
the Group&#8217;s financial statements, all assets, liabilities and transactions of Group entities with a functional currency other than
Canadian dollar are translated into Canadian dollar upon consolidation. The functional currencies of entities within the Group have remained
unchanged during the reporting period. On consolidation, assets and liabilities have been translated into Canadian at the closing rate
at the reporting date. Fair value adjustments arising on the acquisition of a foreign entity have been treated as assets and liabilities
of the foreign entity and translated into Canadian dollar at the closing rate. Income and expenses have been translated into Canadian
dollar at the average rate over the reporting period. Exchange differences are charged or credited to other comprehensive income and
recognized in the currency translation reserve in equity. On disposal of a foreign operation, the related cumulative translation differences
recognized in equity are reclassified to profit or loss and are recognized as part of the gain or loss on disposal.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Financial
instruments</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Classification</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company classifies its financial instruments in the following categories: at fair value through profit and loss (&#8220;FVTPL&#8221;),
at fair value through other comprehensive income (loss) (&#8220;FVTOCI&#8221;) or at amortized cost. The Company determines the classification
of financial assets at initial recognition. The classification of debt instruments is driven by the Company&#8217;s business model for
managing the financial assets and their contractual cash flow characteristics. Equity instruments that are held for trading are classified
as FVTPL. For other equity instruments, on the day of acquisition, the Company can make an irrevocable election (on an instrument-by-instrument
basis) to designate them as at FVTOCI. Financial liabilities are measured at amortized cost, unless they are required to be measured
at FVTPL (such as instruments held for trading or derivatives) or the Company has opted to measure them at FVTPL.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following table shows the classification of the Company&#8217;s financial assets and liabilities:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; margin-left: auto; width: 90%; border-collapse: collapse; margin-right: auto">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; width: 59%; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Financial
    asset/liability</b></span></td>
    <td style="width: 2%">&#160;</td>
    <td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; width: 39%; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Classification</b></span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Cash </span></td>
    <td>&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">FVTPL</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Trade
    payables and accrued liabilities</span></td>
    <td>&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Amortized
    cost</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Lease
    liability</span></td>
    <td>&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Amortized
    cost</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Promissory
    note</span></td>
    <td>&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Amortized
    cost</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Vehicle
    financing</span></td>
    <td>&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Amortized
    cost</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Financial
    liability &#8211; warrant </span></td>
    <td>&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">FVTPL</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Deferred
    share unit liability </span></td>
    <td>&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">FVTPL</span></td></tr>
  </table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Measurement</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Financial
assets and liabilities at amortized cost.</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Financial
assets and liabilities at amortized cost are initially recognized at fair value plus or minus transaction costs, respectively, and subsequently
carried at amortized cost less any impairment.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Financial
assets and liabilities at FVTPL </i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Financial
assets and liabilities carried at FVTPL are initially recorded at fair value and transaction costs are expensed in profit or loss. Realized
and unrealized gains and losses arising from changes in the fair value of the financial assets and liabilities held at FVTPL are included
in the consolidated statements of comprehensive loss in the period in which they arise.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Impairment
of financial assets at amortized cost </i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">An
&#8216;expected credit loss&#8217; impairment model applies that requires a loss allowance to be recognized based on expected credit
losses. The estimated present value of future cash flows associated with the asset is determined and an impairment loss is recognized
for the difference between this amount and the carrying amount as follows: the carrying amount of the asset is reduced to estimated present
value of the future cash flows associated with the asset, discounted at the financial asset&#8217;s original effective interest rate,
either directly or through the use of an allowance account and the resulting loss is recognized in profit or loss for the period.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
a subsequent period, if the amount of the impairment loss related to financial assets measured at amortized cost decreases, the previously
recognized impairment loss is reversed through profit or loss to the extent that the carrying amount of the investment at the date the
impairment is reversed does not exceed what the amortized cost would have been had the impairment not been recognized.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Derecognition</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Financial
assets </i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company derecognizes financial assets only when the contractual rights to cash flows from the financial assets expire, or when it transfers
the financial assets and substantially all of the associated risks and rewards of ownership to another entity. Gains and losses on derecognition
are generally recognized in the statements of comprehensive loss.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Investments
are derecognized when the rights to receive cash flows from the investments have expired or the Company has transferred the financial
asset and the transfer qualifies for derecognition.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Financial
liabilities </i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Financial
liabilities are derecognized when, and only when, the Company&#8217;s obligations are discharged, cancelled or they expire. The difference
between the carrying amount of the financial liability derecognized and the consideration paid and payable is recognized in the Statement
of Comprehensive Loss.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Exploration
and evaluation assets</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Exploration
and evaluation assets include the costs of acquiring licenses, costs associated with exploration and evaluation activity, and the fair
value (at acquisition date) of exploration and evaluation assets acquired in a business combination. Exploration and evaluation expenditures
are initially capitalized. Costs incurred before the Company has obtained the legal rights to explore an area are recognized in profit
or loss.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Government
tax credits received are recorded as a reduction to the cumulative costs incurred and capitalized on the related property.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Exploration
and evaluation assets are assessed for impairment if (i) sufficient data exists to determine technical feasibility and commercial viability,
and (ii) facts, events and circumstances suggest that the carrying amount exceeds the recoverable amount.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Once
the technical feasibility and commercial viability of the extraction of mineral resources in an area of interest are demonstrable, exploration
and evaluation assets attributable to that area of interest are first tested for impairment and then reclassified to mining property
and development assets within equipment.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5pt; text-align: justify; text-indent: -0.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Recoverability
of the carrying amount of any exploration and evaluation assets is dependent on successful development and commercial exploitation, or
alternatively, sale of the respective areas of interest.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5pt; text-align: justify; text-indent: -0.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company may occasionally enter into farm-out arrangements, whereby it will transfer part of the interest, as consideration, for an agreement
by the farmee to meet certain exploration and evaluation expenditures which would have otherwise been undertaken by the Company. The
Company does not record any expenditures made by the farmee on its behalf. Any cash consideration received from the agreement is credited
against the costs previously capitalized to the mineral interest given up by the Company, with any excess consideration accounted for
in profit.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5pt; text-align: justify; text-indent: -0.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">When
a project is deemed to no longer have commercially viable prospects to the Company, exploration and evaluation expenditures in respect
of that project are deemed to be impaired. As a result, those exploration and evaluation expenditure costs, in excess of estimated recoveries,
are written off to the statement of comprehensive loss.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5pt; text-align: justify; text-indent: -0.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Impairment
of assets</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Impairment
tests on non-financial assets, including exploration and evaluation assets, property, plant and equipment, are subject to impairment
tests whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Where the carrying value
of an asset exceeds its recoverable amount, which is the higher of value in use and fair value less costs to sell, the asset is written
down accordingly.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5pt; text-align: justify; text-indent: -0.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Where
it is not possible to estimate the recoverable amount of an individual asset, the impairment test is carried out on the asset&#8217;s
cash-generating unit, which is the lowest group of assets in which the asset belongs for which there are separately identifiable cash
inflows that are largely independent of the cash inflows from other assets.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5pt; text-align: justify; text-indent: -0.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">An
impairment loss is charged to the profit or loss, except to the extent they reverse gains previously recognized in other comprehensive
loss.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"> <span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Leases</b></span></p>



<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5pt; text-align: justify; text-indent: -0.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">At
commencement of a contract, the Company assesses whether a contract is, or contains, a lease by determining whether the contract conveys
the right to control the use of an identified asset for a period of time in exchange for consideration. A right-of-use (the &#8220;ROU
&#8220;) asset and lease liability are recognized at the lease commencement date. The lease liability is initially measured at the present
value of all future lease payments that have not been paid as of the commencement date of the lease, discounted using the Company&#8217;s
incremental borrowing rate, unless the rate implicit in the lease is readily determinable. The ROU asset is initially measured at cost,
which is calculated as the initial amount of the lease liability, with an adjustment for any initial direct costs incurred, plus adjustments
for any lease payments made in advance of the commencement date, and less any lease incentives received. Subsequent to initial recognition,
the ROU asset is depreciated on a straight-line basis over the term of the lease or the estimated useful life, with inclusion for any
options to extend that the Company reasonably expects to exercise.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ROU
assets are tested for impairment in accordance with IAS 36 Impairment of Assets. The right-of-use asset is periodically reduced by impairment
losses, if any, and adjusted for certain remeasurements of the lease liability. The lease liability is remeasured when there is a change
in future lease payments arising from a change in an index or rate, if there is a change in the Company&#8217;s estimate of the amount
expected to be payable under a residual value guarantee, or if the Company changes its assessment of whether it will exercise a purchase,
extension or termination option. These adjustments are recorded through profit or loss.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Property,
Plant and Equipment</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Property,
plant and equipment is stated at historical cost less accumulated depreciation and accumulated impairment losses.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Subsequent
costs are included in the asset&#8217;s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that
future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying
amount of a significant replaced part is derecognized. All other repairs and maintenance are charged to the consolidated statement of
comprehensive loss during the financial period in which they are incurred. Gains and losses on disposals are determined by comparing
the proceeds with the carrying amount and are recognized in profit or loss.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Depreciation
is calculated on a straight-line method to charge the cost, less residual value, of the assets to their residual values over their estimated
useful lives. The depreciation rate applicable to each category of Property, plant and equipment is as follows:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; margin-left: auto; width: 90%; border-collapse: collapse; margin-right: auto">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; width: 49%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Equipment
    </b></span></td>
    <td style="padding-bottom: 1.5pt; width: 2%">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; width: 49%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Estimated
    useful life (years)</b></span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Exploration
    equipment</span></td>
    <td>&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">5</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Computer
    software</span></td>
    <td>&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">2</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Computer
    equipment</span></td>
    <td>&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1-2</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif">Vehicles</td>
    <td>&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif">4</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Furniture
    and fixture</span></td>
    <td>&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">10</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Building</span></td>
    <td>&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">25</span></td></tr>
  </table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Share
capital</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Common Shares and warrants to purchase Common Shares are classified as equity instruments.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Incremental
costs directly attributable to the issue of new shares, warrants or options are shown in equity as a deduction from the proceeds.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Proceeds
received on the issuance of units, consisting of Common Shares and warrants are allocated to share capital.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Share-based
payments</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Where
equity-settled share options are awarded to employees, the fair value of the options at the date of grant is recognized over the vesting
period. Performance vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each
reporting date so that, ultimately, the cumulative amount recognized over the vesting period is based on the number of options that eventually
vest. Non-vesting conditions and market vesting conditions are factored into the fair value of the options granted. As long as all other
vesting conditions are satisfied, a charge is made irrespective of whether these non-vesting and market vesting conditions are satisfied.
The cumulative expense is not adjusted for failure to achieve a market vesting condition or where a non-vesting condition is not satisfied.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Where
the terms and conditions of options are modified, the increase in the fair value of the options, measured immediately before and after
the modification, is also recognized over the remaining vesting period.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Where
equity instruments are granted to non-employees, they are recorded at the fair value of the goods or services received. Amounts related
to the issuance of shares are recorded as a reduction of share capital.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">When
the value of goods and services received in exchange for the share-based payment cannot be reliably estimated, the fair value is measured
by use of a valuation model. The expected life used in the model is adjusted, based on management&#8217;s best estimate, for the effects
of non-transferability, exercise restrictions, and behavioural considerations.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">All
equity-settled share-based payments are reflected in share-based payments reserve, until exercised. Upon exercise shares are issued from
the treasury and the amount reflected in share-based payments reserve is credited to share capital along with any consideration paid.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Deferred
Share Units (&#8220;DSUs&#8221;)</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
the year ended December 31, 2022, the Company approved the adoption of a DSU plan (the &#8220;DSU Plan&#8221;). In accordance with IFRS 2 Share Based Payments,
this plan is a cash-settled share-based compensation program whereby the Company records the fair value of the liability at the date
upon which it is incurred and adjusts the liability to the fair value at the end of each reporting period and at the date of
settlement, with any changes in fair value recognized in profit or loss for the period.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
DSU Plan enables the Company upon approval by the directors to grant DSU&#8217;s to eligible non-management directors. Upon granting
DSU&#8217;s, the Company records stock-based compensation based on the amount of units granted multiplied by the volume weighted
average price of Common Shares for the last five trading days on the TSXV (the &#8220;5-day-VWAP&#8221;) immediately preceding the
date of the grant.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The DSUs credited to the account of a director may only be redeemed following the date upon which the holder ceases
to be a director. Depending upon the country of residence of a director, the DSUs may be redeemed at any time prior to December 15 in
the calendar year following the year in which the holder ceases to be a director, and may be redeemed in as many as four installments.
Upon redemption, the holder is entitled to a cash payment equal to the number of units redeemed multiplied by the 5-day-VWAP of the Company&#8217;s
common shares on that date. The Company may elect, in its sole discretion, to settle the value of the DSUs redeemed in the Company&#8217;s
common shares on a one-for-one basis, provided shareholder approval has been obtained on or prior to the relevant redemption date.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Loss
per share</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company uses the treasury stock method to compute the dilutive effect of options, warrants and similar instruments. Under this method
the dilutive effect on loss per Common Share is recognized on the use of the proceeds that could be obtained upon exercise of options,
warrants and similar instruments. It assumes that the proceeds would be used to purchase Common Shares at the average market price during
the period.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Basic
loss per Common Share is calculated using the weighted average number of Common Shares outstanding during the period and does not include
outstanding options and warrants. Dilutive loss per Common Share is not presented differently from basic loss per share as the conversion
of outstanding stock options and warrants into Common Shares would be anti-dilutive.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Income
taxes</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Income
tax expense comprises current and deferred tax. Current tax and deferred tax are recognized in net income except to the extent that it
arises in a business combination, or from items recognized directly in equity or other comprehensive loss.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Current
income tax assets and liabilities for the current period are measured at the amount expected to be recovered from or paid to the taxation
authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting
date, in the countries where the Company operates and generates taxable income.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Current
income tax relating to items recognized directly in other comprehensive loss or equity is recognized in other comprehensive lost or equity
and not in profit or loss. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable
tax regulations are subject to interpretation and establishes provisions where appropriate.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Deferred
income tax is provided using the asset and liability method of temporary differences at the reporting date between the tax bases of assets
and liabilities and their carrying amounts for financial reporting purposes.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
carrying amount of deferred income tax assets is reviewed at the end of each reporting period and recognized only to the extent that
it is probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilized.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Deferred
income 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 tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting
period.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Deferred
income tax assets and deferred income tax liabilities are offset, only if a legally enforceable right exists to set off current tax assets
against current income tax liabilities and the deferred income taxes relate to the same taxable entity and the same taxation authority.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Accounting
standards and amendments issued but not yet effective:</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Certain
pronouncements were issued by the IASB or the IFRIC that are mandatory for accounting periods commencing on or after January 1, 2023.
Many are not applicable or do not have a significant impact to the Company and have been excluded. The following have not yet been
adopted and are being evaluated to determine their impact on the Company.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">IAS
1 &#8211; Presentation of Financial Statements (&#8220;IAS 1&#8221;) was amended in January 2020 to provide a more general approach to
the classification of liabilities under IAS 1 based on the contractual arrangements in place at the reporting date. The amendments clarify
that the classification of liabilities as current or non-current is based solely on a company&#8217;s right to defer settlement at the
reporting date. The right needs to be unconditional and must have substance. The amendments also clarify that the transfer of a company&#8217;s
own equity instruments is regarded as settlement of a liability, unless it results from the exercise of a conversion option meeting the
definition of an equity instrument. The amendments are effective for annual periods beginning on January 1, 2024.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">IAS
1 &#8211; In February 2021, the IASB issued &#8216;Disclosure of Accounting Policies&#8217; with amendments that are intended to help
preparers in deciding which accounting policies to disclose in their financial statements. The amendments are effective for year ends
beginning on or after January 1, 2023.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">IAS
8 &#8211; In February 2021, the IASB issued &#8216;Definition of Accounting Estimates&#8217; to help entities distinguish between accounting
policies and accounting estimates. The amendments are effective for year ends beginning on or after beginning on or after January 1,
2023.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Critical
accounting judgments, estimates and assumptions</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
preparation of the consolidated financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions
that can affect reported amounts of assets, liabilities, revenue and expenses and the accompanying disclosures. Estimates and assumptions
are continuously evaluated and are based on management&#8217;s historical experience and on other assumptions believed to be reasonable
under the circumstances. However, different judgments, estimates and assumptions could result in outcomes that require a material adjustment
to the carrying amount of assets or liabilities affected in future periods.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
area involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated
financial statements are:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>RTO
&#8211; fair value </b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Fair
value considerations for the RTO transactions are assessed in accordance with IFRS. These considerations are based on various factors
such as the fair value of the assets acquired or liabilities assumed, the fair value of equity instruments issued, and any related acquisition
costs.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
assumptions and estimates used in arriving at fair value figures are based on management&#8217;s judgments and relevant market data.
The fair value of the equity instruments issued is determined based on market prices or valuation techniques that take into account factors
such as expected share price volatility.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Recoverability
of exploration and evaluation assets </b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
ultimate recoverability of the exploration and evaluation assets with a carrying value of $31,823,982 at December 31, 2022, is dependent
upon the Company&#8217;s ability to obtain the necessary financing to complete the exploration and development and commence profitable
production at its projects, or alternatively, upon the Company&#8217;s ability to dispose of its interests therein on an advantageous
basis. A review of the indicators of potential impairment is carried out at least at each period end.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Management
undertakes a periodic review of these assets to determine whether any indication of impairment exists. Where an indicator of impairment
exists, a formal estimate of the recoverable amount of the assets is made. An impairment loss is recognized when the carrying value of
the assets is higher than the recoverable amount and when mineral license tenements are relinquished or have lapsed. In undertaking this
review, management of the Company is required to make significant estimates of, among other things, discount rates, commodity prices,
availability of financing, future operating and capital costs and all aspects of project advancement. These estimates are subject to
various risks and uncertainties, which may ultimately have an effect on the expected recoverability of the carrying values of the assets.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Restoration
provisions</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Management&#8217;s
best estimates regarding the restoration provisions are based on the current economic environment. Changes in estimates of contamination,
restoration standards and restoration activities result in changes to provisions from period to period. Actual restoration provisions
will ultimately depend on future market prices for future restoration obligations. Management has determined that the Company has no
restoration obligations at December 31, 2022.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Going
concern</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Consolidated
financial statements are prepared on a going concern basis unless management either intends to liquidate the Company or has no realistic
alternative to do so. Assessment of the Company&#8217;s ability to continue as a going concern requires the consideration of all available
information about the future, which is at least, but not limited to, twelve months from the end of the reporting period. This information
includes estimates of future cash flows and other factors, the outcome of which is uncertain. When management is aware, in making its
assessment, of material uncertainties related to events or conditions that may cast substantial doubt upon the Company&#8217;s ability
to continue as a going concern those uncertainties are disclosed.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Valuation
of share-based compensation</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company estimates the fair value of warrants and options using the Black-Scholes Option Pricing Model which requires significant estimation
around assumptions and inputs such as expected term to maturity, expected volatility and expected forfeiture rates. Note 8 of the consolidated
financial statements contains further details of significant assumptions applied to these areas of estimation.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Deferred
income tax</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Tax
benefits from uncertain tax positions may be recognized when it is probable that the Company will be able to use deductible temporary
differences against taxable profit: (i) whether a tax position, based solely on its technical merits, is probable to be sustained upon
examination, and (ii) measuring the tax benefit as the expected value or most likely amount taking into consideration which method better
predicts the realized amounts upon ultimate settlement.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Furthermore,
the Company uses the asset and liability method in accounting for deferred income taxes and mining duties. Under this method, deferred
income taxes are recognized for future income tax.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
preparing these estimates, management is required to interpret substantially enacted legislation as well as economic and business conditions
along with management&#8217;s tax and corporate structure plans which may impact taxable income in future periods.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Estimated
useful lives and depreciation of property, plant and equipment</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Depreciation
of property, plant and equipment is dependent upon estimates of useful lives which are determined through the exercise of judgment. The
assessment of any impairment of these assets is dependent upon estimates of recoverable amounts that take into account factors such as
economic and market conditions and the useful lives of the assets.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="b_006"></span>ITEM
6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The names, place of residence, positions within the Company and the principal
occupations of the directors and senior officers of the Company are set out below. Directors are elected annually by a majority vote of the shareholders and hold office until the next general meeting of
the shareholders. Officers are appointed by, and serve at the discretion of, the board of directors.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>A.
Directors and senior management.</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 90%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">
    <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left; width: 29%"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Name,
Municipality of Residence Principal Occupation and Position and Position with the Company</b></span></p></td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; width: 2%; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: center; width: 8%"><b>Age</b></td>
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    <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; width: 59%; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>During
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: white">
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    <td style="text-align: center">56</td>
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: white">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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    <td>&#160;</td>
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    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: center">73</td>
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    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Director
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    including Medoro Resources Ltd., St. Andrew Goldfields Ltd., First Uranium Corp., Defiance Mining Corp./Geomaque Explorations Ltd,
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    Inc.</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: white">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: center">&#160;</td>
    <td>&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: white">
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    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Director
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    and Health and Safety Committee.</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: white">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: center">&#160;</td>
    <td>&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: white">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Don
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    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: center">46</td>
    <td>&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Director
    of PNRL since October 12, 2022; currently the Chief Financial Officer at Ohio Truck Sales; spent most of his career working internationally
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: white">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: center">&#160;</td>
    <td>&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: white">
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    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Director,
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    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: center">63</td>
    <td>&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Director
    and CEO of PNRL, and prior to the RTO, he was director and CEO of NAN since December 2014; Director of Era Resources Inc.,
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: white">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: center">&#160;</td>
    <td>&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: white">
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    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Toronto,
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    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: center">54</td>
    <td>&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">President
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: white">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: center">&#160;</td>
    <td>&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: white">
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    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Montreal,
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    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="text-align: center">48</td>
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    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">CFO
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: white">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="text-align: center">&#160;</td>
    <td>&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: white">
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    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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  </table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>B.
Compensation.</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Management
compensation is determined by the Board of Directors for services provided. During the year ended December 31, 2022, aggregate compensation
paid or accrued to all directors and officers, including private companies controlled by directors and officers, as a group, was $2,418,984.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following table presents information concerning all compensation paid, payable, awarded, granted, given, or otherwise provided, directly
or indirectly, to each officer and director by the Company and its subsidiaries for services in all capacities to the Company during
the 2022 financial year:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>

<p style="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Notes:</p>

<p style="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<table cellspacing="0" cellpadding="0" style="font: 10.5pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-align: justify; width: 0.25in"><span style="font-size: 10pt">(1)</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">Financial year ended December 31.</span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-size: 10pt">(2)</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">Paid to Breniklan Limited and Breniklan Botswana Pty, the private companies controlled by Mr. Morrison, which provide the services of Mr. Morrison as the Company&#8217;s Chief Executive Officer. Mr. Morrison did not receive any compensation for his services as a director of the Company or its subsidiaries in 2022.</span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-size: 10pt">(3)</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">Mr. Whiteford was the Director of the Company from August 3, 2022 to March 1, 2023 and was appointed as President of the Company on March 2, 2023.</span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-size: 10pt">(4)</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">Paid to Consultations WJZHU Inc., a private company controlled by Ms. Zhu, which provides the services of Ms. Zhu as the Chief Financial Officer of the Company.</span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-size: 10pt">(5)</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">Paid to Moran Professional Corporation, a private company controlled by Mr. Moran, which provides the services of Mr. Moran as the Chief Legal Officer of the Company.</span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-size: 10pt">(6)</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">Paid to Latitude 45, a private company controlled by Mr. Riopel, which provides the services of Mr. Riopel as Executive Chairman. Mr. Riopel did not receive any compensation for his services as a director of the Company or its subsidiaries in 2022.</span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-size: 10pt">(7)</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">Mr. Hick was appointed to the board of directors of the Company on February 26, 2020.</span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-size: 10pt">(8)</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">Mr. O&#8217;Reilly was appointed to the board of directors of the Company on August 3, 2022.</span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-size: 10pt">(9)</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">Mr. Newberry was appointed to the board of directors of the Company on October 12, 2022.</span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-size: 10pt">(10)</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">Value of the DSU based on 5-day-VWAP of the Company&#8217;s common shares on December 31, 2022.</span></td></tr>
  </table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
the year ended December 31, 2022, the Company paid $373,472 (including cash and DSUs) in compensation to non-executive directors for acting
as directors. The Company does not have any pension or retirement plans, nor does the Company compensate its directors and officers by
way of any material bonus or profit sharing plans.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
connection with the RTO, the Company adopted an amended Incentive Stock Option Plan providing the authority to grant options to
directors, officers, employees and consultants enabling them to acquire, in aggregate, up to 22,600,000 stock options of the
Company. Under the Incentive Stock Option Plan, the exercise price of each option typically equals the market price or a discounted
price of the Company&#8217;s stock as calculated on the date of grant. The options can be granted for a maximum term of 10
years.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">During
the year ended December 31, 2022, the Company granted an aggregate total of 2,600,000 stock options to employees, directors and
consultants with a maximum term of 5 years. All such options then outstanding vested immediately upon the completion of the RTO and
are exercisable at $2.62 per share. The Company calculates the fair value of all stock options using the Black-Scholes Option
Pricing Model. The fair value of all options, including those granted during the year ended December 31, 2022 as well as the ones
granted in prior year but not vested until the completion of the RTO, amounted to $7,731,117 and was recorded as a share-based
payment expense.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Effective
December 2022, the Company approved a DSU Plan that enables the Company
upon approval by the directors to grant DSUs to eligible non-management directors. The DSUs credited to the account of a director may
only be redeemed following the date upon which the holder ceases to be a director. Depending upon the country of residence of a director,
the DSUs may be redeemed at any time prior to December 15 in the calendar year following the year in which the holder ceases to be a
director and may be redeemed in as many as four installments. Upon redemption, the holder is entitled to a cash payment equal to the
number of units redeemed multiplied by the 5-day-VWAP of the Common Shares on that date. The Company may elect, in its
sole discretion, to settle the value of the DSUs redeemed in the Common Shares on a one-for-one basis, provided shareholder
approval has been obtained on or prior to the relevant redemption date.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">During
the year ended December 31, 2022, the Company granted 200,000 DSUs to the non-management directors at a fair value of $298,000 recorded
as share based compensation, and a DSU liability of the same amount.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>C.
Board practices.</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Pursuant
to the provisions of the OBCA, the Company&#8217;s directors are elected annually at the regularly scheduled annual general meeting of
shareholders. Each elected director is elected for a one-year term.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company has no arrangements in place for provision of benefits to its directors or upon their retirement except DSUs.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company has five committees of its Board of Directors in place:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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    Committee (&#8220;ARMC&#8221;);</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Disclosure
    Committee.</span></td></tr>
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
ARMC is made up of Don Newberry (Chair), John Hick and William O&#8217;Reilly. The ARMC is responsible for providing oversight
of the Company&#8217;s financial reporting, internal controls, and risk management processes. Key responsibilities include ensuring
the accuracy, completeness, and reliability of the financial statements and disclosures, effectiveness of internal controls,
overseeing risk management processes, ensuring compliance with applicable laws, regulations, and internal policies and
procedures.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
HRCC is made up of John Hick (Chair), Don Newberry and William O&#8217;Reilly. In addition to making recommendations to the Board of
Directors of the Company as to appropriate salary and other compensation for senior executives and directors of the Company, the
HRCC makes recommendations to the Board of Directors of the Company as to the level of stock option compensation and DSUs granted by
the Company.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Technical Oversight Committee is made up of Don Newberry, Keith Morrison and Charles Riopel. The Technical Oversight Committee
provides general oversight and support to the Geological team and identifies technical issues and tasks necessary to support the
activities of the Company.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5pt; text-align: justify; text-indent: -0.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5pt; text-align: justify; text-indent: -0.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
CGNC is made up of William O&#8217;Reilly (Chair), Don Newberry and John Hick. The CGNC is responsible for ensuring that the
Company&#8217;s governance practices are effective, transparent, and aligned with best practices. Key responsibilities include board
composition and nominations, governance policies and practices, director orientation and education as well as board evaluation and
succession planning.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5pt; text-align: justify; text-indent: -0.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Disclosure Committee is made up of John Hick, Charles Riopel and Keith Morrison, and includes Sean Whiteford and Sarah Zhu as
representatives from management. The purpose of the Disclosure Committee is to oversee the Company&#8217;s implementation of
programs, policies and procedures that are designed to respond to the various compliance and regulatory risks facing the Company.
The Disclosure Committee meets as required to oversee the dissemination of all corporate material.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>D.
Employees.</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration: underline">Botswana</span></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Upon
the closing of the asset acquisition of the Selebi Mine, the Company started to develop its own local workforce. As of December 31,
2022, The Company had 106 employees at its Botswana operations, of which 95 were engaged in technical work including geology,
drilling, geophysics, engineering and care and maintenance, and 11 were engaged in back-office support and logistics. There were no
salaried employee in Botswana prior to 2022.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company is committed to promoting a safe and healthy workplace environment, and actively participates in training programs to ensure
employees are aware of proper safety and health procedures. The Company also provides resources and support for employees&#8217; mental
and emotional wellbeing.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company values diversity and inclusivity and strives to create a workplace culture that respects and values all employees&#8217; backgrounds
and identities.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company offers competitive compensation and benefits packages, including housing allowance, health insurance, and employee assistance
programs. The employees receive performance evaluations and feedback regularly, and the Company encourages ongoing professional development
and training.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company has implemented measures to protect employee data privacy and maintain confidentiality, in accordance with applicable laws and
regulations.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration: underline">Canada
and Barbados</span></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of December 31, 2022, the Company had no salaried employees at its Canadian or Barbados operations, only contracted
consultants.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


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    <div style="break-before: page; margin-top: 6pt"><p style="margin: 0pt">&#160;</p></div>
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>E.
Share ownership.</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following table sets forth certain information regarding beneficial ownership of the Company&#8217;s shares as of the date of this report
by each of the Company&#8217;s directors and executive officers and all current directors and executive officers as a group. The table
does not reflect Common Shares held of record by depositories.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company adopted an Incentive Stock Option Plan providing the authority to grant options to directors, officers, employees and
consultants enabling them to acquire up to 22,600,000 stock options of the Company. Under the Incentive Stock Option Plan, the
exercise price of each option typically equals to the last closing price per share on the trading day immediately preceding the day
on which the Company announces the grant of the option, less applicable discount, if any, permitted by the policies of the TSXV and
approved by the Board of Directors. The options can be granted for a maximum term of 10 years. The following table sets forth
certain information regarding options granted to the Company&#8217;s directors and executive officers.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

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  <tr style="vertical-align: bottom; background-color: White">
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
total of twenty percent (20%) of the Common Shares outstanding from time to time to a maximum of 22,6000,000 are
reserved for issuance pursuant to stock options under the Incentive Stock Option Plan. During the year 2022, the
Company granted an aggregate total of 2,600,000 stock options to directors, officers, employees and consultants.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="b_007"></span>ITEM
7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS.</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>A.
Major shareholders.</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following table sets forth certain information regarding beneficial ownership of the Company&#8217;s shares as of the date of this
report by each person who is known to own beneficially more than 5% of the outstanding Common Shares. The table does
not reflect Common Shares held of record by depositories but does include currently exercisable options and warrants which are
included in the calculation of percentage of class ownership for each individual holder. As of the date of this Annual Report, there
were 120,958,527 Common Shares issued and outstanding, 65,659 preferred shares outstanding, 10,407,044 exercisable options,
1,510,399 warrants and 322,905 DSUs. On a fully-diluted basis on the date of the report, there were 133,212,006 Common Shares outstanding.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="border-bottom: Black 1.5pt solid; font-weight: bold">Name of Beneficial Owner</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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                                                                                <p style="margin-top: 0; margin-bottom: 0">Outstanding Shares</p></td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 60%; text-align: left">John Chisholm</td><td style="width: 2%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 16%; text-align: right">7,740,396</td><td style="width: 1%; text-align: left"><sup>(1)</sup></td><td style="width: 2%">&#160;</td>
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    <td style="text-align: left">Keith Morrison</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">7,233,523</td><td style="text-align: left"><sup>(2)</sup></td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">5.49</td><td style="text-align: left">%</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left">Sheldon Inwentash</td><td>&#160;</td>
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</table>

<p style="margin: 0">&#160;</p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="text-align: left; width: 0.5in">(1) </td>
    <td style="text-align: left">Includes 6,477,793 shares held through 2412503 Ontario Inc.</td></tr>
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    <td style="text-align: left">(2) </td>
    <td style="text-align: left">Includes 3,608,763 shares held through Breniklan Ltd.</td></tr>
  </table>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
change in the percentage ownership held by major shareholders during the past three years is as follows:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
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    <td>&#160;</td><td style="font-weight: bold">&#160;</td>
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    <td style="border-bottom: Black 1.5pt solid; font-weight: bold">Name of Beneficial Owner</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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    <td style="width: 46%; text-align: left">John Chisholm</td><td style="width: 2%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 14%; text-align: right">6.40</td><td style="width: 1%; text-align: left">%</td><td style="width: 2%">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">%</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Sentient Group GP IV</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: White">
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">No major shareholder listed in this section has different voting rights than any other shareholders of the Company, which is one
vote per Common Share owned.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Effective
August 3, 2022, in connection with the closing of the RTO, the Company completed a share consolidation of the Company&#8217;s issued
and outstanding Common Shares on the basis of one (1) post-consolidation Common Share for every five (5) pre-consolidation
common shares issued and outstanding.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


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    <div style="break-before: page; margin-top: 6pt"><p style="margin: 0pt">&#160;</p></div>
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
August 3, 2022, PNRC combined with NAN in a reverse takeover transaction whereby shareholders of PNRC exchanged their shares at a rate
of 1.054 shares of NAN for each share of PNRC, after giving effect to a 5-to-1 share consolidation for each outstanding share of NAN.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company issued 82,157,536 Common Shares (on a post-consolidation basis) in exchange for 77,948,368 outstanding shares
of PNRC immediately prior to the effective time of the RTO. Immediately after giving effect
to the RTO, the Company was owned approximately 72.1% by persons who were shareholders of PNRC prior to the RTO and 27.9%
by persons who were shareholders of NAN prior to the RTO.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
at December 31, 2022, the Company had 116,521,343 Common Shares issued and outstanding, (December 31, 2021 &#8211; 80,820,623 and
December 31, 2020 &#8211; 67,543,995).</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>B.
Related party transactions.</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Related
party transactions were in the normal course of business and have been recorded at the exchange amount which is the fair value agreed
to between the parties. Amounts due to related parties are unsecured, non-interest bearing and without specific terms of repayment.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Related
party balances - The following amounts due to related parties are included in trade payables and accrued liabilities:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(All
amounts in table are expressed in thousands of Canadian dollars)</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 80%">
  <tr style="vertical-align: bottom">
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    <td colspan="2" style="font-weight: bold; text-align: center">December 31,</td><td style="font-weight: bold">&#160;</td><td style="font-weight: bold">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center">December 31,</td><td style="font-weight: bold">&#160;</td></tr>
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    <td style="padding-bottom: 1.5pt">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">These
amounts are unsecured, non-interest bearing and have no fixed terms of repayment.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">During
the year ended December 31, 2022, ThreeD Capital Inc. subscribed for a further 1,213,538 common shares of PNRC (1,279,069 shares on a
post-RTO and post-consolidation basis), for a further investment of US$2,427,076 (2021 - $374,123). As of December 31, 2022, ThreeD Capital
Inc. beneficially owned 8,662,347 shares (2021 - 7,383,278 shares) on a post-RTO and post-consolidation basis, constituting approximately
7.5% (2021 &#8211; 9.14%) of the current issued and outstanding shares of the Company.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Between
March 2, 2022 and March 3, 2022, to meet its short-term liquidity needs, PNRC issued promissory notes to its officers and directors as well as its shareholders as
below:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(All
amounts in table are expressed in thousands of Canadian dollars)</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 80%">
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 78%; text-align: justify">Directors and Officers of the Company</td><td style="width: 2%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 18%; text-align: right">35</td><td style="width: 1%; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: justify">ThreeD Capital Inc.</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">762</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify; padding-bottom: 1.5pt">NAN</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">1,270</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="padding-bottom: 2.5pt">&#160;</td><td style="font-weight: bold; padding-bottom: 2.5pt">&#160;</td>
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  </table>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The promissory notes had an interest rate of 10% per annum and the holder had an option to convert the principal amount
thereunder plus any accrued interest thereon to common shares of PNRC prior to April 30, 2022.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
April 30, 2022, all amounts owing in respect of the above promissory notes were repaid in full by payment of cash in an amount of
$2,018,568, including interest and fees, and by issuing 310,000 common shares of PNRC (326,740 Common Shares on a
post-RTO and post-consolidation basis).</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


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    <div style="break-before: page; margin-top: 6pt"><p style="margin: 0pt">&#160;</p></div>
    <!-- Field: /Page -->

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(b)
Key Management Compensation</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Key
management personnel are defined as members of the Board of Directors and senior officers.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Key
management compensation was:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(All
amounts in table are expressed in thousands of Canadian dollars)</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-left: auto; border-collapse: collapse; width: 80%; margin-right: auto">
  <tr style="vertical-align: bottom">
    <td>&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 46%; text-align: left">Management fees &#8212; expensed</td><td style="width: 2%">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: White">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">132</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">31</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">108</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">44</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; padding-bottom: 1.5pt">Share-base payments</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">4,623</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; padding-bottom: 2.5pt">Total</td><td style="padding-bottom: 2.5pt">&#160;</td>
    <td style="border-bottom: Black 2.5pt double; text-align: left">&#160;</td><td style="border-bottom: Black 2.5pt double; text-align: right">7,145</td><td style="padding-bottom: 2.5pt; text-align: left">&#160;</td><td style="padding-bottom: 2.5pt">&#160;</td>
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    <td style="border-bottom: Black 2.5pt double; text-align: left">&#160;</td><td style="border-bottom: Black 2.5pt double; text-align: right">287</td><td style="padding-bottom: 2.5pt; text-align: left">&#160;</td></tr>
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>C.
Interests of experts and counsel</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
required.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="b_008"></span>ITEM
8. FINANCIAL INFORMATION</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>A.
Consolidated Statements and Other Financial Information</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">See
Item 17 and the financial statements and accompanying notes beginning on page F-1.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>B.
Significant Changes</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
April 26, 2022, PNRC and NAN entered into a definitive amalgamation agreement (the &#8220;Amalgamation Agreement&#8221;) in respect of
their previously-announced RTO transaction, pursuant to which PNRC would be the surviving public entity following the closing of the RTO.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration: underline">Transaction
Particulars</span></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Pursuant
to the Amalgamation Agreement:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">NAN&#8217;s
    subsidiary, 1000178269 Ontario Inc. (&#8220;NAN Subco&#8221;), amalgamated with PNRC under Section 174 of the OBCA to form one corporation;
    </span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Holders
    of PNRC shares exchanged their shares at a rate of 1.054 shares of NAN for each share of PNRC (the &#8220;Exchange Ratio&#8221;),
    after giving effect to a 5-to-1 share consolidation for each outstanding share of NAN; and </span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
    transactions resulted in an RTO of the Company in accordance with the policies of the TSXV, all in the manner contemplated by, and
    pursuant to, the terms and conditions of the Amalgamation Agreement. </span></td></tr>
  </table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
connection with the RTO, NAN has, among other things: (i) changed its name to &#8220;Premium Nickel Resources Ltd.&#8221;; (ii) changed
its stock exchange ticker symbol to &#8220;PNRL&#8221;; and (iii) reconstituted the Board of Directors and management of the Company.
The outstanding options of PNRC immediately prior to the effective time of the RTO were exchanged and adjusted pursuant to the terms
of the Amalgamation Agreement such that holders thereof were entitled to acquire, following the closing of the RTO, options of the Company
after giving effect to the Exchange Ratio, as applicable.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Before
the closing of the RTO, NAN owned 7,667,707 common shares of PNRC and a common shares purchase warrant which entitled NAN to
purchase common shares of PNRC, for up to 15% of the capital of PNRC, upon payment of US $10,000,000 prior to the fifth anniversary
of the date of issue (the &#8220;15% Warrant&#8221;). Prior to the date that the amalgamation became effective, the PNRC shares and the 15% warrant held by NAN were
contributed to NAN Subco, resulting in such securities being cancelled by operation of the
triangular amalgamation.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Pursuant
to the Amalgamation Agreement, the Company issued 82,157,536 Common Shares (on a post-consolidation basis) in exchange
for 77,948,368 outstanding shares of PNRC immediately prior to the effective time of the RTO. Immediately after giving effect to the
RTO, the Company was owned approximately 72.1% by persons who were shareholders of PNRC prior to the RTO and 27.9% by persons
who were shareholders of NAN prior to the RTO.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Prior
to this exchange, NAN had 31,748,399 shares outstanding (on a post-consolidation basis). Taking into account the composition of the
Board of Directors and senior management and the relative ownership percentages of NAN and PNRC shareholders in the newly combined
enterprise, from an accounting perspective PNRC is considered to have acquired NAN, and hence the transaction has been recorded as a
reverse takeover.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
financial reporting purposes, the Company is considered to be a continuation of PNRC, the legal subsidiary, except with regard to the
authorized and issued share capital, which is that of NAN, the legal parent. The consolidated statements of operations and cash flows
for the year ended December 31, 2022 include the results of operations and cash flows of PNRC for the period from January 1, 2022
to August 3, 2022, and the results of operations and cash flows of both PNRC and NAN for the period from August 3, 2022 to December 31,
2022. The primary reason for the business combination was to create a leading international nickel-copper-cobalt mineral exploration
company. With a portfolio of nickel-copper cobalt assets, the Company will have the ability to execute a phased strategy and focus in
the short term on developing the Selebi Mine in Botswana, its material property.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
substance of the transaction is a reverse acquisition of a non-operating company. The transaction does not constitute a business acquisition
as the amalgamation does not meet the definition of a business combination under IFRS 3. As a result, the transaction is accounted for
as a capital transaction with NAN being identified as the accounting acquiree and the equity consideration being measured at fair value
(&#8220;FV&#8221;).</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
purchase price has been determined based on the number of shares that PNRC would have had to issue on the date of closing to give the
owners of NAN the same percentage equity (27.9%) of the combined entity as they hold subsequent to the reverse takeover.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
costs of the acquisition have been allocated as follows:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-left: auto; border-collapse: collapse; width: 90%; margin-right: auto">
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 78%; text-align: justify">FV of shares transferred</td><td style="width: 2%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 18%; text-align: right">77,431,152</td><td style="width: 1%; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: justify">FV of options, warrants and agent warrants</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">9,665,577</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify">FV of preferred shares</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">31,516</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: justify; padding-bottom: 1.5pt">Settlement of pre-existing relationship &#8211; 15% warrant and shares*</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(47,985,862</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify; padding-bottom: 2.5pt">Total FV of consideration transferred</td><td style="padding-bottom: 2.5pt">&#160;</td>
    <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">39,142,383</td><td style="padding-bottom: 2.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: justify">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify">Cash</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">11,051,917</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: justify">Trade and other receivables</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">450,522</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify">Property, plant and equipment</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">14,111</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: justify; padding-bottom: 1.5pt">Trade payables and accrued liabilities</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(1,548,582</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify">Net assets acquired</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">9,967,968</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: justify; padding-bottom: 1.5pt">Loss on acquisition</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">29,174,415</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify; padding-bottom: 2.5pt">&#160;</td><td style="padding-bottom: 2.5pt">&#160;</td>
    <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">39,142,383</td><td style="padding-bottom: 2.5pt; text-align: left">&#160;</td></tr>
  </table>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i><span style="text-decoration: underline">*Pre-existing
relationship:</span> Before the closing of the RTO, NAN owned 7,667,707 common shares of PNRC and a 15% warrant which entitled NAN to
purchase common shares of PNRC, for up to 15% of the then outstanding capital of PNRC, upon payment of US $10,000,000 prior to the
fifth anniversary of the date of issue. Prior to the date that the amalgamation became effective, the PNRC shares and the 15%
warrant held by NAN were contributed to NAN Subco, as part of the securities contribution, resulting in such securities being
cancelled by operation of the triangular amalgamation. </i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Prior
to the RTO, the fair value of the 15% warrant and the shares held by NAN were $28,275,255 and $19,710,608, respectively. The fair value
of the shares was calculated based on the last offer price of PNRC financing prior to the RTO, and the fair value of the warrants was
calculated using the Black-Sholes Model with the following assumptions: expected life of 2.57 years, expected dividend yield of 0%, a
risk-free rate of 3.14% and an expected volatility of 141.63%. As they were the securities contributed by NAN on the closing of the RTO,
the fair value of the warrants and shares were included as part of the consideration on the acquisition date. </i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Pursuant
to the RTO, an aggregate of 8,827,250 options to purchase Common Shares (&#8220;Replacement Options&#8221;) were issued
(on a post 5:1 consolidation basis) to the former holders of options to purchase common shares of PNRC (prior to the RTO) (&#8220;PNRC
Options&#8221;) in exchange for 8,375,000 PNRC Options. The Replacement Options issued to the former holders of PNRC Options were on
the same terms and conditions as those exchanged by PNRC holders except all the previously unvested options vested immediately. Immediately
prior to the completion of the RTO, PNRC had 2,383,333 unvested options outstanding which re-evaluated at a FV of $5,138,022 upon the
completion of the RTO according to IFRS 2.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Given
that the RTO has been accounted for as a reverse takeover of NAN by PNRC, from an accounting perspective, PNRC is deemed to have issued
options and warrants to the former security holders of NAN. On August 3, 2022, NAN had 2,995,794 options and 2,228,340 warrants outstanding,
respectively, as well as 118,186 preferred shares that could be converted to 13,131 common shares of NAN (on a post-consolidation basis).
The aggregate fair value of such 2,995,794 options, 2,228,340 warrants and 118,186 preferred shares of NAN was $9,665,577, and this amount
has been included as a component of the purchase price. Costs related to the transaction were $2,327,125 and were expensed as incurred.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
purposes of determining the fair value of the share consideration exchanged on the RTO, the shares of PNRC were valued at US$2.00 per
share, the offering price for the PNRC shares on the last PNRC equity financing prior to the RTO.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
RTO resulted in a loss of $29,174,415 with respect to the fair value of the consideration transferred over the fair value of identifiable
net assets, which has been recorded as a loss during the year in other income.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="b_009"></span>ITEM
9. THE OFFER AND LISTING</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Effective
December 21, 2006, the Company&#8217;s common shares became quoted on the United States OTC Bulletin Board, under the symbol &#8220;WSCRF&#8221;.
On May 30, 2011, the common shares began trading under the symbol &#8220;NAN&#8221; on the TSXV. The trading in common
shares of NAN on the TSXV was halted following the announcement of the RTO on February 17, 2022, with the closing share price of $0.58
per share. The Common Shares resumed trading on the TSXV on August 18, 2022, under the symbol &#8220;PNRL&#8221; and commenced trading on the OTCQX Best Market (&#8220;OTCQX&#8221;) on January 20, 2023. The
table below sets forth the high and low prices expressed in Canadian dollars on the TSX-V and in United States dollars on the OTC in
the United States for the Common Shares for the past five years, for each quarter for the last two fiscal years, and
for the last six months. Note this trading data does not take into account the effect of the RTO and the 5-old for 1-new consolidation
which occurred on August 3, 2022.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="text-align: justify">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">High</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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    <td style="text-align: justify">&#160;</td><td style="font-weight: bold">&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
closing price of the Common Shares on the TSXV on December 31, 2022 was C$1.60. The closing price of the
Common Shares on the OTC Bulletin Board on December 31, 2022 was US$1.197.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Common Shares are issued in registered form. Computershare Investor Services Inc. is the registrar and transfer agent
for the Common Shares.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company has no outstanding securities not listed on a marketplace other than incentive stock options, warrants and DSUs.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Since
the beginning of the most recently completed financial year, warrants issued to purchase an aggregate 295,652 Common Shares were issued.
The following table outlines the detail of each issuance:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 60%">
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="b_010"></span>ITEM
10. ADDITIONAL INFORMATION</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>A.
Share capital</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
authorized capital of the Company comprises an unlimited number of <span style="letter-spacing: -0.1pt">Common Share</span>s and 100,000,000 Series 1 convertible
preferred shares without par value. </span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 2.25pt 0pt 1.4pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Effective July 27, 2022, in connection with the RTO, the Company completed a share consolidation of the Company&#8217;s issued
and outstanding common shares, on the basis of one (1) post-consolidation Common Share without par value for every five (5) pre-consolidation
common shares issued and outstanding.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 2.25pt 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 19.4pt; text-align: justify; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>a)
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

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rate of 1.054 shares of NAN for each share of PNRC, after giving effect to a 5-to-1 share consolidation for each outstanding share
of NAN (Note 4 of the consolidated financial statements). The following table provides a continuity of share capital presented in the consolidation financial
statements:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>2022</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
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of $22,388,599 (US$17,731,238). In connection with the private placement, the Company has paid to Finders
(i) cash commission equal to 6% of the gross proceeds raised from subscribers introduced to the Company by such Finders, being an aggregate
of $1,535,727, and (ii) a number of <span style="letter-spacing: -0.1pt">Common Shares</span> equal to 6% of the units attributable to the Finders under the private placement, being
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="letter-spacing: -0.1pt">In
April 2022, NAN completed a private placement offering of 21,118,000 Subscription Receipts at a price of $0.48 per Subscription Receipt (in each case, prior to giving effect to the Company&#8217;s 5:1 consolidation of its common
shares), including the partial exercise of the agents&#8217; option, for total gross proceeds of $10,136,640. Upon the closing of
the RTO on August 3, 2022, the Subscription Receipts were converted into 4,223,600 Common Shares
(post-consolidation), and the net subscription proceeds were released from escrow and delivered to the Company.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
August 3, 2022, the date of the RTO, a total of 82,157,536 common shares of NAN were issued in exchange for 77,948,368 shares of PNRC.
These shares were added to the current NAN shares outstanding balance of 31,748,399 for total shares outstanding of 113,905,935 upon
closing of the RTO.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Before
the closing of the RTO, NAN owned 7,667,707 common shares of PNRC and a non-transferrable common share purchase which entitled NAN to purchase common shares of PNRC,
for up to 15% of the capital of PNRC at the time of such purchase, upon payment of US $10,000,000 prior to the fifth anniversary of the
date of issue. Prior to the date that the amalgamation became effective, the PNRC shares and the 15% warrant held by NAN were contributed
to NAN Subco,  resulting in such securities being cancelled by operation of the triangular amalgamation.
</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Prior
to the RTO, the fair value of the 15% Warrant and the shares held by NAN were $28,275,255 and $19,710,608, respectively. The fair value
of the shares was calculated based on the last offer price of PNRC financing prior to the RTO, the fair value of the 15% Warrant was
calculated using the Black-Sholes Model with the following assumptions: expected life of 2.57 years, expected dividend yield of 0%, a
risk free rate of 3.14% and an expected volatility of 141.63%. As the securities were contributed by NAN and cancelled on completion
of the RTO, the fair value was included as part of the consideration on the acquisition date.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Post
RTO, during the period from August 3 to December 31, 2022, a total of 1,236,408 <span style="letter-spacing: -0.1pt">Common Shares</span> were issued upon the
exercise of warrants at prices between $0.45 and $1.75 per share for total cash proceeds of $569,399. As a result of these
exercises, $2,880,376 was transferred from reserve to share capital.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Post
RTO, during the period from August 3, 2022  to December 31, 2022, a total of 1,379,000 <span style="letter-spacing: -0.1pt">Common Shares</span> were issued upon the exercise
of options at prices between $0.39 and $1.60 per share for total cash proceeds of $723,076. As a result of these exercises, $1,004,188
was transferred from reserve to share capital.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
at December 31, 2022, the Company had 116,521,343 <span style="letter-spacing: -0.1pt">Common Share</span>s issued and outstanding (December 31, 2021 &#8211; 80,820,623 on a post-RTO
and post -consolidation basis).</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>2021</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">During
the year 2021, PNRC closed two non-broker private placement equity financings totalling 12,596,421 shares (pre-RTO, pre-share-consolidation
basis) at a price of $0.40 and $0.95, respectively, and raised aggregate gross proceeds of $6,771,729. The Company incurred total share
issuance costs of $287,228, including the fair value of $7,000 for 17,000 shares issued to the agent in conjunction with the first private
placement.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
at December 31, 2021, PNRC had 76,679,908 common shares issued and outstanding (pre-RTO, pre-share-consolidation basis).</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>2020</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
February 26, 2020, PNRC closed the seed financing of 24,900,000 shares at a price of $0.01 and raised aggregate gross proceeds of $249,000,
with $145,000 received prior to the year-end of 2019. </span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Subsequently
during 2020, PNRC closed three non-broker private placement equity financing of total 39,183,487 common shares at a price of $0.02,
$0.05, and $0.15, respectively, and raised aggregate gross proceeds of $1,219,174. The Company incurred total share issuance cost of
$7,086, including the fair value of $7,000 for 350,000 shares issued to the agent in conjunction with the private placement. </span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
at December 31, 2020, PNRC had 64,083,487 common shares issued and outstanding (pre-RTO, pre-share-consolidation basis).</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>b)</i></span> <span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Preferred shares issued and outstanding</i></span></p>


<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
at December 31, 2022 and December 31, 2021 there are 118,186 series 1 preferred shares of the Company outstanding (on a post-RTO and
post-consolidation basis). </span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 15.6pt; text-align: justify; text-indent: -13.6pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
rights and restrictions of the preferred shares are as follows:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 20pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">i)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">dividends
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">iii)</span></td>
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">iv)</span></td>
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    number of the common shares to be received on conversion of each preferred share is to be determined by dividing the conversion value
    of the share, $1 per share, by $9.00.</span></td></tr>
  </table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; width: 1.4pt"></td><td style="font: 10pt Times New Roman, Times, Serif; width: 18pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>c)</i></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Warrants</i></span></td></tr></table>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
February 26, 2021, PNRC issued NAN the 15% Warrant.,</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
15% Warrant was classified as a derivative financial liability that should be measured at fair value, with changes in value recorded
in profit or loss. Prior to the RTO, on Jun 30, 2022, the Company reassessed the fair value of the warrant at $28,275,256 and
recorded the amount as a long-term financial liability. The fair value of the 15% Warrant did not change up to the date of the RTO
as the underline assumptions remained the same. </span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
fair value of the liability of the 15% Warrant was estimated using the Black-Scholes Option Pricing Model with the following
assumptions: </span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 80%; margin-left: 0.25in">
  <tr style="vertical-align: bottom">
    <td style="padding-bottom: 1.5pt">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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2021</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: White">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: White">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  </table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Volatility
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highly correlated to the advancement of the BCL assets acquisition following its investment in PNRC. </span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Prior
to the date that the amalgamation became effective, the PNRC shares and the 15% Warrant held by NAN were contributed to NAN Subco,
resulting in such securities being cancelled by operation of the triangular amalgamation. The fair value of the 15% Warrant was
written off upon the closing of the RTO. PNRC had no other issued and outstanding warrants prior to the RTO.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Warrant
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 80%; margin-left: 0.25in">
  <tr style="vertical-align: bottom">
    <td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: justify">Premium Nickel Resources Ltd.</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify">December 31, 2021</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="width: 52%; text-align: left">Adjustment pursuant to the <br />RTO</td><td style="width: 2%">&#160;</td>
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">PNRC
had no warrants as at December 31, 2021 except the 15% Warrant granted to NAN that was subsequently cancelled upon the
RTO.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">At
December 31, 2022, the Company had outstanding common share purchase warrants exercisable to acquire <span style="letter-spacing: -0.1pt">Common Shares</span> as
follows: </span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 90%">
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 19.4pt; text-align: justify; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>d)
Stock options </i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company adopted the <span style="letter-spacing: -0.1pt">Incentive Stock Option </span> Plan providing the authority to grant
options to directors, officers, employees and consultants enabling them to acquire up to 22,600,000 stock options of the Company.
Under the Incentive Stock Option Plan, the exercise price of each option typically equals the last closing price per share on the
trading day immediately preceding the da<span style="letter-spacing: -0.1pt">te of the grant of the option, less applicable
discount, if any, permitted by the policies of the TSXV and approved by the Board of Directors. The options can be granted for a maximum term of
10 years.</span></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
outstanding options of each company prior to the completion of the RTO were as follows:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 90%; margin-left: 0pt">
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 90%; margin-left: 0pt">
  <tr style="vertical-align: bottom">
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Subsequent
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 90%; margin-left: 0pt">
  <tr style="vertical-align: bottom">
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">During
the year ended December 31, 2022, prior to the RTO, PNRC granted an aggregate total of 2,600,000 stock options to employees,
directors and consultants with a term of five years. The options are exercisable at US$2.00 per share (C$2.49/share) with 1/3
vesting on <span style="letter-spacing: -0.1pt">January 20, 2022, </span> 1/3 on <span style="letter-spacing: -0.1pt">January 20,
2023 </span> and 1/3 on <span style="letter-spacing: -0.1pt">January 20, 2024 </span> the second anniversary following the close of
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Upon
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Prior to the RTO, PNRC had granted but unvested options of 2,512,033 (Post RTO, Post-consolidation basis). These options were considered
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

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fair value of all options, including those granted during the year ended December 31, 2022 as well as the ones granted but not vested
during the year ended December 2021, amounted to $7,731,117 and was recorded as a share-based payment expense. The weighted average fair
value of options granted is $1.41 per option.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
fair value of stock options granted and vested during the year ended December 31, 2022 was calculated using the following assumptions:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 90%; margin-left: 0pt">
  <tr style="vertical-align: bottom">
    <td style="text-align: justify">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

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assumptions for the valuation of options were derived by reference to the volatility of NAN as the stock price of NAN was highly correlated
to the advancement of the BCL assets acquisition following its investment in PNRC.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Details
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 31.7pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 19.4pt; text-align: justify; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>e)
DSU Plan </i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Effective
December 2022, the Company approved a DSU plan (the &#8220;DSU Plan&#8221;) that enables the Company
upon approval by the directors to grant DSUs to eligible non-management directors. The DSUs credited to the account of a director may
only be redeemed following the date upon which the holder ceases to be a director. Depending upon the country of residence of a director,
the DSUs may be redeemed at any time prior to December 15 in the calendar year following the year in which the holder ceases to be a
director and may be redeemed in as many as four installments. Upon redemption, the holder is entitled to a cash payment equal to the
number of units redeemed multiplied by the 5-day-VWAP of the Common Shares on that date. The Company may elect, in its
sole discretion, to settle the value of the DSUs redeemed in the Common Shares on a one-for-one basis, provided shareholder
approval has been obtained on or prior to the relevant redemption date.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">During
the year ended December 31, 2022, DSUs have been granted as follows:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 80%; margin-left: 0pt">
  <tr style="vertical-align: bottom">
    <td style="text-align: justify">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify">Number of DSUs outstanding at the beginning of the fiscal year</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


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    <div style="break-before: page; margin-top: 6pt"><p style="margin: 0pt">&#160;</p></div>
    <!-- Field: /Page -->

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">During
the year ended December 31, 2022, the DSU compensation amounted to $298,000 recorded as share based compensation, and a DSU liability
of the same amount.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 19.4pt; text-align: justify; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>f)
Reserve</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
reserve records items recognized as stock-based compensation expense and other share-based payments until such time that the stock options
or warrants are exercised, at which time the corresponding amount will be transferred to share capital. Amounts recorded for forfeited
or expired unexercised options and warrants are transferred to deficit.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">During
the year ended December 31, 2022, the Company recorded $7,731,117 (December 31, 2021 - $1,261,891) of share-based payments to reserves
and transferred $3,325,702 to share capital for exercised warrants and options</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(December
31, 2021 &#8211; Nil).</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>B.
Memorandum and articles of association</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; white-space: nowrap"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>B.</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Articles
    of Continuance</b></span></td></tr>
  </table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Set
out below is a description of the Company&#8217;s Articles of Continuance (the &#8220;Articles&#8221;), the Company&#8217;s by-laws,
and of certain provisions of the OBCA (as currently in effect) related to the Company&#8217;s Articles. The Company&#8217;s Articles
and by-laws are filed as exhibits to this Annual Report.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Incorporation</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">PNRL
is organized under the OBCA. PNRL&#8217;s Ontario corporation number is 1000269814.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Objects
and Purposes of the Company</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: -0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>



<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company&#8217;s Articles do not contain and are not required to contain a description of the Company&#8217;s objects and purposes. There
is no restriction contained in the Company&#8217;s Articles of the business that the Company may carry on.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Voting
on Certain Proposal, Arrangement, Contract or Compensation by Directors</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: -0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>



<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Pursuant
to the Company&#8217;s by-laws, a director who is a party to a material contract or transaction or proposed material contract or proposed
transaction with the Company, or who is a director or an officer of, or has a material interest in, any person who is a party to a material
contract or transaction or proposed material contract or proposed transaction with the Company, shall disclose, in writing to the Company
or by requesting to have entered in the minutes of meetings of directors, the nature and extent of his or her interest at the time and
in the manner provided in the OBCA. Except as provided in the OBCA, no such director of the Company shall attend any part of a meeting
of directors during which the contract or transaction is discussed, and no such director shall vote on any resolution to approve such
contract or transaction.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Subject
to the foregoing, neither the Company&#8217;s Articles nor the Company&#8217;s by-laws restrict a directors&#8217; power to vote with
regard to compensation payable to themselves or any other members of their body in the absence of an independent quorum. Additionally,
a director is not required to hold a share in the Company&#8217;s capital as qualification for his or her office but must be qualified
as required by the OBCA to become, act or continue to act as a director. The Company&#8217;s Articles and by-laws do not provide for
an age limit requirement for the retirement or non-retirement of directors other than as provided in the OBCA.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Directors
are authorized from time to time, without authorization of the shareholders, to borrow money on the credit of the Company, limit or increase
the amount to be borrowed, issue, reissue, sell or pledge bonds, debentures, notes or other debt obligations of the Company for such
sums and at such prices as may be deemed expedient, give a guarantee on behalf of the Company to secure payment or performance of an
obligation of any person, mortgage, hypothecate, charge, pledge or otherwise create a security interest in all or any currently owned
or subsequently acquired real and personal, movable and immovable, property of the Company and the undertaking and rights of the Company,
to secure any such bonds, debentures, notes or other debt obligations, or to secure any present or future borrowing, liability or obligation
of the Company, including any guarantee.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Share
Rights</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
holders of Common Shares are entitled to receive notice of and to attend all annual and special meetings of the shareholders of the Company
and to one vote in respect of each Common Share held at such meetings. Exhibit 2.6 &#8211; <i>Description of Securities Registered Under
Section 12 of the Exchange Act</i> to this Annual Report contains a summary of certain other rights attached to the Company&#8217;s shares,
including rights to dividends and rights upon liquidation or dissolution of the Company.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Procedures
to Change the Rights of Shareholders</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
rights, privileges, restrictions and conditions attaching to the Common Shares are contained in the Company&#8217;s Articles and such
rights, privileges, restrictions and conditions may be changed by amending such Articles. In order to amend such Articles, the OBCA requires
a resolution to be passed by a majority of not less than two-thirds of the votes cast by the shareholders entitled to vote thereon. In
addition, if the Company resolves to make certain amendments to its Articles, a holder of Common Shares may dissent with regard to such
resolution and, if such shareholder so elects, the Company would have to pay such shareholder the fair value of the Common Shares so
held. The types of amendment that would be subject to dissent rights include without limitation: (a) to add, remove or change restrictions
on the issue, transfer or ownership of shares of a class or series of the Company&#8217;s shares; and (b) to add, remove or change any
restriction upon the business that the Company may carry on or upon the powers the Company may exercise.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Meetings</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Each
director holds office until the next annual general meeting or until his or her office is earlier vacated in accordance with the provisions
of the OBCA. A director appointed or elected to fill a vacancy on the Board of Directors also holds office until the Company&#8217;s
next annual general meeting.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Annual
meetings of shareholders must be held at such time in each year not more than fifteen (15) months after the last annual meeting, as the
Board of Directors may determine. Pursuant to the Company&#8217;s by-laws, notice of the time and place of a meeting of shareholders
must be sent not less than twenty-one (21) days so long as the Company remains an &#8220;offering corporation&#8221; (as defined in the
OBCA), or in the case of a non-offering corporation not less than 10 days, but in either case not more than fifty (50) days before such
meeting.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
only persons entitled to be present at a meeting of shareholders shall be those entitled to vote thereat, the directors and auditor of
the Company and others who, although not entitled to vote, are entitled or required under any provision of the OBCA or the Articles or
the by-laws to be present at the meeting. Any other person may be admitted only on the invitation of the chairman of the meeting or with
the consent of the meeting.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
OBCA provides that shareholders may requisition a special meeting in accordance with the OBCA. The OBCA provides that the holders of
not less than five (5) percent of the Company&#8217;s issued shares that carry the right to vote at a meeting may requisition the Company&#8217;s
directors to call a special meeting of shareholders for the purposes stated in the requisition.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Under
the Company&#8217;s by-laws, the quorum for the transaction of business at a meeting of shareholders is two persons present that hold
or represent by proxy not less than 10% of the votes attached to the shares entitled to vote at the meeting.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Limitations
on Ownership of Securities</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Except
as provided in the <i>Investment Canada Act</i> (Canada), there are no limitations specific to the rights of non-Canadians to hold or
vote the Common Shares under the laws of Canada or Ontario, or in the Company&#8217;s Articles or by-laws.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Change
in Control</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">There
are no provisions in the Company&#8217;s Articles or by-laws that would have the effect of delaying, deferring or preventing a change
in control of the Company, and that would operate only with respect to a merger, acquisition or corporate restructuring involving the
Company or any of the Company&#8217;s subsidiaries.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Ownership
Threshold</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Neither
the Company&#8217;s by-laws nor the Company&#8217;s Articles contain any provisions governing the ownership threshold above which shareholder
ownership must be disclosed. In addition, securities legislation in Canada requires that the Company disclose in its management information
circular for the Company&#8217;s annual meeting and certain other disclosure documents filed by the Company under such legislation, holders
who beneficially own more than ten (10) percent of the Company&#8217;s issued and outstanding Common Shares.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Advance
Notice By-Laws</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company has included certain advance notice provisions with respect to the election of directors in the Company&#8217;s by-laws (the
&#8220;Advance Notice Provisions&#8221;). The Advance Notice Provisions are intended to: (a) facilitate orderly and efficient annual
general meetings or, where the need arises, special meetings of shareholders; (b) ensure that all shareholders receive adequate notice
of board nominations and sufficient information with respect to all nominees; and (c) allow shareholders to register an informed vote.
Only persons who are nominated by shareholders in accordance with the Advance Notice Provisions will be eligible for election as directors
at any annual meeting of shareholders, or at any special meeting of shareholders if one of the purposes for which the special meeting
was called was the election of directors.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Under
the Advance Notice Provisions, a shareholder wishing to nominate a director would be required to provide the Company notice, in the prescribed
form, within the prescribed time periods. These time periods include (a) in the case of an annual meeting of shareholders (including
annual and special meetings), not less than 30 days nor more than 65 days prior to the date of such meeting; provided that, if the first
public announcement of the date of the annual meeting of shareholders (the &#8220;Notice Date&#8221;) is less than 50 days before the
meeting date, not later than the close of business on the 10th day following the Notice Date and (b) in the case of a special meeting
(which is not also an annual meeting) of shareholders called for any purpose which includes electing directors, not later than the close
of business on the 15th day following the Notice Date.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>C.
Material contracts</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
September 28, 2021, PNRC executed a definitive asset purchase agreement (the &#8220;Selebi APA&#8221;) with the liquidator of BCL to
acquire the Selebi and Selebi North Ni-Cu-Co deposits and related infrastructure formerly operated by BCL. On January 31, 2022, PNRC
closed the transaction and ownership of the assets was transferred to PNRC.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">PNRC
also negotiated a separate asset purchase agreement to finalize terms for any prioritized assets formerly operated by TNMC. On August
22, 2022, the Company announced the completion of its acquisition of the Ni-Cu-Co-PGE Selkirk mine in Botswana, together with associated
infrastructure and four surrounding prospecting licenses. The acquisition was completed pursuant to the Company&#8217;s previously-announced
asset purchase agreement with the liquidator of TNMC on January 20, 2022. With the acquisition complete, ownership of the Selkirk assets
was transferred to the Company in August 22, 2022.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Pursuant
to the Selebi APA, the aggregate purchase price payable to the seller for the Selebi assets, was the sum of US$56,750,000 to be paid in three instalments:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;
US$1,750,000 payable on the closing date. This payment has been made.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;
US$25,000,000 upon the earlier of: a) approval by the Ministry of Mineral Resources, Green Technology and Energy Security (&#8220;MMRGTES&#8221;)
of the Company&#8217;s Section 42 and Section 43 Applications (further extension of the mining license and conversion of the mining license
into an operating license respectively), and b) on the expiry date of the study phase, January 31, 2025, which can be extended for one
year with written notice.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;
The third instalment of US$30,000,000 is payable on the completion of mine construction and production start-up (commissioning) by the
Company on or before January 31, 2030, but not later than four years after the approval by the Minister of MMRGTES of the Company&#8217;s
Section 42 and Section 43 Applications.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;
Payment of care and maintenance funding contribution in respect of the Selkirk assets for a total of US$5,178,747 from March 22, 2021
to the closing date. This payment has been made.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
per the term and conditions of the Selebi APA, the Company has the option to cancel the second and third payments and give back the Selkirk
assets to the liquidator in the event where the exploration program determines that the Selkirk assets are not economical. PNRL also
has an option to pay in advance the second and third payments in the event where the exploration program determines that the Selkirk
assets are economical. The Company&#8217;s accounting policy, as permitted by IAS 16 &#8211; Property, Plant and Equipment, is to measure
and record contingent consideration when the conditions associated with the contingency are met. As of December 31, 2022, none of the
conditions of the second and third instalment are met. Hence, these amounts are not accrued in the condensed interim consolidated financial
statements.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition to the above purchase price, the Company agreed to pay to the seller interest in 12 equal monthly instalments of $13,657,
followed by 12 monthly instalments of $6,828.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
November 25, 2022, the Company issued a promissory note (the &#8220;Promissory Note&#8221;) to Pinnacle Island LP (the &#8220;Lender&#8221;)
in connection with its bridge loan (the &#8220;Bridge Loan&#8221;) financing. The Promissory Note has a principal amount of $7 million
and bears interest at a rate of 10% per annum with an original maturity date of February 23, 2023. The obligations of the Company under
the Promissory Note are fully and unconditionally guaranteed by each of the Company&#8217;s existing and future subsidiaries. No assets
of the Company were pledged as collateral under the Promissory Note. In connection with the Bridge Loan, the Company paid a commitment
fee of $260,000 to the Lender and issued it 119,229 common share purchase warrants, each of which was exercisable to acquire one Common
Share at a price of $2.04 per share until November 25, 2023, which were subsequently cancelled and replaced as detailed
below.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Under
the terms of the Promissory Note, the Company extended the maturity date from February 23, 2023 to March 22, 2023. On March 17, 2023,
the Company entered into an amended and restated promissory note (the &#8220;A&amp;R Promissory Note&#8221;) extending the maturity date
from March 22, 2023 to November 24, 2023. In connection with the entering into of the A&amp;R Promissory Note, the Company paid a fee
of $225,000 and issued 350,000 non-transferrable common share purchase warrants to the Lender (the original 119,229 warrants originally
issued in connection with the Promissory Note were cancelled). Each warrant is exercisable to acquire one Common Share
at a price of $1.75 per Common Share for a period of one year from date of the A&amp;R Promissory Note.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
February 24, 2023, the Company closed a &#8220;best efforts&#8221; brokered private placement offering under which 4,437,184 Common Shares were issued at a price of $1.75 per Common Share for gross proceeds of $7,765,072.00 (the
&#8220;Offering&#8221;). Paradigm Capital Inc. acted as lead agent and sole bookrunner (the &#8220;Lead Agent&#8221;) for the Offering, on behalf of a syndicate of agents (collectively, with the Lead Agent, the &#8220;Agents&#8221;),
pursuant to an agency agreement between the Company and each of the Agents. In connection with the Offering, the Company (i) paid to
the Agents a cash commission equal to 6% of the gross proceeds (other than on certain president&#8217;s list purchasers on which a
cash commission of 3% was paid), and (ii) issued to the Agents that number of non-transferable broker warrants of the Company (the
&#8220;Broker Warrants&#8221;) as is equal to 6% of the number of Common Shares sold under the Offering (other than on Common Shares
issued to president&#8217;s list purchasers on which Broker Warrants equal to 3% were issued). Each Broker Warrant is exercisable to
acquire one Common Share at an exercise price of $1.75 per Common Share until February 24, 2025.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>D.
Exchange Controls</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>This
summary is of a general nature only and is not intended to be, and should not be interpreted as, legal advice to any prospective purchaser.
Accordingly, prospective purchasers of the Company&#8217;s shares should consult with their own advisors with respect to their individual
circumstances.</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">There
are no laws or governmental decrees or regulations in Canada that restrict the export or import of capital, or which affect the remittance
of dividends, interest or other payments to holders of the Company&#8217;s securities who are not residents of Canada, other than withholding
tax requirements.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">There
are no limitations imposed by the laws of Canada, the laws of Ontario or by the charter or other governing documents of the Company on
the right of a non-resident to hold or vote Common Shares, other than as provided in the Investment Canada Act (the &#8220;Investment
Act&#8221;) and the potential requirement for a Competition Act Review.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following summarizes the principal features of the Investment Act and the Competition Act Review for a non-resident who proposes to acquire
Common Shares. This summary is of a general nature only and is not intended to be, nor is it, a substitute for independent advice from
an investor&#8217;s own advisor. This summary does not anticipate statutory or regulatory amendments.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>The
Investment Canada Act</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Investment Canada Act (the &#8220;ICA&#8221;) requires any person that is non-Canadian (as defined in the ICA) who acquires &#8220;control&#8221;
(as defined in the ICA) of an existing Canadian business to file a pre-closing application for review with Innovation, Science and Economic
Development Canada, where prescribed financial thresholds are exceeded. By way of example, for a direct acquisition of control of a Canadian
business by a non-Canadian that is controlled by nationals of a specified trade agreement state (including the US and the European Union,
the United States, Mexico, Australia, Brunei, Chile, Colombia, Honduras, Japan, Malaysia, New Zealand, Panama, Peru, Singapore, South
Korea, the United Kingdom or Vietnam) this threshold is that the enterprise value of the Canadian business must exceed C$1.931 billion
(in 2023; indexed annually). This threshold is C$1.287 billion (in 2023; indexed annually) for investors controlled by nationals of a
World Trade Organization (&#8220;WTO&#8221;) member state that is not a trade agreement state. Different review thresholds apply if the
investor and sellers are not trade agreement/WTO nationals or if the investor is a state-owned enterprise, or if there is an acquisition
of a Canadian cultural business. In these situations, much lower thresholds apply and are based on the total worldwide book value assets
of the Canadian business, rather than its enterprise value. If a proposed investment is reviewable, the relevant minister will assess
whether the investment is likely to be of &#8220;net benefit&#8221; to Canada.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Where
the acquisition of control of a Canadian business by a non-Canadian does not meet the prescribed review thresholds, the investor is required
to file a notification no later than 30 days after the completion of the investment.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Canadian government also has the discretion to review most investments on the grounds that it could be &#8220;injurious to Canada&#8217;s
national security,&#8221; regardless of whether it is &#8220;net benefit&#8221; reviewable. Review on national security grounds may occur
on a pre- or post-closing basis.</span></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span>&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Canadian
Competition Act Review</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Investments
giving rise to the acquisition or establishment, directly or indirectly, by one or more persons of control over, or a significant
interest in the whole or part of a business of a competitor, supplier, customer or other person are subject to substantive review by
Canada&#8217;s Commissioner of Competition (the &#8220;Commissioner&#8221;). If the Commissioner concludes that a merger, prevents
or lessens, or is likely to prevent or lessen competition substantially, the Commissioner may apply to the Competition Tribunal for
a remedial order. Such substantive merger
review power applies to all mergers for up to one year after closing, whether or not they meet limits for pre-notification under the Competition Act.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition to substantive merger review, the Competition Act provides for a pre-notification regime respecting mergers of a certain size.
The regime applies in respect of share acquisitions, asset acquisitions, amalgamations and combinations. For ease of reference, this
filing refers specifically to share acquisition, although the pre-notification regime applies, with the appropriate modification, to
other types of acquisition of control as well.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Pre-merger notification under the Competition Act
is generally required for the acquisition of voting shares of corporations when each of three thresholds is exceeded:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.25in; text-align: justify"><span style="font-size: 10pt">(i)</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">the parties to the transaction, together with their legal affiliates under the Competition Act, must have assets in Canada, or gross revenue from sales in, from or into Canada, that in the aggregate exceed C$400 million</span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-size: 10pt">(ii)</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">the aggregate value of the assets in Canada owned by the target, including entities controlled by the target, or the gross revenues from sales in or from Canada generated from those assets, must exceed C$93 million; and</span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-size: 10pt">(iii)</span></td>
    <td style="text-align: justify"><span style="font-size: 10pt">the acquirer must, as a result of the transaction, own more than 20% of the target&#8217;s voting shares, if the target is publicly traded, or more than 35% of the voting shares of privately-owned corporations. (If the acquirer already owns between 20% (or 35% for privately-owned corporations) and 50% of the target, notification would also be required in connection with a transaction which would result in the acquirer owning more than 50% of the target&#8217;s voting shares.)</span></td></tr>
  </table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span>&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Where a notification is required, the Competition
Act prohibits completion of the acquisition until the expiration of the applicable statutory waiting period, unless compliance with the
waiting period has been waived or the Commissioner has issued an advance ruling certificate under section 102 of the Competition Act.
The Commissioner&#8217;s review of a notifiable transaction for substantive competition law considerations may take longer than the statutory
waiting period.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>E.
Taxation</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Canadian
Federal Income Tax Considerations</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following is, as of the date hereof, a summary of the principal Canadian federal income tax considerations under the <i>Income Tax Act
</i>(Canada) (the &#8220;<b>Canadian Tax Act</b>&#8221;) and the regulations thereunder (the &#8220;<b>Canadian Tax Regulations</b>&#8221;)
generally applicable to a holder of Common Shares (referred to in this summary as &#8220;<b>Shares</b>&#8221;) who holds
Shares as beneficial owner and who, for the purposes of the Canadian Tax Act and the Canadian Tax Regulations and at all relevant times,
is or is deemed to be resident in Canada, deals at arm&#8217;s length with the Company, is not affiliated with the Company, and acquires
and holds the Shares as capital property (a &#8220;<b>Canadian Resident Holder</b>&#8221;). Generally, Shares will be considered to be
capital property to a Canadian Resident Holder provided that the Canadian Resident Holder does not hold the Shares in the course of carrying
on a business or as part of an adventure or concern in the nature of trade. A Canadian Resident Holder whose Shares might not otherwise
qualify as capital property may be entitled to make an irrevocable election permitted by subsection 39(4) of the Canadian Tax Act to
deem the Shares and every other &#8220;Canadian security&#8221; (as defined in the Canadian Tax Act) held or subsequently acquired by
such person, in the taxation year of the election and each subsequent taxation year to be capital property. Canadian Resident Holders
should consult their own tax advisors as to whether this election is available or advisable in their particular circumstances.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">This
summary does not apply to a Canadian Resident Holder (i) that is a &#8220;financial institution&#8221; for the purposes of the mark-to-market
rules contained in the Canadian Tax Act; (ii) that is a &#8220;specified financial institution&#8221; as defined in the Canadian Tax
Act; (iii) an interest in which would be a &#8220;tax shelter investment&#8221; as defined in the Canadian Tax Act; (iv) that has made
a functional currency reporting election under the Canadian Tax Act; (v) that is exempt from tax under Part I of the Canadian Tax Act;
(vi) that has entered or will enter into a &#8220;derivative forward agreement&#8221; or a &#8220;synthetic disposition arrangement&#8221;,
as those terms are defined in the Canadian Tax Act, with respect to the Shares or (vii) that receives dividends on the Shares under or
as part of a &#8220;dividend rental arrangement&#8221;, as defined in the Canadian Tax Act. In addition, this summary does not address
the deductibility of interest by a Canadian Resident Holder that has borrowed money or otherwise incurred indebtedness in connection
with the acquisition of Shares. Such Canadian Resident Holders should consult their own tax advisors with respect to the tax considerations
in respect of acquiring, holding and disposing of Shares.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Additional
considerations, not discussed herein, may be applicable to a Canadian Resident Holder that is a corporation &#8206;resident in Canada (for
the purposes of the Canadian Tax Act), and is, or becomes (or does not deal at arm&#8217;s length for purposes of the Canadian Tax Act
with a corporation resident in Canada that is or becomes) as part of a transaction or event or series of transactions or &#8206;events
that includes the acquisition of Shares, controlled by a non-resident person, or a group of non-resident persons not dealing with each
other at arm&#8217;s length, for purposes of the &#8220;foreign affiliate dumping&#8221; rules in section 212.3 of the Canadian Tax Act.
Such Canadian Resident Holders should consult their tax advisors with respect to the consequences of acquiring Shares.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">This
summary is based upon the current provisions of the Canadian Tax Act and the Canadian Tax Regulations in force as of the date hereof
and an understanding of the current administrative policies and assessing practices of the Canada Revenue Agency (the &#8220;<b>CRA</b>&#8221;)
published in writing by the CRA prior to the date hereof. This summary takes into account all specific proposals to amend the Canadian
Tax Act and the Canadian Tax Regulations publicly announced by or on behalf of the Minister of Finance (Canada) prior to the date hereof
(the &#8220;<b>Tax Proposals</b>&#8221;) and assumes that the Tax Proposals will be enacted in the form proposed, although no assurance
can be given that the Tax Proposals will be enacted in their current form or at all.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Other
than the Tax Proposals, this summary does not otherwise take into account or anticipate any changes in law, whether by legislative, governmental,
administrative or judicial decision or action, nor does it take into account or consider any income tax considerations of any province
or territory of Canada or of any other jurisdiction, which considerations may differ significantly from the Canadian federal income tax
considerations discussed in this summary. This summary also does not take into account any change in the administrative policies or assessing
practices of the CRA.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>This
summary is of a general nature only, is not exhaustive of all possible Canadian federal income tax considerations and is not intended
to be, nor should it be construed to be, legal or tax advice to any particular Canadian Resident Holder. Canadian Resident Holders should
consult their own tax advisors with respect to their particular circumstances.</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Currency</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
general, for purposes of the Canadian Tax Act, all amounts relating to the acquisition, holding or disposition of Shares (including dividends,
adjusted cost base and proceeds of disposition) must, to the extent such amounts are not otherwise expressed in Canadian dollars, be
converted into Canadian dollars based on an exchange rate quoted by the Bank of Canada for the date such amount arose or such other rate
of exchange that is acceptable to the CRA.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Dividends</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Dividends
received or deemed to be received on the Shares will be included in computing a Canadian Resident Holder&#8217;s income. In the case
of an individual (other than certain trusts), such dividends will be subject to the gross-up and dividend tax credit rules normally applicable
in respect of &#8220;taxable dividends&#8221; received from corporations resident in Canada for purposes of the Canadian Tax Act. An
enhanced gross-up and dividend tax credit will be available to individuals (other than certain trusts) in respect of &#8220;eligible
dividends&#8221; designated by the Company to the Canadian Resident Holder in accordance with the provisions of the Canadian Tax Act.
There may be limitations on the ability of the Company to designate dividends as &#8220;eligible dividends&#8221;.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Dividends
received or deemed to be received on the Shares by a Canadian Resident Holder that is a corporation must be included in computing its
income but generally will be deductible in computing its taxable income. In certain circumstances, subsection 55(2) of the Canadian Tax
Act will treat a taxable dividend received or deemed to be received by a Canadian Resident Holder that is a corporation as proceeds of
disposition or a capital gain. Canadian Resident Holders that are corporations should consult their own tax advisors having regard to
their own circumstances.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
Canadian Resident Holder that is throughout the relevant taxation year a &#8220;Canadian-controlled private corporation&#8221; (as defined
in the Canadian Tax Act) also may be liable to pay an additional tax (refundable in certain circumstances) on its &#8220;aggregate investment
income&#8221; (as defined in the Canadian Tax Act) for the year, but which excludes dividends or deemed dividends deductible in computing
taxable income. Tax Proposals released on August 9, 2022 extend this additional tax and refund mechanism in respect of &#8220;aggregate
investment income&#8221; to &#8220;substantive CCPCs&#8221; as defined in the Tax Proposals. Canadian Resident Holders should consult
their own advisors with respect to the application of the Tax Proposals.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
Canadian Resident Holder that is a &#8220;private corporation&#8221; (as defined in the Canadian Tax Act) or a &#8220;subject corporation&#8221;
(as defined in subsection 186(3) of the Canadian Tax Act) may be liable to pay an additional tax (refundable in certain circumstances)
under Part IV of the Canadian Tax Act on dividends received or deemed to be received on the Shares to the extent such dividends are deductible
in computing taxable income.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Dispositions
of Shares</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Upon
a disposition or a deemed disposition of a Share (other than a disposition to the Company that is not a sale in the open market in the
manner in which shares would normally be purchased by any member of the public in an open market), a Canadian Resident Holder generally
will realize a capital gain (or a capital loss) equal to the amount by which the proceeds of disposition, net of any reasonable costs
of disposition, are greater (or are less) than the adjusted cost base of such share to the Canadian Resident Holder. The adjusted cost
base to a Canadian Resident Holder of a Share will be determined by averaging the cost of that share with the adjusted cost base of all
other common shares of the Company held as capital property at that time by the Canadian Resident Holder. The tax treatment of capital
gains and capital losses is discussed in greater detail below under the subheading &#8220;<i>Capital gains and capital losses</i>&#8221;.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Capital
gains and capital losses</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Generally,
a Canadian Resident Holder is required to include in computing its income for a taxation year one-half of the amount of any capital gain
(a &#8220;<b>taxable capital gain</b>&#8221;) realized in the year. Subject to and in accordance with the provisions of the Canadian
Tax Act, a Canadian Resident Holder is required to deduct one-half of the amount of any capital loss (an &#8220;<b>allowable capital
loss</b>&#8221;) realized in a taxation year from taxable capital gains realized in the year by such Canadian Resident Holder. Allowable
capital losses in excess of taxable capital gains realized in a taxation year may be carried back and deducted in any of the three preceding
taxation years or carried forward and deducted in any following taxation year against taxable capital gains realized in such year to
the extent and under the circumstances described in the Canadian Tax Act.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
amount of any capital loss realized on the disposition or deemed disposition of Shares by a Canadian Resident Holder that is a corporation
may be reduced by the amount of dividends received or deemed to have been received by it on such Shares or shares substituted for such
shares, to the extent and in the circumstances specified by the Canadian Tax Act. Similar rules may apply where a Share is owned by a
partnership or trust of which a corporation, trust or partnership is a member or beneficiary. Canadian Resident Holders to whom these
rules may be relevant should consult their own tax advisors.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
Canadian Resident Holder that is throughout the relevant taxation year a &#8220;Canadian-controlled private corporation&#8221; (as defined
in the Canadian Tax Act) also may be liable to pay an additional tax (refundable in certain circumstances) on its &#8220;aggregate investment
income&#8221; (as defined in the Canadian Tax Act) for the year, which will include taxable capital gains. Tax Proposals released on
August 9, 2022 extend this additional tax and refund mechanism in respect of &#8220;aggregate investment income&#8221; to &#8220;substantive
CCPCs&#8221; as defined in the Tax Proposals. Canadian Resident Holders should consult their own advisors with respect to the application
of the Tax Proposals.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Minimum
tax</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Capital
gains realized and dividends received by a Canadian Resident Holder that is an individual or a trust, other than certain specified trusts,
may give rise to minimum tax under the Canadian Tax Act. Canadian Resident Holders should consult their own advisors with respect to
the application of the minimum tax.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Certain
U.S. Federal Income Tax Considerations </b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Subject
to the limitations and qualifications stated herein, this discussion sets forth material U.S. federal income tax considerations relating
to the acquisition, ownership and disposition by U.S. Holders (as hereinafter defined) of the Common Shares. The discussion is based
on the <i>Internal Revenue Code of 1986</i>, as amended (the &#8220;Code&#8221;), its legislative history, existing and proposed regulations
thereunder, published rulings and court decisions, and the <i>Canada-United States Income Tax Convention (1980)</i> as amended (the &#8220;Treaty&#8221;)
all as currently in effect and all subject to change at any time, possibly with retroactive effect. This summary applies only to U.S.
Holders. This discussion of a U.S. Holder&#8217;s tax consequences addresses only those persons that acquire Common Shares in an offering
and that hold those Common Shares as capital assets (generally, property held for investment). In addition, it does not describe all
of the tax consequences that may be relevant in light of a U.S. Holder&#8217;s particular circumstances, including state and local tax
consequences, estate and gift tax consequences, alternative minimum tax consequences, and tax consequences applicable to U.S. Holders
subject to special rules, such as:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: -17.85pt; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">banks,
    insurance companies, and certain other financial institutions;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">U.S.
    expatriates and certain former citizens or long-term residents of the United States;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">dealers
    or traders in securities who use a mark-to-market method of tax accounting;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">persons
    holding Common Shares as part of a hedging transaction, &#8220;straddle,&#8221; wash sale, conversion transaction or integrated transaction
    or persons entering into a constructive sale with respect to Common Shares;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">persons
    whose &#8220;functional currency&#8221; for U.S. federal income tax purposes is not the U.S. dollar;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">brokers,
    dealers or traders in securities, commodities or currencies;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">tax-exempt
    entities or government organizations;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">partnerships
    or other entities or arrangements classified as partnerships for U.S. federal income tax purposes;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">regulated
    investment companies or real estate investment trusts;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">persons
    who acquired the Common Shares pursuant to the exercise of any employee stock option or otherwise as compensation;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">persons
    holding the Common Shares in connection with a trade or business, permanent establishment, or fixed base outside the United States; and</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">persons
    who own (directly or through attribution) 10% or more (by vote or value) of the outstanding Common Shares.</span></td></tr>
  </table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 2.25pt; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
an entity that is classified as a partnership for U.S. federal income tax purposes holds Common Shares, the U.S. federal income tax treatment
of a partner will generally depend on the status of the partner and the activities of the partnership. Partnerships holding Common Shares
and partners in such partnerships are encouraged to consult their tax advisers as to the particular U.S. federal income tax consequences
of holding and disposing of Common Shares.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
&#8220;U.S. Holder&#8221; is a holder who, for U.S. federal income tax purposes, is a beneficial owner of Common Shares and is:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">an
    individual who is a citizen or individual resident of United States;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">a
    corporation, or other entity taxable as a corporation, created or organized in or under the laws of the United States, any state
    therein or the District of Columbia;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">an
    estate the income of which is subject to U.S. federal income taxation regardless of its source; or</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">a
    trust if&#8201; (1) a U.S. court is able to exercise primary supervision over the administration of the trust and one or more U.S.
    persons have authority to control all substantial decisions of the trust or (2) the trust has a valid election in effect to be treated
    as a U.S. person under applicable United States Treasury Regulations.</span></td></tr>
  </table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">PERSONS
CONSIDERING AN INVESTMENT IN COMMON SHARES SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE PARTICULAR TAX CONSEQUENCES APPLICABLE TO
THEM RELATING TO THE ACQUISITION, OWNERSHIP AND DISPOSITION OF THE COMMON SHARES, INCLUDING THE APPLICABILITY OF U.S. FEDERAL, STATE
AND LOCAL TAX LAWS.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Passive
Foreign Investment Company Rules</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
the Company is classified as a passive foreign investment company (a &#8220;PFIC&#8221;) in any taxable year, a U.S. Holder will
be subject to special rules generally intended to reduce or eliminate any benefits from the deferral of U.S. federal income tax that
a U.S. Holder could derive from investing in a non-U.S. company that does not distribute all of its earnings on a current basis.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
non-U.S. corporation will be classified as a PFIC for any taxable year in which, after applying certain look-through rules, either:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: -17.85pt; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">at
    least 75% of its gross income is passive income (which generally includes dividends, interest, rents or royalties (other than certain
    rents or royalties earned in the conduct of an active business) and investment gains); or</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">at
    least 50% of its gross assets (determined on the basis of a quarterly average) is attributable to assets that produce passive income
    or are held for the production of passive income.</span></td></tr>
  </table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company will be treated as owning its proportionate share of the assets and earning its proportionate share of the income of any
other corporation, the equity of which it owns, directly or indirectly, 25% or more (by value).</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Based
on the composition of the Company&#8217;s income and the value of its assets, the Company believes that it was a PFIC for United
States federal income tax purposes for the 2022 taxable year, and, further, the determination of the Company&#8217;s status as a
PFIC for the 2023 tax year cannot be made at this time. A separate determination must be made after the close of each taxable year
as to whether the Company is a PFIC for that year, and as a result, its PFIC status may change from year to year. The total value of
the Company&#8217;s assets for purposes of the asset test generally will be calculated using the market price of the Common Shares,
which may fluctuate considerably.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Fluctuations
in the market price of the Common Shares may result in the Company being a PFIC for any taxable year. Because of the uncertainties
involved in establishing the Company&#8217;s PFIC status, there can be no assurance regarding if the Company currently is treated
as a PFIC, or may be treated as a PFIC in the future.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
the Company is classified as a PFIC in any year with respect to which a U.S. Holder owns the Common Shares, the Company will continue
to be treated as a PFIC with respect to such U.S. Holder in all succeeding years during which the U.S. Holder owns the Common Shares, regardless
of whether the Company continues to meet the tests described above unless the Company ceases to be a PFIC and either (x) the
U.S. Holder has made a &#8220;deemed sale&#8221; election under the PFIC rules or (y) for the period immediately preceding the Company&#8217;s
ceasing to be a PFIC the Common Shares were subject to a mark-to-market election. If the &#8220;deemed sale&#8221; election is made, a U.S.
Holder will be deemed to have sold the Common Shares the U.S. Holder holds at their fair market value and any gain from such deemed sale would
be subject to the rules described below. After the deemed sale election, so long as the Company does not become a PFIC in a subsequent
taxable year, the U.S. Holder&#8217;s Common Shares with respect to which such election was made will not be treated as shares in a PFIC and
the U.S. Holder will not be subject to the rules described below with respect to any &#8220;excess distribution&#8221; the U.S. Holder
receives from the Company or any gain from an actual sale or other disposition of the Common Shares. U.S. Holders should consult their
tax advisors as to the possibility and consequences of making a deemed sale election if the Company ceases to be a PFIC and such
election becomes available.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
each taxable year the Company is treated as a PFIC with respect to U.S. Holders, U.S. Holders will be subject to special tax rules
with respect to any &#8220;excess distribution&#8221; such U.S. Holder receives and any gain such U.S. Holder recognizes from a sale
or other disposition (including, under certain circumstances, a pledge) of Common Shares, unless (i) such U.S. Holder makes a qualified electing
fund election (a &#8220;QEF Election&#8221;) or (ii) the Common Shares constitute &#8220;marketable&#8221; securities, and such U.S. Holder
makes a mark-to-market election as discussed below. Absent the making of a QEF Election or a mark-to-market election, distributions a
U.S. Holder receives in a taxable year that are greater than 125% of the average annual distributions a U.S. Holder received during the
shorter of the three preceding taxable years or the U.S. Holder&#8217;s holding period for the Common Shares will be treated as an excess
distribution. Under these special tax rules:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: -17.85pt; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
    excess distribution or gain will be allocated ratably over a U.S. Holder&#8217;s holding period for the Common Shares;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
    amount allocated to the current taxable year, and any taxable year prior to the first taxable year in which the Corporation became
    a PFIC, will be treated as ordinary income; and</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
    amount allocated to each other year will be subject to the highest tax rate in effect for that year and the interest charge generally
    applicable to underpayments of tax will be imposed on the resulting tax attributable to each such year.</span></td></tr>
  </table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
tax liability for amounts allocated to years prior to the year of disposition or &#8220;excess distribution&#8221; cannot be offset by
any net operating losses for such years, and gains (but not losses) realized on the sale of the Common Shares cannot be treated as capital,
even if a U.S. Holder holds the Common Shares as capital assets.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition, if the Company is a PFIC, a U.S. Holder will generally be subject to similar rules with respect to distributions the Company
receives from, and the Company&#8217;s dispositions of the stock of, any of the Company&#8217;s direct or indirect subsidiaries
that also are PFICs, as if such distributions were indirectly received by, and/or dispositions were indirectly carried out by, such U.S.
Holder. U.S. Holders should consult their tax advisors regarding the application of the PFIC rules to the Company&#8217;s subsidiaries.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
a U.S. Holder makes an effective QEF Election, the U.S. Holder will be required to include in gross income each year, whether or not
the Company makes distributions, as capital gains, such U.S. Holder&#8217;s pro rata share of the Company&#8217;s net capital
gains and, as ordinary income, such U.S. Holder&#8217;s pro rata share of the Company&#8217;s earnings in excess of the Company&#8217;s
net capital gains. U.S. Holders should be aware that, for each tax year, if any, that the Company is a PFIC, the Company can
provide no assurances that it will satisfy the record keeping requirements of a PFIC, or that the Company will make available to
U.S. Holders the information such U.S. Holders require to make a QEF Election with respect to the Company, and as a result, a QEF
Election may not be available to U.S. Holders.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">U.S.
Holders also can avoid the interest charge on excess distributions or gain relating to the Common Shares by making a mark-to-market election
with respect to the Common Shares, provided that the Common Shares are &#8220;marketable.&#8221; Common shares will be marketable if they are &#8220;regularly
traded&#8221; on certain U.S. stock exchanges or on a foreign stock exchange that meets certain conditions. For these purposes, the Common Shares
will be considered regularly traded during any calendar year during which they are traded, other than in de minimis quantities, on at
least 15 days during each calendar quarter. Any trades that have as their principal purpose meeting this requirement will be disregarded.
The Common Shares are listed on the <span style="color: #4D5156; background-color: white">OTCQX</span>, which is a qualified exchange for
these purposes. Consequently, if the Common Shares remain listed on the <span style="color: #4D5156; background-color: white">OTCQX</span>
and are regularly traded, and you are a holder of Common Shares, the Company expects the mark-to-market election would be available to
U.S. Holders if the Company is a PFIC. Each U.S. Holder should consult its tax advisor as to the whether a mark-to-market election
is available or advisable with respect to the Common Shares.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
U.S. Holder that makes a mark-to-market election must include in ordinary income for each year an amount equal to the excess, if any,
of the fair market value of the Common Shares at the close of the taxable year over the U.S. Holder&#8217;s adjusted tax basis in the Common Shares.
An electing holder may also claim an ordinary loss deduction for the excess, if any, of the U.S. Holder&#8217;s adjusted basis in the
Common Shares over the fair market value of the Common Shares at the close of the taxable year, but this deduction is allowable only to the extent
of any net mark-to-market gains for prior years. Gains from an actual sale or other disposition of the Common Shares will be treated as ordinary
income, and any losses incurred on a sale or other disposition of the shares will be treated as an ordinary loss to the extent of any
net mark-to-market gains for prior years. Once made, the election cannot be revoked without the consent of the Internal Revenue Service
(the &#8220;IRS&#8221;), unless the Common Shares cease to be marketable.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">However,
a mark-to-market election generally cannot be made for equity interests in any lower-tier PFICs that the Company owns, unless shares
of such lower-tier PFIC are themselves &#8220;marketable.&#8221; As a result, even if a U.S. Holder validly makes a mark-to-market election
with respect to the Common Shares, the U.S. Holder may continue to be subject to the PFIC rules (described above) with respect to its indirect
interest in any of the Company&#8217;s investments that are treated as an equity interest in a PFIC for U.S. federal income tax purposes.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">U.S.
HOLDERS SHOULD CONSULT THEIR TAX ADVISORS TO DETERMINE WHETHER ANY OF THESE ELECTIONS WOULD BE AVAILABLE AND IF SO, WHAT THE CONSEQUENCES
OF THE ALTERNATIVE TREATMENTS WOULD BE IN THEIR PARTICULAR CIRCUMSTANCES.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Each
U.S. shareholder of a PFIC is required to file a Form 8621, <i>Information Return by a Shareholder of a Passive Foreign Investment Company
or Qualified Electing Fund</i> containing such information as the United States Treasury Department (the &#8220;U.S. Treasury&#8221;)
may require. U.S. Holders should consult their tax advisors regarding the requirements of filing such information returns under these
rules.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">THE
CORPORATION STRONGLY URGES YOU TO CONSULT YOUR TAX ADVISOR REGARDING THE IMPACT OF THE CORPORATION&#8217;S PFIC STATUS ON YOUR INVESTMENT
IN THE COMMON SHARES AS WELL AS THE APPLICATION OF THE PFIC RULES TO YOUR INVESTMENT IN THE COMMON SHARES.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Cash
Dividends and Other Distributions</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Subject
to the discussion under &#8220;Passive Foreign Investment Company Rules&#8221; above, to the extent there are any distributions made
with respect to the Common Shares, a U.S. Holder generally will be required to include in its gross income distributions received with
respect to its Common Shares (including the amount of Canadian taxes withheld, if any) as dividend income, but only to the extent that
the distribution is paid out of the Company&#8217;s current or accumulated earnings and profits (computed using U.S. federal income
tax principles), with the excess treated first as a non-taxable return of capital to the extent of the holder&#8217;s adjusted tax basis
in its Common Shares and, thereafter, as capital gain recognized on a sale or exchange on the day actually or constructively received
by the holder (as described below under &#8220;Sale or Disposition of Common Shares&#8221;). There can be no assurance that the Company
will maintain calculations of the Company&#8217;s earnings and profits in accordance with U.S. federal income tax accounting principles.
U.S. Holders should therefore assume that any distribution with respect to the Common Shares will constitute ordinary dividend income.
Dividends paid on the Common Shares will not be eligible for the dividends received deduction allowed to U.S. corporations.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Dividends
paid to a non-corporate U.S. Holder by a &#8220;qualified foreign corporation&#8221; may be subject to reduced rates of taxation if certain
holding period and other requirements are met. A qualified foreign corporation generally includes a foreign corporation if&#8201; (i)
its Common Shares are readily tradable on an established securities market in the United States or it is eligible for benefits under
a comprehensive U.S. income tax treaty that includes an exchange of information program and which the U.S. Treasury has determined is
satisfactory for these purposes and (ii) if such foreign corporation is not a PFIC (as discussed above) for either the taxable year in
which the dividend is paid or the preceding taxable year. The Common Shares are readily tradable on the <span style="color: #4D5156; background-color: white">OTCQX</span>,
an established securities market in the United States, and the Company may be eligible for the benefits of the Treaty. Accordingly,
subject to the PFIC rules discussed above, a non-corporate U.S. Holder may qualify for the reduced rate on dividends so long as the applicable
holding period requirements are met. U.S. Holders should consult their own tax advisors regarding the availability of the reduced tax
rate on dividends in light of their particular circumstances.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Distributions
paid in a currency other than U.S. dollars will be included in a U.S. Holder&#8217;s gross income in a U.S. dollar amount based on the
spot exchange rate in effect on the date of actual or constructive receipt, whether or not the payment is converted into U.S. dollars
at that time. The U.S. Holder will have a tax basis in such currency equal to such U.S. dollar amount, and any gain or loss recognized
upon a subsequent sale or conversion of the foreign currency for a different U.S. dollar amount will generally be U.S. source ordinary
income or loss. If the dividend is converted into U.S. dollars on the date of receipt, a U.S. Holder generally should generally not be
required to recognize foreign currency gain or loss in respect of the dividend income.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
a U.S. Holder is subject to Canadian withholding taxes (at the rate applicable to such U.S. Holder) with respect to dividends paid on
the Common Shares, such U.S. Holder may be entitled to receive either a deduction or a foreign tax credit for such Canadian taxes paid.
Complex limitations apply to the foreign tax credit. Dividends paid by the Company generally will constitute &#8220;foreign source&#8221;
income and generally will be categorized as &#8220;passive category income.&#8221; Because the foreign tax credit rules are complex,
each U.S. Holder should consult its own tax advisor regarding the foreign tax credit rules.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Sale
or Disposition of Common Shares</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
U.S. Holder generally will recognize gain or loss on the taxable sale or exchange of the Common Shares in an amount equal to the difference
between the U.S. dollar amount realized on such sale or exchange (determined in the case of the Common Shares sold or exchanged for currencies
other than U.S. dollars by reference to the spot exchange rate in effect on the date of the sale or exchange or, if the Common Shares
sold or exchanged are traded on an established securities market and the U.S. Holder is a cash basis taxpayer or an electing accrual
basis taxpayer, which election must be applied consistently from year to year and cannot be changed without the consent of the IRS, the
spot exchange rate in effect on the settlement date) and the U.S. Holder&#8217;s adjusted tax basis in the Common Shares determined in
U.S. dollars. The initial tax basis of the Common Shares to a U.S. Holder will be the U.S. Holder&#8217;s U.S. dollar purchase price
for the Common Shares (determined by reference to the spot exchange rate in effect on the date of the purchase, or if the Common Shares
purchased are traded on an established securities market and the U.S. Holder is a cash basis taxpayer or an electing accrual basis taxpayer,
which election must be applied consistently from year to year and cannot be changed without the consent of the IRS, the spot exchange
rate in effect on the settlement date). An accrual basis U.S. Holder that does not make the special election will recognize exchange
gain or loss to the extent attributable to the difference between the exchange rates on the sale date and the settlement date, and such
exchange gain or loss generally will constitute ordinary income or loss.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Subject
to the discussion under &#8220;Passive Foreign Investment Company Rules&#8221; above, such gain or loss will be capital gain or loss
and will be long-term gain or loss if the Common Shares have been held for more than one year. Under current law, long-term capital gains
of non-corporate U.S. Holders generally are eligible for reduced rates of taxation. The deductibility of capital losses is subject to
limitations. Capital gain or loss, if any, recognized by a U.S. Holder generally will be treated as U.S. source income or loss for U.S.
foreign tax credit purposes. U.S. Holders are encouraged to consult their own tax advisors regarding the availability of the U.S. foreign
tax credit in their particular circumstances.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Net
Investment Income Tax</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Certain
U.S. Holders that are individuals, estates or certain trusts must pay a 3.8% tax on their &#8220;net investment income.&#8221; Net investment
income generally includes, among other things, dividend income and net gains from the disposition of stock. A U.S. Holder that is an
individual, estate or trust should consult its tax advisor regarding the applicability of the net investment income tax to its income
and gains in respect of its investment in the Common Shares.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Information
Reporting and Backup Withholding</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Payments
of dividends and sales proceeds that are made within the United States or through certain U.S.-related financial intermediaries generally
are subject to information reporting, and may be subject to backup withholding, unless (i) the U.S. Holder is a corporation or other
exempt recipient or (ii) in the case of backup withholding, the U.S. Holder provides a correct taxpayer identification number and certifies
that it is not subject to backup withholding on a duly executed IRS Form W-9 or otherwise establishes an exemption.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Backup
withholding is not an additional tax. The amount of any backup withholding from a payment to a U.S. Holder will be allowed as a credit
against the U.S. Holder&#8217;s U.S. federal income tax liability and may entitle the U.S. Holder to a refund, provided that the required
information is timely furnished to the IRS.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Certain
Reporting Requirements</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition to the reporting described above that may be required if the Company is a PFIC, U.S. Holders paying more than US$100,000
for the Common Shares generally may be required to file IRS Form 926 reporting the payment of the offer price for the Common Shares to
the Company. Substantial penalties may be imposed upon a U.S. Holder that fails to comply. Each U.S. Holder should consult its own
tax advisor as to the possible obligation to file IRS Form 926.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Certain
U.S. Holders who are individuals (and, under regulations, certain entities) may be required to report information relating to the Common
Shares, subject to certain exceptions (including an exception for Common Shares held in accounts maintained by certain U.S. financial
institutions), by filing IRS Form 8938 (Statement of Specified Foreign Financial Assets) with their federal income tax return. Such U.S.
Holders who fail to timely furnish the required information may be subject to a penalty. Additionally, if a U.S. Holder does not file
the required information, the statute of limitations with respect to tax returns of the U.S. Holder to which the information relates
may not close until three years after such information is filed. U.S. Holders should consult their tax advisers regarding their reporting
obligations with respect to their ownership and disposition of the Common Shares.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>F.
Dividends and Paying Agents</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
required.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>G.
Statement by Experts</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
required.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>H.
Documents on display</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">All
documents referenced in this Form 20-F may be viewed at the offices of the Company during business hours at One First Canadian Place,
100 King Street West, Suite 3400, Toronto, Ontario, Canada M5X 1A4.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>I.
Subsidiary Information</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not applicable.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="b_011"></span>ITEM
11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
required.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="b_012"></span>ITEM
12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
required.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="b_013"></span>ITEM
13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="b_014"></span>ITEM
14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="b_015"></span>ITEM
15. CONTROLS AND PROCEDURES</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Disclosure
Controls and Procedures</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">At
the end of the period covered by this Annual Report, an evaluation of the effectiveness of the design and operation of the
Company&#8217;s &#8220;disclosure controls and procedures&#8221; (as such term is defined in Rules&#160;13a-15(e)&#160;under the
U.S. Exchange Act) was carried out by the Company&#8217;s principal executive officer and principal financial officer. Based upon
that evaluation, the Company&#8217;s CEO and CFO have concluded that, as of the end of the period covered by this report, the
design and operation of the Company&#8217;s disclosure controls and procedures are effective.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">It
should be noted that while the Company&#8217;s CEO and CFO believe that the Company&#8217;s disclosure controls and procedures
provide a reasonable level of assurance that they are effective, they do not expect that the Company&#8217;s disclosure controls
and procedures will prevent all errors and fraud. A control system, no matter how well conceived or operated, can provide only reasonable,
not absolute, assurance that the objectives of the control system are met.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Management&#8217;s
Report on Internal Control over Financial Reporting</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Management
is responsible for establishing and maintaining adequate internal control over financial reporting (as such term is defined in Rule&#160;13a-15(f)&#160;and
Rule&#160;15d-15(f)&#160;under the U.S. Exchange Act) and has designed such internal control over financial reporting to provide reasonable
assurance regarding the reliability of financial reporting and preparation of financial statements for external purposes in accordance
with International Financial Reporting Standards as issued by the International Accounting Standards Board.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
designing and evaluating the Company&#8217;s internal control over financial reporting, the Company&#8217;s management recognizes
that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their
objectives and management necessarily applies its reasonable judgment in evaluating the cost-benefit relationship of possible controls
and procedures. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Projections of any evaluation of effectiveness to future periods are subject to the risks that controls may become inadequate because
of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Management
conducted an evaluation of the effectiveness of the Company&#8217;s internal control over financial reporting as of December&#160;31,
2022. In making this assessment, management used the criteria set forth in &#8220;Internal Control &#8211; Integrated Framework (2013)&#8221;
issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this evaluation, management concluded
that the Company&#8217;s internal control over financial reporting was effective as of December&#160;31, 2022.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Changes
in Internal Control Over Financial Reporting</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">There
were no changes in the Company&#8217;s internal controls over financial reporting that occurred during the period covered by this Annual
Report on Form 20-F that have materially affected, or are reasonably likely to materially affect the Company&#8217;s internal controls over financial
reporting.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="b_016"></span>ITEM
16.</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="b_017"></span>A.
Audit Committee Financial Expert</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Board of Directors of the Company has determined that Mr. Don Newberry, a member of the Board&#8217;s ARMC qualifies as an
&#8220;audit committee financial expert.&#8221; The Board of Directors has determined that Mr. Newberry is &#8220;independent&#8221;
under applicable standards. Mr. Don Newberry has over 20 years of experience in a variety of senior financial and project management
leadership roles and he is currently the Chief Financial Officer at Ohio Truck Sales. Mr. Newberry has spent most of his career
working internationally in the mining industry for Diavik Diamond Mines, Cleveland Cliffs and Nyrstar. He is experienced in
overseeing large mining projects from studies through to execution, risk management, M&amp;A, integration, and implementing
financial controls and oversight of company&#8217;s assets. Mr. Newberry completed his Bachelor of Commerce (Accounting) at Ottawa
University, Master of Business Administration (MBA) in Global Management at University of Phoenix, and he also completed the Program
for Leadership Development (PLD) at Harvard Business School. He is a Chartered Professional Accountant / Certified Management
Accountant (CPA, CMA).</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Mr.
John Hick has over 40 years of experience in the mining industry in both senior management positions and as an independent director.
He currently serves as an independent director, and in some cases the non-executive Chairman, to a number of publicly listed
companies, including Diamond Estates Wines &amp; Spirits Inc. and Mako Mining Corp. Previously, Mr. Hick has held board and/or
senior management positions with a number of other Canadian mining companies, including Quebec Precious Metals Corp., Medoro
Resources Ltd., St. Andrew Goldfields Ltd., First Uranium Corp., Defiance Mining Corp./Geomaque Explorations Ltd, TVX Gold Inc.,
Cambior Inc., Rio Narcea Gold Mines Ltd, Rayrock Resources Inc., Revett Minerals Inc. and Placer Dome Inc. Mr. Hick holds a B.A.
from the University of Toronto, and a LLB from the University of Ottawa.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Mr.
William O&#8217;Reilly was Managing Partner and a member of the Management Committee of Davies Ward Phillips &amp; Vineberg LLP, a
leading Canadian law firm, from 1997 until his retirement from those positions on May 31, 2010. In his capacity as Managing Partner
at Davies, Mr. O&#8217;Reilly had primary responsibility for a wide range of firm management matters, including firm strategy,
delivery of legal services, client relationships, other business development initiatives, lawyer recruitment, regulatory compliance,
financial reporting, professional education and partner compensation. Since 2009, Mr. O&#8217;Reilly has served as a director of
Russel Metals Inc., a public company listed on the Toronto Stock Exchange.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="b_018"></span>B.
Code of Ethics</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company has adopted a code of ethics applicable to its directors, principal executive officer, principal financial officer, principal
accounting procedures, and persons performing similar functions. A copy of the Company&#8217;s Code of Ethics will be made available
to anyone who requests it in writing from the Company&#8217;s head office.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="b_019"></span>C.
Principal Accounting Fees and Services</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(a)
Audit Fees</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Dale
Matheson Carr-Hilton LaBonte LLP, Chartered Professional Accountants (&#8220;DMCL&#8221;) billed NAN $45,549 in the year ended December
31, 2022 (2021 - $42,512).</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(b)
Audit Related Fees</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">DMCL
billed $29,000 for audit related services in the year ended December 31, 2022 (2021 &#8211; Nil).</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(c)
Tax Fees</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">DMCL
billed the Company $5,300 for the tax year 2021 and $3,400 for the tax year 2021.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(d)
All Other Fees</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">No
other fees were billed by DMCL.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(e)
Audit Committee Pre-Approval Policies and Procedures</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">To
ensure continuing auditor objectivity and to safeguard the independence of its auditors, the Company&#8217;s audit committee has determined
a framework for the type and authorization of non-audit services which its auditors may provide. The audit committee has adopted policies
for the pre-approval of specific services that may be provided by its auditors. The dual objectives of these policies are to ensure that
the Company benefit in a cost effective manner from the cumulative knowledge and experience of its auditors, while also ensuring that
the auditors maintain the necessary degree of independence and objectivity.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company&#8217;s audit committee approved the engagement of MNP LLP to render audit and non-audit services before they were engaged by
the Company.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


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    <!-- Field: /Page -->

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="b_020"></span>D.
Exemption From the Listing Standards for Audit Committees</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
Applicable.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="b_021"></span>E.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
Applicable.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="b_022"></span>F.
Change in the Registrant&#8217;s Certifying Accountant</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 10pt">Effective August 31,
2022, DMCL</span>, the Company&#8217;s former independent registered public accounting firm, resigned from its appointment
due to the requirements of the Canadian Public Accountability Board. Effective December 5, 2022, the Company appointed MNP LLP as the Company&#8217;s independent
registered public accounting firm. The details of the Company&#8217;s change of auditor were previously described in its report of foreign
private issuer on Form 6-K filed with the Securities and Exchange Commission on December 21, 2022 (File No. 001-14740), which is attached
as Exhibit 15.2 to this Annual Report and incorporated by reference herein.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><span id="b_023"></span>G. Corporate Governance</b></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Not applicable.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="b_024"></span>H.
Mine Safety Disclosure</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Not applicable.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="b_025"></span>I.
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="b_026"></span>J.
Insider Trading Policies</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>PART
III</b></span></p>



<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="b_027"></span>ITEM
17. FINANCIAL STATEMENTS</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
financial statements and notes thereto as required by Item 17 are attached hereto and found immediately after the text of this Annual Report. The auditors&#8217; report of MNP LLP, independent registered public accountants, on the audited
financial statements and notes thereto is included immediately preceding the audited financial statements.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify; text-indent: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#aud_001">Independent Auditors&#8217; Report.</a></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify; text-indent: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#a_001">Consolidated
Statements of financial position as at December 31, 2022 and 2021.</a></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify; text-indent: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#a_002">Consolidated
Statements of comprehensive loss for the years ended December 31, 2022 and 2021.</a></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify; text-indent: 0pt"><a href="#a_003">Consolidated
Statement of changes in shareholders&#8217; equity for the years ended December 31, 2022 and 2021</a></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify; text-indent: 0pt"><a href="#a_004">Consolidated
Statements of cash flows for the years ended December 31,2022 and 2021</a></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify; text-indent: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#a_005">Notes
to the consolidated financial statements for the years ended December 31, 2022 and 2021</a></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify; text-indent: 0pt"><a href="#fin2_002">Independent Auditors&#8217; Report</a></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify; text-indent: 0pt"><a href="#fin2_003">Consolidated Statements of financial position as at December 31, 2021 and 2020.</a></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify; text-indent: 0pt"><a href="#fin2_004">Consolidated Statements of comprehensive loss for the years ended December 31, 2021 and 2020.</a></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify; text-indent: 0pt"><a href="#fin2_005">Consolidated Statement of changes in shareholders&#8217; equity for the years ended December 31, 2021 and 2020</a></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify; text-indent: 0pt"><a href="#fin2_006">Consolidated Statements of cash flows for the years ended December 31,2021 and 2020</a></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify; text-indent: 0pt"><a href="#fin2_007">Notes to the consolidated financial statements for the years ended December 31, 2020 and 2020</a></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.35in; text-align: justify; text-indent: -0.7pt">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="b_028"></span>ITEM
18. FINANCIAL STATEMENTS</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable. See &#8220;Item 17. Financial Statements&#8221; above.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="b_029"></span>ITEM
19. EXHIBITS</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="border-bottom: Black 1.5pt solid; text-align: justify; width: 0.75in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Exhibit
    No.</b></span></td>
    <td style="padding-bottom: 1.5pt; text-align: justify; width: 0.1in">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Description</b></span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1.1*</span></td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="ex1-1.htm">Certificate of Continuance</a></span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1.2*</span></td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="ex1-2.htm">Articles of Continuance</a></span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1.3*</span></td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="ex1-3.htm">Bylaws</a></span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">2.1*</span></td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="ex2-1.htm">Warrant Certificate dated March 17, 2023</a></span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">2.2*</span></td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="ex2-2.htm">Form of Broker Warrant Certificate</a></span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">2.3*</span></td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="ex2-3.htm">Commitment Letter among Premium Nick Resources Ltd., Guarantors and Pinnacle Island LP, dated November 18, 2022</a></span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">2.4*</span></td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="ex2-4.htm">Promissory Note dated November 25, 2022 between Premium Nickel Resources Ltd. and Pinnacle Island LLP</a></span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">2.5*</span></td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="ex2-5.htm">Amended and Restated Promissory Note dated March 17, 2022 between Premium Nickel Resources Ltd. and Pinnacle Island LP</a></span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">2.6*</span></td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="ex2-6.htm">Description of Securities Registered Under Section 12 of the Exchange Act</a> </span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.1*</span></td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><a href="ex4-1.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Asset Purchase Agreement dated September 28, 2021 between Trevor Glaum N.O., BCL Limited, Premium Nickel Resources Proprietary Limited and Premium Nickel Resources Corporation </span></a></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.2*</span></td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="ex4-2.htm">Amending Agreement dated January 19, 2022 between Trevor Glaum N.O., BCL Limited, Premium Nickel Resources Proprietary Limited and the Purchaser Gurantors</a></span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.3*</span></td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="ex4-3.htm">Agency Agreement dated February 24, 2023 among Paradigm Capital Inc., as lead agent and sole bookrunner, Tamesis Partners LLP, Cormark Securities Inc., Echelon Wealth Partners Inc., Eight Capital, INFOR Financial Inc. and CIBC World Markets Inc. and Premium Nickel Resources Ltd.</a></span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">8*</span></td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><a href="ex-8.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">List of Subsidiaries</span></a></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">12.1*</span></td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="ex12-1.htm">Certification of Chief Executive Officer pursuant to s.302 of the Sarbanes-Oxley Act of 2002</a></span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">12.2*</span></td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="ex12-2.htm">Certification of Chief Financial Officer pursuant to s.302 of the Sarbanes-Oxley Act of 2002</a></span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">13.1*</span></td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="ex13-1.htm">Certification of Chief Executive Officer pursuant to s.906 of the Sarbanes-Oxley Act of 2002</a></span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">13.2*</span></td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="ex13-2.htm">Certification of Chief Financial Officer pursuant to s.906 of the Sarbanes-Oxley Act of 2002</a></span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">15.1</span></td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/795800/000110465922095977/tm2223379d1_ex99-8.htm" style="-sec-extract: exhibit">Financial Statements of Premium Nickel Resources Corporation for the three months ended March 31, 2022 and for the years ended December 31, 2021 and 2020 (incorporated by reference to Appendix H of Exhibit 99.8 to the Company&#8217;s Form 6-K filed with the U.S. Securities and Exchange Commission on August 30, 2022)</a> </span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">15.2</span></td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="https://www.sec.gov/Archives/edgar/data/795800/000110465922129009/tm2233190d1_ex99-1.htm" style="-sec-extract: exhibit">Notice of Change of Auditor (incorporated by reference to Exhibit 99.1 to the Company&#8217;s Form 6-K filed with the U.S. Securities and Exchange Commission on December 21, 2022)</a></span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">
    <p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0">101*</p>
    <p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0"></p></td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The following materials from the Company&#8217;s Annual Report on Form 20-F for the fiscal year ended December 31, 2022, formatted in eXtensible Business Reporting Language (XBRL): (i) Consolidated Statements of Financial Position as of December 31, 2022 and 2021; (ii) Consolidated Statements of Comprehensive Loss for the years ended December 31, 2022, 2021 and 2020; (iii) Consolidated Statements of Changes in Shareholders&#8217; Equity for the years ended December 31, 2022, 2021 and 2020; (iv) Consolidated Statements of Cash Flows for the years ended December 31, 2022, 2021 and 2020; and (v) Notes to Consolidated Financial Statements</span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">104*</span></td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Cover Page Interactive Data File (formatted as Inline eXtensible Business Reporting Language (iXBRL) and contained in Exhibit 101)</span></td></tr>
  </table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">*Filed herewith.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>SIGNATURES</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized
the undersigned to sign this annual report on its behalf.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td colspan="2" style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">PREMIUM
    NICKEL RESOURCES LTD.</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 50%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 5%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 45%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Date:
    May &#9679;, 2023</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">By:</span></td>
    <td style="border-bottom: black 1.5pt solid; font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>/s/
    Keith Morrison</i></span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Name:
    </span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Keith
    Morrison</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Title:
    </span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Chief Executive Officer</span></td></tr>
  </table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


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    <div style="break-before: page; margin-top: 6pt"><p style="margin: 0pt">&#160;</p></div>
    <!-- Field: /Page -->

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><img src="fin_001.jpg" alt="" style="height: 72px; width: 514px" /></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: #767070">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Formerly
&#8220;North American Nickel Inc.&#8221;</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: #767070"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1in 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>CONSOLIDATED
FINANCIAL STATEMENTS</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1in 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1in 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b></b></span><b><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i></i></span></b></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1in 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>For
the years ended December 31, 2022 and 2021</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>In
accordance with International Financial Reporting Standards (&#8220;IFRS) &#8220; and stated in Canadian dollars, unless otherwise indicated.</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: #767070"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>INDEX</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: #00246F"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><a href="#Manage_001"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Management&#8217;s Responsibility for Financial Reporting</span></a></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><a href="#aud_001"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Independent Auditor&#8217;s Report</span></a></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Consolidated
Financial Statements</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: #767070"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" border="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt">
<tr style="vertical-align: top">
    <td style="width: 0.25in">&#160;</td>
  <td style="width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
  <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#a_001">Consolidated Statements of Financial Position</a></span></td></tr>

<tr style="vertical-align: top">
    <td>&#160;</td>
  <td>&#160;</td>
  <td>&#160;</td></tr>
<tr style="vertical-align: top">
    <td>&#160;</td>
  <td>&#9679;<span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></td>
  <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#a_002">Consolidated Statements of Comprehensive Loss</a></span></td></tr>

<tr style="vertical-align: top">
    <td>&#160;</td>
  <td>&#160;</td>
  <td>&#160;</td></tr>
<tr style="vertical-align: top">
    <td>&#160;</td>
  <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span>&#9679;</td>
  <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#a_003">Consolidated Statements of Changes in Shareholders&#8217; Equity (Deficiency)</a></span></td></tr>

<tr style="vertical-align: top">
    <td>&#160;</td>
  <td>&#160;</td>
  <td>&#160;</td></tr>
<tr style="vertical-align: top">
    <td>&#160;</td>
  <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span>&#9679;</td>
  <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#a_004">Consolidated Statements of Cash Flows</a></span></td></tr>

<tr style="vertical-align: top">
    <td>&#160;</td>
  <td>&#160;</td>
  <td>&#160;</td></tr>
<tr style="vertical-align: top">
    <td>&#160;</td>
  <td>&#9679;</td>
  <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#a_005">Notes to the Consolidated Financial Statements</a></span></td></tr>
</table>


<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; color: #767070"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; color: #767070"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; color: #767070"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>

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    <div style="break-before: page; margin-top: 6pt"><p style="margin: 0pt">&#160;</p></div>
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; color: #767070"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1in 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="Manage_001"></span>MANAGEMENT
RESPONSIBILITY FOR FINANCIAL REPORTING</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1in 0pt 0; color: #00246F"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
consolidated financial statements, and the notes thereto, of Premium Nickel Resources Ltd., formerly North American Nickel Inc. and its
subsidiaries have been prepared by management in accordance with International Financial Reporting standards. Management acknowledges
responsibility for the preparation and presentation of the consolidated financial statements, including responsibility for significant
accounting judgments and estimates and the choice of accounting principles and methods that are appropriate to the Company&#8217;s circumstances.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Management,
in discharging these responsibilities, maintains a system of internal controls designed to provide reasonable assurance that its assets
are safeguarded, only valid and authorized transactions are executed and accurate, timely and comprehensive financial information is
prepared. However, any system of internal controls over financial reporting, no matter how well designed and implemented, has inherent
limitations and may not prevent or detect all misstatements.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Board of Directors, principally through the Audit Committee, is responsible for reviewing and approving the consolidated financial statements
together with other financial information of the Company and for ensuring that management fulfills its financial reporting responsibilities.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
consolidated financial statements have been audited by MNP LLP, Chartered Professional Accountants, Licensed Public Accountants, who
were retained by the Company to audit the consolidated financial statements and provide an independent auditor&#8217;s report thereon.
The auditor&#8217;s report outlines the scope of their examination and their opinion on the consolidated financial statements. MNP LLP
has full and free access to the Board of Directors.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" border="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt">
<tr style="vertical-align: top">
  <td style="width: 50%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#8220;signed&#8221;</b></span></td>
  <td style="width: 50%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#8220;signed&#8221;</b></span></td></tr>

<tr style="vertical-align: top">
  <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Keith Morrison </b></span></td>
  <td><b>Sarah Zhu</b></td></tr>

<tr style="vertical-align: top">
  <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Chief Executive Officer</b></span></td>
  <td><b>Chief Financial Officer</b></td></tr>
<tr style="vertical-align: top">
  <td><b>&#160;</b></td>
  <td><b>&#160;</b></td></tr>
<tr style="vertical-align: top">
  <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">May 2, 2023</span></td>
  <td><b>&#160;</b></td></tr>
</table>


<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


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    <div style="break-before: page; margin-top: 6pt"><p style="margin: 0pt">&#160;</p></div>
    <!-- Field: /Page -->

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><img src="aud_001.jpg" alt="" style="height: 42px; width: 116px" /></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span id="aud_001"></span>REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.25in 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">To
the Board of Directors and</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.25in 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Shareholders
of Premium Nickel Resources Ltd. (Formerly North American Nickel Inc.)</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.25in 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Opinion
on the Consolidated Financial Statements</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21.55pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have audited the accompanying consolidated balance sheet of Premium Nickel Resources Ltd. (Formerly North American Nickel Inc.) (the
Company) as of December 31, 2022 and the related consolidated statement of comprehensive loss, change in shareholders&#8217; equity,
and cash flow for year ended December 31, 2022, and the related notes (collectively referred to as the consolidated financial statements).</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.25in 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the
Company as of December 31, 2022 and the results of its consolidated operations and its consolidated cash flow for the year ended December
31, 2022, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Other
Matter</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
consolidated financial statements of the Company for the year ended December 31, 2021 and December 31, 2020 were audited by another auditor
who expressed an unmodified audit opinion on those consolidated statements on April 25, 2022.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Material
Uncertainty Related to Going Concern</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed
in Note 1 to the consolidated financial statements, the Company incurred a net loss from operations and has no source of operating cash
flows that raise substantial doubt about its ability to continue as a going concern. Management&#8217;s plans in regard to these matters
are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome
of this uncertainty. This matter is also described in the &#8220;Critical Audit Matters&#8221; section of our report.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Basis
for Opinion</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">These
consolidated financial statements are the responsibility of the Company&#8217;s management. Our responsibility is to express an opinion
on the Company&#8217;s consolidated financial statements based on our audit. We are a public accounting firm registered with the Public
Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance
with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.25in 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.
The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part
of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing
an opinion on the effectiveness of the Company&#8217;s internal control over financial reporting. Accordingly, we express no such opinion.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.25in 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.25in 0pt 0; text-align: justify"></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due
to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence
regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles
used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that our audit provide a reasonable basis for our opinion.<br />
</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.25in 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><img src="aud_002.jpg" alt="" style="height: 77px; width: 620px" /></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.25in 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.25in 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.25in 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Critical
Audit Matters</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements
that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are
material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The
communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole,
and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the
accounts or disclosures to which they relate.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.25in 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Going
Concern</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Critical
Audit Matter Description</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
described in Note 1, the Company, being in the exploration and redevelopment stage, is subject to risks and challenges similar to companies
in a comparable stage of development. These risks include the challenges of securing adequate capital for exploration, development and
operational risks inherent in the mining industry, and global economic and metal price volatility and there is no assurance management
will be successful in its endeavors. The ability of the Company to continue operations as a going concern is ultimately dependent upon
achieving profitable operations and its ability to obtain adequate financing. To date, the Company has not generated profitable operations
from its resource activities and will need to invest additional funds in carrying out its planned exploration, development and operational
activities. Management has prepared future cash flow forecasts, which involves judgement and estimation of key variables, such as planned
financing and capital and operational expenditures. Future economic conditions and effects of key events subsequent to the year end,
such as debt and equity financing, also impacted management&#8217;s judgements and estimates. We identified the Company&#8217;s ability
to continue as a going concern as a critical audit matter because auditing the Company&#8217;s going concern assessment is complex and
involves a high degree of auditor judgment to assess the reasonableness of the cash flow forecasts, planned refinancing actions and other
assumptions used in the Company&#8217;s going concern analysis. The Company&#8217;s ability to execute the planned refinancing actions
are especially judgmental given that the global financial markets and economic conditions have been, volatile. This matter is also described
in the &#8220;Material Uncertainty Related to Going Concern&#8221; section of our report.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Audit
Response</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
responded to this matter by performing procedures over management&#8217;s assessment of the Company&#8217;s ability to continue as a
going concern. Our audit work in relation to this included, but was not restricted to, the following:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.15in 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; width: 0.3in"></td><td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
                                            evaluated the cash flow forecasts prepared by management and evaluated the integrity and
                                            arithmetical accuracy of the model.</span></td></tr>
<tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; width: 0.3in"></td><td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
                                            evaluated the key assumptions used in the model to estimate future cash flows for a reasonable
                                            period of time, not exceeding 12 months from the date of the consolidated statements of financial
                                            position, by comparing assumptions used by management against budgets, economic and industry
                                            indicators and publicly available information.</span></td></tr>
<tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; width: 0.3in"></td><td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
                                            evaluated the key assumptions pertaining to estimated cash flows from operating activities
                                            and expected cash flows from financing activities, comparing these to available market data,
                                            underlying agreements, private placement raises and subsequent events thereafter. We assessed
                                            the adequacy of the going concern disclosures included in Note 1 of the consolidated financial
                                            statements and consider these to appropriately reflect the assessments that management has
                                            performed.</span></td></tr></table>

<p style="margin-top: 0; margin-bottom: 0">&#160;</p>

<p style="text-align: right; margin-top: 0; margin-bottom: 0"><img src="loogo_001.jpg" alt="" /></p>

<p style="margin-top: 0; margin-bottom: 0">&#160;</p>


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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Reverse
Acquisition of North American Nickel Ltd. - Fair Value of Consideration Received and Net Assets Acquired</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Critical
Audit Matter Description</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.2in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
April 26, 2022, Premium Nickel Resources Corp. (&#8220;PNRC&#8221;) and North American Nickel Inc. (&#8220;NAN&#8221;) entered into a
definitive amalgamation agreement pursuant to which PNRC would go-public by way of a reverse takeover of NAN. Effective August 3, 2022,
NAN completed the 100% acquisition of the outstanding shares of PNRC for consideration in the amount of $39,142,383 and changed its name
to Premium Nickel Resources Ltd. The substance of the transaction is reverse acquisition of a non-operating company and has been accounted
for as an asset acquisition with NAN being identified as the accounting acquiree and the equity consideration being measured at fair
value (&#8220;FV&#8221;) in accordance with IFRS 2. Refer to note 4 of the consolidated financial statements for further details.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.35in 0pt 0.2in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">This
matter represented an area of significant risk of material misstatement, given the auditing of the reverse acquisition is complex
due to the subjective nature of estimating the fair values of net assets acquired as at the date of the acquisition, particularly
the exploration and evaluation assets, and fair value of consideration received. Significant auditor attention is required to
evaluate the results of our audit procedures and assess the Company&#8217;s determination of the fair value of the net assets
acquired and fair value of consideration received.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.45in 0pt 0.2in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Audit
Response</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.2in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
responded to this matter by performing procedures in relation to fair value of assets acquired and consideration received. Our audit
work in relation to this included, but was not restricted to, the following:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.35in 0pt 0.2in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellspacing="0" cellpadding="0" style="width: 100%">
  <tr style="vertical-align: top">
    <td style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
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  <tr style="vertical-align: top">
    <td style="font: 11pt Calibri, Helvetica, Sans-Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 11pt Calibri, Helvetica, Sans-Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We reviewed the amalgamation agreement to obtain an understanding of the key terms and conditions to identify the necessary accounting considerations and identification of assets and liabilities acquired;</span></td></tr>
  <tr style="vertical-align: top">
    <td style="font: 11pt Calibri, Helvetica, Sans-Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 11pt Calibri, Helvetica, Sans-Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">With the assistance of our valuation specialists, we evaluated whether the fair value of consideration has been appropriately valued;</span></td></tr>
  <tr style="vertical-align: top">
    <td style="font: 11pt Calibri, Helvetica, Sans-Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
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  <tr style="vertical-align: top">
    <td style="font: 11pt Calibri, Helvetica, Sans-Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 11pt Calibri, Helvetica, Sans-Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We assessed the adequacy of the Company&#8217;s disclosure included in note 4, Amalgamation, of the accompanying consolidated financial statements in relation to this matter.</span></td></tr>
  </table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.35in 0pt 0.2in">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Chartered
Professional Accountants<br /></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.2in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><img src="fin_002.jpg" alt="" style="height: 40px; width: 150px" /></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span id="xdx_904_edei--AuditorName_c20220101__20221231_zG6Lr0N2GhYc"><ix:nonNumeric contextRef="From2022-01-01to2022-12-31" name="dei:AuditorName">Licensed Public Accountants</ix:nonNumeric></span></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have served as the Company&#8217;s auditor since 2022.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span id="xdx_904_edei--AuditorLocation_c20220101__20221231_zaTPtgnIFPVh"><ix:nonNumeric contextRef="From2022-01-01to2022-12-31" name="dei:AuditorLocation">Ottawa,
Canada</ix:nonNumeric></span></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">May
2, 2023</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">PCAOB
ID: <span id="xdx_902_edei--AuditorFirmId_c20220101__20221231_zUGko121F5Xc"><ix:nonNumeric contextRef="From2022-01-01to2022-12-31" name="dei:AuditorFirmId">1930</ix:nonNumeric></span>&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.2in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; text-align: right; margin: 0pt 0 0pt 0.2in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><img src="loogo_001.jpg" alt="" /></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.2in; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.2in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.2in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.2in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; text-align: left; margin-top: 0pt; margin-bottom: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><img src="fin_001.jpg" alt="" style="height: 72px; width: 514px" /></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.2in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 13pt/12.95pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; letter-spacing: -0.3pt"><b><i>Formerly
&#8220;North American Nickel Inc.&#8221;</i></b></span></p>

<p style="font: 11pt/12.3pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 3.7pt 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="a_001"></span>Consolidated
Statements of Financial Position<br />
</b><i>(Expressed in Canadian dollars)</i></span></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.2in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.2in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" id="xdx_301_111_zXA91aV4jS0e" summary="xdx: Statement - Consolidated Statements of Financial Position" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
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    <td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Notes</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td>
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    <td style="text-align: center">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr id="xdx_404_eifrs-full--CurrentAssets_i02TI_mtCAzxyo_maAzLrj_zd2QBBKW6B9c" style="vertical-align: bottom; background-color: White">
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  <tr id="xdx_40D_eifrs-full--NoncurrentAssetsAbstract_i01B_zLeBe9vRUSVa" style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr id="xdx_401_eifrs-full--TangibleExplorationAndEvaluationAssets_i02I_maNAz0wf_zljSHb9w0wC6" style="vertical-align: bottom; background-color: White">
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  <tr id="xdx_404_eifrs-full--PropertyPlantAndEquipment_i02I_maNAz0wf_zxKT1gqCz7Df" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt">Property, plant and equipment</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr id="xdx_400_eifrs-full--NoncurrentAssets_i02TI_mtNAz0wf_maAzLrj_zRS20NDDkAJ6" style="vertical-align: bottom; background-color: White">
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    <td style="text-align: center; padding-bottom: 1.5pt">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right"><ix:nonFraction name="ifrs-full:NoncurrentAssets" contextRef="AsOf2022-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">35,218,652</ix:nonFraction></td><td style="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr id="xdx_407_eifrs-full--Assets_i01TI_mtAzLrj_zSYtyf63PX2i" style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: center; padding-bottom: 2.5pt">&#160;</td><td style="font-weight: bold; padding-bottom: 2.5pt">&#160;</td>
    <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">&#160;</td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right"><ix:nonFraction name="ifrs-full:Assets" contextRef="AsOf2022-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">41,656,998</ix:nonFraction></td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; padding-bottom: 2.5pt">&#160;</td>
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  <tr id="xdx_40E_eifrs-full--LiabilitiesAbstract_iB_zKxtLOO46Caa" style="vertical-align: bottom; background-color: White">
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    <td style="text-align: center">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr id="xdx_40A_eifrs-full--CurrentLiabilitiesAbstract_i01B_zKDxQpEuxaVb" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: left">CURRENT LIABILITIES</td><td>&#160;</td>
    <td style="text-align: center">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr id="xdx_407_eifrs-full--TradeAndOtherCurrentPayables_i02I_maCLzWmi_zq6zmhLuuXO9" style="vertical-align: bottom; background-color: White">
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  <tr id="xdx_40D_eifrs-full--CurrentLeaseLiabilities_i02I_maCLzWmi_zT45lbY2pQhk" style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl0090">-</span></td><td style="text-align: left">&#160;</td></tr>
  <tr id="xdx_406_ecustom--PromissoryNote_i02I_maCLzWmi_zAx6SrhftOP9" style="vertical-align: bottom; background-color: White">
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    <td style="text-align: center; padding-bottom: 1.5pt">9</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction name="PNRLF:PromissoryNote" contextRef="AsOf2022-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">7,070,959</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl0093">-</span></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr id="xdx_409_eifrs-full--CurrentLiabilities_i02TI_mtCLzWmi_maLzftP_zDSxiS2S6ngh" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt">TOTAL CURRENT LIABILITIES</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="text-align: center; padding-bottom: 1.5pt">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right"><ix:nonFraction name="ifrs-full:CurrentLiabilities" contextRef="AsOf2022-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">12,462,372</ix:nonFraction></td><td style="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr id="xdx_403_eifrs-full--NoncurrentLiabilitiesAbstract_i01B_zsY3Tscqsahi" style="vertical-align: bottom; background-color: White">
    <td style="font-weight: bold; text-align: left">NON-CURRENT LIABILITIES</td><td>&#160;</td>
    <td style="text-align: center">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr id="xdx_403_eifrs-full--LongtermBorrowings_i02I_maNLz5hH_zLfXns4XLKC1" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Vehicle financing</td><td>&#160;</td>
    <td style="text-align: center">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction name="ifrs-full:LongtermBorrowings" contextRef="AsOf2022-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">164,644</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl0102">-</span></td><td style="text-align: left">&#160;</td></tr>
  <tr id="xdx_40E_eifrs-full--NoncurrentProvisionsForEmployeeBenefits_i02I_maNLz5hH_zjKN5NKvE0e1" style="vertical-align: bottom; background-color: White">
    <td style="text-align: left">Provision for leave and severance</td><td>&#160;</td>
    <td style="text-align: center">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction name="ifrs-full:NoncurrentProvisionsForEmployeeBenefits" contextRef="AsOf2022-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">177,941</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl0105">-</span></td><td style="text-align: left">&#160;</td></tr>
  <tr id="xdx_40B_eifrs-full--NoncurrentLeaseLiabilities_i02I_maNLz5hH_z9R2snNUzrha" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Lease liability</td><td>&#160;</td>
    <td style="text-align: center">10</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl0108">-</span></td><td style="text-align: left">&#160;</td></tr>
  <tr id="xdx_40E_ecustom--DeferredShareUnitsLiability_i02I_maNLz5hH_z6dpC8f12L46" style="vertical-align: bottom; background-color: White">
    <td style="text-align: left">Deferred share units liability</td><td>&#160;</td>
    <td style="text-align: center">11</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction name="PNRLF:DeferredShareUnitsLiability" contextRef="AsOf2022-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">298,000</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr id="xdx_407_eifrs-full--NoncurrentWarrantLiability_i02I_maNLz5hH_zvJZeVLcWB49" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt">Financial liability &#8211; warrant</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="text-align: center; padding-bottom: 1.5pt">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl0113">-</span></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction name="ifrs-full:NoncurrentWarrantLiability" contextRef="AsOf2021-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">8,974,901</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr id="xdx_408_eifrs-full--NoncurrentLiabilities_i02TI_mtNLz5hH_maLzftP_zITT12l7a0p" style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; padding-bottom: 1.5pt">TOTAL NON-CURRENT LIABILITIES</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="text-align: center; padding-bottom: 1.5pt">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right"><ix:nonFraction name="ifrs-full:NoncurrentLiabilities" contextRef="AsOf2022-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">2,006,282</ix:nonFraction></td><td style="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right"><ix:nonFraction name="ifrs-full:NoncurrentLiabilities" contextRef="AsOf2021-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">8,974,901</ix:nonFraction></td><td style="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&#160;</td></tr>
  <tr id="xdx_403_eifrs-full--Liabilities_i01TI_maEALzSxG_mtLzftP_zxF8tpuuiW6c" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: left; padding-bottom: 1.5pt">TOTAL LIABILITIES</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="text-align: center; padding-bottom: 1.5pt">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right"><ix:nonFraction name="ifrs-full:Liabilities" contextRef="AsOf2022-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">14,468,654</ix:nonFraction></td><td style="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right"><ix:nonFraction name="ifrs-full:Liabilities" contextRef="AsOf2021-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">9,555,387</ix:nonFraction></td><td style="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&#160;</td></tr>
  <tr id="xdx_40F_eifrs-full--EquityAbstract_i01B" style="vertical-align: bottom; background-color: White">
    <td style="font-weight: bold; text-align: left">SHAREHOLDERS&#8217; EQUITY (DEFICIENCY)</td><td>&#160;</td>
    <td style="text-align: center">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr id="xdx_40B_eifrs-full--IssuedCapital_i02I_maEzhIh_zN8Yhx9Ts5wg" style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr id="xdx_40C_eifrs-full--Equity_i02TI_mtEzhIh_maEALzSxG_zFlAThMVT0m5" style="vertical-align: bottom; background-color: White">
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 7.1pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Nature
of Operations and Going Concern (Note 1)</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Subsequent
Events (Note 18)</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.1in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
accompanying notes are an integral part of these Consolidated Financial Statements. Approved by the Board of Directors on May 1, 2023</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in">&#160;</p>

<table cellpadding="0" cellspacing="0" border="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt">
<tr style="vertical-align: top">
  <td style="width: 50%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#8220;</b>signed&#8221;</span></td>
  <td style="width: 50%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#8220;</b>signed&#8221;</span></td></tr>

<tr style="vertical-align: top">
  <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Keith</span></td>
  <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Morrison Don Newberry</span></td></tr>

<tr style="vertical-align: top">
  <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Chief</span></td>
  <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Executive Officer Audit Committee Chair</span></td></tr>
</table>


<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


<!-- Field: Page; Sequence: 67; Value: 2 -->
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    <div style="break-before: page; margin-top: 6pt"><p style="margin: 0pt">&#160;</p></div>
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><img src="fin_001.jpg" alt="" style="height: 72px; width: 514px" /></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 13pt/12.95pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; letter-spacing: -0.3pt"><b><i>Formerly
&#8220;North American Nickel Inc.</i></b></span></p>

<p style="font: 11pt/12.3pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 3.7pt 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="a_002"></span>Consolidated
Statements of Comprehensive Loss<br />
</b><i>(Expressed in Canadian dollars)</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" id="xdx_307_113_zDOsHiVgTF68" summary="xdx: Statement - Consolidated Statements of Comprehensive Loss" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="padding-bottom: 1.5pt">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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    <td style="text-align: center">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr id="xdx_402_eifrs-full--GeneralAndAdministrativeExpense_i01N_di_maEBNz8ma_z9lAU2GhHrXi" style="vertical-align: bottom; background-color: White">
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.15in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
accompanying notes are an integral part of these Consolidated Financial Statements.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.15in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><img src="fin_001.jpg" alt="" style="height: 72px; width: 514px" /></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Formerly
&#8220;North American Nickel Inc.</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="a_003"></span>Consolidated
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(Expressed
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

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  <tr id="xdx_43C_c20220101__20221231_eifrs-full--Equity_iS_zGjjipbmb924" style="vertical-align: bottom; background-color: White">
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  <tr id="xdx_43C_c20220101__20221231_eifrs-full--Equity_iS_zcVehZi63AC8" style="display: none; vertical-align: bottom; background-color: White">
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<tr id="xdx_409_eifrs-full--ProfitLoss_z7RVzmm6nVmb" style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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<tr id="xdx_408_ecustom--NumberOfShareCapitalIssuedThroughPrivatePlacementValue_zHOXh7IL76Q4" style="vertical-align: bottom; background-color: White">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr id="xdx_40D_eifrs-full--ShareIssueRelatedCost_iN_di_zLVrB9Rs4Lv6" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td>Share issue costs</td><td>&#160;</td>
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: White">
    <td>Acquisition of NAN</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr id="xdx_405_ecustom--StockIssuedDuringPeriodCancelSharesHeldBySubsidiaryValue_z4Fnc8yGZfJf" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 10pt; text-align: left">Cancel PNRC shares held by NAN</td><td>&#160;</td>
    <td>&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction name="PNRLF:StockIssuedDuringPeriodCancelSharesHeldBySubsidiaryValue" contextRef="From2022-01-01to2022-12-31" format="ixt:numdotdecimal" decimals="0" sign="-" unitRef="CAD">19,710,608</ix:nonFraction></td><td style="text-align: left">)</td></tr>
  <tr id="xdx_400_ecustom--StockIssuedDuringPeriodCancelSharesWarrantHeldByDeficitValue_zE2WYlZIQDLb" style="vertical-align: bottom; background-color: White">
    <td style="padding-left: 10pt; text-align: left">Cancel PNRC warrant held by NAN</td><td>&#160;</td>
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction name="PNRLF:StockIssuedDuringPeriodCancelSharesWarrantHeldByDeficitValue" contextRef="From2022-01-012022-12-31_ifrs-full_RetainedEarningsMember" format="ixt:numdotdecimal" decimals="0" sign="-" unitRef="CAD">28,275,255</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction name="PNRLF:StockIssuedDuringPeriodCancelSharesWarrantHeldByDeficitValue" contextRef="From2022-01-01to2022-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">28,275,255</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr id="xdx_404_ecustom--StockIssuedDuringPeriodSharesExchanged_zf2RkdEV26T4" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 10pt">PNRC shares <br /> exchanged</td><td>&#160;</td>
    <td>&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl0322">-</span></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr id="xdx_408_ecustom--StockIssuedDuringPeriodSharesReceivedInExchangeValue_zh0ArUooPOHa" style="vertical-align: bottom; background-color: White">
    <td style="padding-left: 10pt; text-align: left">PNRL shares received in exchange</td><td>&#160;</td>
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td id="xdx_981_ecustom--StockIssuedDuringPeriodSharesReceivedInExchangeShares_pid_c20220101__20221231__ifrs-full--ComponentsOfEquityAxis__ifrs-full--OrdinarySharesMember_zCQPl9Iguyud" title="PNRL shares received in exchange,shares" style="text-align: right"><ix:nonFraction name="PNRLF:StockIssuedDuringPeriodSharesReceivedInExchangeShares" contextRef="From2022-01-012022-12-31_ifrs-full_OrdinarySharesMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">82,157,536</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl0331">-</span></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr id="xdx_401_ecustom--OutstandingSharesAcquiredValue_zi8vjM49jd5a" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 10pt; text-align: left">Outstanding shares of NAN acquired in RTO</td><td>&#160;</td>
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td id="xdx_982_ecustom--OutstandingSharesAcquiredShares_pid_c20220101__20221231__ifrs-full--ComponentsOfEquityAxis__ifrs-full--OrdinarySharesMember_zCOnzMSQ8ne4" title="Outstanding shares of NAN acquired in RTO, shares" style="text-align: right"><ix:nonFraction name="PNRLF:OutstandingSharesAcquiredShares" contextRef="From2022-01-012022-12-31_ifrs-full_OrdinarySharesMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">31,748,399</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction name="PNRLF:OutstandingSharesAcquiredValue" contextRef="From2022-01-012022-12-31_ifrs-full_OrdinarySharesMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">77,431,152</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction name="PNRLF:OutstandingSharesAcquiredValue" contextRef="From2022-01-012022-12-31_ifrs-full_PreferenceSharesMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">31,516</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction name="PNRLF:OutstandingSharesAcquiredValue" contextRef="From2022-01-012022-12-31_custom_ReserveMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">9,665,577</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction name="PNRLF:OutstandingSharesAcquiredValue" contextRef="From2022-01-01to2022-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">87,128,245</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr id="xdx_405_ecustom--ExerciseOfWarrantsValue_zJMkdGUxeQ09" style="vertical-align: bottom; background-color: White">
    <td>Exercise of warrants</td><td>&#160;</td>
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td id="xdx_98C_ecustom--ExerciseOfWarrantsShares_pid_c20220101__20221231__ifrs-full--ComponentsOfEquityAxis__ifrs-full--OrdinarySharesMember_zEolgJC9tYv2" title="Exercise of warrants, shares" style="text-align: right"><ix:nonFraction name="PNRLF:ExerciseOfWarrantsShares" contextRef="From2022-01-012022-12-31_ifrs-full_OrdinarySharesMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">1,236,408</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction name="PNRLF:ExerciseOfWarrantsValue" contextRef="From2022-01-012022-12-31_ifrs-full_OrdinarySharesMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">569,399</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction name="PNRLF:ExerciseOfWarrantsValue" contextRef="From2022-01-01to2022-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">569,399</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr id="xdx_408_eifrs-full--IncreaseDecreaseThroughExerciseOfWarrantsEquity_z211tkna72d" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">FV of exercised warrants</td><td>&#160;</td>
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction name="ifrs-full:IncreaseDecreaseThroughExerciseOfWarrantsEquity" contextRef="From2022-01-012022-12-31_ifrs-full_OrdinarySharesMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">2,321,514</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction name="ifrs-full:IncreaseDecreaseThroughExerciseOfWarrantsEquity" contextRef="From2022-01-012022-12-31_custom_ReserveMember" format="ixt:numdotdecimal" decimals="0" sign="-" unitRef="CAD">2,321,514</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl0363">-</span></td><td style="text-align: left">&#160;</td></tr>
  <tr id="xdx_40E_ecustom--ExerciseOfOptionsValue_zjR0uoD4ioq4" style="vertical-align: bottom; background-color: White">
    <td>Exercise of options</td><td>&#160;</td>
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td id="xdx_989_ecustom--ExercisOfOptionsShares_pid_c20220101__20221231__ifrs-full--ComponentsOfEquityAxis__ifrs-full--OrdinarySharesMember_zKvZWqEDLldc" title="Exercise of options, shares" style="text-align: right"><ix:nonFraction name="PNRLF:ExercisOfOptionsShares" contextRef="From2022-01-012022-12-31_ifrs-full_OrdinarySharesMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">1,379,000</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction name="PNRLF:ExerciseOfOptionsValue" contextRef="From2022-01-012022-12-31_ifrs-full_OrdinarySharesMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">723,076</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
accompanying notes are an integral part of these Consolidated Financial Statements.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


<!-- Field: Page; Sequence: 69; Value: 2 -->
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    <!-- Field: /Page -->

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><img src="fin_001.jpg" alt="" style="height: 72px; width: 514px" /></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 13pt/12.95pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; letter-spacing: -0.3pt"><b><i>Formerly
&#8220;North American Nickel Inc.</i></b></span></p>

<p style="font: 11pt/10.9pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 1.7pt 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="a_004"></span>Consolidated
Statements of Cash Flows <br />
</b><i>(Expressed in Canadian dollars)</i></span></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt"></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>


<p style="margin: 0">&#160;</p>

<table cellpadding="0" cellspacing="0" id="xdx_306_112_ztoXifO6YqJe" summary="xdx: Statement - Consolidated Statements of Cash Flows" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
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    <td style="padding-left: 10pt">Depreciation</td><td>&#160;</td>
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    <td style="padding-left: 10pt; text-align: left">Accrued interest expense of Promissory note</td><td>&#160;</td>
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  <tr id="xdx_40B_ecustom--WarrantFairValueMovement_i02N_di_msABC_zP9T6SyDHT79" style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr id="xdx_406_eifrs-full--ProfitLossOfAcquiree_i02N_di_msABC_zcfO6ANm6V4a" style="vertical-align: bottom; background-color: White">
    <td style="padding-left: 10pt; text-align: left">Loss on acquisition</td><td>&#160;</td>
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  <tr id="xdx_40C_ecustom--ChangesInWorkingCapitalAbstract_i02B_zMiLPeWJn7d" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Changes in working capital</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr id="xdx_408_eifrs-full--AdjustmentsForDecreaseIncreaseInOtherOperatingReceivables_i03_maABC_zxJWi9mopnyg" style="vertical-align: bottom; background-color: White">
    <td style="padding-left: 10pt; text-align: left">Prepaid expenses and other receivables</td><td>&#160;</td>
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction name="ifrs-full:AdjustmentsForDecreaseIncreaseInOtherOperatingReceivables" contextRef="From2022-01-01to2022-12-31" format="ixt:numdotdecimal" decimals="0" sign="-" unitRef="CAD">1,127,061</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
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  <tr id="xdx_409_eifrs-full--AdjustmentsForIncreaseDecreaseInTradeAndOtherPayables_i03_maABC_zTLnYrc0ZCO1" style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="padding-bottom: 1.5pt">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction name="ifrs-full:AdjustmentsForIncreaseDecreaseInTradeAndOtherPayables" contextRef="From2022-01-01to2022-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">3,445,230</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction name="ifrs-full:AdjustmentsForIncreaseDecreaseInTradeAndOtherPayables" contextRef="From2021-01-012021-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">419,326</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr id="xdx_406_eifrs-full--CashFlowsFromUsedInOperatingActivities_i01T_maIDICAzxDh_mtABC_zPMEFgd5EqYk" style="vertical-align: bottom; background-color: White">
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    <td style="padding-bottom: 1.5pt">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">(<ix:nonFraction name="ifrs-full:CashFlowsFromUsedInOperatingActivities" contextRef="From2022-01-01to2022-12-31" format="ixt:numdotdecimal" decimals="0" sign="-" unitRef="CAD">5,518,226</ix:nonFraction></td><td style="padding-bottom: 1.5pt; font-weight: bold; text-align: left">)</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr id="xdx_407_eifrs-full--CashFlowsFromUsedInInvestingActivitiesAbstract_iB" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: left">INVESTING ACTIVITIES</td><td>&#160;</td>
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr id="xdx_40F_eifrs-full--PurchaseOfPropertyPlantAndEquipmentClassifiedAsInvestingActivities_i01N_di_msCFFUIzDdc_zPx9PPQA2SXf" style="vertical-align: bottom; background-color: White">
    <td style="text-align: left">Additions to property, plant and equipment</td><td>&#160;</td>
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction name="ifrs-full:PurchaseOfPropertyPlantAndEquipmentClassifiedAsInvestingActivities" contextRef="From2022-01-01to2022-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">737,271</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl0466">-</span></td><td style="text-align: left">&#160;</td></tr>
  <tr id="xdx_40A_eifrs-full--PurchaseOfExplorationAndEvaluationAssets_i01N_di_msCFFUIzDdc_zCwiOyL2nH6" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Additions to Expenditures on exploration and evaluation assets</td><td>&#160;</td>
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction name="ifrs-full:PurchaseOfExplorationAndEvaluationAssets" contextRef="From2022-01-01to2022-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">28,924,135</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction name="ifrs-full:PurchaseOfExplorationAndEvaluationAssets" contextRef="From2021-01-012021-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">3,099,926</ix:nonFraction></td><td style="text-align: left">)</td></tr>
  <tr id="xdx_405_eifrs-full--OtherCashReceiptsFromSalesOfEquityOrDebtInstrumentsOfOtherEntitiesClassifiedAsInvestingActivities_i01_maCFFUIzDdc_zPgJ5jhXCvA9" style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; padding-bottom: 1.5pt">Cash received though RTO transaction</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="text-align: center; padding-bottom: 1.5pt">4</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction name="ifrs-full:OtherCashReceiptsFromSalesOfEquityOrDebtInstrumentsOfOtherEntitiesClassifiedAsInvestingActivities" contextRef="From2022-01-01to2022-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">11,051,917</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl0472">-</span></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr id="xdx_40E_eifrs-full--CashFlowsFromUsedInInvestingActivities_i01T_mtCFFUIzDdc_maIDICAzxDh_zvnqvElWKkje" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: left; padding-bottom: 1.5pt">Net cash used in investing activities</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="padding-bottom: 1.5pt">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">(<ix:nonFraction name="ifrs-full:CashFlowsFromUsedInInvestingActivities" contextRef="From2022-01-01to2022-12-31" format="ixt:numdotdecimal" decimals="0" sign="-" unitRef="CAD">18,609,489</ix:nonFraction></td><td style="padding-bottom: 1.5pt; font-weight: bold; text-align: left">)</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">(<ix:nonFraction name="ifrs-full:CashFlowsFromUsedInInvestingActivities" contextRef="From2021-01-012021-12-31" format="ixt:numdotdecimal" decimals="0" sign="-" unitRef="CAD">3,099,926</ix:nonFraction></td><td style="padding-bottom: 1.5pt; font-weight: bold; text-align: left">)</td></tr>
  <tr id="xdx_40E_eifrs-full--CashFlowsFromUsedInFinancingActivitiesAbstract_iB" style="vertical-align: bottom; background-color: White">
    <td style="font-weight: bold; text-align: left">FINANCING ACTIVITIES</td><td>&#160;</td>
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr id="xdx_406_ecustom--ProceedsFromRepaymentOfIssuingShares_i01_maCFFUIztaY_zjIARTx2Jrya" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Proceeds from issuance of common shares</td><td>&#160;</td>
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction name="PNRLF:ProceedsFromRepaymentOfIssuingShares" contextRef="From2022-01-01to2022-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">23,404,857</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction name="PNRLF:ProceedsFromRepaymentOfIssuingShares" contextRef="From2021-01-012021-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">6,771,729</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr id="xdx_400_eifrs-full--PaymentsForDebtIssueCosts_i01N_di_msCFFUIztaY_zRk1Sgc0rBBb" style="vertical-align: bottom; background-color: White">
    <td>Share issue costs</td><td>&#160;</td>
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction name="ifrs-full:PaymentsForDebtIssueCosts" contextRef="From2022-01-01to2022-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">1,535,727</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction name="ifrs-full:PaymentsForDebtIssueCosts" contextRef="From2021-01-012021-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">287,228</ix:nonFraction></td><td style="text-align: left">)</td></tr>
  <tr id="xdx_406_eifrs-full--ProceedsFromCurrentBorrowings_i01_maCFFUIztaY_z32yQD8BT2Zb" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Vehicle loan financing</td><td>&#160;</td>
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction name="ifrs-full:ProceedsFromCurrentBorrowings" contextRef="From2022-01-01to2022-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">164,644</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr id="xdx_40F_ecustom--ProceedsFromPromissoryNoteFinancing_i01_maCFFUIztaY_zWXSiLPQXxgg" style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; padding-bottom: 1.5pt">Promissory note financing</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="padding-bottom: 1.5pt">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction name="PNRLF:ProceedsFromPromissoryNoteFinancing" contextRef="From2022-01-01to2022-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">6,740,000</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl0490">-</span></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr id="xdx_40C_eifrs-full--CashFlowsFromUsedInFinancingActivities_i01T_mtCFFUIztaY_maIDICAzxDh_zLTPWbTHzKMa" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: left; padding-bottom: 1.5pt">Net cash provided by financing activities</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="padding-bottom: 1.5pt">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right"><ix:nonFraction name="ifrs-full:CashFlowsFromUsedInFinancingActivities" contextRef="From2022-01-01to2022-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">28,773,774</ix:nonFraction></td><td style="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right"><ix:nonFraction name="ifrs-full:CashFlowsFromUsedInFinancingActivities" contextRef="From2021-01-012021-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">6,484,501</ix:nonFraction></td><td style="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&#160;</td></tr>
  <tr id="xdx_402_ecustom--ImpactOfCurrencyTranslationForForeignOperations_i01_maIDICAzxDh_zNZTS0h32mkh" style="vertical-align: bottom; background-color: White">
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.05in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
accompanying notes are an integral part of these Consolidated Financial Statements.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.05in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><img src="fin_001.jpg" alt="" style="height: 72px; width: 514px" /></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt"></p>

<p style="font: 13pt/12.95pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; letter-spacing: -0.3pt"><b><i>Formerly
&#8220;North American Nickel Inc.</i></b></span></p>

<p style="font: 9pt/10.9pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 1.7pt 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="a_005"></span>Notes
to the Consolidated Financial statements<br />
</b>For the years ended December 31, 2022 and 2021<br />
<i>(Expressed in Canadian dollars)</i></span></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="PNRLF:DisclosureOfNatureAndContinuanceOfOperationsExplanatory"><p id="xdx_80B_ecustom--DisclosureOfNatureAndContinuanceOfOperationsExplanatory_z2m0IHL3DNol" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1.8pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>1.
<span id="xdx_829_zFeVpAGNgH53">NATURE OF OPERATIONS AND GOING CONCERN</span></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1.8pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1.8pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Premium
Nickel Resources Ltd. (TSXV: PNRL) (formerly, North American Nickel Inc.) (the &#8220;Company&#8221; or &#8220;PNRL&#8221;) was founded
upon the closing of a reverse takeover transaction (the &#8220;<b>RTO</b>&#8221;) whereby Premium Nickel Resources Corporation (&#8220;<b>PNRC</b>&#8221;)
and 1000178269 Ontario Inc., a wholly owned subsidiary of North American Nickel Inc. (&#8220;<b>NAN</b>&#8221;), amalgamated by way of
a triangular amalgamation under the Business Corporations Act (Ontario) (&#8220;<b>OBCA</b>&#8221;) (the &#8220;<b>Amalgamation</b>&#8221;)
on August 3, 2022. (Note 4). Prior to the RTO, the common shares of NAN were listed and posted for trading on the TSX Venture Exchange
(the &#8220;<b>Exchange</b>&#8221;) under the symbol &#8220;NAN&#8221;.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1.8pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1.8pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Prior
to the RTO, PNRC was a private company existing under the OBCA to evaluate, acquire, improve and reopen, assuming economic feasibility,
a combination of certain assets of BCL Limited (&#8220;<b>BCL</b>&#8221;) and Tati Nickel Mining Company (&#8220;<b>TNMC</b>&#8221;)
that were in liquidation in Botswana. The initial investors of PNRC include NAN, several resource investors and local Namibian and Botswana
mine operators.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1.8pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1.8pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
connection with the RTO, the Company was continued under the OBCA and changed its name from &#8220;North American Nickel Inc.&#8221;
to &#8220;Premium Nickel Resources Ltd.&#8221;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1.8pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1.8pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Currently,
the Company&#8217;s principal business activity is the exploration and development of mineral properties in Botswana through its wholly-owned
subsidiaries.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1.8pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1.8pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following corporate structure chart sets out details of the direct and indirect ownership of the principal subsidiaries of the Company:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><img src="fin_007.jpg" alt="" style="width: 544px" /></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span style="text-decoration: underline">Notes:</span></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 91.2pt 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span style="text-decoration: underline"></span></b></span></p>

<table cellpadding="0" cellspacing="0" border="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt">
<tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
  <td style="padding-left: 10pt; text-indent: -0.01pt; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(1)</span></td>
  <td style="padding-left: 10pt; text-indent: -0.01pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Premium Nickel Resources Proprietary Limited owns the Selebi
Mines (as defined below).</span></td></tr>

<tr style="vertical-align: top">
    <td>&#160;</td>
  <td style="padding-left: 10pt; text-indent: -0.01pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(2)</span></td>
  <td style="padding-left: 10pt; text-indent: -0.01pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Premium Nickel Group Proprietary Limited owns the Selkirk mine.</span></td></tr>
</table>


<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1.8pt 0pt 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


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    <div style="break-before: page; margin-top: 6pt"><p style="margin: 0pt">&#160;</p></div>
    <!-- Field: /Page --></ix:exclude>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><img src="fin_001.jpg" alt="" style="height: 72px; width: 514px" /></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt"></p>

<p style="font: 13pt/12.95pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; letter-spacing: -0.3pt"><b><i>Formerly
&#8220;North American Nickel Inc.</i></b></span></p>

<p style="font: 9pt/10.9pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 1.7pt 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Notes
to the Consolidated Financial statements<br />
</b>For the years ended December 31, 2022 and 2021<br />
<i>(Expressed in Canadian dollars)</i></span></p>


<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company has its head and registered office at One First Canadian Place, 100 King Street West, Suite 3400, Toronto, Ontario, Canada, M5X
1A4.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
September 28, 2021, PNRC executed a definitive asset purchase agreement (the &#8220;<b>Selebi APA</b>&#8221;) with the liquidator of
BCL to acquire the Selebi and Selebi North (together, the &#8220;Selebi Assets&#8221;) nickel-copper-cobalt (&#8220;<b>Ni-Cu-Co</b>&#8221;)
deposits and related infrastructure formerly operated by BCL. On January 31, 2022, PNRC closed the transaction and ownership of the assets
was transferred to the Company.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">PNRC
also negotiated a separate asset purchase agreement to finalize terms for any prioritized assets formerly operated by TNMC. On August
22, 2022, the Company announced the completion of its acquisition of the nickel, copper, cobalt, platinum-group elements (&#8220;<b>Ni-Cu-Co-PGE</b>&#8221;)
Selkirk mine in Botswana, together with associated infrastructure and four surrounding prospecting licenses (collectively, the &#8220;<b>Selkirk
Assets</b>&#8221;). The acquisition was completed pursuant to the PNRC&#8217;s previously announced asset purchase agreement with the
liquidator of TNMC on January 20, 2022. With the acquisition now complete, ownership of the Selkirk mine has been transferred to the
Company</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company continues to monitor the global COVID-19 developments and is committed to working with health and safety as a priority and in
full respect of all government and local COVID-19 protocol requirements. PNRL has developed COVID-19 travel, living and working protocols
and is ensuring integration of those protocols with the currently applicable protocols of the Government of Botswana and surrounding
communities. The impact of COVID-19 on the Company&#8217;s operation was mainly the increase in travelling costs due to travel restriction
as well as inflated material cost for exploration and drilling work.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Going
Concern</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company, being in the exploration and redevelopment stage, is subject to risks and challenges similar to companies in a comparable stage
of exploration and development. These risks include the challenges of securing adequate capital for exploration, development and operational
risks inherent in the mining industry, and global economic and metal price volatility and there is no assurance management will be successful
in its endeavors. As at December 31, 2022, the Company had no source of operating cash flows, nor any credit line currently in place.
The Company incurred a net loss of $<span id="xdx_907_eifrs-full--ProfitLoss_iN_di_c20220101__20221231_zlO2cXCr33ac" title="Net loss"><ix:nonFraction name="ifrs-full:ProfitLoss" contextRef="From2022-01-01to2022-12-31" format="ixt:numdotdecimal" decimals="0" sign="-" unitRef="CAD">36,410,469</ix:nonFraction></span> for the year ended December 31, 2022 ($<span id="xdx_901_eifrs-full--ProfitLoss_iN_di_c20210101__20211231_zB89LnsOck2a" title="Net loss"><ix:nonFraction name="ifrs-full:ProfitLoss" contextRef="From2021-01-012021-12-31" format="ixt:numdotdecimal" decimals="0" sign="-" unitRef="CAD">9,359,605</ix:nonFraction></span>) for the year ended December 31, 2021).
The Company&#8217;s committed cash obligations and expected level of expenses will vary depending on its operations.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">These
consolidated financial statements have been prepared on the assumption that the Company will continue as a going concern, meaning it
will continue in operation for the foreseeable future and will be able to realize assets and discharge liabilities in the ordinary course
of operations. The ability of the Company to continue operations as a going concern is ultimately dependent upon achieving profitable
operations and its ability to obtain adequate financing. To date, the Company has not generated profitable operations from its resource
activities and will need to invest additional funds in carrying out its planned exploration, development and operational activities.
It is not possible to predict whether financing efforts will be successful or if the Company will attain a profitable level of operation.
These material uncertainties cast substantial doubt about the Company&#8217;s ability to continue as a going concern. These consolidated
financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification
of liabilities and the reported expenses and comprehensive loss that might be necessary should the Company be unable to continue as a
going concern. These adjustments could be material.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
evaluation properties in which the Company currently has an interest are in pre-revenue exploration stage. As such, the Company is dependent
on external financing to fund its activities. In order to carry out the planned exploration and cover administrative costs, the Company
will use its existing working capital and raise additional amounts as needed. Although the Company has been successful in its past fundraising
activities, there is no assurance as to the success of future fundraising efforts or as to the sufficiency of funds raised in the future.
The Company will continue to assess new properties and seek to acquire interests in additional properties if there is sufficient geologic
or economic potential and if adequate financial resources are available to do so.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


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    <div style="break-before: page; margin-top: 6pt"><p style="margin: 0pt">&#160;</p></div>
    <!-- Field: /Page --></ix:exclude>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: #767070"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i></i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: #767070"></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><img src="fin_001.jpg" alt="" style="height: 72px; width: 514px" /></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt"></p>

<p style="font: 13pt/12.95pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; letter-spacing: -0.3pt"><b><i>Formerly
&#8220;North American Nickel Inc.</i></b></span></p>

<p style="font: 9pt/10.9pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 1.7pt 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Notes
to the Consolidated Financial statements<br />
</b>For the years ended December 31, 2022 and 2021<br />
<i>(Expressed in Canadian dollars)</i></span></p>


<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
consolidated financial statements were approved and authorized for issuance by the Board of Directors of the Company on May 1, 2023.
The discussion in the notes to the consolidated financial statements is stated in Canadian dollars.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

</ix:nonNumeric><ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="ifrs-full:DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory"><p id="xdx_807_eifrs-full--DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory_zgSnHyY1eYde" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>2.
<span id="xdx_822_zFYf5nUEdzy4">BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES</span></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.05in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="PNRLF:DescriptionOfAccountingPolicyForStatementOfComplianceExplanatory"><p id="xdx_84A_ecustom--DescriptionOfAccountingPolicyForStatementOfComplianceExplanatory_zHbAw2U5iG56" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(a)
<span id="xdx_862_zc1ZLcurGxJ1">Statement of Compliance</span></i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">These
consolidated financial statements were prepared in accordance with International Financial Reporting Standards (&#8220;<b>IFRS</b>&#8221;)
as issued by the International Accounting Standards Board (the &#8220;IASB&#8221;) and Interpretations of the International Financial
Reporting Interpretations Committee (&#8220;IFRIC&#8221;).</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

</ix:nonNumeric><ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="ifrs-full:DisclosureOfBasisOfPreparationOfFinancialStatementsExplanatory"><p id="xdx_84D_eifrs-full--DisclosureOfBasisOfPreparationOfFinancialStatementsExplanatory_zIpTsyYKiBl7" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(b)
<span id="xdx_86E_zWcVIjhPoSo8">Basis of preparation</span></i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">These
consolidated financial statements have been prepared under the historical cost convention, modified by the revaluation of any financial
assets and financial liabilities where applicable. The preparation of consolidated financial statements in conformity with IFRS requires
the use of certain critical accounting estimates. It also requires management to exercise judgment in the process of applying the Company&#8217;s
accounting policies. These areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant
to the consolidated financial statements, are disclosed in note 3.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

</ix:nonNumeric><ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="ifrs-full:DisclosureOfBasisOfConsolidationExplanatory"><p id="xdx_845_eifrs-full--DisclosureOfBasisOfConsolidationExplanatory_z3PyRyOgcc7g" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(c)
<span id="xdx_86B_zenqxUTHRPH9">Basis of consolidation</span></i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">These
consolidated financial statements include the financial statements of the Company and its wholly owned subsidiaries. All intercompany
transactions, balances, income and expenses are eliminated upon consolidation.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Effective
August 3, 2022, NAN completed the <span id="xdx_909_eifrs-full--PercentageOfVotingEquityInterestsAcquired_iI_pid_dp_uPure_c20220302__dei--LegalEntityAxis__custom--NorthAmericanNickelIncMember_zaiBMTMLTvmd" title="Percentage of voting equity interests acquired"><ix:nonFraction name="ifrs-full:PercentageOfVotingEquityInterestsAcquired" contextRef="AsOf2022-03-02_custom_NorthAmericanNickelIncMember" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">100</ix:nonFraction>%</span> acquisition of the outstanding shares of PNRC (Note 4). As the shareholders of PNRC obtained control
of the Company through the exchange of their shares of PNRC for shares of NAN, the acquisition of PNRC has been accounted for in these
consolidated financial statements as a reverse takeover. Consequently, the consolidated statements of loss and cash flows reflect the
results from the operations and cash flows of PNRC, the legal subsidiary, for the year ended December 31, 2022 and 2021, combined with
those of NAN, the legal parent, from the acquisition on August 3, 2022 to December 31, 2022, in accordance with generally accepted accounting
principles for reverse takeovers. The comparative balance sheet reflects the balance sheet of PNRC as at December 31, 2021.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

</ix:nonNumeric><ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="ifrs-full:DescriptionOfAccountingPolicyForForeignCurrencyTranslationExplanatory"><p id="xdx_846_eifrs-full--DescriptionOfAccountingPolicyForForeignCurrencyTranslationExplanatory_z3g60oKjmO67" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(d)
<span id="xdx_867_zTwAer2C2e06">Foreign currency translation</span></i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company&#8217;s functional and presentation currency is the Canadian dollar. Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the date of the transaction. Foreign currency monetary items are translated at the year-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.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Exchange
differences arising on the translation of monetary items or on settlement of monetary items are recognized in profit or loss in the statement
of comprehensive loss in the period in which they arise, except where deferred in equity as a qualifying cash flow or net investment
hedge.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Exchange
differences arising on the translation of non-monetary items are recognized in other comprehensive income in the statement of comprehensive
loss to the extent that gains and losses arising on those non-monetary items are also recognized in other comprehensive income. Where
the non-monetary gain or loss is recognized in profit or loss, the exchange component is also recognized in profit or loss.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


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    <div style="break-before: page; margin-top: 6pt"><p style="margin: 0pt">&#160;</p></div>
    <!-- Field: /Page --></ix:exclude>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><img src="fin_001.jpg" alt="" style="height: 72px; width: 514px" /></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt"></p>

<p style="font: 13pt/12.95pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; letter-spacing: -0.3pt"><b><i>Formerly
&#8220;North American Nickel Inc.</i></b></span></p>

<p style="font: 9pt/10.9pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 1.7pt 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Notes
to the Consolidated Financial statements<br />
</b>For the years ended December 31, 2022 and 2021<br />
<i>(Expressed in Canadian dollars)</i></span></p>


<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

</ix:nonNumeric><ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="PNRLF:DescriptionOfAccountingPolicyForForeignOperationsExplanatory"><p id="xdx_844_ecustom--DescriptionOfAccountingPolicyForForeignOperationsExplanatory_zSmIJhHbji4h" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(e)
<span id="xdx_86D_zjiQM29tLMFc">Foreign operations</span></i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
the Company&#8217;s consolidated financial statements, all assets, liabilities and transactions of the Company&#8217;s entities with
a functional currency other than the Canadian dollar are translated into Canadian dollars upon consolidation. The functional currency
of the Company&#8217;s subsidiaries in Barbados is the US dollar, and the Botswana Pula (BWP) for the subsidiaries in Botswana during
the reporting period. On consolidation, assets and liabilities have been translated into Canadian dollars at the closing rate on the
reporting date. Fair value adjustments arising on the acquisition of a foreign entity have been treated as assets and liabilities of
the foreign entity and translated into Canadian dollars at the closing rate on the reporting date. Income and expenses have been translated
into Canadian dollars at the average rate over the reporting period. Exchange differences are charged or credited to other comprehensive
loss and recognized in the currency translation reserve in equity. On disposal of a foreign operation, the related cumulative translation
differences recognized in equity are reclassified to profit or loss and are recognized as part of the gain or loss on disposal.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

</ix:nonNumeric><ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="ifrs-full:DescriptionOfAccountingPolicyForDerivativeFinancialInstrumentsExplanatory"><p id="xdx_84D_eifrs-full--DescriptionOfAccountingPolicyForDerivativeFinancialInstrumentsExplanatory_zkLc9Babtmjg" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(f)
<span id="xdx_86E_zRLG671p6fwh">Financial instruments</span></i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Classification</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company classifies its financial instruments in the following categories: at fair value through profit and loss (&#8220;FVTPL&#8221;),
at fair value through other comprehensive income (loss) (&#8220;FVTOCI&#8221;) or at amortized cost. The Company determines the classification
of financial assets at initial recognition. The classification of debt instruments is driven by the Company&#8217;s business model for
managing the financial assets and their contractual cash flow characteristics. Equity instruments that are held for trading are classified
as FVTPL. For other equity instruments, on the day of acquisition, the Company can make an irrevocable election (on an instrument-by-instrument
basis) to designate them as at FVTOCI. Financial liabilities are measured at amortized cost, unless they are required to be measured
at FVTPL (such as instruments held for trading or derivatives) or the Company has opted to measure them at FVTPL.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following table shows the classification of the Company&#8217;s financial assets and liabilities:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 96%; border-collapse: collapse; margin-left: 0.25in">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; width: 68%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Financial
    asset/liability</b></span></td>
    <td style="width: 2%">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; width: 30%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Classification</b></span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Cash</span></td>
    <td>&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">FVTPL</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Trade
    payables and accrued liabilities</span></td>
    <td>&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Amortized
    cost</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Lease
    liability</span></td>
    <td>&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Amortized
    cost</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Promissory
    note</span></td>
    <td>&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Amortized
    cost</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Vehicle
    financing</span></td>
    <td>&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Amortized
    cost</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Financial
    liability &#8211; warrant</span></td>
    <td>&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">FVTPL</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Deferred
    share unit liability</span></td>
    <td>&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">FVTPL</span></td></tr>
  </table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Measurement</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Financial
assets and liabilities at amortized cost</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Financial
assets and liabilities at amortized cost are initially recognized at fair value plus or minus transaction costs,</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">respectively,
and subsequently carried at amortized cost less any impairment.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Financial
assets and liabilities at FVTPL</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Financial
assets and liabilities carried at FVTPL are initially recorded at fair value and transaction costs are expensed in profit or loss. Realized
and unrealized gains and losses arising from changes in the fair value of the financial assets and liabilities held at FVTPL are included
in the statements of comprehensive loss in the period in which they arise.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><img src="fin_001.jpg" alt="" style="height: 72px; width: 514px" /></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt"></p>

<p style="font: 13pt/12.95pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; letter-spacing: -0.3pt"><b><i>Formerly
&#8220;North American Nickel Inc.</i></b></span></p>

<p style="font: 9pt/10.9pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 1.7pt 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Notes
to the Consolidated Financial statements<br />
</b>For the years ended December 31, 2022 and 2021<br />
<i>(Expressed in Canadian dollars)</i></span></p>


<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Impairment
of financial assets at amortized cost</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">An
&#8216;expected credit loss&#8217; impairment model applies that requires a loss allowance to be recognized based on expected credit
losses. The estimated present value of future cash flows associated with the asset is determined and an </span>impairment loss is
recognized for the difference between this amount and the carrying amount as follows: the carrying amount of the asset is reduced to
estimated present value of the future cash flows associated with the asset, discounted at the financial asset&#8217;s original
effective interest rate, either directly or through the use of an allowance account and the resulting loss is recognized in profit
or loss for the period.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
a subsequent period, if the amount of the impairment loss related to financial assets measured at amortized cost decreases, the previously
recognized impairment loss is reversed through profit or loss to the extent that the carrying amount of the investment at the date the
impairment is reversed does not exceed what the amortized cost would have been had the impairment not been recognized.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Derecognition</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0.25in">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Financial assets</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company derecognizes financial assets only when the contractual rights to cash flows from the financial assets expire, or when it transfers
the financial assets and substantially all of the associated risks and rewards of ownership to another party. Gains and losses on derecognition
are generally recognized in the statements of comprehensive loss.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Investments
are derecognized when the rights to receive cash flows from the investments have expired or the Company has transferred the financial
asset and the transfer qualifies for derecognition.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Financial
liabilities</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Financial
liabilities are derecognized when, and only when, the Company&#8217;s obligations are discharged, cancelled or they expire. The difference
between the carrying amount of the financial liability derecognized and the consideration paid and payable is recognized in the Statement
of Comprehensive Loss.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

</ix:nonNumeric><ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="ifrs-full:DescriptionOfAccountingPolicyForExplorationAndEvaluationExpenditures"><p id="xdx_843_eifrs-full--DescriptionOfAccountingPolicyForExplorationAndEvaluationExpenditures_zGg5tj4JzI6e" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(g)
<span id="xdx_865_zONNl9rJu0q9">Exploration and evaluation assets</span></i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Exploration
and evaluation assets include the costs of acquiring licenses, costs associated with exploration and evaluation activity less accumulated
impairment losses and the fair value (at acquisition date) of exploration and evaluation assets acquired in a business combination. Exploration
and evaluation expenditures are initially capitalized.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Costs incurred before the Company has obtained the legal rights to explore an
area are recognized in profit or loss.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Government
tax credits received are generally recorded as a reduction to the cumulative costs incurred and capitalized on the related property.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Exploration
and evaluation assets are assessed for impairment if (i) sufficient data exists to determine technical feasibility and commercial viability,
and (ii) facts, events and circumstances suggest that the carrying amount exceeds the recoverable amount.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Once
the technical feasibility and commercial viability of the extraction of mineral resources in an area of interest are demonstrable, exploration
and evaluation assets attributable to that area of interest are first tested for impairment and then reclassified to mining property
and development assets within property, plant and equipment.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Recoverability
of the carrying amount of any exploration and evaluation assets is dependent on successful development and commercial exploitation, or
alternatively, sale of the respective areas of interest.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company may occasionally enter into farm-out arrangements, whereby it will transfer part of an interest, as consideration, for an agreement
by the farmee to meet certain exploration and evaluation expenditures which would have otherwise been undertaken by the Company. The
Company does not record any expenditures made by the farmee on its behalf. Any cash consideration received from the agreement is credited
against the costs previously capitalized to the mineral interest given up by the Company, with any excess consideration accounted for
in profit.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


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    <div style="break-before: page; margin-top: 6pt"><p style="margin: 0pt">&#160;</p></div>
    <!-- Field: /Page --></ix:exclude>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><img src="fin_001.jpg" alt="" style="height: 72px; width: 514px" /></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt"></p>

<p style="font: 13pt/12.95pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; letter-spacing: -0.3pt"><b><i>Formerly
&#8220;North American Nickel Inc.</i></b></span></p>

<p style="font: 9pt/10.9pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 1.7pt 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Notes
to the Consolidated Financial statements<br />
</b>For the years ended December 31, 2022 and 2021<br />
<i>(Expressed in Canadian dollars)</i></span></p>


<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">When
a project is deemed to no longer have commercially viable prospects to the Company, exploration and evaluation expenditures in respect
of that project are deemed to be impaired. As a result, those exploration and evaluation expenditure costs, in excess of estimated recoveries,
are written off to the consolidated statement of comprehensive loss.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

</ix:nonNumeric><ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfAssetsExplanatory"><p id="xdx_848_eifrs-full--DescriptionOfAccountingPolicyForImpairmentOfAssetsExplanatory_zNCo4yOfJnC3" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(h)
<span id="xdx_86D_z0OGByDYfLBj">Impairment of assets</span></i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Non-financial
assets, including exploration and evaluation assets and property, plant and equipment, are subject to impairment tests whenever events
or changes in circumstances indicate that their carrying amount may not be recoverable. Where the carrying value of an asset exceeds
its recoverable amount, which is the higher of value in use and fair value less costs to sell, the asset is written down accordingly.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Where
it is not possible to estimate the recoverable amount of an individual asset, the impairment test is carried out on the
asset&#8217;s cash-generating unit, which is the lowest group of assets in which the asset belongs and for which </span>there are
separately identifiable cash inflows that are largely independent of the cash inflows from other assets.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">An
impairment loss is charged to the profit or loss, except to the extent the loss reverses gains previously recognized in other comprehensive
loss</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

</ix:nonNumeric><ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="ifrs-full:DescriptionOfAccountingPolicyForLeasesExplanatory"><p id="xdx_849_eifrs-full--DescriptionOfAccountingPolicyForLeasesExplanatory_zuWJQGtQIdC5" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(i)
<span id="xdx_863_zmXCrSNZgkal">Leases</span></i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">At
commencement of a contract, the Company assesses whether a contract is, or contains, a lease by determining whether the contract conveys
the right to control the use of an identified asset for a period of time in exchange for consideration. A right-of-use (the &#8220;ROU
&#8220;) asset and lease liability are recognized at the lease commencement date. The lease liability is initially measured at the present
value of all future lease payments that have not been paid as of the commencement date of the lease, discounted using the Company&#8217;s
incremental borrowing rate, unless the rate implicit in the lease is readily determinable. The ROU asset is initially measured at cost,
which is calculated as the initial amount of the lease liability, with an adjustment for any initial direct costs incurred, plus adjustments
for any lease payments made in advance of the commencement date, and less any lease incentives received. Subsequent to initial recognition,
the ROU asset is depreciated on a straight-line basis over the term of the lease or the estimated useful life, with inclusion for any
options to extend that the Company reasonably expects to exercise.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ROU
assets are tested for impairment in accordance with IAS 36 Impairment of Assets. The right-of-use asset is periodically reduced by impairment
losses, if any, and adjusted for certain remeasurements of the lease liability. The lease liability is remeasured when there is a change
in future lease payments arising from a change in an index or rate, if there is a change in the Company&#8217;s estimate of the amount
expected to be payable under a residual value guarantee, or if the Company changes its assessment of whether it will exercise a purchase,
extension or termination option. These adjustments are recorded through profit or loss.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

</ix:nonNumeric><ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="ifrs-full:DescriptionOfAccountingPolicyForPropertyPlantAndEquipmentExplanatory"><p id="xdx_845_eifrs-full--DescriptionOfAccountingPolicyForPropertyPlantAndEquipmentExplanatory_znY7XO2pl2d2" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(j)
<span id="xdx_863_z4IfD8usB1ga">Property, plant and equipment</span></i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Property,
Plant and Equipment is stated at historical cost less accumulated depreciation and accumulated impairment losses.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Subsequent
costs are included in the asset&#8217;s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that
future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying
amount of a significant replaced part is derecognized. All other repairs and maintenance are charged to the consolidated statement of
comprehensive loss during the financial period in which they are incurred. Gains and losses on disposals are determined by comparing
the proceeds with the carrying amount and are recognized in profit or loss.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


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    <div style="break-before: page; margin-top: 6pt"><p style="margin: 0pt">&#160;</p></div>
    <!-- Field: /Page --></ix:exclude>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><img src="fin_001.jpg" alt="" style="height: 72px; width: 514px" /></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt"></p>

<p style="font: 13pt/12.95pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; letter-spacing: -0.3pt"><b><i>Formerly
&#8220;North American Nickel Inc.</i></b></span></p>

<p style="font: 9pt/10.9pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 1.7pt 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Notes
to the Consolidated Financial statements<br />
</b>For the years ended December 31, 2022 and 2021<br />
<i>(Expressed in Canadian dollars)</i></span></p>


<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Depreciation
is calculated on a straight-line method to charge the cost, less residual value, of the assets to their residual values over their estimated
useful lives. The depreciation rate applicable to each category of property, plant and equipment is as follows:</span></p>

<ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="PNRLF:DisclosureOfDepreciationAndAmortizationRatesExplanatory"><p id="xdx_893_ecustom--DisclosureOfDepreciationAndAmortizationRatesExplanatory_zztzmNhgDhTd" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.7pt 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;<span id="xdx_8BB_zNK53fHDz3Ge" style="display: none">SCHEDULE OF DEPRECIATION AND AMORTIZATION RATE</span></span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 90%; border-collapse: collapse; margin-left: 0.25in">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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    <td style="padding-bottom: 1.5pt; width: 2%">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; width: 30%; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Estimated
    useful life (years)</b></span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Exploration
    equipment</span></td>
    <td>&#160;</td>
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Computer
    software</span></td>
    <td>&#160;</td>
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Computer
    equipment</span></td>
    <td>&#160;</td>
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Vehicles</span></td>
    <td>&#160;</td>
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Furniture
    and fixture</span></td>
    <td>&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span id="xdx_905_eifrs-full--UsefulLifeMeasuredAsPeriodOfTimePropertyPlantAndEquipment_dtY_c20220101__20221231__ifrs-full--ClassesOfPropertyPlantAndEquipmentAxis__custom--FurnitureAndFixtureMember_zay34AOem9A4" title="Estimated useful life (years)"><ix:nonNumeric contextRef="From2022-01-012022-12-31_custom_FurnitureAndFixtureMember" format="ixt-sec:duryear" name="ifrs-full:UsefulLifeMeasuredAsPeriodOfTimePropertyPlantAndEquipment">10</ix:nonNumeric></span></span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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    <td>&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span id="xdx_901_eifrs-full--UsefulLifeMeasuredAsPeriodOfTimePropertyPlantAndEquipment_dtY_c20220101__20221231__ifrs-full--ClassesOfPropertyPlantAndEquipmentAxis__ifrs-full--BuildingsMember_zEd8tTzyJvSc" title="Estimated useful life (years)"><ix:nonNumeric contextRef="From2022-01-012022-12-31_ifrs-full_BuildingsMember" format="ixt-sec:duryear" name="ifrs-full:UsefulLifeMeasuredAsPeriodOfTimePropertyPlantAndEquipment">25</ix:nonNumeric></span></span></td></tr>
  </table>
</ix:nonNumeric><p id="xdx_8A1_zdA55h1IrYQh" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

</ix:nonNumeric><ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="ifrs-full:DescriptionOfAccountingPolicyForIssuedCapitalExplanatory"><p id="xdx_84A_eifrs-full--DescriptionOfAccountingPolicyForIssuedCapitalExplanatory_z9eBasXLqVEj" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(k)
<span id="xdx_863_zl3O39lEyX9">Share capital</span></i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company&#8217;s common shares and share warrants are classified as equity instruments.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Incremental
costs directly attributable to the issue of new shares, warrants or options are shown in equity as a deduction from the proceeds.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Proceeds
received on the issuance of units, consisting of common shares and warrants are allocated to share capital.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

</ix:nonNumeric><ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="ifrs-full:DescriptionOfAccountingPolicyForSharebasedPaymentTransactionsExplanatory"><p id="xdx_840_eifrs-full--DescriptionOfAccountingPolicyForSharebasedPaymentTransactionsExplanatory_zGzvb3DC1H6a" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(l)
<span id="xdx_869_zxFwzsUVBV76">Share-based payments</span></i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Where
equity-settled share options are awarded to employees, the fair value of the options at the date of grant is recognized over the vesting
period. Performance vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each
reporting date so that, ultimately, the cumulative amount recognized over the vesting period is based on the number of options that eventually
vest. Non-vesting conditions and market vesting conditions are factored into the fair value of the options granted. As long as all other
vesting conditions are satisfied, a charge is made irrespective of whether these non-vesting and market vesting conditions are satisfied.
The cumulative expense is not adjusted for failure to achieve a market vesting condition or where a non-vesting condition is not satisfied.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.7pt 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Where
the terms and conditions of options are modified, the increase in the fair value of the options, measured immediately before and after
the modification, is also recognized over the remaining vesting period.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.7pt 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Where
equity instruments are granted to non-employees, they are recorded at the fair value of the goods or services received. Amounts related
to the issuance of shares are recorded as a reduction of share capital.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.7pt 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">When
the value of goods and services received in exchange for the share-based payment cannot be reliably estimated, the fair value is measured
by use of a valuation model. The expected life used in the model is adjusted, based on management&#8217;s best estimate, for the effects
of non-transferability, exercise restrictions, and behavioural considerations.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">All
equity-settled share-based payments are reflected in share-based payments reserve, until exercised. Upon exercise shares are issued from
the treasury and the amount reflected in share-based payments reserve is credited to share capital along with any consideration paid.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.7pt 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

</ix:nonNumeric><ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="PNRLF:DescriptionOfAccountingPolicyDeferredShareUnitsExplanatory"><p id="xdx_847_ecustom--DescriptionOfAccountingPolicyDeferredShareUnitsExplanatory_z3h9EjXY65W1" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(m)
<span id="xdx_86F_zKp5oIMo1wMj">Deferred Share Units</span> (&#8220;DSUs)&#8221;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
the year ended December 31, 2022, the Company approved the adoption of a DSU plan. In accordance with IFRS 2 Share Based Payments, this
plan is a cash-settled share-based compensation program whereby the Company records the fair value of the liability at the date upon
which it is incurred and adjusts the liability to the fair value at the end of each reporting period and at the date of settlement, with
any changes in fair value recognized in profit or loss for the period.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


<ix:exclude><!-- Field: Page; Sequence: 77; Value: 2 -->
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    <div style="break-before: page; margin-top: 6pt"><p style="margin: 0pt">&#160;</p></div>
    <!-- Field: /Page --></ix:exclude>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><img src="fin_001.jpg" alt="" style="height: 72px; width: 514px" /></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt"></p>

<p style="font: 13pt/12.95pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; letter-spacing: -0.3pt"><b><i>Formerly
&#8220;North American Nickel Inc.</i></b></span></p>

<p style="font: 9pt/10.9pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 1.7pt 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Notes
to the Consolidated Financial statements<br />
</b>For the years ended December 31, 2022 and 2021<br />
<i>(Expressed in Canadian dollars)</i></span></p>


<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
DSU Plan enables the Company upon approval by the Directors to grant DSU&#8217;s to eligible non-management directors. Upon granting
DSU&#8217;s, the Company records stock-based compensation based on the number of units granted multiplied by the volume weighted average
price of the Company&#8217;s common shares for the last five trading days (&#8220;5-day-VWAP&#8221;) immediately preceding the date of
the grant.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.7pt 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
DSUs credited to the account of a director may only be redeemed following the date upon which the holder ceases to be a director. Depending
upon the country of residence of a director, the DSUs may be redeemed at any time prior to December 15 in the calendar year following
the year in which the holder ceases to be a director, and may be redeemed in as many as four installments. Upon redemption, the holder
is entitled to a cash payment equal to the number of units redeemed multiplied by the 5-day-VWAP of the Company&#8217;s common shares
on that date. The Company may elect, in its sole discretion, to settle the value of the DSUs redeemed in the Company&#8217;s common shares
on a one-for-one basis, provided shareholder approval has been obtained on or prior to the relevant redemption date.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.7pt 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

</ix:nonNumeric><ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="ifrs-full:DescriptionOfAccountingPolicyForEarningsPerShareExplanatory"><p id="xdx_84D_eifrs-full--DescriptionOfAccountingPolicyForEarningsPerShareExplanatory_zZOC2Oiq3Q07" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(n)
<span id="xdx_865_zMdCJLdhBidi">Loss per share</span></i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.7pt 0pt 17.85pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company uses the treasury stock method to compute the dilutive effect of options, warrants and similar instruments. Under this method,
the dilutive effect on loss per common share is recognized on the use of the proceeds that could be obtained upon exercise of options,
warrants and similar instruments. It assumes that the proceeds would be used to purchase common shares at the average market price during
the period.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Basic
loss per common share is calculated using the weighted average number of common shares outstanding during the period and does not include
outstanding options and warrants. Dilutive loss per common share is not presented differently from basic loss per share as the conversion
of outstanding stock options and warrants into common shares would be anti-dilutive.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.7pt 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

</ix:nonNumeric><ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="ifrs-full:DescriptionOfAccountingPolicyForIncomeTaxExplanatory"><p id="xdx_84A_eifrs-full--DescriptionOfAccountingPolicyForIncomeTaxExplanatory_zxT2P0QAFXg7" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(o)
<span id="xdx_867_z3xDyjOn9m1f">Income taxes</span></i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Income
tax expense comprises current income and deferred income tax. Current tax and deferred tax are recognized in net loss except to the extent
that it arises in a business combination, or from items recognized directly in equity or other comprehensive loss</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Current
income tax assets and liabilities for the current period are measured at the amount expected to be recovered from or paid to the taxation
authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting
date, in the countries where the Company operates and generates taxable income.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Current
income tax relating to items recognized directly in other comprehensive losses equity is recognized in other comprehensive loss or equity
and not in profit or loss. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable
tax regulations are subject to interpretation and establishes provisions where appropriate.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Deferred
income tax is calculated using the asset and liability method of temporary differences at the reporting date between the tax bases of
assets and liabilities and their carrying amounts for financial reporting purposes.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
carrying amount of deferred income tax assets is reviewed at the end of each reporting period and recognized only to the extent that
it is probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilized.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Deferred
income 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 tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting
period.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


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    <div style="break-before: page; margin-top: 6pt"><p style="margin: 0pt">&#160;</p></div>
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><img src="fin_001.jpg" alt="" style="height: 72px; width: 514px" /></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt"></p>

<p style="font: 13pt/12.95pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; letter-spacing: -0.3pt"><b><i>Formerly
&#8220;North American Nickel Inc.</i></b></span></p>

<p style="font: 9pt/10.9pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 1.7pt 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Notes
to the Consolidated Financial statements<br />
</b>For the years ended December 31, 2022 and 2021<br />
<i>(Expressed in Canadian dollars)</i></span></p>


<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Deferred
income tax assets and deferred income tax liabilities are offset only if a legally enforceable right exists to set off current tax assets
against current income tax liabilities and the deferred income taxes relate to the same taxable entity and the same taxation authority.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
deferred tax asset is recognized for all deductible temporary differences to the extent that it is probable that taxable profit will
be available against which the deductible temporary difference can be utilized. We have not recognized any deferred tax asset as at December
31, 2022 as there are currently no sources of taxable profit currently available to the Company. We will continue to reassess whether
the tax attributes meet the criteria for recognition as a deferred tax asset.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

</ix:nonNumeric><ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="PNRLF:DescriptionOfAccountingPolicyNewAccountingStandardsIssuedNotYetEffectiveExplanatory"><p id="xdx_844_ecustom--DescriptionOfAccountingPolicyNewAccountingStandardsIssuedNotYetEffectiveExplanatory_zhdfxjAvRZh3" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(p)
<span id="xdx_867_z6I9RhNKDpq4">Accounting standards and amendments issued but not yet effective</span></i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Certain
pronouncements were issued by the IASB or the IFRIC that are mandatory for accounting periods commencing on or after January 1, 2023.
Many are not applicable or do not have a significant impact to the Company and have been excluded. The following have not yet been adopted
and are being evaluated to determine their impact on the Company.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">IAS
1 &#8211; Presentation of Financial Statements (&#8220;IAS 1&#8221;) was amended in January 2020 to provide a more general approach to
the classification of liabilities under IAS 1 based on the contractual arrangements in place at the reporting date. The amendments clarify
that the classification of liabilities as current or non-current is based solely on a company&#8217;s right to defer settlement at the
reporting date. The right needs to be unconditional and must have substance. The amendments also clarify that the transfer of a company&#8217;s
own equity instruments is regarded as settlement of a liability, unless it results from the exercise of a conversion option meeting the
definition of an equity instrument. The amendments are effective for annual periods beginning on January 1, 2024.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">IAS
1 &#8211; In February 2021, the IASB issued &#8216;Disclosure of Accounting Policies&#8217; with amendments that are intended to help
preparers in deciding which accounting policies to disclose in their financial statements. The amendments are effective for year ends
beginning on or after January 1, 2023.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">IAS
8 &#8211; In February 2021, the IASB issued &#8216;Definition of Accounting Estimates&#8217; to help entities distinguish between accounting
policies and accounting estimates. The amendments are effective for year ends beginning on or after beginning on or after January 1,
2023.</span></p>
<!-- Field: Split-Segment; Name: 001 -->
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

</ix:nonNumeric></ix:nonNumeric><ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="ifrs-full:DisclosureOfChangesInAccountingPoliciesAccountingEstimatesAndErrorsExplanatory"><p id="xdx_80C_eifrs-full--DisclosureOfChangesInAccountingPoliciesAccountingEstimatesAndErrorsExplanatory_z8h7Lx0HFTsj" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>3.
<span id="xdx_824_zNvyowwrEo06">CRITICAL ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS</span></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.05in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
preparation of the consolidated financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions
that can affect reported amounts of assets, liabilities, revenue and expenses and the accompanying disclosures. Estimates and assumptions
are continuously evaluated and are based on management&#8217;s historical experience and on other assumptions believed to be reasonable
under the circumstances. However, different judgments, estimates and assumptions could result in outcomes that require a material adjustment
to the carrying amount of assets or liabilities affected in future periods.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.05in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
area involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated
financial statements are:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.05in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Critical
Accounting Judgement:</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.05in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(a) RTO &#8211; fair value</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.05in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Fair
value considerations for the RTO transactions are assessed in accordance with International Financial Reporting Standards (IFRS). These
considerations are based on various factors such as the fair value of the assets acquired or liabilities assumed, the fair value of equity
instruments issued, and any related acquisition costs.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.05in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><img src="fin_001.jpg" alt="" style="height: 72px; width: 514px" /></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt"></p>

<p style="font: 13pt/12.95pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; letter-spacing: -0.3pt"><b><i>Formerly
&#8220;North American Nickel Inc.</i></b></span></p>

<p style="font: 9pt/10.9pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 1.7pt 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Notes
to the Consolidated Financial statements<br />
</b>For the years ended December 31, 2022 and 2021<br />
<i>(Expressed in Canadian dollars)</i></span></p>


<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
assumptions and estimates used in arriving at fair value figures are based on management&#8217;s judgments and relevant market data.
The fair value of the equity instruments issued is determined based on market prices or valuation techniques that take into account factors
such as expected share price volatility.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(b)
Recoverability of exploration and evaluation Assets</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
ultimate recoverability of the exploration and evaluation assets with a carrying value of $<span id="xdx_90B_eifrs-full--TangibleExplorationAndEvaluationAssets_iI_pp0p0_c20221231_zXJ7woQvXLi2" title="Carrying value of exploration and evaluation assets"><ix:nonFraction name="ifrs-full:TangibleExplorationAndEvaluationAssets" contextRef="AsOf2022-12-31" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="CAD">31,823,982</ix:nonFraction></span> at December 31, 2022, is dependent
upon the Company&#8217;s ability to obtain the necessary financing to complete the exploration and development and commence profitable
production at its projects, or alternatively, upon the Company&#8217;s ability to dispose of its interests therein on an advantageous
basis. A review of the indicators of potential impairment is carried out at least at each period end.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Management
undertakes a periodic review of these assets to determine whether any indication of impairment exists. Where an indicator of impairment
exists, a formal estimate of the recoverable amount of the assets is made. An impairment loss is recognized when the carrying value of
the assets is higher than the recoverable amount and when mineral license tenements are relinquished or have lapsed. In undertaking this
review, management of the Company is required to make significant estimates of, among other things, discount rates, commodity prices,
availability of financing, future operating and capital costs and all aspects of project advancement. These estimates are subject to
various risks and uncertainties, which may ultimately have an effect on the expected recoverability of the carrying values of the assets.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(c)
Restoration provisions</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Management&#8217;s
best estimates regarding the restoration provisions are based on the current economic environment. Changes in estimates of contamination,
restoration standards and restoration activities result in changes to provisions from period to period. Actual restoration provisions
will ultimately depend on future market prices for future restoration obligations. Management has determined that the Company has no
restoration obligations at December 31, 2022.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(d)
Going concern</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Consolidated
financial statements are prepared on a going concern basis unless management either intends to liquidate the Company or has no realistic
alternative to do so. Assessment of the Company&#8217;s ability to continue as a going concern requires the consideration of all available
information about the future, which is at least, but not limited to, twelve months from the end of the reporting period. This information
includes estimates of future cash flows and other factors, the outcome of which is uncertain. When management is aware, in making its
assessment, of material uncertainties related to events or conditions that may cast substantial doubt upon the Company&#8217;s ability
to continue as a going concern those uncertainties are disclosed.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Critical
Accounting Estimates</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(a)
Valuation of share-based compensation</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company estimates the fair value of warrants and options using the Black-Scholes Option Pricing Model which requires significant estimation
around assumptions and inputs such as expected term to maturity, expected volatility and expected forfeiture rates. Note 8 of the consolidated
financial statements contains further details of significant assumptions applied to these areas of estimation.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(b)
Deferred income tax</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Tax
benefits from uncertain tax positions may be recognized when it is probable that the Company will be able to use deductible temporary
differences against taxable profit: (i) whether a tax position, based solely on its technical merits, is probable to be sustained upon
examination, and (ii) measuring the tax benefit as the expected value or most likely amount taking into consideration which method better
predicts the realized amounts upon ultimate settlement.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Furthermore,
the Corporation uses the asset and liability method in accounting for deferred income taxes and mining duties. Under this method, deferred
income taxes are recognized for future income tax.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>

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    <div style="break-before: page; margin-top: 6pt"><p style="margin: 0pt">&#160;</p></div>
    <!-- Field: /Page --></ix:exclude>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><img src="fin_001.jpg" alt="" style="height: 72px; width: 514px" /></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt"></p>

<p style="font: 13pt/12.95pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; letter-spacing: -0.3pt"><b><i>Formerly
&#8220;North American Nickel Inc.</i></b></span></p>

<p style="font: 9pt/10.9pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 1.7pt 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Notes
to the Consolidated Financial statements<br />
</b>For the years ended December 31, 2022 and 2021<br />
<i>(Expressed in Canadian dollars)</i></span></p>


<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;<br /></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
preparing these estimates, management is required to interpret substantially enacted legislation as well as economic and business conditions
along with management&#8217;s tax and corporate structure plans which may impact taxable income in future periods.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.05in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(c)
Estimated useful lives and depreciation of property, plant and equipment</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 3.7pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Depreciation
of property, plant and equipment is dependent upon estimates of useful lives which are determined through the exercise of judgment. The
assessment of any impairment of these assets is dependent upon estimates of recoverable amounts that take into account factors such as
economic and market conditions and the useful lives of assets.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.05in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

</ix:nonNumeric><ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="ifrs-full:DisclosureOfBusinessCombinationsExplanatory"><p id="xdx_80A_eifrs-full--DisclosureOfBusinessCombinationsExplanatory_zu0JM4QIsxv6" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>4.
<span id="xdx_820_z5B2u3zqPxI8">AMALGAMATION</span></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 3.7pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
April 26, 2022, PNRC and NAN entered into a definitive amalgamation agreement (the &#8220;<b>Amalgamation Agreement</b>&#8221;) in respect
of their previously-announced RTO transaction, pursuant to which PNRC would &#8220;go-public&#8221; by way of a reverse takeover of NAN.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.05in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration: underline">Transaction
Particulars</span></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.05in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Pursuant
to the Amalgamation Agreement:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.05in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></td><td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(i)</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">NAN&#8217;s
                                            subsidiary, 1000178269 Ontario Inc. (&#8220;<b>NAN Subco</b>&#8221;), amalgamated with PNRC
                                            under Section 174 of the OBCA to form one corporation;</span></td></tr>
<tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif"></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(ii)</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Holders
                                            of PNRC shares exchanged their shares at a rate of <span id="xdx_90E_ecustom--ShareExchangeRatioForRto_iI_pid_uPure_c20220426__ifrs-full--CategoriesOfRelatedPartiesAxis__custom--NorthAmericanNickelIncMember__ifrs-full--TypesOfContractsAxis__custom--AmalgamationAgreementMember_zMhfgnbRWMFj" title="Exchange ratio for RTO"><ix:nonFraction name="PNRLF:ShareExchangeRatioForRto" contextRef="AsOf2022-04-26_custom_NorthAmericanNickelIncMember_custom_AmalgamationAgreementMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Pure">1.054</ix:nonFraction></span> shares of NAN for each share of
                                            PNRC (the &#8220;<b>Exchange Ratio</b>&#8221;), after giving effect to a <span id="xdx_90F_eifrs-full--DescriptionOfNatureAndPurposeOfReservesWithinEquity_c20220425__20220426__ifrs-full--CategoriesOfRelatedPartiesAxis__custom--NorthAmericanNickelIncMember__ifrs-full--TypesOfContractsAxis__custom--AmalgamationAgreementMember_zCVmjVOVCW77" title="Share consolidation description"><ix:nonNumeric contextRef="From2022-04-252022-04-26_custom_NorthAmericanNickelIncMember_custom_AmalgamationAgreementMember" name="ifrs-full:DescriptionOfNatureAndPurposeOfReservesWithinEquity">5-to-1</ix:nonNumeric></span> share consolidation
                                            for each outstanding share of NAN; and</span></td></tr>
<tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif"></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(iii)</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
                                            transactions resulted in an RTO of the Company in accordance with the policies of the TSXV,
                                            all in the manner contemplated by, and pursuant to, the terms and conditions of the Amalgamation
                                            Agreement.</span></td></tr></table>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.05in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
connection with the RTO, NAN has, among other things: (i) changed its name to &#8220;Premium Nickel Resources Ltd.&#8221;; (ii) changed
its stock exchange ticker symbol to &#8220;PNRL&#8221;; and (iii) reconstituted the board of directors and management of the Company.
The outstanding options of PNRC immediately prior to the effective time of the RTO were exchanged and adjusted pursuant to the terms
of the Amalgamation Agreement such that holders thereof were entitled to acquire, following the closing of the RTO, options of the Company
after giving effect to the Exchange Ratio, as applicable.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.05in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Pursuant
to the Amalgamation Agreement, the Company issued <span id="xdx_901_eifrs-full--NumberOfSharesIssued_iI_c20220803__ifrs-full--TypesOfContractsAxis__custom--AmalgamationAgreementMember__dei--LegalEntityAxis__custom--PremiumNickelResourcesCorporationMember_zyZfVgvnqdEc" title="Common share issued"><ix:nonFraction name="ifrs-full:NumberOfSharesIssued" contextRef="AsOf2022-08-03_custom_AmalgamationAgreementMember_custom_PremiumNickelResourcesCorporationMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">82,157,536</ix:nonFraction></span> common shares of the Company (on a post-consolidation basis) in exchange
for <span id="xdx_902_ecustom--OutstandingNumberOfSharesSubscribedByRelatedParty_iI_c20220803__ifrs-full--TypesOfContractsAxis__custom--AmalgamationAgreementMember__dei--LegalEntityAxis__custom--PremiumNickelResourcesCorporationMember_zmKI4Riojn96" title="Outstanding shares"><ix:nonFraction name="PNRLF:OutstandingNumberOfSharesSubscribedByRelatedParty" contextRef="AsOf2022-08-03_custom_AmalgamationAgreementMember_custom_PremiumNickelResourcesCorporationMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">77,948,368</ix:nonFraction> </span>outstanding shares of PNRC immediately prior to the effective time of the RTO. Immediately after giving effect to the
RTO Transaction, the Company was owned approximately <span id="xdx_900_ecustom--ProportionOfOwnershipInterest_dp_c20220803__20220803__ifrs-full--TypesOfContractsAxis__custom--AmalgamationAgreementMember__dei--LegalEntityAxis__custom--PremiumNickelResourcesCorporationMember_znaKVaZgGvKj" title="Proportion of ownership interest"><ix:nonFraction name="PNRLF:ProportionOfOwnershipInterest" contextRef="From2022-08-032022-08-03_custom_AmalgamationAgreementMember_custom_PremiumNickelResourcesCorporationMember" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">72.1</ix:nonFraction></span>% by persons who were shareholders of PNRC prior to the RTO and <span id="xdx_906_ecustom--ProportionOfOwnershipInterest_dp_c20220803__20220803__ifrs-full--TypesOfContractsAxis__custom--AmalgamationAgreementMember__dei--LegalEntityAxis__custom--NorthAmericanNickelIncMember_zNzAvsDwTySa" title="Proportion of ownership interest"><ix:nonFraction name="PNRLF:ProportionOfOwnershipInterest" contextRef="From2022-08-032022-08-03_custom_AmalgamationAgreementMember_custom_NorthAmericanNickelIncMember" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">27.9</ix:nonFraction></span>% by persons
who were shareholders of NAN prior to the RTO.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.05in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Prior
to this exchange, NAN had <span id="xdx_907_ecustom--OutstandingNumberOfSharesSubscribedByRelatedParty_iI_c20220803_z1WeUS3T8hXd" title="Outstanding shares"><ix:nonFraction name="PNRLF:OutstandingNumberOfSharesSubscribedByRelatedParty" contextRef="AsOf2022-08-03" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">31,748,399</ix:nonFraction></span> shares outstanding (on a post-consolidation basis). Taking into account the composition of the board
and senior management and the relative ownership percentages of NAN and PNRC shareholders in the newly combined enterprise, from an accounting
perspective PNRC is considered to have acquired NAN, and hence the transaction has been recorded as a reverse takeover.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.05in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
substance of the transaction is a reverse acquisition of a public company. The transaction does not constitute a business acquisition
as NAN does not meet the definition of a business under IFRS 3 as it has no inputs or processes. As a result, the transaction is accounted
for as a capital transaction with NAN being identified as the accounting acquiree and the equity consideration being measured at fair
value (&#8220;<b>FV</b>&#8221;).</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.05in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
purchase price has been determined based on the number of shares that PNRC would have had to issue on the date of closing to give the
owners of NAN the same percentage equity (<span id="xdx_90C_ecustom--ProportionOfOwnershipInterest_pid_dp_c20220803__20220803__ifrs-full--TypesOfContractsAxis__custom--AmalgamationAgreementMember__dei--LegalEntityAxis__custom--NorthAmericanNickelIncMember_znuBmfu2WTKb" title="Proportion of ownership interest"><ix:nonFraction name="PNRLF:ProportionOfOwnershipInterest" contextRef="From2022-08-032022-08-03_custom_AmalgamationAgreementMember_custom_NorthAmericanNickelIncMember" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">27.9</ix:nonFraction></span>%) of the combined entity as they hold subsequent to the reverse takeover.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.05in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


<ix:exclude><!-- Field: Page; Sequence: 81; Value: 2 -->
    <div style="border-bottom: Black 1.5pt solid; margin-bottom: 6pt"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font-size: 10pt"><tr style="vertical-align: top; text-align: left"><td style="text-align: right; width: 100%"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->20<!-- Field: /Sequence --> | PNRL / Year ended 2022 and 2021</td></tr></table></div>
    <div style="break-before: page; margin-top: 6pt"><p style="margin: 0pt">&#160;</p></div>
    <!-- Field: /Page --></ix:exclude>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><img src="fin_001.jpg" alt="" style="height: 72px; width: 514px" /></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt"></p>

<p style="font: 13pt/12.95pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; letter-spacing: -0.3pt"><b><i>Formerly
&#8220;North American Nickel Inc.</i></b></span></p>

<p style="font: 9pt/10.9pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 1.7pt 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Notes
to the Consolidated Financial statements<br />
</b>For the years ended December 31, 2022 and 2021<br />
<i>(Expressed in Canadian dollars)</i></span></p>


<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="ifrs-full:DisclosureOfDetailedInformationAboutBusinessCombinationsExplanatory"><p id="xdx_89E_eifrs-full--DisclosureOfDetailedInformationAboutBusinessCombinationsExplanatory_zVvzH3XTxDV6" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
costs of the acquisition have been allocated as follows:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;<span id="xdx_8BB_zQ2PKtjf3nVk" style="display: none">SUMMARY
OF COST OF ACQUISITION</span></span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 96%; margin-left: 0.25in">
  <tr style="display: none; vertical-align: bottom; background-color: rgb(204,238,255)">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td id="xdx_493_20220426__dei--LegalEntityAxis__custom--NorthAmericanNickelIncMember_zQkQfM4C1Zt" style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr id="xdx_40A_ecustom--FairValueOfShareTransferred_iI_zTz9MzVQV5C4" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 80%">FV of shares transferred</td><td style="width: 2%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 16%; text-align: right"><ix:nonFraction name="PNRLF:FairValueOfShareTransferred" contextRef="AsOf2022-04-26_custom_NorthAmericanNickelIncMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">77,431,152</ix:nonFraction></td><td style="width: 1%; text-align: left">&#160;</td></tr>
  <tr id="xdx_403_ecustom--FairValueOfOptionsWarrantsAndAgentWarrants_iI_zEyFVowqMIM5" style="vertical-align: bottom; background-color: White">
    <td style="text-align: left">FV of options, warrants and agent warrants</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction name="PNRLF:FairValueOfOptionsWarrantsAndAgentWarrants" contextRef="AsOf2022-04-26_custom_NorthAmericanNickelIncMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">9,665,577</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr id="xdx_407_ecustom--FairValueOfPreferredShares_iI_zNnqIqs1ooTk" style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr id="xdx_40A_ecustom--SettlementOfPreexistingRelationship_iI_znookwAsGES2" style="vertical-align: bottom; background-color: White">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction name="PNRLF:SettlementOfPreexistingRelationship" contextRef="AsOf2022-04-26_custom_NorthAmericanNickelIncMember" format="ixt:numdotdecimal" decimals="0" sign="-" unitRef="CAD">47,985,863</ix:nonFraction></td><td style="text-align: left">)</td></tr>
  <tr id="xdx_407_eifrs-full--AcquisitiondateFairValueOfTotalConsiderationTransferred_iI_zCuEmUhStpwd" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 2.5pt">Total FV of consideration transferred</td><td style="padding-bottom: 2.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: White">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr id="xdx_40E_eifrs-full--CashTransferred_iI_z8lQfHvQ4AHe" style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">$</td><td style="text-align: right"><ix:nonFraction name="ifrs-full:CashTransferred" contextRef="AsOf2022-04-26_custom_NorthAmericanNickelIncMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">11,051,917</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr id="xdx_402_eifrs-full--FairValueOfAcquiredReceivables_iI_zOMX34iWIAQ3" style="vertical-align: bottom; background-color: White">
    <td style="text-align: left">Trade and other receivables</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction name="ifrs-full:FairValueOfAcquiredReceivables" contextRef="AsOf2022-04-26_custom_NorthAmericanNickelIncMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">450,522</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr id="xdx_401_eifrs-full--PropertyPlantAndEquipmentRecognisedAsOfAcquisitionDate_iI_zxk46BTLVzQ3" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Property, plant and equipment</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction name="ifrs-full:PropertyPlantAndEquipmentRecognisedAsOfAcquisitionDate" contextRef="AsOf2022-04-26_custom_NorthAmericanNickelIncMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">14,111</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr id="xdx_405_eifrs-full--TradeAndOtherPayablesRecognisedAsOfAcquisitionDate_iNI_di_zebRSVuPF9R5" style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; padding-bottom: 1.5pt">Trade payables and accrued liabilities</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction name="ifrs-full:TradeAndOtherPayablesRecognisedAsOfAcquisitionDate" contextRef="AsOf2022-04-26_custom_NorthAmericanNickelIncMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">1,548,582</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
  <tr id="xdx_402_eifrs-full--IdentifiableAssetsAcquiredLiabilitiesAssumed_iI_zymcfG9eUri" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Net assets acquired</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction name="ifrs-full:IdentifiableAssetsAcquiredLiabilitiesAssumed" contextRef="AsOf2022-04-26_custom_NorthAmericanNickelIncMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">9,967,968</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr id="xdx_407_ecustom--LossOnAcquisition_zfRCMEiRtSM2" style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; padding-bottom: 1.5pt">Loss on acquisition</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction name="PNRLF:LossOnAcquisition" contextRef="AsOf2022-04-26_custom_NorthAmericanNickelIncMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">29,174,415</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr id="xdx_401_eifrs-full--AcquisitiondateFairValueOfTotalConsiderationTransferred_iI_zDB4S0uC0zVi" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-bottom: 2.5pt"><span style="display: none; font-family: Times New Roman, Times, Serif">Total purchase price</span></td><td style="padding-bottom: 2.5pt">&#160;</td>
    <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right"><ix:nonFraction name="ifrs-full:AcquisitiondateFairValueOfTotalConsiderationTransferred" contextRef="AsOf2022-04-26_custom_NorthAmericanNickelIncMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">39,142,383</ix:nonFraction></td><td style="padding-bottom: 2.5pt; text-align: left">&#160;</td></tr>
  </table>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21.3pt">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21.3pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i><span style="text-decoration: underline">*Pre-existing
relationship</span></i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21.3pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 21.3pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Before
the closing of the RTO, NAN owned <span id="xdx_905_eifrs-full--NumberOfSharesOutstanding_iI_c20220803__dei--LegalEntityAxis__custom--NorthAmericanNickelIncMember__ifrs-full--ComponentsOfEquityAxis__ifrs-full--OrdinarySharesMember_zvbsiYoM4g82" title="Number of common shares" class="xdx_phnt_RGlzY2xvc3VyZSAtIFNVTU1BUlkgT0YgQ09TVCBPRiBBQ1FVSVNJVElPTiAoRGV0YWlscykgKFBhcmVudGhldGljYWwpAA__"><ix:nonFraction name="ifrs-full:NumberOfSharesOutstanding" contextRef="AsOf2022-08-03_custom_NorthAmericanNickelIncMember_ifrs-full_OrdinarySharesMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">7,667,707</ix:nonFraction></span> common shares of PNRC and a <span id="xdx_909_ecustom--WarrantsPercent_iI_pid_dp_c20220803_zThqyLY6UhLl" title="Warrant percent" class="xdx_phnt_RGlzY2xvc3VyZSAtIFNVTU1BUlkgT0YgQ09TVCBPRiBBQ1FVSVNJVElPTiAoRGV0YWlscykgKFBhcmVudGhldGljYWwpAA__"><ix:nonFraction name="PNRLF:WarrantsPercent" contextRef="AsOf2022-08-03" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">15</ix:nonFraction></span>% warrant which entitled NAN to purchase common shares of PNRC,
for up to <span id="xdx_901_ecustom--OutstandingCapitalPercent_iI_pid_dp_c20220803__dei--LegalEntityAxis__custom--NorthAmericanNickelIncMember__ifrs-full--ComponentsOfEquityAxis__ifrs-full--OrdinarySharesMember_zflfShY8K9E9" title="Outstanding capital percent" class="xdx_phnt_RGlzY2xvc3VyZSAtIFNVTU1BUlkgT0YgQ09TVCBPRiBBQ1FVSVNJVElPTiAoRGV0YWlscykgKFBhcmVudGhldGljYWwpAA__"><ix:nonFraction name="PNRLF:OutstandingCapitalPercent" contextRef="AsOf2022-08-03_custom_NorthAmericanNickelIncMember_ifrs-full_OrdinarySharesMember" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">15</ix:nonFraction></span>% of the then outstanding capital of PNRC, upon payment of US $<span id="xdx_90C_ecustom--CapitalToBeIssued_iI_c20220803__dei--LegalEntityAxis__custom--NorthAmericanNickelIncMember__ifrs-full--ComponentsOfEquityAxis__ifrs-full--OrdinarySharesMember_zRqlFVPhOUml" title="Capital to be issued" class="xdx_phnt_RGlzY2xvc3VyZSAtIFNVTU1BUlkgT0YgQ09TVCBPRiBBQ1FVSVNJVElPTiAoRGV0YWlscykgKFBhcmVudGhldGljYWwpAA__"><ix:nonFraction name="PNRLF:CapitalToBeIssued" contextRef="AsOf2022-08-03_custom_NorthAmericanNickelIncMember_ifrs-full_OrdinarySharesMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">10,000,000</ix:nonFraction></span> prior to the fifth anniversary of the date of issue.
Prior to the date that the Amalgamation became effective, the PNRC shares and the <span id="xdx_903_ecustom--WarrantsPercent_iI_pid_dp_c20220803_zkJn0wpLoGlc" title="Warrant percent" class="xdx_phnt_RGlzY2xvc3VyZSAtIFNVTU1BUlkgT0YgQ09TVCBPRiBBQ1FVSVNJVElPTiAoRGV0YWlscykgKFBhcmVudGhldGljYWwpAA__"><ix:nonFraction name="PNRLF:WarrantsPercent" contextRef="AsOf2022-08-03" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">15</ix:nonFraction></span>% warrant held by NAN were contributed to NAN Subco,
as part of the securities contribution, resulting in such securities being cancelled by operation of the triangular amalgamation.</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21.3pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21.3pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Prior
to the RTO, the fair value of the <span id="xdx_90F_ecustom--WarrantsPercent_iI_pid_dp_c20220803_zcKf5C1G2ubh" title="Warrant percent" class="xdx_phnt_RGlzY2xvc3VyZSAtIFNVTU1BUlkgT0YgQ09TVCBPRiBBQ1FVSVNJVElPTiAoRGV0YWlscykgKFBhcmVudGhldGljYWwpAA__"><ix:nonFraction name="PNRLF:WarrantsPercent" contextRef="AsOf2022-08-03" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">15</ix:nonFraction></span>% warrant and the shares held by NAN were $<span id="xdx_903_ecustom--FairValueOfWarrants_iI_c20220803__dei--LegalEntityAxis__custom--NorthAmericanNickelIncMember_zyiq7vGUhyA7" title="Fair value of warrants" class="xdx_phnt_RGlzY2xvc3VyZSAtIFNVTU1BUlkgT0YgQ09TVCBPRiBBQ1FVSVNJVElPTiAoRGV0YWlscykgKFBhcmVudGhldGljYWwpAA__"><ix:nonFraction name="PNRLF:FairValueOfWarrants" contextRef="AsOf2022-08-03_custom_NorthAmericanNickelIncMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">28,275,255</ix:nonFraction></span> and $<span id="xdx_900_ecustom--FairValueOfShares_iI_c20220803__dei--LegalEntityAxis__custom--NorthAmericanNickelIncMember_zbAJSsqLIn4h" title="Fair value of shares" class="xdx_phnt_RGlzY2xvc3VyZSAtIFNVTU1BUlkgT0YgQ09TVCBPRiBBQ1FVSVNJVElPTiAoRGV0YWlscykgKFBhcmVudGhldGljYWwpAA__"><ix:nonFraction name="PNRLF:FairValueOfShares" contextRef="AsOf2022-08-03_custom_NorthAmericanNickelIncMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">19,710,608</ix:nonFraction></span>, respectively. The fair value
of the shares was calculated based on the last offer price of PNRC financing prior to the RTO, and the fair value of the warrants was
calculated using the Black-Sholes Model with the following assumptions: expected life of <span id="xdx_907_ecustom--ExpectedLifeOfShares_dtY_c20220803__20220803_zVK27NezILsi" title="Expected life of shares" class="xdx_phnt_RGlzY2xvc3VyZSAtIFNVTU1BUlkgT0YgQ09TVCBPRiBBQ1FVSVNJVElPTiAoRGV0YWlscykgKFBhcmVudGhldGljYWwpAA__"><ix:nonNumeric contextRef="From2022-08-032022-08-03" format="ixt-sec:duryear" name="PNRLF:ExpectedLifeOfShares">2.57</ix:nonNumeric></span> years, expected dividend yield of <span id="xdx_907_eifrs-full--ExpectedDividendAsPercentageShareOptionsGranted_pid_dp_c20220803__20220803_zZQnrHDnO7kf" title="Expected dividend yield" class="xdx_phnt_RGlzY2xvc3VyZSAtIFNVTU1BUlkgT0YgQ09TVCBPRiBBQ1FVSVNJVElPTiAoRGV0YWlscykgKFBhcmVudGhldGljYWwpAA__"><ix:nonFraction name="ifrs-full:ExpectedDividendAsPercentageShareOptionsGranted" contextRef="From2022-08-032022-08-03" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">0</ix:nonFraction></span>%, a
risk free rate of <span id="xdx_90D_eifrs-full--DescriptionOfRiskFreeInterestRateShareOptionsGranted_pid_dp_c20220803__20220803_zkFG9Saby2Di" title="Risk free interest rate" class="xdx_phnt_RGlzY2xvc3VyZSAtIFNVTU1BUlkgT0YgQ09TVCBPRiBBQ1FVSVNJVElPTiAoRGV0YWlscykgKFBhcmVudGhldGljYWwpAA__"><ix:nonFraction name="ifrs-full:DescriptionOfRiskFreeInterestRateShareOptionsGranted" contextRef="From2022-08-032022-08-03" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">3.14</ix:nonFraction></span>% and an expected volatility of <span id="xdx_906_eifrs-full--DescriptionOfExpectedVolatilityShareOptionsGranted_pid_dp_c20220803__20220803_zfZeeqVci7Yj" title="Expected volatility rate" class="xdx_phnt_RGlzY2xvc3VyZSAtIFNVTU1BUlkgT0YgQ09TVCBPRiBBQ1FVSVNJVElPTiAoRGV0YWlscykgKFBhcmVudGhldGljYWwpAA__"><ix:nonFraction name="ifrs-full:DescriptionOfExpectedVolatilityShareOptionsGranted" contextRef="From2022-08-032022-08-03" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">141.63</ix:nonFraction></span>%. As they were the securities contributed by NAN on the closing of the RTO,
the fair value of the warrants and shares were included as part of the consideration on the acquisition date.</i></span></p>

</ix:nonNumeric><p id="xdx_8A3_zCiQ5IIgSlMl" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21.3pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Pursuant
to the RTO, an aggregate of <span id="xdx_908_eifrs-full--NumberOfShareOptionsGrantedInSharebasedPaymentArrangement_uShares_c20220803__20220803__ifrs-full--TypesOfContractsAxis__custom--ReverseTakeoverTransactionMember_z7ZJzPoEqYxc" title="Options to purchase"><ix:nonFraction name="ifrs-full:NumberOfShareOptionsGrantedInSharebasedPaymentArrangement" contextRef="From2022-08-032022-08-03_custom_ReverseTakeoverTransactionMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">8,827,250</ix:nonFraction></span> options to purchase common shares of the Company (&#8220;<b>Replacement Options</b>&#8221;) were
issued (on a post 5:1 consolidation basis) to the former holders of options to purchase common shares of PNRC (prior to the RTO) (&#8220;<b>PNRC
Options</b>&#8221;) in exchange for <span id="xdx_909_eifrs-full--NumberOfShareOptionsGrantedInSharebasedPaymentArrangement_uShares_c20220803__20220803__dei--LegalEntityAxis__custom--PremiumNickelResourcesCorporationMember_zQO66sWyRk2a" title="Options to purchase shares"><ix:nonFraction name="ifrs-full:NumberOfShareOptionsGrantedInSharebasedPaymentArrangement" contextRef="From2022-08-032022-08-03_custom_PremiumNickelResourcesCorporationMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">8,375,000</ix:nonFraction></span> PNRC Options. The Replacement Options issued to the former holders of PNRC Options were
on the same terms and conditions as those exchanged by PNRC holders except all the previously unvested options vested immediately. Immediately
prior to the completion of the RTO, PNRC had <span id="xdx_903_ecustom--NumberOfUnvestedOptionsOutstanding_iI_uShares_c20220803__dei--LegalEntityAxis__custom--PremiumNickelResourcesCorporationMember_zABh3qQliKC4" title="Unvested options"><ix:nonFraction name="PNRLF:NumberOfUnvestedOptionsOutstanding" contextRef="AsOf2022-08-03_custom_PremiumNickelResourcesCorporationMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">2,383,333</ix:nonFraction></span> unvested options outstanding which re-evaluated at a FV of $ <span id="xdx_902_eifrs-full--WeightedAverageFairValueAtMeasurementDateShareOptionsGranted_iI_c20220803__dei--LegalEntityAxis__custom--PremiumNickelResourcesCorporationMember_z2nLpMRxFGi9" title="Fair value of stock option"><ix:nonFraction name="ifrs-full:WeightedAverageFairValueAtMeasurementDateShareOptionsGranted" contextRef="AsOf2022-08-03_custom_PremiumNickelResourcesCorporationMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">5,138,022</ix:nonFraction></span> upon the
completion of the RTO according to IFRS2. See Note 11 (d) for details.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Given
that the RTO has been accounted for as a reverse takeover of NAN by PNRC, from an accounting perspective, PNRC is deemed to have issued
options and warrants to the former security holders of NAN. Immediately prior to the closing of the RTO, NAN had <span id="xdx_90D_eifrs-full--NumberOfOutstandingShareOptions_iI_uShares_c20220803__dei--LegalEntityAxis__custom--NorthAmericanNickelIncMember_zDumAe143xg6" title="Option outstanding"><ix:nonFraction name="ifrs-full:NumberOfOutstandingShareOptions" contextRef="AsOf2022-08-03_custom_NorthAmericanNickelIncMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">2,995,794</ix:nonFraction></span> options and
<span id="xdx_90B_eifrs-full--NumberOfOtherEquityInstrumentsOutstandingInSharebasedPaymentArrangement_iI_uShares_c20220803__dei--LegalEntityAxis__custom--NorthAmericanNickelIncMember_zCtiYM8V1O6i" title="Warrants outstanding"><ix:nonFraction name="ifrs-full:NumberOfOtherEquityInstrumentsOutstandingInSharebasedPaymentArrangement" contextRef="AsOf2022-08-03_custom_NorthAmericanNickelIncMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">2,228,340</ix:nonFraction></span> warrants outstanding, respectively, as well as <span id="xdx_908_ecustom--ConversionOfStockSharesIssued_iI_uShares_c20220803__ifrs-full--ComponentsOfEquityAxis__ifrs-full--PreferenceSharesMember_zyOq44zjiG19" title="Conversion of stock, shares issued"><ix:nonFraction name="PNRLF:ConversionOfStockSharesIssued" contextRef="AsOf2022-08-03_ifrs-full_PreferenceSharesMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">118,186</ix:nonFraction></span> preferred shares that could be converted to <span id="xdx_901_ecustom--ConversionOfStockSharesIssued_iI_uShares_c20220803__ifrs-full--ComponentsOfEquityAxis__ifrs-full--OrdinarySharesMember_zPBiV0rMtvnf" title="Conversion of stock, shares issued"><ix:nonFraction name="PNRLF:ConversionOfStockSharesIssued" contextRef="AsOf2022-08-03_ifrs-full_OrdinarySharesMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">13,131</ix:nonFraction></span> common shares of
NAN (on a post-consolidation basis). The aggregate fair value of such <span id="xdx_90E_eifrs-full--NumberOfOutstandingShareOptions_iI_uShares_c20220803__dei--LegalEntityAxis__custom--NorthAmericanNickelIncMember_zdQ9pChRJbgf" title="Option outstanding"><ix:nonFraction name="ifrs-full:NumberOfOutstandingShareOptions" contextRef="AsOf2022-08-03_custom_NorthAmericanNickelIncMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">2,995,794</ix:nonFraction></span> options, <span id="xdx_900_eifrs-full--NumberOfOtherEquityInstrumentsOutstandingInSharebasedPaymentArrangement_iI_uShares_c20220803__dei--LegalEntityAxis__custom--NorthAmericanNickelIncMember_ziJ6TpUA6THg" title="Warrants outstanding"><ix:nonFraction name="ifrs-full:NumberOfOtherEquityInstrumentsOutstandingInSharebasedPaymentArrangement" contextRef="AsOf2022-08-03_custom_NorthAmericanNickelIncMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">2,228,340</ix:nonFraction></span> warrants and <span id="xdx_90B_ecustom--ConversionOfStockSharesIssued_iI_uShares_c20220803__ifrs-full--ComponentsOfEquityAxis__ifrs-full--PreferenceSharesMember_znGYyySFyNEa" title="Conversion of stock, shares issued"><ix:nonFraction name="PNRLF:ConversionOfStockSharesIssued" contextRef="AsOf2022-08-03_ifrs-full_PreferenceSharesMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">118,186</ix:nonFraction></span> preferred shares
of NAN was $<span id="xdx_90A_ecustom--FairValueOfShares_iI_c20220803_zviMbNpksDB4" title="Fair value of shares"><ix:nonFraction name="PNRLF:FairValueOfShares" contextRef="AsOf2022-08-03" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">9,665,577</ix:nonFraction></span>, and this amount has been included as a component of the purchase price. Costs related to the transaction were
$<span id="xdx_90B_ecustom--TransactionCosts_iI_c20221231_zAMX2CeE7Rsg" title="Transaction costs"><ix:nonFraction name="PNRLF:TransactionCosts" contextRef="AsOf2022-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">2,327,125</ix:nonFraction></span> and were expensed as incurred.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


<ix:exclude><!-- Field: Page; Sequence: 82; Value: 2 -->
    <div style="border-bottom: Black 1.5pt solid; margin-bottom: 6pt"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font-size: 10pt"><tr style="vertical-align: top; text-align: left"><td style="text-align: right; width: 100%"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->21<!-- Field: /Sequence --> | PNRL / Year ended 2022 and 2021</td></tr></table></div>
    <div style="break-before: page; margin-top: 6pt"><p style="margin: 0pt">&#160;</p></div>
    <!-- Field: /Page --></ix:exclude>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><img src="fin_001.jpg" alt="" style="height: 72px; width: 514px" /></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt"></p>

<p style="font: 13pt/12.95pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; letter-spacing: -0.3pt"><b><i>Formerly
&#8220;North American Nickel Inc.</i></b></span></p>

<p style="font: 9pt/10.9pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 1.7pt 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Notes
to the Consolidated Financial statements<br />
</b>For the years ended December 31, 2022 and 2021<br />
<i>(Expressed in Canadian dollars)</i></span></p>


<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="ifrs-full:DisclosureOfSharebasedPaymentArrangementsExplanatory"><p id="xdx_896_eifrs-full--DisclosureOfSharebasedPaymentArrangementsExplanatory_zStuXU8llKm8" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
fair value of NAN&#8217;s options and warrants as at August 3, 2022 was calculated using the following assumptions:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.05in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;<span id="xdx_8B6_zcEFJniNmpEd" style="display: none">SCHEDULE
OF FAIR VALUE ASSUMPTIONS OF OPTIONS AND WARRANTS</span></span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 85%; margin-left: 0.25in">
  <tr style="vertical-align: bottom">
    <td style="padding-bottom: 1.5pt; font-weight: bold">As of August 3, 2022</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">Warrants</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">Options</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 60%; text-align: left">Expected dividend yield</td><td style="width: 2%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td id="xdx_981_eifrs-full--ExpectedDividendAsPercentageShareOptionsGranted_pid_dp_c20220803__20220803__ifrs-full--ComponentsOfEquityAxis__custom--WarrantsMember_zCzYWuZKqz32" title="Expected dividend yield" style="width: 16%; text-align: right"><ix:nonFraction name="ifrs-full:ExpectedDividendAsPercentageShareOptionsGranted" contextRef="From2022-08-032022-08-03_custom_WarrantsMember" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">0</ix:nonFraction></td><td style="width: 1%; text-align: left">%</td><td style="width: 2%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td id="xdx_981_eifrs-full--ExpectedDividendAsPercentageShareOptionsGranted_pid_dp_c20220803__20220803__ifrs-full--ComponentsOfEquityAxis__custom--OptionsMember_zAO0vkCd6WHj" title="Expected dividend yield" style="width: 16%; text-align: right"><ix:nonFraction name="ifrs-full:ExpectedDividendAsPercentageShareOptionsGranted" contextRef="From2022-08-032022-08-03_custom_OptionsMember" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">0</ix:nonFraction></td><td style="width: 1%; text-align: left">%</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td>Share price of last financing</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td>Expected share price volatility</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left">Risk free interest rate</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td id="xdx_98A_eifrs-full--DescriptionOfRiskFreeInterestRateShareOptionsGranted_pid_dp_c20220803__20220803__ifrs-full--ComponentsOfEquityAxis__custom--WarrantsMember_z9tPpXBtF0pg" title="Risk free interest rate" style="text-align: right"><ix:nonFraction name="ifrs-full:DescriptionOfRiskFreeInterestRateShareOptionsGranted" contextRef="From2022-08-032022-08-03_custom_WarrantsMember" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">3.18</ix:nonFraction></td><td style="text-align: left">%</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt">Remaining life of warrants &amp; options</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span id="xdx_90D_eifrs-full--WeightedAverageRemainingContractualLifeOfOutstandingShareOptions2019_dtY_c20220803__20220803__ifrs-full--ComponentsOfEquityAxis__custom--WarrantsMember__ifrs-full--RangeAxis__ifrs-full--BottomOfRangeMember_zZORMj5RytBj" title="Remaining life of warrants and options"><ix:nonNumeric contextRef="From2022-08-032022-08-03_custom_WarrantsMember_ifrs-full_BottomOfRangeMember" format="ixt-sec:duryear" name="ifrs-full:WeightedAverageRemainingContractualLifeOfOutstandingShareOptions2019">0.03</ix:nonNumeric></span> - <span id="xdx_902_eifrs-full--WeightedAverageRemainingContractualLifeOfOutstandingShareOptions2019_dtY_c20220803__20220803__ifrs-full--ComponentsOfEquityAxis__custom--WarrantsMember__ifrs-full--RangeAxis__ifrs-full--TopOfRangeMember_zf0aWZMPXpC8" title="Remaining life of warrants and options"><ix:nonNumeric contextRef="From2022-08-032022-08-03_custom_WarrantsMember_ifrs-full_TopOfRangeMember" format="ixt-sec:duryear" name="ifrs-full:WeightedAverageRemainingContractualLifeOfOutstandingShareOptions2019">2</ix:nonNumeric></span> years</span></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span id="xdx_902_eifrs-full--WeightedAverageRemainingContractualLifeOfOutstandingShareOptions2019_dtY_c20220803__20220803__ifrs-full--ComponentsOfEquityAxis__custom--OptionsMember__ifrs-full--RangeAxis__ifrs-full--BottomOfRangeMember_zmfFACYOZUH7" title="Remaining life of warrants and options"><ix:nonNumeric contextRef="From2022-08-032022-08-03_custom_OptionsMember_ifrs-full_BottomOfRangeMember" format="ixt-sec:duryear" name="ifrs-full:WeightedAverageRemainingContractualLifeOfOutstandingShareOptions2019">2.56</ix:nonNumeric></span> &#8211; <span id="xdx_906_eifrs-full--WeightedAverageRemainingContractualLifeOfOutstandingShareOptions2019_dtY_c20220803__20220803__ifrs-full--ComponentsOfEquityAxis__custom--OptionsMember__ifrs-full--RangeAxis__ifrs-full--TopOfRangeMember_z00jOLUlYks6" title="Remaining life of warrants and options"><ix:nonNumeric contextRef="From2022-08-032022-08-03_custom_OptionsMember_ifrs-full_TopOfRangeMember" format="ixt-sec:duryear" name="ifrs-full:WeightedAverageRemainingContractualLifeOfOutstandingShareOptions2019">4.23</ix:nonNumeric></span> years</span></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  </table>

</ix:nonNumeric><p id="xdx_8AC_zzmHJYOVODk1" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
purposes of determining the fair value of the share consideration exchanged on the RTO, the shares of PNRC were valued at US$<span id="xdx_90E_eifrs-full--ParValuePerShare_iI_c20220803__dei--LegalEntityAxis__custom--PremiumNickelResourcesCorporationMember_zLtvSCBBojV1" title="Share price"><ix:nonFraction name="ifrs-full:ParValuePerShare" contextRef="AsOf2022-08-03_custom_PremiumNickelResourcesCorporationMember" format="ixt:numdotdecimal" decimals="INF" unitRef="CADPShares">2.00</ix:nonFraction></span> per
share, the offering price for the PNRC shares on the last PNRC equity financing prior to the RTO.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
RTO resulted in a loss of $<span id="xdx_904_eifrs-full--FinancialAssetsAtFairValue_iI_c20220803__ifrs-full--TypesOfContractsAxis__custom--ReverseTakeoverTransactionMember_zut6f9cVVon7" title="Fair value of assets"><ix:nonFraction name="ifrs-full:FinancialAssetsAtFairValue" contextRef="AsOf2022-08-03_custom_ReverseTakeoverTransactionMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">29,174,415</ix:nonFraction></span> with respect to the fair value of the consideration transferred over the fair value of identifiable
net assets, which has been recorded as a loss during the year in other income.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.05in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

</ix:nonNumeric><ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="ifrs-full:DisclosureOfTradeAndOtherReceivablesExplanatory"><p id="xdx_80F_eifrs-full--DisclosureOfTradeAndOtherReceivablesExplanatory_zaR8KML29Wz1" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>5.
<span><span id="xdx_824_zoSnqBX4M4V2">OTHER RECEIVABLES</span></span></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.05in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="PNRLF:DisclosureOfDetailedInformationReceivablesAndOtherCurrentAssetsExplanatory"><p id="xdx_89A_ecustom--DisclosureOfDetailedInformationReceivablesAndOtherCurrentAssetsExplanatory_zU5xJTq8GYm4" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
summary of the other receivables as at December 31, 2022 and December 31, 2021 is detailed in the table below:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 3.7pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span id="xdx_8B5_zshVvRhNm1Q5" style="display: none">SCHEDULE OF RECEIVABLES AND OTHER CURRENT ASSETS</span></span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td>&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" id="xdx_49C_20221231_zzuifvljO9Wg" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right"><p style="margin-top: 0; margin-bottom: 0">December 31,</p>
                                                                                <p style="margin-top: 0; margin-bottom: 0">2022</p></td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" id="xdx_499_20211231_zleb12Xnv69k" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right"><p style="margin-top: 0; margin-bottom: 0">December 31,</p>
                                                                                <p style="margin-top: 0; margin-bottom: 0">2021</p></td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr id="xdx_401_ecustom--HstPaidOnPurchases_iI_pp0p0_maTAOCRzYSI_zUOIRy3ZWrqi" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 60%; text-align: left">HST paid on purchases</td><td style="width: 2%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 16%; text-align: right"><ix:nonFraction name="PNRLF:HstPaidOnPurchases" contextRef="AsOf2022-12-31" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="CAD">445,128</ix:nonFraction></td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 2%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 16%; text-align: right"><ix:nonFraction name="PNRLF:HstPaidOnPurchases" contextRef="AsOf2021-12-31" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="CAD">84,563</ix:nonFraction></td><td style="width: 1%; text-align: left">&#160;</td></tr>
  <tr id="xdx_408_eifrs-full--ValueAddedTaxReceivables_iI_pp0p0_maTAOCRzYSI_zKD5DGn6mBCj" style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; padding-bottom: 1.5pt">VAT paid on purchases</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction name="ifrs-full:ValueAddedTaxReceivables" contextRef="AsOf2022-12-31" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="CAD">359,502</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction name="ifrs-full:ValueAddedTaxReceivables" contextRef="AsOf2021-12-31" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="CAD">55,067</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr id="xdx_40B_eifrs-full--TradeAndOtherCurrentReceivables_iTI_pp0p0_mtTAOCRzYSI_zj6P4Xuxyysc" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-bottom: 2.5pt"><span style="display: none; font-family: Times New Roman, Times, Serif">Total receivables and other current assets</span></td><td style="padding-bottom: 2.5pt">&#160;</td>
    <td style="border-bottom: Black 2.5pt double; text-align: left">&#160;</td><td style="border-bottom: Black 2.5pt double; text-align: right"><ix:nonFraction name="ifrs-full:TradeAndOtherCurrentReceivables" contextRef="AsOf2022-12-31" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="CAD">804,630</ix:nonFraction></td><td style="padding-bottom: 2.5pt; text-align: left">&#160;</td><td style="padding-bottom: 2.5pt">&#160;</td>
    <td style="border-bottom: Black 2.5pt double; text-align: left">&#160;</td><td style="border-bottom: Black 2.5pt double; text-align: right"><ix:nonFraction name="ifrs-full:TradeAndOtherCurrentReceivables" contextRef="AsOf2021-12-31" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="CAD">139,630</ix:nonFraction></td><td style="padding-bottom: 2.5pt; text-align: left">&#160;</td></tr>
  </table>

</ix:nonNumeric><p id="xdx_8AF_zwE7jqb0NLx5" style="margin-top: 0; margin-bottom: 0">&#160;</p>


<ix:exclude><!-- Field: Page; Sequence: 83; Value: 2 -->
    <div style="border-bottom: Black 1.5pt solid; margin-bottom: 6pt"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font-size: 10pt"><tr style="vertical-align: top; text-align: left"><td style="text-align: right; width: 100%"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->22<!-- Field: /Sequence --> | PNRL / Year ended 2022 and 2021</td></tr></table></div>
    <div style="break-before: page; margin-top: 6pt"><p style="margin: 0pt">&#160;</p></div>
    <!-- Field: /Page --></ix:exclude>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><img src="fin_001.jpg" alt="" style="height: 72px; width: 514px" /></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt"></p>

<p style="font: 13pt/12.95pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; letter-spacing: -0.3pt"><b><i>Formerly
&#8220;North American Nickel Inc.</i></b></span></p>

<p style="font: 9pt/10.9pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 1.7pt 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Notes
to the Consolidated Financial statements<br />
</b>For the years ended December 31, 2022 and 2021<br />
<i>(Expressed in Canadian dollars)</i></span></p>


<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

</ix:nonNumeric><ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="ifrs-full:DisclosureOfExplorationAndEvaluationAssetsExplanatory"><p id="xdx_807_eifrs-full--DisclosureOfExplorationAndEvaluationAssetsExplanatory_zkOOuX3WmXRf" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>6.
<span id="xdx_82D_zI0iJT5EWgt6">EXPLORATION AND EVALUATION ASSETS</span></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span>&#160;</span></b></span></p>

<ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="PNRLF:DisclosureOfDetailedInformationExplorationAndEvaluationAssetsExplanatory"><p id="xdx_894_ecustom--DisclosureOfDetailedInformationExplorationAndEvaluationAssetsExplanatory_zCSIwreYJmbh" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="xdx_8BC_zjd0hDMek58b" style="display: none">SUMMARY OF EXPLORATION AND EVALUATION ASSETS</span></b></span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="display: none; vertical-align: bottom">
    <td>&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" id="xdx_4BB_custom--TypeOfPropertyAxis_custom--SelebiMember_ifrs-full--GeographicalAreasAxis_country--BW_zOUpAa0YjRAc" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">Selebi</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" id="xdx_4B9_custom--TypeOfPropertyAxis_custom--SelkirkMember_ifrs-full--GeographicalAreasAxis_country--BW_zYuQMGl2pfXi" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">Selkirk</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" id="xdx_4B5_zaVJ8IaKufg" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">Total</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
<tr style="vertical-align: bottom">
    <td>&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="6" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Botswana</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td></tr>
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    <td>&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr id="xdx_430_c20220101__20221231__ifrs-full--ClassesOfAssetsAxis__custom--ExplorationAndEvaluationAssetsArisingFromAcquisitionMember_ecustom--IncreaseThroughAcquisitionCostsExplorationAndEvaluationAssets_zXBewrn0Tpsf" style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr id="xdx_43B_c20220101__20221231__ifrs-full--ClassesOfAssetsAxis__custom--ExplorationAndEvaluationAssetsArisingFromExplorationMember_eifrs-full--IntangibleExplorationAndEvaluationAssets_iS_zJwhtV8f0y0j" style="vertical-align: bottom; background-color: White">
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  <tr id="xdx_430_c20220101__20221231__ifrs-full--ClassesOfAssetsAxis__custom--ExplorationAndEvaluationAssetsArisingFromExplorationMember_eifrs-full--IntangibleExplorationAndEvaluationAssets_iS_zfAjeLo4YiHl" style="display: none; vertical-align: bottom; background-color: White">
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<tr id="xdx_438_c20220101__20221231__ifrs-full--ClassesOfAssetsAxis__custom--ExplorationAndEvaluationAssetsArisingFromExplorationMember_ecustom--IncreaseThroughSiteAdministrationExplorationAndEvaluationAssets_zl8i0VKiQVY4" style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr id="xdx_436_c20220101__20221231__ifrs-full--ClassesOfAssetsAxis__custom--ExplorationAndEvaluationAssetsArisingFromExplorationMember_ecustom--IncreaseThroughCareAndMaintenanceExpensesExplorationAndEvaluationAssets_z3Sd9Ins8Au2" style="vertical-align: bottom; background-color: White">
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  <tr id="xdx_438_c20220101__20221231__ifrs-full--ClassesOfAssetsAxis__custom--ExplorationAndEvaluationAssetsArisingFromExplorationMember_ecustom--IncreaseThroughGeologyExpensesExplorationAndEvaluationAssets_zd8UJiET9Cf" style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction name="PNRLF:IncreaseThroughGeologyExpensesExplorationAndEvaluationAssets" contextRef="From2022-01-012022-12-31_custom_ExplorationAndEvaluationAssetsArisingFromExplorationMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">1,736,994</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr id="xdx_437_c20220101__20221231__ifrs-full--ClassesOfAssetsAxis__custom--ExplorationAndEvaluationAssetsArisingFromExplorationMember_ecustom--IncreaseThroughDrillingExpensesExplorationAndEvaluationAssets_zofFgqma9Gs5" style="vertical-align: bottom; background-color: White">
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction name="PNRLF:IncreaseThroughDrillingExpensesExplorationAndEvaluationAssets" contextRef="From2022-01-012022-12-31_custom_ExplorationAndEvaluationAssetsArisingFromExplorationMember_custom_SelkirkMember_country_BW" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">8,613</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction name="PNRLF:IncreaseThroughDrillingExpensesExplorationAndEvaluationAssets" contextRef="From2022-01-012022-12-31_custom_ExplorationAndEvaluationAssetsArisingFromExplorationMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">7,211,328</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr id="xdx_43E_c20220101__20221231__ifrs-full--ClassesOfAssetsAxis__custom--ExplorationAndEvaluationAssetsArisingFromExplorationMember_ecustom--IncreaseThroughGeophysicsExpensesExplorationAndEvaluationAssets_zMZ8ZVubDi4k" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 10pt">Geophysics</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction name="PNRLF:IncreaseThroughGeophysicsExpensesExplorationAndEvaluationAssets" contextRef="From2022-01-012022-12-31_custom_ExplorationAndEvaluationAssetsArisingFromExplorationMember_custom_SelkirkMember_country_BW" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">12,651</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction name="PNRLF:IncreaseThroughGeophysicsExpensesExplorationAndEvaluationAssets" contextRef="From2022-01-012022-12-31_custom_ExplorationAndEvaluationAssetsArisingFromExplorationMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">1,672,465</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr id="xdx_439_c20220101__20221231__ifrs-full--ClassesOfAssetsAxis__custom--ExplorationAndEvaluationAssetsArisingFromExplorationMember_ecustom--IncreaseThroughEngineeringExplorationAndEvaluationAssets_zkjLMcy3dZYe" style="vertical-align: bottom; background-color: White">
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction name="PNRLF:IncreaseThroughEngineeringExplorationAndEvaluationAssets" contextRef="From2022-01-012022-12-31_custom_ExplorationAndEvaluationAssetsArisingFromExplorationMember_custom_SelkirkMember_country_BW" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">66,761</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction name="PNRLF:IncreaseThroughEngineeringExplorationAndEvaluationAssets" contextRef="From2022-01-012022-12-31_custom_ExplorationAndEvaluationAssetsArisingFromExplorationMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">2,035,379</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr id="xdx_437_c20220101__20221231__ifrs-full--ClassesOfAssetsAxis__custom--ExplorationAndEvaluationAssetsArisingFromExplorationMember_ecustom--IncreaseThroughESGExplorationAndEvaluationAssets_zTd0Agwaihx3" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 10pt">ESG</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction name="PNRLF:IncreaseThroughESGExplorationAndEvaluationAssets" contextRef="From2022-01-012022-12-31_custom_ExplorationAndEvaluationAssetsArisingFromExplorationMember_custom_SelkirkMember_country_BW" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">35,262</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr id="xdx_435_c20220101__20221231__ifrs-full--ClassesOfAssetsAxis__custom--ExplorationAndEvaluationAssetsArisingFromExplorationMember_ecustom--IncreaseThroughMetallurgyAndMPExplorationAndEvaluationAssets_zcRlYL73AgX7" style="vertical-align: bottom; background-color: White">
    <td style="padding-left: 10pt; text-align: left">Metallurgy &amp; MP</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction name="PNRLF:IncreaseThroughMetallurgyAndMPExplorationAndEvaluationAssets" contextRef="From2022-01-012022-12-31_custom_ExplorationAndEvaluationAssetsArisingFromExplorationMember_custom_SelkirkMember_country_BW" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">4,800</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction name="PNRLF:IncreaseThroughMetallurgyAndMPExplorationAndEvaluationAssets" contextRef="From2022-01-012022-12-31_custom_ExplorationAndEvaluationAssetsArisingFromExplorationMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">80,755</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr id="xdx_436_c20220101__20221231__ifrs-full--ClassesOfAssetsAxis__custom--ExplorationAndEvaluationAssetsArisingFromExplorationMember_ecustom--IncreaseThroughTechnicalStudiesExplorationAndEvaluationAssets_zIQ4o6VWQhK7" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 10pt; text-align: left">Technical studies</td><td>&#160;</td>
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    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr id="xdx_433_c20220101__20221231_eifrs-full--IntangibleExplorationAndEvaluationAssets_iE_zudW246OneDa" style="vertical-align: bottom; background-color: White">
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  <tr id="xdx_43C_c20210101__20211231_eifrs-full--IntangibleExplorationAndEvaluationAssets_iE_zsNRwLygZUP9" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 10pt; font-weight: bold; padding-bottom: 2.5pt">Total, December 31, 2021</td><td style="font-weight: bold; padding-bottom: 2.5pt">&#160;</td>
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    <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">&#160;</td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl0791">-</span></td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; padding-bottom: 2.5pt">&#160;</td>
    <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">&#160;</td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right"><ix:nonFraction name="ifrs-full:IntangibleExplorationAndEvaluationAssets" contextRef="AsOf2021-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">3,099,926</ix:nonFraction></td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&#160;</td></tr>
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    <td style="padding-left: 10pt; font-weight: bold; padding-bottom: 2.5pt">Ending balance</td><td style="font-weight: bold; padding-bottom: 2.5pt">&#160;</td>
    <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">&#160;</td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right"><ix:nonFraction name="ifrs-full:IntangibleExplorationAndEvaluationAssets" contextRef="AsOf2021-12-31_custom_SelebiMember_country_BW" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">3,099,926</ix:nonFraction></td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; padding-bottom: 2.5pt">&#160;</td>
    <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">&#160;</td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl0795">-</span></td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; padding-bottom: 2.5pt">&#160;</td>
    <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">&#160;</td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right"><ix:nonFraction name="ifrs-full:IntangibleExplorationAndEvaluationAssets" contextRef="AsOf2021-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">3,099,926</ix:nonFraction></td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&#160;</td></tr>
</table>

</ix:nonNumeric><p id="xdx_8A6_z3SoI48pTVt" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following is a description of the Company&#8217;s exploration and evaluation assets and the related spending commitments:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.15in 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Botswana
Assets - Selebi and Selkirk</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.15in 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
September 28, 2021, the Company executed the Selebi APA with the BCL liquidator to acquire the Selebi assets and related infrastructure
formerly operated by BCL. On January 31, 2022, the Company closed the transaction and ownership of the Selebi Assets transferred to the
Company.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">PNRC
also negotiated a separate asset purchase agreement (the &#8220;Selkirk APA&#8221;) with the liquidator of TNMC to acquire the Selkirk
deposit and related infrastructure formerly operated by TNMC on January 20, 2022 and closed the transaction on August 22, 2022.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Pursuant
to the Selebi APA the aggregate purchase price payable to the seller for the Selebi Assets, shall be the sum of $<span id="xdx_90E_eifrs-full--IdentifiableAssetsAcquiredLiabilitiesAssumed_iI_c20210928__ifrs-full--BusinessCombinationsAxis__custom--SelebiMember_zsU6YtkpQjQ2" title="Assets purchase price"><ix:nonFraction name="ifrs-full:IdentifiableAssetsAcquiredLiabilitiesAssumed" contextRef="AsOf2021-09-28_custom_SelebiMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">76,862,200</ix:nonFraction></span>(US$<span id="xdx_907_eifrs-full--IdentifiableAssetsAcquiredLiabilitiesAssumed_iI_uUSD_c20210928__ifrs-full--BusinessCombinationsAxis__custom--SelebiMember_zl5LeHrYGPNa" title="Assets purchase price"><ix:nonFraction name="ifrs-full:IdentifiableAssetsAcquiredLiabilitiesAssumed" contextRef="AsOf2021-09-28_custom_SelebiMember" format="ixt:numdotdecimal" decimals="0" unitRef="USD">56,750,000</ix:nonFraction></span>)
which amount shall be paid in three instalments:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; width: 0.35in">&#9679;</td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$<span id="xdx_90C_ecustom--ClosingPayable_c20210928__20210928__ifrs-full--BusinessCombinationsAxis__custom--SelebiMember_zsaj9aH09Igd" title="Closing payment"><ix:nonFraction name="PNRLF:ClosingPayable" contextRef="From2021-09-282021-09-28_custom_SelebiMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">2,086,830</ix:nonFraction></span>
                                            (US$<span id="xdx_90C_ecustom--ClosingPayable_uUSD_c20210928__20210928__ifrs-full--BusinessCombinationsAxis__custom--SelebiMember_zBk17XiWFCq4" title="Closing payment"><ix:nonFraction name="PNRLF:ClosingPayable" contextRef="From2021-09-282021-09-28_custom_SelebiMember" format="ixt:numdotdecimal" decimals="0" unitRef="USD">1,750,000</ix:nonFraction></span>) payable on the closing date. This payment has been made.</span></td></tr>
<tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif">&#9679;</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$<span id="xdx_90B_ecustom--SecondInstallmentPurchasePrice_c20210928__20210928__ifrs-full--BusinessCombinationsAxis__custom--SelebiMember_z7V7ib9h7Xh1" title="Earlier payment"><ix:nonFraction name="PNRLF:SecondInstallmentPurchasePrice" contextRef="From2021-09-282021-09-28_custom_SelebiMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">33,860,000</ix:nonFraction></span>
                                            (US$<span id="xdx_904_ecustom--SecondInstallmentPurchasePrice_uUSD_c20210928__20210928__ifrs-full--BusinessCombinationsAxis__custom--SelebiMember_zurOeSs6fvKh" title="Second installment purchase price"><ix:nonFraction name="PNRLF:SecondInstallmentPurchasePrice" contextRef="From2021-09-282021-09-28_custom_SelebiMember" format="ixt:numdotdecimal" decimals="0" unitRef="USD">25,000,000</ix:nonFraction></span>) upon the earlier of: a) approval by the Ministry of Mineral Resources, Green
                                            Technology and Energy Security (&#8220;<b>MMRGTES</b>&#8221;) of the Company&#8217;s Section
                                            42 and Section 43 Applications (further extension of the mining license and conversion of
                                            the mining licence into an operating license respectively), and b) on the expiry date of
                                            the study phase, January 31, 2025, which can be extended for one year with written notice.</span></td></tr>
<tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif">&#9679;</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                            third instalment of $<span id="xdx_90C_ecustom--ThirdInstallmentPurchasePriceUponMineConstruction_c20210928__20210928__ifrs-full--BusinessCombinationsAxis__custom--SelebiMember_zMdaoV7bv1j7" title="Payable of mine construction"><ix:nonFraction name="PNRLF:ThirdInstallmentPurchasePriceUponMineConstruction" contextRef="From2021-09-282021-09-28_custom_SelebiMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">40,632,000</ix:nonFraction></span> (US$<span id="xdx_90B_ecustom--ThirdInstallmentPurchasePriceUponMineConstruction_uUSD_c20210928__20210928__ifrs-full--BusinessCombinationsAxis__custom--SelebiMember_zdykdGNK6ulg" title="Third installment of purchase price upon mine construction"><ix:nonFraction name="PNRLF:ThirdInstallmentPurchasePriceUponMineConstruction" contextRef="From2021-09-282021-09-28_custom_SelebiMember" format="ixt:numdotdecimal" decimals="0" unitRef="USD">30,000,000</ix:nonFraction></span>) is payable on the completion of mine construction
                                            and production start-up (commissioning) by the Company on or before January 31, 2030, but
                                            not later than four years after the approval by the Minister of MMRGTES of the Company&#8217;s
                                            Section 42 and Section 43 Applications.</span></td></tr>
<tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif">&#9679;</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Payment
                                            of care and maintenance funding contribution in respect of the Selebi Assets for a total
                                            of $<span id="xdx_908_ecustom--PaymentOfCareAndMaintenanceExpense_c20210322__20220131__ifrs-full--BusinessCombinationsAxis__custom--SelebiMember_zD1eGtaCYJJh" title="Payment of care and maintenance"><ix:nonFraction name="PNRLF:PaymentOfCareAndMaintenanceExpense" contextRef="From2021-03-222022-01-31_custom_SelebiMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">6,164,688</ix:nonFraction></span> (US$<span id="xdx_90E_ecustom--PaymentOfCareAndMaintenanceExpense_uUSD_c20210322__20220131__ifrs-full--BusinessCombinationsAxis__custom--SelebiMember_z783DrAsxQIl" title="Payment of care and maintenance"><ix:nonFraction name="PNRLF:PaymentOfCareAndMaintenanceExpense" contextRef="From2021-03-222022-01-31_custom_SelebiMember" format="ixt:numdotdecimal" decimals="0" unitRef="USD">5,178,747</ix:nonFraction></span>) from March 22, 2021 to the closing date. This payment has been
                                            made.</td></tr>
</table>

<p style="margin-top: 0; margin-bottom: 0">&#160;</p>

<p style="margin-top: 0; margin-bottom: 0"></p>

<ix:exclude><!-- Field: Page; Sequence: 84; Value: 2 -->
    <div style="border-bottom: Black 1.5pt solid; margin-bottom: 6pt"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font-size: 10pt"><tr style="vertical-align: top; text-align: left"><td style="text-align: right; width: 100%"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->23<!-- Field: /Sequence --> | PNRL / Year ended 2022 and 2021</td></tr></table></div>
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    <!-- Field: /Page --></ix:exclude>

<p style="margin-top: 0; margin-bottom: 0"></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><img src="fin_001.jpg" alt="" style="height: 72px; width: 514px" /></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt"></p>

<p style="font: 13pt/12.95pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; letter-spacing: -0.3pt"><b><i>Formerly
&#8220;North American Nickel Inc.</i></b></span></p>

<p style="font: 9pt/10.9pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 1.7pt 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Notes
to the Consolidated Financial statements<br />
</b>For the years ended December 31, 2022 and 2021</span></p>

<p style="font: 9pt/10.9pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 1.7pt 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(Expressed in Canadian dollars)</i></span></p>

<p style="font: 9pt/10.9pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 1.7pt 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>


<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
total acquisition cost of Selebi included the 1<sup>st</sup> instalment of $<span id="xdx_901_eifrs-full--FinancialAssetsRecognisedAsOfAcquisitionDate_iI_c20210928__ifrs-full--BusinessCombinationsAxis__custom--SelebiMember_zGH4xNA2sEP4" title="Acquisition cost"><ix:nonFraction name="ifrs-full:FinancialAssetsRecognisedAsOfAcquisitionDate" contextRef="AsOf2021-09-28_custom_SelebiMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">2,086,830</ix:nonFraction></span> (US$<span id="xdx_90B_eifrs-full--FinancialAssetsRecognisedAsOfAcquisitionDate_iI_uUSD_c20210928__ifrs-full--BusinessCombinationsAxis__custom--SelebiMember_zD9aOtTHZuv6" title="Acquisition cost"><ix:nonFraction name="ifrs-full:FinancialAssetsRecognisedAsOfAcquisitionDate" contextRef="AsOf2021-09-28_custom_SelebiMember" format="ixt:numdotdecimal" decimals="0" unitRef="USD">1,750,000</ix:nonFraction></span>) and the payment of the care and
maintenance funding contribution of $<span id="xdx_902_ecustom--PaymentOfCareAndMaintenanceFundings_c20210928__20210928__ifrs-full--BusinessCombinationsAxis__custom--SelebiMember_zrjbTPC4xfSi" title="Payment of care and maintenance funding"><ix:nonFraction name="PNRLF:PaymentOfCareAndMaintenanceFundings" contextRef="From2021-09-282021-09-28_custom_SelebiMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">6,164,688</ix:nonFraction></span> (US$<span id="xdx_903_ecustom--PaymentOfCareAndMaintenanceFundings_uUSD_c20210928__20210928__ifrs-full--BusinessCombinationsAxis__custom--SelebiMember_zD0OK6lFFIM4" title="Payment of care and maintenance funding"><ix:nonFraction name="PNRLF:PaymentOfCareAndMaintenanceFundings" contextRef="From2021-09-282021-09-28_custom_SelebiMember" format="ixt:numdotdecimal" decimals="0" unitRef="USD">5,178,747</ix:nonFraction></span>) for the asset. As per the terms and conditions of the Selebi APA, the Company
has the option to cancel the second and third payments and give back the Selebi Assets to the liquidator in the event where the exploration
program determines that the Selebi Assets are not economical. The Company also has an option to pay in advance the second and third payments
in the event where the exploration program determines that the Selebi Assets are economical. The Company&#8217;s accounting policy, as
permitted by IAS 16 &#8211; <i>Property, Plant and Equipment</i>, is to measure and record contingent consideration when the conditions
associated with the contingency are met. As of December 31, 2022, none of the conditions of the second and third instalment are met.
Hence, these amounts are not accrued in the consolidated financial statements.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition to the Selebi APA, the purchase of the Selebi Assets is also subject to a contingent compensation agreement as well as a royalty
agreement with the liquidator.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
regard to the Selkirk Assets, the Selkirk APA does not provide for a purchase price or initial payment for the purchase of the assets.
The acquisition cost of Selkirk of $<span id="xdx_90C_eifrs-full--FinancialAssetsRecognisedAsOfAcquisitionDate_iI_c20220822__custom--TypeOfPropertyAxis__custom--SelkirkAssetsMember_z7X5Qad1Uyel" title="Acquisition cost"><ix:nonFraction name="ifrs-full:FinancialAssetsRecognisedAsOfAcquisitionDate" contextRef="AsOf2022-08-22_custom_SelkirkAssetsMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">327,109</ix:nonFraction></span> (US$<span id="xdx_904_eifrs-full--FinancialAssetsRecognisedAsOfAcquisitionDate_iI_uUSD_c20220822__custom--TypeOfPropertyAxis__custom--SelkirkAssetsMember_zWgdL5uoRxM7" title="Acquisition cost"><ix:nonFraction name="ifrs-full:FinancialAssetsRecognisedAsOfAcquisitionDate" contextRef="AsOf2022-08-22_custom_SelkirkAssetsMember" format="ixt:numdotdecimal" decimals="0" unitRef="USD">244,954</ix:nonFraction></span>) was the care and maintenance funding contribution from April 1, 2021 to the
closing date of the Selkirk APA. The Selkirk APA provides that if the Company elects to develop Selkirk first, the payment of the second
Selebi instalment of $<span id="xdx_90C_ecustom--PaymentOfSecondInstalment_pp0p0_c20210401__20220822__custom--TypeOfPropertyAxis__custom--SelkirkAssetsMember_z3Ua2vgjmgzl" title="Payment of second instalment"><ix:nonFraction name="PNRLF:PaymentOfSecondInstalment" contextRef="From2021-04-012022-08-22_custom_SelkirkAssetsMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="CAD">33,860,000</ix:nonFraction></span> (US$<span id="xdx_90A_ecustom--PaymentOfSecondInstalment_pp0p0_uUSD_c20210401__20220822__custom--TypeOfPropertyAxis__custom--SelkirkAssetsMember_z1EkdvnKB18g" title="Payment of second instalment"><ix:nonFraction name="PNRLF:PaymentOfSecondInstalment" contextRef="From2021-04-012022-08-22_custom_SelkirkAssetsMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">25,000,000</ix:nonFraction></span>) would be upon the approval by the Minister of MMRGTES of the Company&#8217;s Section
42 and Section 43 Applications (further extension of the Selkirk mining license (years) and conversion of the Selkirk mining license
into an operating license respectively). For the third Selebi instalment of $<span id="xdx_903_ecustom--PaymentOfThirdInstalment_pp0p0_c20210401__20220822__custom--TypeOfPropertyAxis__custom--SelkirkAssetsMember_zuV7aVimK9Ia" title="Payment of third instalment"><ix:nonFraction name="PNRLF:PaymentOfThirdInstalment" contextRef="From2021-04-012022-08-22_custom_SelkirkAssetsMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="CAD">40,632,000</ix:nonFraction></span> (US$<span id="xdx_90A_ecustom--PaymentOfThirdInstalment_pp0p0_uUSD_c20210401__20220822__custom--TypeOfPropertyAxis__custom--SelkirkAssetsMember_zHHhQWvVVOQb" title="Payment of third instalment"><ix:nonFraction name="PNRLF:PaymentOfThirdInstalment" contextRef="From2021-04-012022-08-22_custom_SelkirkAssetsMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="USD">30,000,000</ix:nonFraction></span>), if Selkirk were to be commissioned
earlier than Selebi, the payment would trigger on Selkirk&#8217;s commission date.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">During
the year ended December 31, 2022, the Company incurred $<span id="xdx_906_eifrs-full--PaymentsForExplorationAndEvaluationExpenses_c20220101__20221231__ifrs-full--BusinessCombinationsAxis__custom--SelebiMember_zvzCC1GnObh2" title="Exploration related cost"><ix:nonFraction name="ifrs-full:PaymentsForExplorationAndEvaluationExpenses" contextRef="From2022-01-012022-12-31_custom_SelebiMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">28,046,746</ix:nonFraction></span> and $<span id="xdx_90F_ecustom--ExplorationAndLicenseRelatedExpenditure_c20220101__20221231__custom--TypeOfPropertyAxis__custom--SelkirkAssetsMember_zz8kh5kUY6se" title="Exploration and assets related expenditure"><ix:nonFraction name="PNRLF:ExplorationAndLicenseRelatedExpenditure" contextRef="From2022-01-012022-12-31_custom_SelkirkAssetsMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">677,310</ix:nonFraction></span> in acquisition and exploration expenditures on the Selebi
Assets and Selkirk Assets, respectively (December 31, 2021 - $<span id="xdx_907_ecustom--ExplorationAndLicenseRelatedExpenditure_c20210101__20211231__custom--TypeOfPropertyAxis__custom--SelkirkAssetsMember_zl8tnCaiyOnj" title="Exploration and assets related expenditure"><span id="xdx_90B_ecustom--ExplorationAndLicenseRelatedExpenditure_c20210101__20211231__ifrs-full--BusinessCombinationsAxis__custom--SelebiMember_z0E76IsOc5ph" title="Exploration and assets related expenditure"><ix:nonFraction name="PNRLF:ExplorationAndLicenseRelatedExpenditure" contextRef="From2021-01-012021-12-31_custom_SelkirkAssetsMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD"><ix:nonFraction name="PNRLF:ExplorationAndLicenseRelatedExpenditure" contextRef="From2021-01-012021-12-31_custom_SelebiMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">3,099,926</ix:nonFraction></ix:nonFraction></span></span>).</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Greenland
&#8211; Maniitsoq Property</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company&#8217;s Maniitsoq property in Greenland was owned by NAN prior to the RTO. The Maniitsoq property is subject to a <span id="xdx_90C_ecustom--PercentageOfNetSmelterReturnRoyalties_pid_dp_c20220101__20221231__custom--TypeOfPropertyAxis__custom--ManiitsoqPropertyMember_zqBPlYSeSYjk" title="Percentage of net smelter return royalties"><ix:nonFraction name="PNRLF:PercentageOfNetSmelterReturnRoyalties" contextRef="From2022-01-012022-12-31_custom_ManiitsoqPropertyMember" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">2.5</ix:nonFraction></span>% net smelter
return (&#8220;NSR&#8221;). The Company can reduce the NSR to <span id="xdx_900_ecustom--PercentageOfNetSmelterReturnRoyaltiesAfterReduction_pid_dp_c20220101__20221231__custom--TypeOfPropertyAxis__custom--ManiitsoqPropertyMember_zZ6F4g3DuG4c" title="Percentage of net smelter return royalties after reduction"><ix:nonFraction name="PNRLF:PercentageOfNetSmelterReturnRoyaltiesAfterReduction" contextRef="From2022-01-012022-12-31_custom_ManiitsoqPropertyMember" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">1</ix:nonFraction></span>% by paying $<span id="xdx_90F_ecustom--PaymentRequiredToReduceNetSmelterReturnRoyalties_c20220101__20221231__custom--TypeOfPropertyAxis__custom--ManiitsoqPropertyMember_zfJz3I6rbh1j" title="Payment required to reduce net smelter return royalties"><ix:nonFraction name="PNRLF:PaymentRequiredToReduceNetSmelterReturnRoyalties" contextRef="From2022-01-012022-12-31_custom_ManiitsoqPropertyMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">2,000,000</ix:nonFraction></span> on or before 60 days from the decision to commence
commercial production.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span id="xdx_90D_ecustom--LicensePeriodDescription_c20220101__20221231__custom--TypeOfPropertyAxis__custom--ManiitsoqPropertyMember_zwMymQAJXCB6" title="License period description"><ix:nonNumeric contextRef="From2022-01-012022-12-31_custom_ManiitsoqPropertyMember" name="PNRLF:LicensePeriodDescription">At
the expiration of the first license period, the Company may apply for a second license period (years 6-10), and the Company may apply
for a further <span id="xdx_90B_ecustom--PeriodOfAdditionalLicenseApplication_dtY_c20220101__20221231__custom--TypeOfPropertyAxis__custom--ManiitsoqPropertyMember__srt--StatementScenarioAxis__custom--ElevenToThirteenYearsMember_zAFQtai9YSm5" title="Period of additional license application"><ix:nonNumeric contextRef="From2022-01-012022-12-31_custom_ManiitsoqPropertyMember_custom_ElevenToThirteenYearsMember" format="ixt-sec:duryear" name="PNRLF:PeriodOfAdditionalLicenseApplication">3</ix:nonNumeric></span>-year license for years 11 to 13. Thereafter, the Company may apply for additional <span id="xdx_909_ecustom--PeriodOfAdditionalLicenseApplication_dtY_c20220101__20221231__custom--TypeOfPropertyAxis__custom--ManiitsoqPropertyMember__srt--StatementScenarioAxis__custom--FourteenToTwentyTwoMember_zrR8jtSghfQ" title="Period of additional license application"><ix:nonNumeric contextRef="From2022-01-012022-12-31_custom_ManiitsoqPropertyMember_custom_FourteenToTwentyTwoMember" format="ixt-sec:duryear" name="PNRLF:PeriodOfAdditionalLicenseApplication">3</ix:nonNumeric></span>-year licenses for years 14 to 16,
17 to 19 and 20 to 22. The Company will be required to pay additional license fees and will be obligated to incur minimum eligible exploration
expenses for such years.</ix:nonNumeric></span></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company may terminate the licenses at any time, however any unfulfilled obligations according to the licenses will remain in force, regardless
of the termination.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Future
required minimum exploration expenditures will be adjusted each year on the basis of the change to the Danish Consumer Price Index.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Prior
to the closing of the RTO on August 3, 2022, the Maniitsoq property had a book value of $<span id="xdx_901_ecustom--PropertyOfBookValue_c20220803__20220803__custom--TypeOfPropertyAxis__custom--ManiitsoqPropertyMember_zLrO4V3KiZtl" title="Book value"><ix:nonFraction name="PNRLF:PropertyOfBookValue" contextRef="From2022-08-032022-08-03_custom_ManiitsoqPropertyMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">36,692,516</ix:nonFraction></span>. As the transaction is accounted
for as a capital transaction with NAN being identified as the accounting acquiree, the net assets of NAN should be measured at fair value
at the acquisition date. Upon the completion of the RTO, the Company has switched its focus to development of the Botswana assets with
the result that limited resources (management time, capital etc.) have since been allocated or will be allocated to the Greenland assets.
Management believes that facts and circumstances exist to suggest that the carrying amount of the Maniitsoq property at August 3, 2022
exceeds its fair value. As a result, the carrying value of the Greenland assets has been reduced to nil as of August 3, 2022, for a total
impairment of $<span id="xdx_904_eifrs-full--ImpairmentLossRecognisedInProfitOrLossInvestmentProperty_c20220803__20220803__custom--TypeOfPropertyAxis__custom--ManiitsoqPropertyMember_zqC19O5nsDW2" title="Impairment of property"><ix:nonFraction name="ifrs-full:ImpairmentLossRecognisedInProfitOrLossInvestmentProperty" contextRef="From2022-08-032022-08-03_custom_ManiitsoqPropertyMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">36,692,516</ix:nonFraction></span>.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">From
August 3 to December 31, 2022, the Company spent an additional $<span id="xdx_909_ecustom--AcquisitionAndExplorationExpenditureAmount_c20220802__20221231__custom--TypeOfPropertyAxis__custom--ManiitsoqPropertyMember_zCnfkvL7U3sc" title="Acquisition and exploration expenditure"><ix:nonFraction name="PNRLF:AcquisitionAndExplorationExpenditureAmount" contextRef="From2022-08-022022-12-31_custom_ManiitsoqPropertyMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">48,001</ix:nonFraction></span> in acquisition and exploration expenditures on the Maniitsoq property,
which is comprised of the Sulussugut, Ininngui, Carbonatite and 2020/05 Licenses. These expenditures were recorded as general exploration
expense in the consolidated statements of comprehensive loss.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


<ix:exclude><!-- Field: Page; Sequence: 85; Value: 2 -->
    <div style="border-bottom: Black 1.5pt solid; margin-bottom: 6pt"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font-size: 10pt"><tr style="vertical-align: top; text-align: left"><td style="text-align: right; width: 100%"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->24<!-- Field: /Sequence --> | PNRL / Year ended 2022 and 2021</td></tr></table></div>
    <div style="break-before: page; margin-top: 6pt"><p style="margin: 0pt">&#160;</p></div>
    <!-- Field: /Page --></ix:exclude>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><img src="fin_001.jpg" alt="" style="height: 72px; width: 514px" /></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt"></p>

<p style="font: 13pt/12.95pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; letter-spacing: -0.3pt"><b><i>Formerly
&#8220;North American Nickel Inc.</i></b></span></p>

<p style="font: 9pt/10.9pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 1.7pt 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Notes
to the Consolidated Financial statements<br />
</b>For the years ended December 31, 2022 and 2021</span></p>

<p style="font: 9pt/10.9pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 1.7pt 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(Expressed in Canadian dollars)</span></p>


<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Sulussugut License (2011/54), which was first granted on August 15, 2011 by the Bureau of Minerals and Petroleum (&#8220;<b>BMP</b>&#8221;)
of Greenland, has been renewed and is valid until December 31, 2022. The Company has available credits of DKK <span id="xdx_908_ecustom--AmountOfLicenseCarriedCredits_uDKK_c20210101__20211231__custom--TypeOfPropertyAxis__custom--SulussugutLicenseMember_z2eOetiakLvb" title="Amount of license carried credits"><ix:nonFraction name="PNRLF:AmountOfLicenseCarriedCredits" contextRef="From2021-01-012021-12-31_custom_SulussugutLicenseMember" format="ixt:numdotdecimal" decimals="0" unitRef="DKK">278,854,152</ix:nonFraction></span> (approximately
$<span id="xdx_906_ecustom--AmountOfLicenseCarriedCredits_c20210101__20211231__custom--TypeOfPropertyAxis__custom--SulussugutLicenseMember_zsJtnp7ANgCj" title="Amount of license carried credits"><ix:nonFraction name="PNRLF:AmountOfLicenseCarriedCredits" contextRef="From2021-01-012021-12-31_custom_SulussugutLicenseMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">55,627,220</ix:nonFraction></span>) at the end of December 31, 2021. The credits available from each year may be carried forward for three years plus a two-year
extension and expire between December 31, 2022 and December 31, 2024.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.7pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Ininngui License (2012/28) was first granted by BMP on March 4, 2012.During the year ended December 31, 2021, the Company received a
license extension, which provides for a renewal period until December 31, 2023. Total cumulative surplus credit as at December 31, 2021
was DKK <span id="xdx_903_ecustom--AmountOfLicenseCarriedCredits_uDKK_c20210101__20211231__custom--TypeOfPropertyAxis__custom--IninnguiLicenseMember_zvKZo0T5v4D1" title="Amount of license carried credits"><ix:nonFraction name="PNRLF:AmountOfLicenseCarriedCredits" contextRef="From2021-01-012021-12-31_custom_IninnguiLicenseMember" format="ixt:numdotdecimal" decimals="0" unitRef="DKK">35,426,696</ix:nonFraction></span> (approximately $<span id="xdx_90E_ecustom--AmountOfLicenseCarriedCredits_c20210101__20211231__custom--TypeOfPropertyAxis__custom--IninnguiLicenseMember_zD8q5fKcIlaa" title="Amount of license carried credits"><ix:nonFraction name="PNRLF:AmountOfLicenseCarriedCredits" contextRef="From2021-01-012021-12-31_custom_IninnguiLicenseMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">7,067,162</ix:nonFraction></span>) and is expected to expire between December 31, 2022 and December 31, 2024.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.7pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Carbonatite
License (2018/21) was granted on May 4, 2018 for exclusive exploration rights of an area located near Maniitsoq in West Greenland. The
license is valid for five years until December 31, 2022 and during the year ended December 31, 2021, the Company received a license extension,
which provides for renewal until December 31, 2024. The Company has a total surplus credit of DKK <span id="xdx_90D_ecustom--AmountOfLicenseCarriedCredits_uDKK_c20210101__20211231__custom--TypeOfPropertyAxis__custom--CarbonatiteLicenseMember_z1OHBzadrZFj" title="Amount of license carried credits"><ix:nonFraction name="PNRLF:AmountOfLicenseCarriedCredits" contextRef="From2021-01-012021-12-31_custom_CarbonatiteLicenseMember" format="ixt:numdotdecimal" decimals="0" unitRef="DKK">10,577,191</ix:nonFraction></span> (approximately $<span id="xdx_901_ecustom--AmountOfLicenseCarriedCredits_c20210101__20211231__custom--TypeOfPropertyAxis__custom--CarbonatiteLicenseMember_zOQ62rYlHHUl" title="Amount of license carried credits"><ix:nonFraction name="PNRLF:AmountOfLicenseCarriedCredits" contextRef="From2021-01-012021-12-31_custom_CarbonatiteLicenseMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">2,110,012</ix:nonFraction></span>)
which is expected to expire between December 31, 2023 and December 31, 2024.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.7pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
February 18, 2020, the Company was granted new prospective license No. 2020/05, by the BMP of Greenland for a period of five years ending
December 31, 2024.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.7pt 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Canada
&#8211; Post Creek, Halcyon and Quetico Property</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">NAN
acquired the rights to the Post Creek, Halcyon and Quetico properties within the Sudbury Mining District of Ontario in 2013, 2015, and
2018, respectively. The Company is obligated to pay advances on net smelter return royalties (&#8220;NSR&#8221;) of $<span id="xdx_904_ecustom--AdvancesPayableAnnuallyOnNetSmelterReturnRoyalties_c20220101__20221231__custom--TypeOfPropertyAxis__custom--PostCreekPropertyMember_ziydFn2j6o6" title="Advances payable annually on net smelter return royalties"><ix:nonFraction name="PNRLF:AdvancesPayableAnnuallyOnNetSmelterReturnRoyalties" contextRef="From2022-01-012022-12-31_custom_PostCreekPropertyMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">10,000</ix:nonFraction></span> per annum
for the Post Creek Property and $<span id="xdx_90A_ecustom--AdvancesPayableAnnuallyOnNetSmelterReturnRoyalties_c20220101__20221231__custom--TypeOfPropertyAxis__custom--HalcyonPropertyMember_zJuh5zlasH9c" title="Advances payable annually on net smelter return royalties"><ix:nonFraction name="PNRLF:AdvancesPayableAnnuallyOnNetSmelterReturnRoyalties" contextRef="From2022-01-012022-12-31_custom_HalcyonPropertyMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">8,000</ix:nonFraction></span> per annum for the Halcyon Property. The total of the advances will be deducted from any payments
to be made under the NSR.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
work commitment to hold all 809 claim cells of Quetico was $<span id="xdx_901_ecustom--TotalAnnualWorkRequirementCost_c20220401__20220430__custom--TypeOfPropertyAxis__custom--QueticoPropertyMember__custom--CreationsDateAxis__custom--PriorToAprilTwentySixTwothousandTwentyOneMember_zlLXdz6p3Ph7" title="Work commitment amount"><span id="xdx_90D_ecustom--TotalAnnualWorkRequirementCost_c20220501__20220531__custom--TypeOfPropertyAxis__custom--QueticoPropertyMember__custom--CreationsDateAxis__custom--PriorToAprilTwentySixTwothousandTwentyOneMember_zIAiQ5GZjbla" title="Work commitment amount"><ix:nonFraction name="PNRLF:TotalAnnualWorkRequirementCost" contextRef="From2022-04-012022-04-30_custom_QueticoPropertyMember_custom_PriorToAprilTwentySixTwothousandTwentyOneMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD"><ix:nonFraction name="PNRLF:TotalAnnualWorkRequirementCost" contextRef="From2022-05-012022-05-31_custom_QueticoPropertyMember_custom_PriorToAprilTwentySixTwothousandTwentyOneMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">323,600</ix:nonFraction></ix:nonFraction></span></span>, with claims due in April and May of 2022. NAN renewed 49 high priority
claims for two years for the Quetico East Block and renewed 46 claims for one year and four high priority claims for two years for the
West Block. All other claims expired.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Prior
to the closing of the RTO on August 3, 2022, total book value of the Canadian assets was $<span id="xdx_90F_ecustom--WrittenOffOfAssetsBookValue_iI_c20220803__custom--TypeOfPropertyAxis__custom--CanadianPropertiesMember_zPuValbygRa7" title="Written off of assets book value"><ix:nonFraction name="PNRLF:WrittenOffOfAssetsBookValue" contextRef="AsOf2022-08-03_custom_CanadianPropertiesMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">2,535,873</ix:nonFraction></span> which has been written off effective
as at August 3, 2022, the closing date of the RTO as the Company has switched its focus to development of the Botswana assets with the
result that limited resources (management time, capital etc.) have since been allocated or will be allocated to the Canada assets. During
the period from August 3 to December 31, 2022, the Company incurred additional $<span id="xdx_90D_ecustom--ExplorationAndLicenseRelatedExpenditure_c20220802__20221231__custom--TypeOfPropertyAxis__custom--CanadianPropertiesMember_zRYFrNZbYhP6" title="Exploration and license related expenditures"><ix:nonFraction name="PNRLF:ExplorationAndLicenseRelatedExpenditure" contextRef="From2022-08-022022-12-31_custom_CanadianPropertiesMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">21,739</ix:nonFraction></span> in exploration and license related expenditures
for the Canadian properties and the expenditures were recorded as general exploration expense in the consolidated statements of comprehensive
loss.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>High
Atlas Project in Morocco</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
2018, the Company&#8217;s geologists identified a project opportunity in the high Atlas Mountains of Morocco. There is no modern geophysical
coverage and no drilling on the property.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
2019, the Company signed a memorandum of understanding (the &#8220;<b>MOU</b>&#8221;) with Office National des Hydrocarbons et des Mines
(&#8220;<b>ONHYM</b>&#8221;), a government entity and the single largest current permit holder in Morocco. Through this alliance, the
Company was given access to confidential exploration data to develop nickel projects in the High Atlas Region of Morocco. In November
and December 2021, the Company lodged applications for five permits in Morocco. In December, four of the five permits were awarded to
the Company. An application for a fifth permit was submitted and awarded in February 2022. Work plans were submitted in May 2022. The
work obligations are approximately $<span id="xdx_901_eifrs-full--CapitalCommitments_iI_c20221231__custom--TypeOfPropertyAxis__custom--HighAtlasProjectInMoroccoMember_zE9yT9O1mEb4" title="Work commitment amount"><ix:nonFraction name="ifrs-full:CapitalCommitments" contextRef="AsOf2022-12-31_custom_HighAtlasProjectInMoroccoMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">65,000</ix:nonFraction></span> per permit over a three-year period with work commencing within six months.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
October 2022, the Company and ONHYM decided not to pursue the joint venture discussions that initially set out the general framework
of a joint venture for the exploration and consolidation of permits owned by ONHYM in the Imilchil area. The Company intends to continue
its work on the five permits it acquired in 2021 in the same region.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


<ix:exclude><!-- Field: Page; Sequence: 86; Value: 2 -->
    <div style="border-bottom: Black 1.5pt solid; margin-bottom: 6pt"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font-size: 10pt"><tr style="vertical-align: top; text-align: left"><td style="text-align: right; width: 100%"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->25<!-- Field: /Sequence --> | PNRL / Year ended 2022 and 2021</td></tr></table></div>
    <div style="break-before: page; margin-top: 6pt"><p style="margin: 0pt">&#160;</p></div>
    <!-- Field: /Page --></ix:exclude>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><img src="fin_001.jpg" alt="" style="height: 72px; width: 514px" /></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt"></p>

<p style="font: 13pt/12.95pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; letter-spacing: -0.3pt"><b><i>Formerly
&#8220;North American Nickel Inc.</i></b></span></p>

<p style="font: 9pt/10.9pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 1.7pt 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Notes
to the Consolidated Financial statements<br />
</b>For the years ended December 31, 2022 and 2021</span></p>

<p style="font: 9pt/10.9pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 1.7pt 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(Expressed in Canadian dollars)</span></p>


<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
exploration and license related expenditures for the project are recorded as property investigation expense in the consolidated statements
of comprehensive loss. The Company has spent $nil on the project during the period from August 3 to December 31, 2022.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.55in 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

</ix:nonNumeric><ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="ifrs-full:DisclosureOfPropertyPlantAndEquipmentExplanatory"><p id="xdx_80B_eifrs-full--DisclosureOfPropertyPlantAndEquipmentExplanatory_zG1KO7dzK2F3" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>7.
<span id="xdx_826_zwfMZTCTslbe">PROPERTY, PLANT AND EQUIPMENT</span></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="ifrs-full:DisclosureOfDetailedInformationAboutPropertyPlantAndEquipmentExplanatory"><p id="xdx_894_eifrs-full--DisclosureOfDetailedInformationAboutPropertyPlantAndEquipmentExplanatory_zaqTSZgRIWUh" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
table below sets out costs and accumulated amortization as at December 31, 2022. The Company had no property, plant and equipment as
at December 31, 2021.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.55in 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;<span id="xdx_8B8_zxI6hkLSftK9" style="display: none">SUMMARY OF PROPERTY, PLANT AND EQUIPMENT</span></span></p>

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    <td style="text-align: left">Dispositions</td><td>&#160;</td>
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<tr id="xdx_409_eifrs-full--DepreciationPropertyPlantAndEquipment_zEoMJW6sYmJ8" style="display: none; vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Depreciation during the year</td><td>&#160;</td>
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<tr id="xdx_430_c20220101__20221231__ifrs-full--CarryingAmountAccumulatedDepreciationAmortisationAndImpairmentAndGrossCarryingAmountAxis__ifrs-full--GrossCarryingAmountMember_eifrs-full--PropertyPlantAndEquipment_iE_z9NyTPd7kuY4" style="vertical-align: bottom; background-color: White">
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</table>

<p style="margin: 0">&#160;</p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom; background-color: White">
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    <td style="font-weight: bold">Balance &#8211; December 31, 2021</td><td style="font-weight: bold">&#160;</td>
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  <tr id="xdx_403_eifrs-full--DepreciationPropertyPlantAndEquipment_hifrs-full--CarryingAmountAccumulatedDepreciationAmortisationAndImpairmentAndGrossCarryingAmountAxis__custom--AccumulatedDepreciationMember_zS9Cc9Lu6NA7" style="vertical-align: bottom; background-color: White">
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  <tr id="xdx_432_c20220101__20221231__ifrs-full--CarryingAmountAccumulatedDepreciationAmortisationAndImpairmentAndGrossCarryingAmountAxis__custom--AccumulatedDepreciationMember_eifrs-full--PropertyPlantAndEquipment_iE_zNmNrF3Q21Ml" style="vertical-align: bottom; background-color: rgb(204,238,255)">
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</table>

<p style="margin: 0">&#160;</p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom; background-color: White">
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</ix:nonNumeric><p id="xdx_8AC_zbi5tytXhuVg" style="margin-top: 0; margin-bottom: 0">&#160;</p>


<ix:exclude><!-- Field: Page; Sequence: 87; Value: 2 -->
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    <!-- Field: /Page --></ix:exclude>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><img src="fin_001.jpg" alt="" style="height: 72px; width: 514px" /></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt"></p>

<p style="font: 13pt/12.95pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; letter-spacing: -0.3pt"><b><i>Formerly
&#8220;North American Nickel Inc.</i></b></span></p>

<p style="font: 9pt/10.9pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 1.7pt 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Notes
to the Consolidated Financial statements<br />
</b>For the years ended December 31, 2022 and 2021</span></p>

<p style="font: 9pt/10.9pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 1.7pt 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(Expressed in Canadian dollars)</span></p>

<p style="font: 9pt/10.9pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 1.7pt 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


</ix:nonNumeric><ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="ifrs-full:DisclosureOfTradeAndOtherPayablesExplanatory"><p id="xdx_808_eifrs-full--DisclosureOfTradeAndOtherPayablesExplanatory_zGf0rzTZHNcj" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>8.
<span id="xdx_82A_zKgQCqrOdTog">TRADE PAYABLES AND ACCRUED LIABILITIES</span></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span>&#160;</span></b></span></p>

<ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="PNRLF:DisclosureOfDetailedInformationAboutTradePayablesAndAccruedLiabilitiesExplanatory"><p id="xdx_894_ecustom--DisclosureOfDetailedInformationAboutTradePayablesAndAccruedLiabilitiesExplanatory_zrFlOG9zc7Af" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span id="xdx_8B4_zXe5FlvEkQDd" style="display: none">SUMMARY OF TRADE PAYABLES AND ACCRUED LIABILITIES</span></b></span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td>&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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    <td style="width: 60%; text-align: left">Amounts due to related parties (note 12)</td><td style="width: 2%">&#160;</td>
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  </table>

</ix:nonNumeric><p id="xdx_8A8_z4E5Mx1oNkgh" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

</ix:nonNumeric><ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="PNRLF:DisclosureOfDetailedInformationAboutPromissoryNoteExplanatory"><p id="xdx_808_ecustom--DisclosureOfDetailedInformationAboutPromissoryNoteExplanatory_zEFjP61Imdrl" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>9.
<span id="xdx_828_zdZIvgIcPsOb">PROMISSORY NOTE</span></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
November 21, 2022, the Company announced a $<span id="xdx_902_eifrs-full--CorporateLoans_iI_c20221121__ifrs-full--CategoriesOfRelatedPartiesAxis__custom--PinnacleIslandLPMember_zDmfC3OTrpUd" title="Bridge loan"><ix:nonFraction name="ifrs-full:CorporateLoans" contextRef="AsOf2022-11-21_custom_PinnacleIslandLPMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">7,000,000</ix:nonFraction></span> million bridge loan (the &#8220;<b>Bridge Loan</b>&#8221;) financing from Pinnacle
Island LP (the &#8220;<b>Lender</b>&#8221;). The Bridge Loan financing closed on November 25, 2022 and net proceeds of $<span id="xdx_90C_eifrs-full--LoansReceived_iI_c20221121__ifrs-full--CategoriesOfRelatedPartiesAxis__custom--PinnacleIslandLPMember_zF8kzkkHOQNf" title="Proceeds from loans"><ix:nonFraction name="ifrs-full:LoansReceived" contextRef="AsOf2022-11-21_custom_PinnacleIslandLPMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">6,740,000</ix:nonFraction></span> were
received by the Company (after deducting the commitment fee of $<span id="xdx_90D_eifrs-full--FeeAndCommissionExpense_c20221121__20221121__ifrs-full--CategoriesOfRelatedPartiesAxis__custom--PinnacleIslandLPMember_zvpCpnrwKH05" title="Commitment fee"><ix:nonFraction name="ifrs-full:FeeAndCommissionExpense" contextRef="From2022-11-212022-11-21_custom_PinnacleIslandLPMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">260,000</ix:nonFraction></span>). The Bridge Loan is evidenced by the issuance of a promissory
note by the Company to the Lender (the &#8220;<b>Promissory Note</b>&#8221;). The Promissory Note has a principal amount of $<span id="xdx_901_eifrs-full--Borrowings_iI_pn6n6_c20221121__ifrs-full--CategoriesOfRelatedPartiesAxis__custom--PinnacleIslandLPMember_zfKBBcJm9gUh" title="Promissory note principal amount"><ix:nonFraction name="ifrs-full:Borrowings" contextRef="AsOf2022-11-21_custom_PinnacleIslandLPMember" format="ixt:numdotdecimal" decimals="-6" scale="6" unitRef="CAD">7</ix:nonFraction></span> million
and bears interest at a rate of <span id="xdx_905_eifrs-full--BorrowingsInterestRate_iI_pid_dp_uPure_c20221121__ifrs-full--CategoriesOfRelatedPartiesAxis__custom--PinnacleIslandLPMember_zbg8CKAMmbhb" title="Commitment fee"><ix:nonFraction name="ifrs-full:BorrowingsInterestRate" contextRef="AsOf2022-11-21_custom_PinnacleIslandLPMember" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">10</ix:nonFraction></span>% per annum, calculated monthly and initially payable on <span id="xdx_905_eifrs-full--BorrowingsMaturity_c20221121__20221121__ifrs-full--CategoriesOfRelatedPartiesAxis__custom--PinnacleIslandLPMember_zwdMZx2m9bIh" title="Maturity date"><ix:nonNumeric contextRef="From2022-11-212022-11-21_custom_PinnacleIslandLPMember" name="ifrs-full:BorrowingsMaturity">February 22, 2023</ix:nonNumeric></span>, being the maturity date
of the Promissory Note, with a right of the Company to extend the maturity date to March 22, 2023 and further by providing written notice
to the Lender by February 15, 2023. <span id="xdx_901_ecustom--BorrowingsExtendedMaturity_c20221121__20221121__ifrs-full--CategoriesOfRelatedPartiesAxis__custom--PinnacleIslandLPMember_zjhHrBM2q4lh" title="Extend maturity date description"><ix:nonNumeric contextRef="From2022-11-212022-11-21_custom_PinnacleIslandLPMember" name="PNRLF:BorrowingsExtendedMaturity">The Company extended the maturity to March 22, 2023 and negotiated further extension to November
24, 2023.</ix:nonNumeric></span> All other terms of the Promissory Note remain the same. Further details are disclosed in the subsequent events note 17 for
further details.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
connection with the promissory note, the Company accrued $<span id="xdx_90C_eifrs-full--InterestPayable_iI_c20221231__ifrs-full--CategoriesOfRelatedPartiesAxis__custom--PinnacleIslandLPMember_z1cCtNVbgGfe" title="Accrued interest"><ix:nonFraction name="ifrs-full:InterestPayable" contextRef="AsOf2022-12-31_custom_PinnacleIslandLPMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">70,959</ix:nonFraction> </span>of interest due to the Lender as at December 31, 2022.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
obligations of the Company under the Promissory Note are fully and unconditionally guaranteed by each of its existing and future subsidiaries.
No assets of the Company were pledged as collateral under the Promissory Notes. The Promissory Note is subject to certain covenants and
provisions on events of default, repayments and mandatory prepayments.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
connection with the Bridge Loan financing, the Company also issued <span id="xdx_904_ecustom--WarrantsIssuedToPurchaseCommonShares_iI_uShares_c20221121__ifrs-full--CategoriesOfRelatedPartiesAxis__custom--PinnacleIslandLPMember_zxyhnevvhSYc" title="Warrants issued to purchase common shares"><ix:nonFraction name="PNRLF:WarrantsIssuedToPurchaseCommonShares" contextRef="AsOf2022-11-21_custom_PinnacleIslandLPMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">119,229</ix:nonFraction></span> common share purchase warrants to the Lender, each of which
is exercisable to acquire one common share of the Company at a price of $<span id="xdx_901_eifrs-full--ExercisePriceOfOutstandingShareOptions2019_iI_pid_c20221121__ifrs-full--CategoriesOfRelatedPartiesAxis__custom--PinnacleIslandLPMember_zuRHm3K7sq35" title="Exercise price"><ix:nonFraction name="ifrs-full:ExercisePriceOfOutstandingShareOptions2019" contextRef="AsOf2022-11-21_custom_PinnacleIslandLPMember" format="ixt:numdotdecimal" decimals="INF" unitRef="CADPShares">2.04</ix:nonFraction></span> per share until November 25, 2023. The fair value of the
liability of the warrants was estimated at $<span id="xdx_905_eifrs-full--WarrantLiability_iI_c20221121__ifrs-full--CategoriesOfRelatedPartiesAxis__custom--PinnacleIslandLPMember_zfjo0nbiIm9b" title="Warrant liability"><ix:nonFraction name="ifrs-full:WarrantLiability" contextRef="AsOf2022-11-21_custom_PinnacleIslandLPMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">46,492</ix:nonFraction></span> using the Black-Scholes Option Pricing Model. Subsequent to year end, in connection
with the extension of the maturity of the promissory note from March 22, 2023 to November 24, 2023 these warrants were cancelled and
<span id="xdx_906_ecustom--NontransferrableWarrantsIssued_uShares_c20221121__20221121__ifrs-full--CategoriesOfRelatedPartiesAxis__custom--PinnacleIslandLPMember_z9SGjMeVd5u2" title="Non-transferrable warrants issued"><ix:nonFraction name="PNRLF:NontransferrableWarrantsIssued" contextRef="From2022-11-212022-11-21_custom_PinnacleIslandLPMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">350,000</ix:nonFraction></span> new non-transferrable common share purchase warrants were issued.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

</ix:nonNumeric><ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="ifrs-full:DisclosureOfLeasesExplanatory"><p id="xdx_801_eifrs-full--DisclosureOfLeasesExplanatory_znOzpBTElXwa" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>10.
<span id="xdx_822_z3DJyncZNmv7">LEASE LIABILITY</span></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
July 9, 2022, the Company executed a sales agreement (the &#8220;Agreement&#8221;) with Tuli Tourism Pty Ltd. (the &#8220;Seller&#8221;)
for the Syringa Lodge (the &#8220;Lodge&#8221;) in Botswana.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
per the Agreement of the Lodge, the aggregate purchase price payable to the Seller shall be the sum of $<span id="xdx_90E_eifrs-full--PaymentsOfLeaseLiabilitiesClassifiedAsFinancingActivities_c20220709__20220709__ifrs-full--CategoriesOfRelatedPartiesAxis__custom--TuliTourismPtyLtdMember_zWbA9Ivl9Z3h" title="Payment of lease liabilities"><ix:nonFraction name="ifrs-full:PaymentsOfLeaseLiabilitiesClassifiedAsFinancingActivities" contextRef="From2022-07-092022-07-09_custom_TuliTourismPtyLtdMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">3,213,404</ix:nonFraction></span> (BWP <span id="xdx_906_eifrs-full--PaymentsOfLeaseLiabilitiesClassifiedAsFinancingActivities_uBWP_c20220709__20220709__ifrs-full--CategoriesOfRelatedPartiesAxis__custom--TuliTourismPtyLtdMember_zrFJ1YeIwPs7" title="Payment of lease liabilities"><ix:nonFraction name="ifrs-full:PaymentsOfLeaseLiabilitiesClassifiedAsFinancingActivities" contextRef="From2022-07-092022-07-09_custom_TuliTourismPtyLtdMember" format="ixt:numdotdecimal" decimals="0" unitRef="BWP">30,720,000.00</ix:nonFraction></span>)
A deposit of $<span id="xdx_905_eifrs-full--LongtermDeposits_iI_c20220817__ifrs-full--CategoriesOfRelatedPartiesAxis__custom--TuliTourismPtyLtdMember_zHdMZ8A70KDd" title="Deposits paid"><ix:nonFraction name="ifrs-full:LongtermDeposits" contextRef="AsOf2022-08-17_custom_TuliTourismPtyLtdMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">482,011</ix:nonFraction></span> (BWP <span id="xdx_902_eifrs-full--LongtermDeposits_iI_uBWP_c20220817__ifrs-full--CategoriesOfRelatedPartiesAxis__custom--TuliTourismPtyLtdMember_zXqlAxRSnmUj" title="Deposits paid"><ix:nonFraction name="ifrs-full:LongtermDeposits" contextRef="AsOf2022-08-17_custom_TuliTourismPtyLtdMember" format="ixt:numdotdecimal" decimals="0" unitRef="BWP">4,608,000</ix:nonFraction></span>) was paid on August 17, 2022. The balance is payable into two installments of $<span id="xdx_900_eifrs-full--BalancesOnTermDepositsFromCustomers_iI_c20230701__ifrs-full--CategoriesOfRelatedPartiesAxis__custom--TuliTourismPtyLtdMember__ifrs-full--NonadjustingEventsAfterReportingPeriodAxis__custom--NonadjustingEventMember_zvCei6WD6s0i" title="Term deposits payable"><span id="xdx_90B_eifrs-full--BalancesOnTermDepositsFromCustomers_iI_c20240801__ifrs-full--CategoriesOfRelatedPartiesAxis__custom--TuliTourismPtyLtdMember__ifrs-full--NonadjustingEventsAfterReportingPeriodAxis__custom--NonadjustingEventMember_zdyebsBrncE4" title="Term deposits payable"><ix:nonFraction name="ifrs-full:BalancesOnTermDepositsFromCustomers" contextRef="AsOf2023-07-01_custom_TuliTourismPtyLtdMember_custom_NonadjustingEventMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD"><ix:nonFraction name="ifrs-full:BalancesOnTermDepositsFromCustomers" contextRef="AsOf2024-08-01_custom_TuliTourismPtyLtdMember_custom_NonadjustingEventMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">1,365,697</ix:nonFraction></ix:nonFraction></span></span> (BWP <span id="xdx_900_eifrs-full--BalancesOnTermDepositsFromCustomers_iI_uBWP_c20230701__ifrs-full--CategoriesOfRelatedPartiesAxis__custom--TuliTourismPtyLtdMember__ifrs-full--NonadjustingEventsAfterReportingPeriodAxis__custom--NonadjustingEventMember_zjeIeHMekf04" title="Term deposits payable"><span id="xdx_90D_eifrs-full--BalancesOnTermDepositsFromCustomers_iI_uBWP_c20240801__ifrs-full--CategoriesOfRelatedPartiesAxis__custom--TuliTourismPtyLtdMember__ifrs-full--NonadjustingEventsAfterReportingPeriodAxis__custom--NonadjustingEventMember_z9IjDw1OcnFa" title="Term deposits payable"><ix:nonFraction name="ifrs-full:BalancesOnTermDepositsFromCustomers" contextRef="AsOf2023-07-01_custom_TuliTourismPtyLtdMember_custom_NonadjustingEventMember" format="ixt:numdotdecimal" decimals="0" unitRef="BWP"><ix:nonFraction name="ifrs-full:BalancesOnTermDepositsFromCustomers" contextRef="AsOf2024-08-01_custom_TuliTourismPtyLtdMember_custom_NonadjustingEventMember" format="ixt:numdotdecimal" decimals="0" unitRef="BWP">13,056,000.00</ix:nonFraction></ix:nonFraction></span></span>)
on July 1, 2023 and August 1, 2024.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition to the above purchase price, the Company will pay to the Seller the Agreed Interest Amount in 12 equal monthly instalments of
$<span id="xdx_903_eifrs-full--CurrentInterestPayable_iI_c20220709__ifrs-full--CategoriesOfRelatedPartiesAxis__custom--TuliTourismPtyLtdMember_zzLOv1P2dNWh" title="Interest payable current"><ix:nonFraction name="ifrs-full:CurrentInterestPayable" contextRef="AsOf2022-07-09_custom_TuliTourismPtyLtdMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">13,657</ix:nonFraction></span> (BWP <span id="xdx_90E_eifrs-full--CurrentInterestPayable_iI_uBWP_c20220709__ifrs-full--CategoriesOfRelatedPartiesAxis__custom--TuliTourismPtyLtdMember_zLunG25ESOe3" title="Interest payable current"><ix:nonFraction name="ifrs-full:CurrentInterestPayable" contextRef="AsOf2022-07-09_custom_TuliTourismPtyLtdMember" format="ixt:numdotdecimal" decimals="0" unitRef="BWP">130,560</ix:nonFraction></span>), followed by 12 equal monthly instalments of $<span id="xdx_903_eifrs-full--NoncurrentInterestPayable_iI_c20220709__ifrs-full--CategoriesOfRelatedPartiesAxis__custom--TuliTourismPtyLtdMember_z5A8xd9tiX0f" title="Interest payable noncurrent"><ix:nonFraction name="ifrs-full:NoncurrentInterestPayable" contextRef="AsOf2022-07-09_custom_TuliTourismPtyLtdMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">6,828</ix:nonFraction></span> (BWP <span id="xdx_908_eifrs-full--NoncurrentInterestPayable_iI_uBWP_c20220709__ifrs-full--CategoriesOfRelatedPartiesAxis__custom--TuliTourismPtyLtdMember_zoA66b5gzVzc" title="Interest payable noncurrent"><ix:nonFraction name="ifrs-full:NoncurrentInterestPayable" contextRef="AsOf2022-07-09_custom_TuliTourismPtyLtdMember" format="ixt:numdotdecimal" decimals="0" unitRef="BWP">65,280</ix:nonFraction></span>).</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>

<ix:exclude><!-- Field: Page; Sequence: 88; Value: 2 -->
    <div style="border-bottom: Black 1.5pt solid; margin-bottom: 6pt"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font-size: 10pt"><tr style="vertical-align: top; text-align: left"><td style="text-align: right; width: 100%"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->27<!-- Field: /Sequence --> | PNRL / Year ended 2022 and 2021</td></tr></table></div>
    <div style="break-before: page; margin-top: 6pt"><p style="margin: 0pt">&#160;</p></div>
    <!-- Field: /Page --></ix:exclude>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><img src="fin_001.jpg" alt="" style="height: 72px; width: 514px" /></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt"></p>

<p style="font: 13pt/12.95pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; letter-spacing: -0.3pt"><b><i>Formerly
&#8220;North American Nickel Inc.</i></b></span></p>

<p style="font: 9pt/10.9pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 1.7pt 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Notes
to the Consolidated Financial statements<br />
</b>For the years ended December 31, 2022 and 2021</span></p>

<p style="font: 9pt/10.9pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 1.7pt 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(Expressed in Canadian dollars)</span></p>


<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="PNRLF:DisclosureOfDetailedInformationOfLeaseLiabilitiesExplanatory"><p id="xdx_896_ecustom--DisclosureOfDetailedInformationOfLeaseLiabilitiesExplanatory_zQkeI7YHEKhe" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
details of lease liabilities are as follows:</span></p>




<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;<span id="xdx_8B8_zMkcGvhb1pfi" style="display: none">SCHEDULE
OF DETAILS OF LEASE LIABILITIES</span></span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 80%">
  <tr style="vertical-align: bottom">
    <td>&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" id="xdx_496_20220101__20221231_z51m4Opkf83b" style="border-bottom: Black 1.5pt solid; text-align: right"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>December 31,</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>2022</b></span></p></td><td style="padding-bottom: 1.5pt">&#160;</td></tr>
  <tr id="xdx_40D_eifrs-full--LeaseLiabilities_iS_zGlnjVs0acCl" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td>Lease liabilities as of beginning of year</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl1060">-</span></td><td style="text-align: left">&#160;</td></tr>
  <tr id="xdx_407_ecustom--LeaseAdditionsFromAcquisitions_zXxyWppScfHe" style="vertical-align: bottom; background-color: White">
    <td style="width: 80%; text-align: left">Lease additions from acquisitions</td><td style="width: 2%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 16%; text-align: right"><ix:nonFraction name="PNRLF:LeaseAdditionsFromAcquisitions" contextRef="From2022-01-01to2022-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">3,213,404</ix:nonFraction></td><td style="width: 1%; text-align: left">&#160;</td></tr>
  <tr id="xdx_40F_eifrs-full--PaymentsOfLeaseLiabilitiesClassifiedAsFinancingActivities_iN_di_z4AcOpONVAxe" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Lease payments</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction name="ifrs-full:PaymentsOfLeaseLiabilitiesClassifiedAsFinancingActivities" contextRef="From2022-01-01to2022-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">550,295</ix:nonFraction></td><td style="text-align: left">)</td></tr>
  <tr id="xdx_40D_eifrs-full--InterestExpenseOnLeaseLiabilities_zwBOlm7mJEI5" style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; padding-bottom: 1.5pt">Interest expense on lease liabilities</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction name="ifrs-full:InterestExpenseOnLeaseLiabilities" contextRef="From2022-01-01to2022-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">68,285</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr id="xdx_40A_eifrs-full--LeaseLiabilities_iE_z9Ym7aCstSq4" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt">IFRS 16 lease liabilities as of end of year</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: White">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Long-term lease liability (one to five year)</td><td>&#160;</td>
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  </table>

</ix:nonNumeric><p id="xdx_8A3_zjQoqmh69jQ4" style="margin-top: 0; margin-bottom: 0">&#160;</p>
<!-- Field: Split-Segment; Name: 002 -->
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

</ix:nonNumeric><ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="ifrs-full:DisclosureOfShareCapitalReservesAndOtherEquityInterestExplanatory"><p id="xdx_80D_eifrs-full--DisclosureOfShareCapitalReservesAndOtherEquityInterestExplanatory_zAJ7aU9Li5B5" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>11.
<span id="xdx_829_zUoGl70EuI59">SHARE CAPITAL, WARRANTS AND OPTIONS</span></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
authorized capital of the Company comprises an unlimited number of common shares without par value and <span id="xdx_906_ecustom--PreferredShareConvertedToCommonShares_c20220101__20221231__ifrs-full--ClassesOfShareCapitalAxis__custom--SeriesOneConvertiblePreferredSharesMember_zWe7c5i0q3r2" title="Convertible preferred shares"><ix:nonFraction name="PNRLF:PreferredShareConvertedToCommonShares" contextRef="From2022-01-012022-12-31_custom_SeriesOneConvertiblePreferredSharesMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">100,000,000</ix:nonFraction></span> Series 1 convertible
preferred shares without par value.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.3in 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Effective
August 3, 2022, in connection with the closing of the RTO, the Company completed a share consolidation of the Company&#8217;s issued
and outstanding common shares, exchanging one (1) post-consolidation common share without par value for every five (5) pre-consolidation
common shares issued and outstanding.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.3in 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">All
references to share capital, warrants, options and weighted average number of shares outstanding have been adjusted in these financial
statements and retrospectively to reflect the Company&#8217;s RTO share exchange and <span id="xdx_90D_eifrs-full--DescriptionOfNatureAndPurposeOfReservesWithinEquity_c20220101__20221231_zuobzPdnaWxj" title="Share consolidation description"><ix:nonNumeric contextRef="From2022-01-01to2022-12-31" name="ifrs-full:DescriptionOfNatureAndPurposeOfReservesWithinEquity">5-for-1</ix:nonNumeric></span> share consolidation as if it occurred at
the beginning of the earliest period presented.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.35in 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>a)
Common Shares Issued and Outstanding</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
August 3, 2022, PNRC combined with NAN in a reverse takeover transaction whereby shareholders of PNRC exchanged their shares at a rate
of <span id="xdx_904_ecustom--ShareExchangeRatioForRto_iI_pid_uPure_c20220803__srt--ConsolidationItemsAxis__custom--PostConsolidationBasisMember__ifrs-full--CategoriesOfRelatedPartiesAxis__custom--NorthAmericanNickelIncMember_zo9KZUudo1Wb" title="Share exchange ratio for RTO"><ix:nonFraction name="PNRLF:ShareExchangeRatioForRto" contextRef="AsOf2022-08-03_custom_PostConsolidationBasisMember_custom_NorthAmericanNickelIncMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Pure">1.054</ix:nonFraction></span> shares of NAN for each share of PNRC, after giving effect to a <span id="xdx_90B_eifrs-full--DescriptionOfNatureAndPurposeOfReservesWithinEquity_c20220803__20220803__ifrs-full--CategoriesOfRelatedPartiesAxis__custom--NorthAmericanNickelIncMember__srt--ConsolidationItemsAxis__custom--PostConsolidationBasisMember_zEjQ42yimf0e" title="Share consolidation description"><ix:nonNumeric contextRef="From2022-08-032022-08-03_custom_NorthAmericanNickelIncMember_custom_PostConsolidationBasisMember" name="ifrs-full:DescriptionOfNatureAndPurposeOfReservesWithinEquity">5-to-1</ix:nonNumeric></span> share consolidation for each outstanding share of NAN
(Note 4). The following table provides a continuity of share capital presented in these consolidation financial statements:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="ifrs-full:DisclosureOfClassesOfShareCapitalExplanatory"><p id="xdx_898_eifrs-full--DisclosureOfClassesOfShareCapitalExplanatory_zf5U2rkeKzsb" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.3in 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span id="xdx_8BF_zX5Kdo9C9oP" style="display: none">SCHEDULE
OF SHARE CAPITAL</span></span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: White">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify">December 31, 2021</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td id="xdx_980_eifrs-full--Equity_iS_c20220101__20221231__ifrs-full--CategoriesOfRelatedPartiesAxis__custom--NorthAmericanNickelIncMember_zpe3WC9Atzmg" title="Shares capital, beginning" style="text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl1108">-</span></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left">Share capital issued through private placement (net of issue costs)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td id="xdx_98A_ecustom--ShareCapitalIssuedThroughPrivatePlacementShares_c20220101__20221231__ifrs-full--CategoriesOfRelatedPartiesAxis__custom--PremiumNickelResourcesCorporationMember_zpP2gYTyouGi" title="Share capital issued through private placement (net of issue costs), shares" style="text-align: right"><ix:nonFraction name="PNRLF:ShareCapitalIssuedThroughPrivatePlacementShares" contextRef="From2022-01-012022-12-31_custom_PremiumNickelResourcesCorporationMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">8,936,167</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: White">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Share capital of the Company immediately post RTO</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: White">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt">Shares issued for exercised options</td><td style="padding-bottom: 1.5pt">&#160;</td>
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">&#160;</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: White">
    <td style="padding-bottom: 2.5pt">Balance as at December 31, 2022</td><td style="padding-bottom: 2.5pt">&#160;</td>
    <td style="border-bottom: Black 2.5pt double; text-align: left">&#160;</td><td id="xdx_98A_eifrs-full--NumberOfSharesOutstanding_iE_c20220101__20221231__ifrs-full--CategoriesOfRelatedPartiesAxis__custom--PremiumNickelResourcesCorporationMember_za6AZUe8jPGf" title="Shares outstanding, ending" style="border-bottom: Black 2.5pt double; text-align: right"><span style="display: none; font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="-sec-ix-hidden: xdx2ixbrl1146">-</span></span></td><td style="padding-bottom: 2.5pt; text-align: left">&#160;</td><td style="padding-bottom: 2.5pt">&#160;</td>
    <td style="border-bottom: Black 2.5pt double; text-align: left"><b>$</b></td><td id="xdx_988_eifrs-full--Equity_iE_c20220101__20221231__ifrs-full--CategoriesOfRelatedPartiesAxis__custom--PremiumNickelResourcesCorporationMember_zzR9swnCTs9d" title="Shares capital, ending" style="border-bottom: Black 2.5pt double; text-align: right"><span style="display: none; font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="-sec-ix-hidden: xdx2ixbrl1148">-</span></span></td><td style="padding-bottom: 2.5pt; text-align: left">&#160;</td><td style="font-weight: bold; padding-bottom: 2.5pt">&#160;</td>
    <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">&#160;</td><td id="xdx_98C_eifrs-full--NumberOfSharesOutstanding_iE_c20220101__20221231__ifrs-full--CategoriesOfRelatedPartiesAxis__custom--NorthAmericanNickelIncMember_zxr4gMJ31Jpf" title="Shares outstanding, ending" style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right"><ix:nonFraction name="ifrs-full:NumberOfSharesOutstanding" contextRef="AsOf2022-12-31_custom_NorthAmericanNickelIncMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">116,521,343</ix:nonFraction></td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; padding-bottom: 2.5pt">&#160;</td>
    <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td id="xdx_98A_eifrs-full--Equity_iE_c20220101__20221231__ifrs-full--CategoriesOfRelatedPartiesAxis__custom--NorthAmericanNickelIncMember_z7qiudAZyznf" title="Shares capital, ending" style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right"><ix:nonFraction name="ifrs-full:Equity" contextRef="AsOf2022-12-31_custom_NorthAmericanNickelIncMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">91,144,268</ix:nonFraction></td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&#160;</td></tr>
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</ix:nonNumeric><p id="xdx_8A2_zlhpsFCkphXk" style="margin-top: 0; margin-bottom: 0">&#160;</p>

<ix:exclude><!-- Field: Page; Sequence: 89; Value: 2 -->
    <div style="border-bottom: Black 1.5pt solid; margin-bottom: 6pt"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font-size: 10pt"><tr style="vertical-align: top; text-align: left"><td style="text-align: right; width: 100%"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->28<!-- Field: /Sequence --> | PNRL / Year ended 2022 and 2021</td></tr></table></div>
    <div style="break-before: page; margin-top: 6pt"><p style="margin: 0pt">&#160;</p></div>
    <!-- Field: /Page --></ix:exclude>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: #767070"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: #767070"></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><img src="fin_001.jpg" alt="" style="height: 72px; width: 514px" /></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt"></p>

<p style="font: 13pt/12.95pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; letter-spacing: -0.3pt"><b><i>Formerly
&#8220;North American Nickel Inc.</i></b></span></p>

<p style="font: 9pt/10.9pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 1.7pt 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Notes
to the Consolidated Financial statements<br />
</b>For the years ended December 31, 2022 and 2021</span></p>

<p style="font: 9pt/10.9pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 1.7pt 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(Expressed in Canadian dollars)</span></p>

<p style="font: 9pt/10.9pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 1.7pt 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>2022</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.15in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
April 2022, the Company completed a non-brokered private placement of <span id="xdx_905_ecustom--ShareCapitalIssuedThroughPrivatePlacementShares_c20220401__20220430__ifrs-full--ClassesOfShareCapitalAxis__custom--PrivatePlacementsMember_zxNUQ6nFtoja" title="Issuance of subscription receipts units"><ix:nonFraction name="PNRLF:ShareCapitalIssuedThroughPrivatePlacementShares" contextRef="From2022-04-012022-04-30_custom_PrivatePlacementsMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">8,936,167</ix:nonFraction></span> shares at a price of US$<span id="xdx_90C_eifrs-full--ParValuePerShare_iI_uUSDPShares_c20220430__ifrs-full--ClassesOfShareCapitalAxis__custom--PrivatePlacementsMember_z78DSXZp8vI9" title="Subscription Receipts price per share"><ix:nonFraction name="ifrs-full:ParValuePerShare" contextRef="AsOf2022-04-30_custom_PrivatePlacementsMember" format="ixt:numdotdecimal" decimals="INF" unitRef="USDPShares">2.00</ix:nonFraction></span>/Share for gross proceeds
of $<span id="xdx_901_eifrs-full--ProceedsFromIssuingShares_c20220401__20220430__ifrs-full--ClassesOfShareCapitalAxis__custom--PrivatePlacementsMember_zXBsslo4E1x7" title="Gross proceeds"><ix:nonFraction name="ifrs-full:ProceedsFromIssuingShares" contextRef="From2022-04-012022-04-30_custom_PrivatePlacementsMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">22,388,599</ix:nonFraction></span> (US$<span id="xdx_903_eifrs-full--ProceedsFromIssuingShares_uUSD_c20220401__20220430__ifrs-full--ClassesOfShareCapitalAxis__custom--PrivatePlacementsMember_zdj3kMwAdgV5" title="Gross proceeds"><ix:nonFraction name="ifrs-full:ProceedsFromIssuingShares" contextRef="From2022-04-012022-04-30_custom_PrivatePlacementsMember" format="ixt:numdotdecimal" decimals="0" unitRef="USD">17,731,238</ix:nonFraction></span>). In connection with the private placement, the Company has paid to eligible finders (&#8220;Finders&#8221;)
(i) cash commission equal to <span id="xdx_90B_ecustom--CashCommissionPercentage_iI_c20220430__ifrs-full--ClassesOfShareCapitalAxis__custom--PrivatePlacementsMember_ziu2htjLjSni" title="Commision percentage"><ix:nonFraction name="PNRLF:CashCommissionPercentage" contextRef="AsOf2022-04-30_custom_PrivatePlacementsMember" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">6</ix:nonFraction>%</span> of the gross proceeds raised from subscribers introduced to the Company by such Finders, being an aggregate
of $<span id="xdx_904_eifrs-full--OtherFeeAndCommissionIncome_c20220401__20220430__ifrs-full--ClassesOfShareCapitalAxis__custom--PrivatePlacementsMember_zoWXNDxnHqBd" title="Cash commission"><ix:nonFraction name="ifrs-full:OtherFeeAndCommissionIncome" contextRef="From2022-04-012022-04-30_custom_PrivatePlacementsMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">1,535,727</ix:nonFraction></span>, and (ii) a number of common share equal to <span id="xdx_907_ecustom--CashCommissionPercentage_iI_c20220430__ifrs-full--ClassesOfShareCapitalAxis__custom--PrivatePlacementsMember__srt--TitleOfIndividualAxis__custom--FinderMember_zVzJdVpTMenf" title="Commision percentage"><ix:nonFraction name="PNRLF:CashCommissionPercentage" contextRef="AsOf2022-04-30_custom_PrivatePlacementsMember_custom_FinderMember" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">6</ix:nonFraction>%</span> of the units attributable to the Finders under the private placement, being
an aggregate of <span id="xdx_904_eifrs-full--NumberOfSharesIssued_iI_c20220430__ifrs-full--ClassesOfShareCapitalAxis__custom--PrivatePlacementsMember__srt--TitleOfIndividualAxis__custom--FinderMember_zOnZ6tUVzjuj" title="Aggregate gross proceeds"><ix:nonFraction name="ifrs-full:NumberOfSharesIssued" contextRef="AsOf2022-04-30_custom_PrivatePlacementsMember_custom_FinderMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">70,548</ix:nonFraction></span> shares with total value of $<span id="xdx_90B_eifrs-full--IssueOfEquity_c20220401__20220430__ifrs-full--ClassesOfShareCapitalAxis__custom--PrivatePlacementsMember__srt--TitleOfIndividualAxis__custom--FinderMember_zCW0qOK68Hgd" title="Value of shares issued"><ix:nonFraction name="ifrs-full:IssueOfEquity" contextRef="From2022-04-012022-04-30_custom_PrivatePlacementsMember_custom_FinderMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">176,398</ix:nonFraction></span> at the offer price of the private placement.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.15in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
August 3, 2022, the date of the RTO, a total of <span id="xdx_90B_ecustom--SharesExchangedOnReverseTakeoverTransaction_pid_c20220803__20220803__ifrs-full--CategoriesOfRelatedPartiesAxis__custom--NorthAmericanNickelIncMember_z49sohXzyBL3" title="Shares exchanged on the RTO, Shares"><ix:nonFraction name="PNRLF:SharesExchangedOnReverseTakeoverTransaction" contextRef="From2022-08-032022-08-03_custom_NorthAmericanNickelIncMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">82,157,536</ix:nonFraction></span> common shares of NAN were issued in exchange for <span id="xdx_904_ecustom--SharesExchangedOnReverseTakeoverTransaction_pid_c20220803__20220803__ifrs-full--CategoriesOfRelatedPartiesAxis__custom--PremiumNickelResourcesCorporationMember_zX7ztH89L4D5" title="Shares exchanged on the RTO, Shares"><ix:nonFraction name="PNRLF:SharesExchangedOnReverseTakeoverTransaction" contextRef="From2022-08-032022-08-03_custom_PremiumNickelResourcesCorporationMember27041609" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">77,948,368</ix:nonFraction></span> shares of PNRC.
These shares were added to the current NAN shares outstanding balance of <span id="xdx_901_ecustom--SharesOfTheCompanyImmediatelyPostReverseTakeoverTransaction_c20220803__20220803__ifrs-full--CategoriesOfRelatedPartiesAxis__custom--NorthAmericanNickelIncMember_z0ouTTif2qJg" title="Share capital of the company immediately post RTO, Shares"><ix:nonFraction name="PNRLF:SharesOfTheCompanyImmediatelyPostReverseTakeoverTransaction" contextRef="From2022-08-032022-08-03_custom_NorthAmericanNickelIncMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">31,748,399</ix:nonFraction></span> for total shares outstanding of <span id="xdx_903_ecustom--SharesOfTheCompanyImmediatelyPostReverseTakeoverTransaction_c20220803__20220803_zY12lqRnIvQj" title="Share capital of the company immediately post RTO, Shares"><ix:nonFraction name="PNRLF:SharesOfTheCompanyImmediatelyPostReverseTakeoverTransaction" contextRef="From2022-08-032022-08-03" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">113,905,935</ix:nonFraction></span> upon
closing of the RTO.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.15in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Before
the closing of the RTO, NAN owned <span id="xdx_905_ecustom--CancellationOfRelatedPartySharesHeldBySubsidiary_c20220803__20220803__ifrs-full--CategoriesOfRelatedPartiesAxis__custom--PremiumNickelResourcesCorporationMember_ziePp0Xi8Cp6" title="Cancel PNRC shares held by NAN, Shares"><ix:nonFraction name="PNRLF:CancellationOfRelatedPartySharesHeldBySubsidiary" contextRef="From2022-08-032022-08-03_custom_PremiumNickelResourcesCorporationMember27041609" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">7,667,707</ix:nonFraction></span>
common shares of PNRC and a <span id="xdx_902_ecustom--PercentageForWarrantsPurchaseCommonStock_pid_dp_uPure_c20220803__20220803__ifrs-full--CategoriesOfRelatedPartiesAxis__custom--NorthAmericanNickelIncMember_zzHtz8XknGpd" title="Percentage for warrants purchase common stock"><ix:nonFraction name="PNRLF:PercentageForWarrantsPurchaseCommonStock" contextRef="From2022-08-032022-08-03_custom_NorthAmericanNickelIncMember" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">15</ix:nonFraction></span>%
warrant which entitled NAN to purchase common shares of PNRC, for up to <span id="xdx_90A_ecustom--PercentageForWarrantsPurchaseCommonStock_pid_dp_uPure_c20220803__20220803__ifrs-full--CategoriesOfRelatedPartiesAxis__custom--PremiumNickelResourcesCorporationMember_zc84KMssvRqb" title="Percentage for warrants purchase common stock"><ix:nonFraction name="PNRLF:PercentageForWarrantsPurchaseCommonStock" contextRef="From2022-08-032022-08-03_custom_PremiumNickelResourcesCorporationMember27041609" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">15</ix:nonFraction></span>% of the capital of PNRC at the time of such purchase,
upon payment of US $<span id="xdx_904_ecustom--CapitalToBeIssued_iI_c20220803__ifrs-full--CategoriesOfRelatedPartiesAxis__custom--PremiumNickelResourcesCorporationMember_zyJMK7BSp1Kk" title="Capital to be issued" class="xdx_phnt_RGlzY2xvc3VyZSAtIFNVTU1BUlkgT0YgQ09TVCBPRiBBQ1FVSVNJVElPTiAoRGV0YWlscykgKFBhcmVudGhldGljYWwpAA__"><ix:nonFraction name="PNRLF:CapitalToBeIssued" contextRef="AsOf2022-08-03_custom_PremiumNickelResourcesCorporationMember27036093" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">10,000,000</ix:nonFraction></span>
prior to the fifth anniversary of the date of issue. Prior to the date that the Amalgamation became effective, the PNRC shares and
the <span id="xdx_904_ecustom--PercentageForWarrantsPurchaseCommonStock_pid_dp_uPure_c20220803__20220803__ifrs-full--CategoriesOfRelatedPartiesAxis__custom--NorthAmericanNickelIncMember_zngr5mxwqCO1" title="Percentage for warrants purchase common stock"><ix:nonFraction name="PNRLF:PercentageForWarrantsPurchaseCommonStock" contextRef="From2022-08-032022-08-03_custom_NorthAmericanNickelIncMember" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">15</ix:nonFraction></span>% warrant held by NAN were contributed to NAN Subco, as part of the securities contribution, resulting in such securities
being cancelled by operation of the triangular amalgamation.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.15in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Prior
to the RTO, the fair value of the <span id="xdx_90F_ecustom--PercentageForWarrantsPurchaseCommonStock_pid_dp_uPure_c20220803__20220803__ifrs-full--CategoriesOfRelatedPartiesAxis__custom--NorthAmericanNickelIncMember_zXYdJdZXUjt" title="Percentage for warrants purchase common stock"><ix:nonFraction name="PNRLF:PercentageForWarrantsPurchaseCommonStock" contextRef="From2022-08-032022-08-03_custom_NorthAmericanNickelIncMember" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">15</ix:nonFraction></span>% warrant and the shares held by NAN were $<span id="xdx_90A_ecustom--FairValueOfWarrants_iI_c20220803__dei--LegalEntityAxis__custom--NorthAmericanNickelIncMember_zTqgaXxvpds9" title="Fair value of warrants" class="xdx_phnt_RGlzY2xvc3VyZSAtIFNVTU1BUlkgT0YgQ09TVCBPRiBBQ1FVSVNJVElPTiAoRGV0YWlscykgKFBhcmVudGhldGljYWwpAA__"><ix:nonFraction name="PNRLF:FairValueOfWarrants" contextRef="AsOf2022-08-03_custom_NorthAmericanNickelIncMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">28,275,255</ix:nonFraction></span> and $<span id="xdx_90C_ecustom--FairValueOfShares_iI_c20220803__dei--LegalEntityAxis__custom--NorthAmericanNickelIncMember_zUaxDyJHbvdg" title="Fair value of shares" class="xdx_phnt_RGlzY2xvc3VyZSAtIFNVTU1BUlkgT0YgQ09TVCBPRiBBQ1FVSVNJVElPTiAoRGV0YWlscykgKFBhcmVudGhldGljYWwpAA__"><ix:nonFraction name="PNRLF:FairValueOfShares" contextRef="AsOf2022-08-03_custom_NorthAmericanNickelIncMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">19,710,608</ix:nonFraction></span>, respectively. The fair value
of the shares was calculated based on the last offer price of PNRC financing prior to the RTO, the fair value of the <span id="xdx_903_ecustom--PercentageForWarrantsPurchaseCommonStock_pid_dp_uPure_c20220803__20220803__ifrs-full--CategoriesOfRelatedPartiesAxis__custom--NorthAmericanNickelIncMember_z5sZAL2nlM3h" title="Percentage for warrants purchase common stock"><ix:nonFraction name="PNRLF:PercentageForWarrantsPurchaseCommonStock" contextRef="From2022-08-032022-08-03_custom_NorthAmericanNickelIncMember" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">15</ix:nonFraction></span>% warrant was
calculated using the Black-Sholes Model with the <i>the following assumptions: expected life of <span id="xdx_906_ecustom--ExpectedLifeOfShares_dtY_c20220803__20220803_zI65VIvIbP3e" title="Expected life of shares" class="xdx_phnt_RGlzY2xvc3VyZSAtIFNVTU1BUlkgT0YgQ09TVCBPRiBBQ1FVSVNJVElPTiAoRGV0YWlscykgKFBhcmVudGhldGljYWwpAA__"><ix:nonNumeric contextRef="From2022-08-032022-08-03" format="ixt-sec:duryear" name="PNRLF:ExpectedLifeOfShares">2.57</ix:nonNumeric></span> years, expected dividend yield of<span id="xdx_90B_eifrs-full--ExpectedDividendAsPercentageShareOptionsGranted_pid_dp_c20220803__20220803_zCDVumfajQEb" title="Expected dividend yield" class="xdx_phnt_RGlzY2xvc3VyZSAtIFNVTU1BUlkgT0YgQ09TVCBPRiBBQ1FVSVNJVElPTiAoRGV0YWlscykgKFBhcmVudGhldGljYWwpAA__">
<ix:nonFraction name="ifrs-full:ExpectedDividendAsPercentageShareOptionsGranted" contextRef="From2022-08-032022-08-03" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">0</ix:nonFraction></span>%, a risk free rate of <span id="xdx_902_eifrs-full--DescriptionOfRiskFreeInterestRateShareOptionsGranted_pid_dp_c20220803__20220803_zigyyiodLgUg" title="Risk free interest rate" class="xdx_phnt_RGlzY2xvc3VyZSAtIFNVTU1BUlkgT0YgQ09TVCBPRiBBQ1FVSVNJVElPTiAoRGV0YWlscykgKFBhcmVudGhldGljYWwpAA__"><ix:nonFraction name="ifrs-full:DescriptionOfRiskFreeInterestRateShareOptionsGranted" contextRef="From2022-08-032022-08-03" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">3.14</ix:nonFraction></span>% and an expected volatility of <span id="xdx_90C_eifrs-full--DescriptionOfExpectedVolatilityShareOptionsGranted_pid_dp_c20220803__20220803_zzv2G6OOqim6" title="Expected volatility rate" class="xdx_phnt_RGlzY2xvc3VyZSAtIFNVTU1BUlkgT0YgQ09TVCBPRiBBQ1FVSVNJVElPTiAoRGV0YWlscykgKFBhcmVudGhldGljYWwpAA__"><ix:nonFraction name="ifrs-full:DescriptionOfExpectedVolatilityShareOptionsGranted" contextRef="From2022-08-032022-08-03" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">141.63</ix:nonFraction></span>%</i>. As the securities were contributed by NAN and cancelled on completion
of the RTO, the fair value was included as part of the consideration on the acquisition date.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.15in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Post
RTO, during the period from August 3 to December 31, 2022, a total of <span id="xdx_901_ecustom--NumberOfShareWarrantOutstanding_c20220802__20221231__srt--ConsolidationItemsAxis__custom--ReverseTakeoverTransactionMember_zewEKPyJB2mf" title="Post RTO Shares outstanding"><ix:nonFraction name="PNRLF:NumberOfShareWarrantOutstanding" contextRef="From2022-08-022022-12-31_custom_ReverseTakeoverTransactionMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">1,236,408</ix:nonFraction></span> common shares of the Company were issued upon the exercise
of warrants at prices between $<span id="xdx_908_eifrs-full--ExercisePriceShareOptionsGranted2019_c20220802__20221231__srt--ConsolidationItemsAxis__custom--ReverseTakeoverTransactionMember__ifrs-full--ComponentsOfEquityAxis__ifrs-full--WarrantReserveMember__ifrs-full--RangeAxis__ifrs-full--BottomOfRangeMember_ztRwjxNGMxv7" title="Post RTO Share excercise price"><ix:nonFraction name="ifrs-full:ExercisePriceShareOptionsGranted2019" contextRef="From2022-08-022022-12-31_custom_ReverseTakeoverTransactionMember_ifrs-full_WarrantReserveMember_ifrs-full_BottomOfRangeMember" format="ixt:numdotdecimal" decimals="INF" unitRef="CADPShares">0.45</ix:nonFraction></span> and $<span id="xdx_90A_ecustom--OrdinarySharesOutstanding_c20220802__20221231__srt--ConsolidationItemsAxis__custom--ReverseTakeoverTransactionMember__ifrs-full--ComponentsOfEquityAxis__ifrs-full--WarrantReserveMember__ifrs-full--RangeAxis__ifrs-full--TopOfRangeMember_z0H6yCkc3u2i" title="Post RTO Share excercise price"><ix:nonFraction name="PNRLF:OrdinarySharesOutstanding" contextRef="From2022-08-022022-12-31_custom_ReverseTakeoverTransactionMember_ifrs-full_WarrantReserveMember_ifrs-full_TopOfRangeMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">1.75</ix:nonFraction></span> per share for total cash proceeds of $<span id="xdx_907_ecustom--ProceedsFromIssuingWarrants_c20220802__20221231__srt--ConsolidationItemsAxis__custom--ReverseTakeoverTransactionMember_zCNdPVLWWCv7" title="Post RTO warrants outstanding"><ix:nonFraction name="PNRLF:ProceedsFromIssuingWarrants" contextRef="From2022-08-022022-12-31_custom_ReverseTakeoverTransactionMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">569,399</ix:nonFraction></span>. As a result of these exercises, $<span id="xdx_90F_eifrs-full--CapitalReserve_iI_c20221231__srt--ConsolidationItemsAxis__custom--ReverseTakeoverTransactionMember_zZTKr7T4Sj09" title="Share capital"><ix:nonFraction name="ifrs-full:CapitalReserve" contextRef="AsOf2022-12-31_custom_ReverseTakeoverTransactionMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">2,880,376</ix:nonFraction></span>
was transferred from reserve to share capital.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.15in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Post
RTO, during the period from August 3 to December 31, 2022, a total of <span id="xdx_90E_ecustom--OrdinaryStockOptionsOutstanding_c20220802__20221231__srt--ConsolidationItemsAxis__custom--ReverseTakeoverTransactionMember_zqDIvikX1V03" title="Post RTO Shares outstanding"><ix:nonFraction name="PNRLF:OrdinaryStockOptionsOutstanding" contextRef="From2022-08-022022-12-31_custom_ReverseTakeoverTransactionMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">1,379,000</ix:nonFraction></span> common shares of the Company were issued upon the exercise
of options at prices between $<span id="xdx_900_eifrs-full--ExercisePriceShareOptionsGranted2019_c20220802__20221231__srt--ConsolidationItemsAxis__custom--ReverseTakeoverTransactionMember__ifrs-full--ComponentsOfEquityAxis__custom--OptionsMember__ifrs-full--RangeAxis__ifrs-full--BottomOfRangeMember_zq8rJ43kwJL" title="Post RTO Share excercise price"><ix:nonFraction name="ifrs-full:ExercisePriceShareOptionsGranted2019" contextRef="From2022-08-022022-12-31_custom_ReverseTakeoverTransactionMember_custom_OptionsMember_ifrs-full_BottomOfRangeMember" format="ixt:numdotdecimal" decimals="INF" unitRef="CADPShares">0.39</ix:nonFraction></span> and $<span id="xdx_900_ecustom--OrdinarySharesOutstanding_c20220802__20221231__srt--ConsolidationItemsAxis__custom--ReverseTakeoverTransactionMember__ifrs-full--ComponentsOfEquityAxis__custom--OptionsMember__ifrs-full--RangeAxis__ifrs-full--TopOfRangeMember_zMuFvW0Bpnf3" title="Post RTO Share excercise price"><ix:nonFraction name="PNRLF:OrdinarySharesOutstanding" contextRef="From2022-08-022022-12-31_custom_ReverseTakeoverTransactionMember_custom_OptionsMember_ifrs-full_TopOfRangeMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">1.60</ix:nonFraction></span> per share for total cash proceeds of $<span id="xdx_90D_ecustom--ProceedsFromIssuingShareOptions_c20220802__20221231__srt--ConsolidationItemsAxis__custom--ReverseTakeoverTransactionMember_zcETZNsSkR4j" title="Post RTO Share option outstanding"><ix:nonFraction name="PNRLF:ProceedsFromIssuingShareOptions" contextRef="From2022-08-022022-12-31_custom_ReverseTakeoverTransactionMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">723,076</ix:nonFraction></span>. As a result of these exercises, $<span id="xdx_90C_ecustom--CapitalReserveFromOptions_iI_c20221231__srt--ConsolidationItemsAxis__custom--ReverseTakeoverTransactionMember_z2G5jA3TZ512" title="Share capital"><ix:nonFraction name="PNRLF:CapitalReserveFromOptions" contextRef="AsOf2022-12-31_custom_ReverseTakeoverTransactionMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">1,004,188</ix:nonFraction></span>
was transferred from reserve to share capital.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.15in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
at December 31, 2022, the Company had <span id="xdx_90D_eifrs-full--NumberOfSharesIssued_iI_c20221231__ifrs-full--ComponentsOfEquityAxis__ifrs-full--OrdinarySharesMember_zRxXMTzr8Sgl" title="Shares issued"><span id="xdx_908_eifrs-full--NumberOfSharesOutstanding_iI_c20221231__ifrs-full--ComponentsOfEquityAxis__ifrs-full--OrdinarySharesMember_zCdfXMSqFGP" title="Shares outstanding"><ix:nonFraction name="ifrs-full:NumberOfSharesIssued" contextRef="AsOf2022-12-31_ifrs-full_OrdinarySharesMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares"><ix:nonFraction name="ifrs-full:NumberOfSharesOutstanding" contextRef="AsOf2022-12-31_ifrs-full_OrdinarySharesMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">116,521,343</ix:nonFraction></ix:nonFraction></span></span> common shares issued and outstanding (December 31, 2021 &#8211; <span id="xdx_90B_eifrs-full--NumberOfSharesIssued_iI_c20211231__srt--ConsolidationItemsAxis__custom--ReverseTakeoverTransactionMember_zYKfPNJGw96" title="Shares issued"><span id="xdx_90D_eifrs-full--NumberOfSharesOutstanding_iI_c20211231__srt--ConsolidationItemsAxis__custom--ReverseTakeoverTransactionMember_zlRCRwmUOgU2" title="Shares outstanding"><ix:nonFraction name="ifrs-full:NumberOfSharesIssued" contextRef="AsOf2021-12-31_custom_ReverseTakeoverTransactionMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares"><ix:nonFraction name="ifrs-full:NumberOfSharesOutstanding" contextRef="AsOf2021-12-31_custom_ReverseTakeoverTransactionMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">80,820,623</ix:nonFraction></ix:nonFraction></span></span> on a post-RTO
and post -consolidation basis).</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.15in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>2021</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.15in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">During
the year 2021, the Company closed two non-broker private placement equity financings totalling <span id="xdx_900_ecustom--ShareCapitalIssuedThroughPrivatePlacementShares_c20210101__20211231__srt--ConsolidationItemsAxis__custom--PreReverseTakeoverTransactionAndPostConsolidationBasisMember__srt--TitleOfIndividualAxis__custom--TwoNonBrokerMember_z8MYO28DMssa" title="Number of private placement equity"><ix:nonFraction name="PNRLF:ShareCapitalIssuedThroughPrivatePlacementShares" contextRef="From2021-01-012021-12-31_custom_PreReverseTakeoverTransactionAndPostConsolidationBasisMember_custom_TwoNonBrokerMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">12,596,421</ix:nonFraction></span> shares (pre-RTO, pre-share-consolidation
basis) at a price of $<span id="xdx_90F_eifrs-full--ParValuePerShare_iI_c20211231__srt--ConsolidationItemsAxis__custom--PreReverseTakeoverTransactionAndPostConsolidationBasisMember__ifrs-full--RangeAxis__ifrs-full--BottomOfRangeMember__srt--TitleOfIndividualAxis__custom--TwoNonBrokerMember_zHqhDj3UFbjf" title="Price per share"><ix:nonFraction name="ifrs-full:ParValuePerShare" contextRef="AsOf2021-12-31_custom_PreReverseTakeoverTransactionAndPostConsolidationBasisMember_ifrs-full_BottomOfRangeMember_custom_TwoNonBrokerMember" format="ixt:numdotdecimal" decimals="INF" unitRef="CADPShares">0.40</ix:nonFraction></span> and $<span id="xdx_904_eifrs-full--ParValuePerShare_iI_c20211231__srt--ConsolidationItemsAxis__custom--PreReverseTakeoverTransactionAndPostConsolidationBasisMember__ifrs-full--RangeAxis__ifrs-full--TopOfRangeMember__srt--TitleOfIndividualAxis__custom--TwoNonBrokerMember_zVPhFlHIIGU" title="Price per share"><ix:nonFraction name="ifrs-full:ParValuePerShare" contextRef="AsOf2021-12-31_custom_PreReverseTakeoverTransactionAndPostConsolidationBasisMember_ifrs-full_TopOfRangeMember_custom_TwoNonBrokerMember" format="ixt:numdotdecimal" decimals="INF" unitRef="CADPShares">0.95</ix:nonFraction></span>, respectively, and raised aggregate gross proceeds of $<span id="xdx_905_eifrs-full--ProceedsFromIssuingShares_c20210101__20211231__srt--ConsolidationItemsAxis__custom--PreReverseTakeoverTransactionAndPostConsolidationBasisMember__srt--TitleOfIndividualAxis__custom--TwoNonBrokerMember_zDJXAJcFiJZf" title="Gross proceeds"><ix:nonFraction name="ifrs-full:ProceedsFromIssuingShares" contextRef="From2021-01-012021-12-31_custom_PreReverseTakeoverTransactionAndPostConsolidationBasisMember_custom_TwoNonBrokerMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">6,771,729</ix:nonFraction></span>. The Company incurred total share
issuance costs of $<span id="xdx_908_eifrs-full--ShareIssueRelatedCost_c20210101__20211231__srt--ConsolidationItemsAxis__custom--PreReverseTakeoverTransactionAndPostConsolidationBasisMember__srt--TitleOfIndividualAxis__custom--TwoNonBrokerMember_z30yZiiCFW0h" title="Issuance cost"><ix:nonFraction name="ifrs-full:ShareIssueRelatedCost" contextRef="From2021-01-012021-12-31_custom_PreReverseTakeoverTransactionAndPostConsolidationBasisMember_custom_TwoNonBrokerMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">287,228</ix:nonFraction></span>, including the fair value of $<span id="xdx_90A_ecustom--SharesFairValue_c20210101__20211231__srt--ConsolidationItemsAxis__custom--PreReverseTakeoverTransactionAndPostConsolidationBasisMember__srt--TitleOfIndividualAxis__custom--TwoNonBrokerMember_zDWJvNbrLpei" title="Shares fair value price"><ix:nonFraction name="PNRLF:SharesFairValue" contextRef="From2021-01-012021-12-31_custom_PreReverseTakeoverTransactionAndPostConsolidationBasisMember_custom_TwoNonBrokerMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">7,000</ix:nonFraction></span> for <span id="xdx_909_ecustom--SharesIssuedAtFairValue_c20210101__20211231__srt--ConsolidationItemsAxis__custom--PreReverseTakeoverTransactionAndPostConsolidationBasisMember__srt--TitleOfIndividualAxis__custom--TwoNonBrokerMember_zVxl6iCCGB72" title="Shares issued at fair value"><ix:nonFraction name="PNRLF:SharesIssuedAtFairValue" contextRef="From2021-01-012021-12-31_custom_PreReverseTakeoverTransactionAndPostConsolidationBasisMember_custom_TwoNonBrokerMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">17,000</ix:nonFraction></span> shares issued to the agent in conjunction with the first private
placement.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.15in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
at December 31, 2021, the Company had <span id="xdx_902_eifrs-full--NumberOfSharesIssued_iI_c20211231__srt--ConsolidationItemsAxis__custom--PreReverseTakeoverTransactionAndPostConsolidationBasisMember_zkCy9XMEvKR6" title="Shares issued"><span id="xdx_901_eifrs-full--NumberOfSharesOutstanding_iI_c20211231__srt--ConsolidationItemsAxis__custom--PreReverseTakeoverTransactionAndPostConsolidationBasisMember_zBoFpnb1LuF7" title="Shares outstanding"><ix:nonFraction name="ifrs-full:NumberOfSharesIssued" contextRef="AsOf2021-12-31_custom_PreReverseTakeoverTransactionAndPostConsolidationBasisMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares"><ix:nonFraction name="ifrs-full:NumberOfSharesOutstanding" contextRef="AsOf2021-12-31_custom_PreReverseTakeoverTransactionAndPostConsolidationBasisMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">76,679,908</ix:nonFraction></ix:nonFraction></span></span> common shares issued and outstanding (pre-RTO, pre-share-consolidation basis).</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.15in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>b)
Preferred shares issued and outstanding</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 10.75pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
at December 31, 2022 and December 31, 2021 there are <span id="xdx_90E_eifrs-full--NumberOfSharesIssued_iI_c20221231__ifrs-full--ClassesOfShareCapitalAxis__custom--SeriesOneConvertiblePreferredSharesMember__srt--ConsolidationItemsAxis__custom--PreReverseTakeoverTransactionAndPostConsolidationBasisMember_zDqkznYWcnF2" title="Number of shares issued"><span id="xdx_901_eifrs-full--NumberOfSharesIssued_iI_c20211231__ifrs-full--ClassesOfShareCapitalAxis__custom--SeriesOneConvertiblePreferredSharesMember__srt--ConsolidationItemsAxis__custom--PreReverseTakeoverTransactionAndPostConsolidationBasisMember_z7WWUanqA3G1" title="Number of shares issued"><ix:nonFraction name="ifrs-full:NumberOfSharesIssued" contextRef="AsOf2022-12-31_custom_SeriesOneConvertiblePreferredSharesMember_custom_PreReverseTakeoverTransactionAndPostConsolidationBasisMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares"><ix:nonFraction name="ifrs-full:NumberOfSharesIssued" contextRef="AsOf2021-12-31_custom_SeriesOneConvertiblePreferredSharesMember_custom_PreReverseTakeoverTransactionAndPostConsolidationBasisMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">118,186</ix:nonFraction></ix:nonFraction></span></span> series 1 preferred shares outstanding (on a post-RTO and post-consolidation
basis).</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.15in 0pt 0.4in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.15in 0pt 0.4in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>

<ix:exclude><!-- Field: Page; Sequence: 90; Value: 2 -->
    <div style="border-bottom: Black 1.5pt solid; margin-bottom: 6pt"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font-size: 10pt"><tr style="vertical-align: top; text-align: left"><td style="text-align: right; width: 100%"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->29<!-- Field: /Sequence --> | PNRL / Year ended 2022 and 2021</td></tr></table></div>
    <div style="break-before: page; margin-top: 6pt"><p style="margin: 0pt">&#160;</p></div>
    <!-- Field: /Page --></ix:exclude>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.15in 0pt 0.4in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.15in 0pt 0.4in; text-align: justify"></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><img src="fin_001.jpg" alt="" style="height: 72px; width: 514px" /></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt"></p>

<p style="font: 13pt/12.95pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; letter-spacing: -0.3pt"><b><i>Formerly
&#8220;North American Nickel Inc.</i></b></span></p>

<p style="font: 9pt/10.9pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 1.7pt 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Notes
to the Consolidated Financial statements<br />
</b>For the years ended December 31, 2022 and 2021</span></p>

<p style="font: 9pt/10.9pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 1.7pt 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(Expressed in Canadian dollars)</span></p>

<p style="font: 9pt/10.9pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 1.7pt 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
rights and restrictions of the preferred shares are as follows:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.4in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;<br /></span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif">&#160;</td><td style="font: 10pt Times New Roman, Times, Serif">i)</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">dividends
shall be paid at the discretion of the directors;</td></tr>
                                                                                                                                      <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></td><td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ii)</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
                                            holders of the preferred shares are not entitled to vote except at meetings of the holders
                                            of the preferred shares, where they are entitled to one vote for each preferred share held;</span></td></tr>
<tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif"></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">iii)</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
                                            shares are convertible at any time after six months from the date of issuance, upon the holder
                                            serving the Company with 10 days written notice; and</span></td></tr>
<tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif"></td><td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">iv)</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
                                            number of the common shares to be received on conversion of each preferred share is to be
                                            determined by dividing the conversion value of the share, $<span id="xdx_902_ecustom--ShareConversionPrice_c20210101__20211231_zePG40MTpfk3" title="Conversion price"><ix:nonFraction name="PNRLF:ShareConversionPrice" contextRef="From2021-01-012021-12-31" format="ixt:numdotdecimal" decimals="INF" unitRef="CADPShares">1</ix:nonFraction></span> per share, by $<span id="xdx_90C_ecustom--ShareConversionPrice1_c20210101__20211231_zOVfl9ZUbj57" title="Conversion price"><ix:nonFraction name="PNRLF:ShareConversionPrice1" contextRef="From2021-01-012021-12-31" format="ixt:numdotdecimal" decimals="INF" unitRef="CADPShares">9.00</ix:nonFraction></span>.</span></td></tr></table>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.15in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>c)
Warrants</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.15in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
February 26, 2021, PNRC issued NAN a non-transferable share purchase warrant (the &#8220;<b>Warrant</b>&#8221;), which entitled NAN to
purchase common shares of PNRC for up to <span id="xdx_909_ecustom--PercentageForWarrantsPurchaseCommonStock_pid_dp_uPure_c20220225__20220226__ifrs-full--CategoriesOfRelatedPartiesAxis__custom--PremiumNickelResourcesCorporationMember_zOc6FGnPINB8" title="Percentage for warrants purchase common stock"><ix:nonFraction name="PNRLF:PercentageForWarrantsPurchaseCommonStock" contextRef="From2022-02-252022-02-26_custom_PremiumNickelResourcesCorporationMember" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">15</ix:nonFraction></span>% of the then outstanding capital of PNRC, upon payment of US $<span id="xdx_901_ecustom--CapitalToBeIssued_iI_c20220226__ifrs-full--CategoriesOfRelatedPartiesAxis__custom--PremiumNickelResourcesCorporationMember_z4dnxzSCulhh" title="Capital to be issued" class="xdx_phnt_RGlzY2xvc3VyZSAtIFNVTU1BUlkgT0YgQ09TVCBPRiBBQ1FVSVNJVElPTiAoRGV0YWlscykgKFBhcmVudGhldGljYWwpAA__"><ix:nonFraction name="PNRLF:CapitalToBeIssued" contextRef="AsOf2022-02-26_custom_PremiumNickelResourcesCorporationMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">10,000,000</ix:nonFraction></span> prior to the fifth
anniversary of the date of issue.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.15in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Warrant was classified as a derivative financial liability that should be measured at fair value, with changes in value recorded in profit
or loss. Prior to the RTO, on Jun 30, 2022, the Company reassessed the fair value of the warrant at $<span id="xdx_903_eifrs-full--NoncurrentWarrantLiability_iI_c20220630__srt--ConsolidationItemsAxis__custom--ReverseTakeoverTransactionMember_zKbU6Pawpdpl" title="Fair value of warrants"><ix:nonFraction name="ifrs-full:NoncurrentWarrantLiability" contextRef="AsOf2022-06-30_custom_ReverseTakeoverTransactionMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">28,275,256</ix:nonFraction></span> and recorded the amount
as a long-term financial liability. The fair value of the warrant did not change up to the date of the RTO as the underline assumptions
remained the same.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.15in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<ix:nonNumeric contextRef="From2022-01-012022-12-31_ifrs-full_WarrantReserveMember" escape="true" name="ifrs-full:DisclosureOfIndirectMeasurementOfFairValueOfGoodsOrServicesReceivedShareOptionsGrantedDuringPeriodExplanatory"><p id="xdx_894_eifrs-full--DisclosureOfIndirectMeasurementOfFairValueOfGoodsOrServicesReceivedShareOptionsGrantedDuringPeriodExplanatory_hifrs-full--ComponentsOfEquityAxis__ifrs-full--WarrantReserveMember_zK3hAtv6hcx5" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
fair value of the liability of the Warrant was estimated using the Black-Scholes Option Pricing Model with the following assumptions:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.15in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span id="xdx_8BB_zzkbxqsE9Cfi" style="display: none">SCHEDULE OF INPUTS TO OPTION PRICING MODEL</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></span></span></span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 80%; margin-left: 0.25in">
  <tr style="vertical-align: bottom">
    <td>&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">December 31, 2022</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">December 31, 2021</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 60%; text-align: left">Expected dividend yield</td><td style="width: 2%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td id="xdx_982_eifrs-full--ExpectedDividendAsPercentageShareOptionsGranted_pid_dp_uPure_c20220101__20221231__ifrs-full--ComponentsOfEquityAxis__ifrs-full--WarrantReserveMember_zKKR5WZZieWf" title="Expected dividend yield" style="width: 16%; text-align: right"><ix:nonFraction name="ifrs-full:ExpectedDividendAsPercentageShareOptionsGranted" contextRef="From2022-01-012022-12-31_ifrs-full_WarrantReserveMember" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">0</ix:nonFraction></td><td style="width: 1%; text-align: left">%</td><td style="width: 2%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td id="xdx_985_eifrs-full--ExpectedDividendAsPercentageShareOptionsGranted_pid_dp_uPure_c20210101__20211231__ifrs-full--ComponentsOfEquityAxis__ifrs-full--WarrantReserveMember_zbRutrXyLS16" title="Expected dividend yield" style="width: 16%; text-align: right"><ix:nonFraction name="ifrs-full:ExpectedDividendAsPercentageShareOptionsGranted" contextRef="From2021-01-012021-12-31_ifrs-full_WarrantReserveMember" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">0</ix:nonFraction></td><td style="width: 1%; text-align: left">%</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left">Latest private placement price</td><td>&#160;</td>
    <td style="text-align: left">$</td><td id="xdx_982_ecustom--LatestPrivatePlacementPrice_iI_c20221231__ifrs-full--ComponentsOfEquityAxis__ifrs-full--WarrantReserveMember_zK9B3c2IhSBj" title="Latest private placement price" style="text-align: right"><ix:nonFraction name="PNRLF:LatestPrivatePlacementPrice" contextRef="AsOf2022-12-31_ifrs-full_WarrantReserveMember" format="ixt:numdotdecimal" decimals="INF" unitRef="CADPShares">2.49</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td id="xdx_987_ecustom--LatestPrivatePlacementPrice_iI_c20211231__ifrs-full--ComponentsOfEquityAxis__ifrs-full--WarrantReserveMember_zrbGDjHaojHk" title="Latest private placement price" style="text-align: right"><ix:nonFraction name="PNRLF:LatestPrivatePlacementPrice" contextRef="AsOf2021-12-31_ifrs-full_WarrantReserveMember" format="ixt:numdotdecimal" decimals="INF" unitRef="CADPShares">0.95</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td>Expected share price volatility</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td id="xdx_988_eifrs-full--DescriptionOfExpectedVolatilityShareOptionsGranted_pid_dp_uPure_c20220101__20221231__ifrs-full--ComponentsOfEquityAxis__ifrs-full--WarrantReserveMember_z1IvzpPGd1th" title="Expected share price volatility" style="text-align: right"><ix:nonFraction name="ifrs-full:DescriptionOfExpectedVolatilityShareOptionsGranted" contextRef="From2022-01-012022-12-31_ifrs-full_WarrantReserveMember" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">141.63</ix:nonFraction></td><td style="text-align: left">%</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td id="xdx_984_eifrs-full--DescriptionOfExpectedVolatilityShareOptionsGranted_pid_dp_uPure_c20210101__20211231__ifrs-full--ComponentsOfEquityAxis__ifrs-full--WarrantReserveMember_zpO6tSSiUv2l" title="Expected share price volatility" style="text-align: right"><ix:nonFraction name="ifrs-full:DescriptionOfExpectedVolatilityShareOptionsGranted" contextRef="From2021-01-012021-12-31_ifrs-full_WarrantReserveMember" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">144.13</ix:nonFraction></td><td style="text-align: left">%</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left">Risk free interest rate</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td id="xdx_984_eifrs-full--DescriptionOfRiskFreeInterestRateShareOptionsGranted_pid_dp_uPure_c20220101__20221231__ifrs-full--ComponentsOfEquityAxis__ifrs-full--WarrantReserveMember_zquuP7VeCvHi" title="Risk free interest rate" style="text-align: right"><ix:nonFraction name="ifrs-full:DescriptionOfRiskFreeInterestRateShareOptionsGranted" contextRef="From2022-01-012022-12-31_ifrs-full_WarrantReserveMember" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">3.14</ix:nonFraction></td><td style="text-align: left">%</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td id="xdx_981_eifrs-full--DescriptionOfRiskFreeInterestRateShareOptionsGranted_pid_dp_uPure_c20210101__20211231__ifrs-full--ComponentsOfEquityAxis__ifrs-full--WarrantReserveMember_zfmeWJY8i2yh" title="Risk free interest rate" style="text-align: right"><ix:nonFraction name="ifrs-full:DescriptionOfRiskFreeInterestRateShareOptionsGranted" contextRef="From2021-01-012021-12-31_ifrs-full_WarrantReserveMember" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">1.02</ix:nonFraction></td><td style="text-align: left">%</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 2.5pt">Remaining life of warrants</td><td style="padding-bottom: 2.5pt">&#160;</td>
    <td style="border-bottom: Black 2.5pt double; text-align: left">&#160;</td><td style="border-bottom: Black 2.5pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span id="xdx_903_ecustom--ExpectedLifeOfOptionsGranted_dtY_c20220101__20221231__ifrs-full--ComponentsOfEquityAxis__ifrs-full--WarrantReserveMember_zov6zIdCVNK8"><ix:nonNumeric contextRef="From2022-01-012022-12-31_ifrs-full_WarrantReserveMember" format="ixt-sec:duryear" name="PNRLF:ExpectedLifeOfOptionsGranted">2.66</ix:nonNumeric></span> years</span></td><td style="padding-bottom: 2.5pt; text-align: left">&#160;</td><td style="padding-bottom: 2.5pt">&#160;</td>
    <td style="border-bottom: Black 2.5pt double; text-align: left">&#160;</td><td style="border-bottom: Black 2.5pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span id="xdx_903_ecustom--ExpectedLifeOfOptionsGranted_dtY_c20210101__20211231__ifrs-full--ComponentsOfEquityAxis__ifrs-full--WarrantReserveMember_zjTkWk42Ct28"><ix:nonNumeric contextRef="From2021-01-012021-12-31_ifrs-full_WarrantReserveMember" format="ixt-sec:duryear" name="PNRLF:ExpectedLifeOfOptionsGranted">3.16</ix:nonNumeric></span> years</span></td><td style="padding-bottom: 2.5pt; text-align: left">&#160;</td></tr>
  </table>

</ix:nonNumeric><p id="xdx_8A7_zdLpprAyhLDb" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 10.75pt; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Volatility
assumptions for the valuation of the Warrant were derived by reference to the volatility of NAN as the stock price of NAN was highly
correlated to the advancement of the BCL assets acquisition following its investment in PNRC.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Prior
to the date that the Amalgamation became effective, the PNR Shares and the Warrant held by NAN were contributed to NAN Subco, as part
of the securities contribution, resulting in such securities being cancelled by operation of the triangular amalgamation. The fair value
of the Warrant was written off upon the closing of the RTO. PNRC had no other issued and outstanding warrants prior to the RTO.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.15in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="ifrs-full:DisclosureOfNumberAndWeightedAverageExercisePricesOfOtherEquityInstrumentsExplanatory"><p id="xdx_891_eifrs-full--DisclosureOfNumberAndWeightedAverageExercisePricesOfOtherEquityInstrumentsExplanatory_zrVIAvxWzLb4" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Warrant
activity, after converting for the Exchange Ratio, for the year ended December 31, 2022 was as follows:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.15in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span id="xdx_8B3_zmI3zkvXdE95" style="display: none">SCHEDULE
OF WARRANT ACTIVITY AFTER CONVERTING FOR EXCHANGE RATIO</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></span></span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 80%; margin-left: 0.25in">
  <tr style="vertical-align: bottom">
    <td style="padding-bottom: 1.5pt; font-weight: bold">Premium Nickel Resources Ltd.</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Number Outstanding <br /> (Post-consolidation basis)</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Weighted Average <br /> Exercise Price ($)</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td>December 31, 2021</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td id="xdx_987_ecustom--NumberOfWarrantsOutstanding_iS_pid_uShares_c20220101__20221231__srt--ConsolidationItemsAxis__custom--PostConsolidationBasisMember_zlbgBkui2iS2" title="Issued" style="text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl1288">-</span></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td id="xdx_98A_ecustom--WeightedAverageExercisePriceOfWarrantsOutstanding_iS_pid_c20220101__20221231__srt--ConsolidationItemsAxis__custom--PostConsolidationBasisMember_z9k26G6xdGga" title="Weighted Average Exercise Price, Outstanding at beginning of year" style="text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl1290">-</span></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left">Adjustment pursuant to the</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 60%">RTO</td><td style="width: 2%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td id="xdx_98B_ecustom--NumberOfWarrantsReverseTakeoverTransaction_iS_pid_uShares_c20220101__20221231__srt--ConsolidationItemsAxis__custom--PostConsolidationBasisMember_z3yxsviTSVhi" title="RTO" style="width: 16%; text-align: right"><ix:nonFraction name="PNRLF:NumberOfWarrantsReverseTakeoverTransaction" contextRef="AsOf2021-12-31_custom_PostConsolidationBasisMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">2,228,340</ix:nonFraction></td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 2%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td id="xdx_980_ecustom--ReverseTakeoverTransaction_iI_pid_c20220101__20221231__srt--ConsolidationItemsAxis__custom--PostConsolidationBasisMember_z9yyW3PNTCOl" title="Weighted Average Exercise Price, issued" style="width: 16%; text-align: right"><ix:nonFraction name="PNRLF:ReverseTakeoverTransaction" contextRef="From2022-01-012022-12-31_custom_PostConsolidationBasisMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">1.11</ix:nonFraction></td><td style="width: 1%; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td>Issued</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td id="xdx_988_ecustom--NumberOfWarrantsIssued_pid_uShares_c20220101__20221231__srt--ConsolidationItemsAxis__custom--PostConsolidationBasisMember_zhyXRIGKXnSe" title="Issued" style="text-align: right"><ix:nonFraction name="PNRLF:NumberOfWarrantsIssued" contextRef="From2022-01-012022-12-31_custom_PostConsolidationBasisMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">119,229</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td id="xdx_983_ecustom--WeightedAverageExercisePriceOfWarrantsIssued_pid_c20220101__20221231__srt--ConsolidationItemsAxis__custom--PostConsolidationBasisMember_zClGqwcoUas8" title="Weighted Average Exercise Price, issued" style="text-align: right"><ix:nonFraction name="PNRLF:WeightedAverageExercisePriceOfWarrantsIssued" contextRef="From2022-01-012022-12-31_custom_PostConsolidationBasisMember" format="ixt:numdotdecimal" decimals="INF" unitRef="CADPShares">2.04</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td>Exercised</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: White">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-bottom: 1.5pt">Balance as at December 31, 2022</td><td style="padding-bottom: 1.5pt">&#160;</td>
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</ix:nonNumeric><p id="xdx_8A2_zgp7JgzEqLcl" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 10.75pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">PNRC
had no warrants as at December 31, 2021 except the Warrant granted to NAN that was subsequently cancelled upon the RTO.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 10.75pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<ix:exclude><!-- Field: Page; Sequence: 91; Value: 2 -->
    <div style="border-bottom: Black 1.5pt solid; margin-bottom: 6pt"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font-size: 10pt"><tr style="vertical-align: top; text-align: left"><td style="text-align: right; width: 100%"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->30<!-- Field: /Sequence --> | PNRL / Year ended 2022 and 2021</td></tr></table></div>
    <div style="break-before: page; margin-top: 6pt"><p style="margin: 0pt">&#160;</p></div>
    <!-- Field: /Page --></ix:exclude>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 10.75pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><br />&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 10.75pt; text-align: justify"></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><img src="fin_001.jpg" alt="" style="height: 72px; width: 514px" /></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt"></p>

<p style="font: 13pt/12.95pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; letter-spacing: -0.3pt"><b><i>Formerly
&#8220;North American Nickel Inc.</i></b></span></p>

<p style="font: 9pt/10.9pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 1.7pt 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Notes
to the Consolidated Financial statements<br />
</b>For the years ended December 31, 2022 and 2021</span></p>

<p style="font: 9pt/10.9pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 1.7pt 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(Expressed in Canadian dollars)</span></p>


<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 10.75pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 10.75pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>

<ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="PNRLF:DisclosureOfNumberAndWeightedAverageRemainingContractualLifeOfOutstandingWarrantsExplanatory"><p id="xdx_896_ecustom--DisclosureOfNumberAndWeightedAverageRemainingContractualLifeOfOutstandingWarrantsExplanatory_zIx5uqkhrFIj" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">At
December 31, 2022, the Company had outstanding common share purchase warrants exercisable to acquire common shares of the Company as
follows:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.15in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span><span id="xdx_8BF_zcdpZ3NkLyu" style="display: none">SCHEDULE
OF NUMBER AND WEIGHTED AVERAGE REMAINING CONTRACTUAL LIFE OF OUTSTANDING WARRANTS</span></span></span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 90%">
  <tr style="vertical-align: bottom">
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    <td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">Expiry Date</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left">&#160;</td><td id="xdx_989_ecustom--NumberOfWarrantsOutstanding_iI_c20221231__custom--TypesOfWarrantsAxis__custom--WarrantsExpiringAugustThreeTwoThousandTwentyFourMember_zouLKTREwsP9" title="Warrants outstanding" style="text-align: right"><ix:nonFraction name="PNRLF:NumberOfWarrantsOutstanding" contextRef="AsOf2022-12-31_custom_WarrantsExpiringAugustThreeTwoThousandTwentyFourMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">295,652</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: right">August 3, 2024</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td id="xdx_98F_ecustom--NumberOfWarrantsOutstanding_iI_c20221231__custom--TypesOfWarrantsAxis__custom--WarrantsExpiringNovemberTwentyFiveTwoThousandTwentyThreeMember_zm0ONwAavFJ3" title="Warrants outstanding" style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction name="PNRLF:NumberOfWarrantsOutstanding" contextRef="AsOf2022-12-31_custom_WarrantsExpiringNovemberTwentyFiveTwoThousandTwentyThreeMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">119,229</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="text-align: right; padding-bottom: 1.5pt">November 25, 2023</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td id="xdx_983_ecustom--ExercisePriceOfWarrant_iI_c20221231__custom--TypesOfWarrantsAxis__custom--WarrantsExpiringNovemberTwentyFiveTwoThousandTwentyThreeMember_zninR1OguNBc" title="Exercise price" style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction name="PNRLF:ExercisePriceOfWarrant" contextRef="AsOf2022-12-31_custom_WarrantsExpiringNovemberTwentyFiveTwoThousandTwentyThreeMember" format="ixt:numdotdecimal" decimals="INF" unitRef="CADPShares">2.04</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td id="xdx_98E_ecustom--WeightedAverageRemainingContractualLifeOfOutstandingWarrant_dtY_c20220101__20221231__custom--TypesOfWarrantsAxis__custom--WarrantsExpiringNovemberTwentyFiveTwoThousandTwentyThreeMember_zs0Co5Mb2uAd" title="Weighted Average remaining contractual life (years)" style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonNumeric contextRef="From2022-01-012022-12-31_custom_WarrantsExpiringNovemberTwentyFiveTwoThousandTwentyThreeMember" format="ixt-sec:duryear" name="PNRLF:WeightedAverageRemainingContractualLifeOfOutstandingWarrant">0.10</ix:nonNumeric></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td id="xdx_983_ecustom--NumberOfWarrantsOutstanding_iI_c20221231_zCtY796442a8" title="Warrants outstanding" style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction name="PNRLF:NumberOfWarrantsOutstanding" contextRef="AsOf2022-12-31" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">1,098,786</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="padding-bottom: 1.5pt">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">&#160;</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td id="xdx_983_ecustom--WeightedAverageRemainingContractualLifeOfOutstandingWarrant_dtY_c20220101__20221231_zqrmi5lfspwb" title="Weighted Average remaining contractual life (years)" style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonNumeric contextRef="From2022-01-01to2022-12-31" format="ixt-sec:duryear" name="PNRLF:WeightedAverageRemainingContractualLifeOfOutstandingWarrant">0.71</ix:nonNumeric></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  </table>

</ix:nonNumeric><p id="xdx_8A4_zqMde3IFFO9c" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 14.45pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>d) Stock
options</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company adopted a Stock Option Plan (the &#8220;<b>Plan</b>&#8221;), providing the authority to grant options to directors, officers,
employees and consultants enabling them to acquire up to <span id="xdx_908_ecustom--PercentageForIssuedAndOutstanding_dp_uPure_c20220101__20221231__ifrs-full--TypesOfSharebasedPaymentArrangementsAxis__custom--StockOptionPlanMember_zMIIXKrufmEi" title="Percentage for issued and outstanding"><ix:nonFraction name="PNRLF:PercentageForIssuedAndOutstanding" contextRef="From2022-01-012022-12-31_custom_StockOptionPlanMember" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">20</ix:nonFraction></span>% of the issued and outstanding common shares of the Company. Under the Plan,
the exercise price of each option typically equals to the last closing price per share on the trading day immediately preceding the day
on which the Company announces the grant of the option, less applicable discount, if any, permitted by the policies of the Exchanges
and approved by the Board. The options can be granted for a maximum term of five years.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="ifrs-full:DisclosureOfNumberAndWeightedAverageExercisePricesOfShareOptionsExplanatory"><p id="xdx_890_eifrs-full--DisclosureOfNumberAndWeightedAverageExercisePricesOfShareOptionsExplanatory_zpEgzdWF8IZ" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
outstanding options of each company prior to the completion of the RTO were as follows:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span id="xdx_8B4_z7kDoVMOsIGb" style="display: none">SCHEDULE OF NUMBER AND WEIGHTED AVERAGE EXERCISE PRICES OF SHARE OPTIONS</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></span></span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="padding-bottom: 1.5pt; font-weight: bold">North American Nickel</td><td>&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: right"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Number Outstanding</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>(post-consolidation basis)</b></span></p></td><td>&#160;</td><td>&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: right"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Weighted Average</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Exercise Price ($)</b></span></p></td><td>&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 60%">December 31, 2021</td><td style="width: 2%">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: White">
    <td>Cancelled/expired</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Balance as at August 3, 2022 prior to business combination with PNRC</td><td style="font-weight: bold">&#160;</td>
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</table>

<p style="margin: 0">&#160;</p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom; background-color: White">
    <td style="font-weight: bold; text-align: left; width: 60%">Premium Nickel Resources Corp.</td><td style="font-weight: bold; width: 2%">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td>December 31, 2021</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td id="xdx_984_eifrs-full--NumberOfOutstandingShareOptions_iS_pid_uShares_c20220101__20220803__ifrs-full--TypesOfSharebasedPaymentArrangementsAxis__custom--StockOptionPlanMember__srt--ConsolidationItemsAxis__custom--PriorConsolidationBasisMember__ifrs-full--CategoriesOfRelatedPartiesAxis__custom--PremiumNickelResourcesCorporationMember_zNshPfK5NbHh" title="Outstanding, beginning of year" style="text-align: right"><ix:nonFraction name="ifrs-full:NumberOfOutstandingShareOptions" contextRef="AsOf2021-12-31_custom_StockOptionPlanMember_custom_PriorConsolidationBasisMember_custom_PremiumNickelResourcesCorporationMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">5,775,000</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: White">
    <td>Granted</td><td>&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td id="xdx_988_eifrs-full--NumberOfShareOptionsGrantedInSharebasedPaymentArrangement_pid_uShares_c20220101__20220803__ifrs-full--TypesOfSharebasedPaymentArrangementsAxis__custom--StockOptionPlanMember__srt--ConsolidationItemsAxis__custom--PriorConsolidationBasisMember__ifrs-full--CategoriesOfRelatedPartiesAxis__custom--PremiumNickelResourcesCorporationMember_z80DPhfR14Ak" title="Issued" style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction name="ifrs-full:NumberOfShareOptionsGrantedInSharebasedPaymentArrangement" contextRef="From2022-01-012022-08-03_custom_StockOptionPlanMember_custom_PriorConsolidationBasisMember_custom_PremiumNickelResourcesCorporationMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">2,600,000</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td id="xdx_981_ecustom--WeightedAverageGrantedSharesExercisePrice_pid_c20220101__20220803__ifrs-full--TypesOfSharebasedPaymentArrangementsAxis__custom--StockOptionPlanMember__srt--ConsolidationItemsAxis__custom--PriorConsolidationBasisMember__ifrs-full--CategoriesOfRelatedPartiesAxis__custom--PremiumNickelResourcesCorporationMember_zIUDLItsLK2c" title="Weighted Average Exercise Price, Issued" style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction name="PNRLF:WeightedAverageGrantedSharesExercisePrice" contextRef="From2022-01-012022-08-03_custom_StockOptionPlanMember_custom_PriorConsolidationBasisMember_custom_PremiumNickelResourcesCorporationMember" format="ixt:numdotdecimal" decimals="INF" unitRef="CADPShares">2.49</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Balance as at August 3, 2022 prior to business combination with NAN</td><td style="font-weight: bold">&#160;</td>
    <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">&#160;</td><td id="xdx_98C_eifrs-full--NumberOfOutstandingShareOptions_iE_pid_uShares_c20220101__20220803__ifrs-full--TypesOfSharebasedPaymentArrangementsAxis__custom--StockOptionPlanMember__srt--ConsolidationItemsAxis__custom--PriorConsolidationBasisMember__ifrs-full--CategoriesOfRelatedPartiesAxis__custom--PremiumNickelResourcesCorporationMember_zzGwaExdIrlk" title="Outstanding, End of year" style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right"><ix:nonFraction name="ifrs-full:NumberOfOutstandingShareOptions" contextRef="AsOf2022-08-03_custom_StockOptionPlanMember_custom_PriorConsolidationBasisMember_custom_PremiumNickelResourcesCorporationMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">8,375,000</ix:nonFraction></td><td style="font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold">&#160;</td>
    <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">&#160;</td><td id="xdx_989_ecustom--WeightedAverageExercisePriceOutstandingAtEndOfYear_pid_c20220101__20220803__ifrs-full--TypesOfSharebasedPaymentArrangementsAxis__custom--StockOptionPlanMember__srt--ConsolidationItemsAxis__custom--PriorConsolidationBasisMember__ifrs-full--CategoriesOfRelatedPartiesAxis__custom--PremiumNickelResourcesCorporationMember_zFPS0aN83kXl" title="Weighted Average Exercise Price,End of year" style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right"><ix:nonFraction name="PNRLF:WeightedAverageExercisePriceOutstandingAtEndOfYear" contextRef="From2022-01-012022-08-03_custom_StockOptionPlanMember_custom_PriorConsolidationBasisMember_custom_PremiumNickelResourcesCorporationMember" format="ixt:numdotdecimal" decimals="INF" unitRef="CADPShares">1.13</ix:nonFraction></td><td style="font-weight: bold; text-align: left">&#160;</td></tr>
  </table>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Subsequent
to the RTO, the outstanding options of the Company were as follows:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="padding-bottom: 1.5pt; font-weight: bold">Premium Nickel Resources Ltd.</td><td style="font-weight: bold">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">Number Outstanding</td><td style="font-weight: bold">&#160;</td><td>&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: right"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Weighted Average</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Exercise Price ($)</b></span></p></td><td>&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 60%; text-align: left">Balance as at August 3, 2022 prior to business combination with PNRC</td><td style="width: 2%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td id="xdx_981_eifrs-full--NumberOfOutstandingShareOptions_iS_pid_uShares_c20220804__20221231__ifrs-full--TypesOfSharebasedPaymentArrangementsAxis__custom--StockOptionPlanMember__srt--ConsolidationItemsAxis__custom--PostConsolidationBasisMember_zLLX3xKL0cif" title="Outstanding, beginning of year" style="width: 16%; text-align: right"><ix:nonFraction name="ifrs-full:NumberOfOutstandingShareOptions" contextRef="AsOf2022-08-03_custom_StockOptionPlanMember_custom_PostConsolidationBasisMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">2,995,794</ix:nonFraction></td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 2%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td id="xdx_981_ecustom--WeightedAverageExercisePriceOutstandingAtBeginningOfYear_pid_c20220804__20221231__ifrs-full--TypesOfSharebasedPaymentArrangementsAxis__custom--StockOptionPlanMember__srt--ConsolidationItemsAxis__custom--PostConsolidationBasisMember_z5o7AgsXZKFk" title="Weighted Average Exercise Price, Outstanding at beginning of year" style="width: 16%; text-align: right"><ix:nonFraction name="PNRLF:WeightedAverageExercisePriceOutstandingAtBeginningOfYear" contextRef="From2022-08-042022-12-31_custom_StockOptionPlanMember_custom_PostConsolidationBasisMember" format="ixt:numdotdecimal" decimals="INF" unitRef="CADPShares">1.33</ix:nonFraction></td><td style="width: 1%; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left">Issued pursuant to RTO in exchange for options of PNRC</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td id="xdx_98A_eifrs-full--NumberOfShareOptionsGrantedInSharebasedPaymentArrangement_pid_uShares_c20220804__20221231__ifrs-full--TypesOfSharebasedPaymentArrangementsAxis__custom--StockOptionPlanMember__srt--ConsolidationItemsAxis__custom--PostConsolidationBasisMember_zxVjYUUkTGcc" title="Issued" style="text-align: right"><ix:nonFraction name="ifrs-full:NumberOfShareOptionsGrantedInSharebasedPaymentArrangement" contextRef="From2022-08-042022-12-31_custom_StockOptionPlanMember_custom_PostConsolidationBasisMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">8,827,250</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td id="xdx_98B_ecustom--WeightedAverageGrantedSharesExercisePrice_pid_c20220804__20221231__ifrs-full--TypesOfSharebasedPaymentArrangementsAxis__custom--StockOptionPlanMember__srt--ConsolidationItemsAxis__custom--PostConsolidationBasisMember_zZezEUQbRyje" title="Weighted Average Exercise Price, Issued" style="text-align: right"><ix:nonFraction name="PNRLF:WeightedAverageGrantedSharesExercisePrice" contextRef="From2022-08-042022-12-31_custom_StockOptionPlanMember_custom_PostConsolidationBasisMember" format="ixt:numdotdecimal" decimals="INF" unitRef="CADPShares">1.16</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Options exercised</td><td>&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td id="xdx_980_eifrs-full--NumberOfShareOptionsExercisedInSharebasedPaymentArrangement_pid_uShares_c20220804__20221231__ifrs-full--TypesOfSharebasedPaymentArrangementsAxis__custom--StockOptionPlanMember__srt--ConsolidationItemsAxis__custom--PostConsolidationBasisMember_zMMcU8KOAlGb" title="Options exercised" style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction name="ifrs-full:NumberOfShareOptionsExercisedInSharebasedPaymentArrangement" contextRef="From2022-08-042022-12-31_custom_StockOptionPlanMember_custom_PostConsolidationBasisMember" format="ixt:numdotdecimal" decimals="INF" sign="-" unitRef="Shares">1,416,000</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td id="xdx_989_ecustom--WeightedAverageExercisePriceOptionsExercised_pid_c20220804__20221231__ifrs-full--TypesOfSharebasedPaymentArrangementsAxis__custom--StockOptionPlanMember__srt--ConsolidationItemsAxis__custom--PostConsolidationBasisMember_zxSwejABxVM7" title="Weighted Average Exercise Price, Options Exercised" style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction name="PNRLF:WeightedAverageExercisePriceOptionsExercised" contextRef="From2022-08-042022-12-31_custom_StockOptionPlanMember_custom_PostConsolidationBasisMember" format="ixt:numdotdecimal" decimals="INF" unitRef="CADPShares">0.46</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td>Balance as at December 31, 2022</td><td style="font-weight: bold">&#160;</td>
    <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">&#160;</td><td id="xdx_98B_eifrs-full--NumberOfOutstandingShareOptions_iE_pid_uShares_c20220804__20221231__ifrs-full--TypesOfSharebasedPaymentArrangementsAxis__custom--StockOptionPlanMember__srt--ConsolidationItemsAxis__custom--PostConsolidationBasisMember_zddP9ZY0P2Pa" title="Outstanding, End of year" style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right"><ix:nonFraction name="ifrs-full:NumberOfOutstandingShareOptions" contextRef="AsOf2022-12-31_custom_StockOptionPlanMember_custom_PostConsolidationBasisMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">10,407,044</ix:nonFraction></td><td style="font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold">&#160;</td>
    <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">&#160;</td><td id="xdx_98B_ecustom--WeightedAverageExercisePriceOutstandingAtEndOfYear_pid_c20220804__20221231__ifrs-full--TypesOfSharebasedPaymentArrangementsAxis__custom--StockOptionPlanMember__srt--ConsolidationItemsAxis__custom--PostConsolidationBasisMember_zX14abuERll7" title="Weighted Average Exercise Price, Outstanding at End of year" style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right"><ix:nonFraction name="PNRLF:WeightedAverageExercisePriceOutstandingAtEndOfYear" contextRef="From2022-08-042022-12-31_custom_StockOptionPlanMember_custom_PostConsolidationBasisMember" format="ixt:numdotdecimal" decimals="INF" unitRef="CADPShares">1.10</ix:nonFraction></td><td style="font-weight: bold; text-align: left">&#160;</td></tr>
  </table>

</ix:nonNumeric><p id="xdx_8A2_zwdn8NISWBG7" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">During
the year ended December 31, 2022, prior to the RTO, PNRC granted an aggregate total of <span id="xdx_901_eifrs-full--NumberOfShareOptionsGrantedInSharebasedPaymentArrangement_pid_uShares_c20220101__20221231__ifrs-full--TypesOfSharebasedPaymentArrangementsAxis__custom--StockOptionPlanMember_zfBGPkrL9OHk" title="Number of stock option granted"><ix:nonFraction name="ifrs-full:NumberOfShareOptionsGrantedInSharebasedPaymentArrangement" contextRef="From2022-01-012022-12-31_custom_StockOptionPlanMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">2,600,000</ix:nonFraction></span> stock options to employees, directors
and consultants with a maximum term of <span id="xdx_902_ecustom--PeriodOfOptionsGranted_dt_c20220101__20221231__ifrs-full--TypesOfSharebasedPaymentArrangementsAxis__custom--StockOptionPlanMember_zHmLdDfHTIki" title="Period of options granted"><ix:nonNumeric contextRef="From2022-01-012022-12-31_custom_StockOptionPlanMember" format="ixt-sec:durwordsen" name="PNRLF:PeriodOfOptionsGranted">five years</ix:nonNumeric></span>. The options are exercisable at US$<span id="xdx_908_eifrs-full--ExercisePriceShareOptionsGranted2019_uUSDPShares_c20220101__20221231__ifrs-full--TypesOfSharebasedPaymentArrangementsAxis__custom--StockOptionPlanMember_zL5S4tlAx06h" title="Stock options exercisable price per share"><ix:nonFraction name="ifrs-full:ExercisePriceShareOptionsGranted2019" contextRef="From2022-01-012022-12-31_custom_StockOptionPlanMember" format="ixt:numdotdecimal" decimals="INF" unitRef="USDPShares">2.00</ix:nonFraction></span> per share (C$<span id="xdx_90E_ecustom--StockOptionsExercisablePricePerShare_iI_uCADPShares_c20221231__ifrs-full--TypesOfSharebasedPaymentArrangementsAxis__custom--StockOptionPlanMember_zL1vfqKf07Sd" title="Stock options exercisable price per share"><ix:nonFraction name="PNRLF:StockOptionsExercisablePricePerShare" contextRef="AsOf2022-12-31_custom_StockOptionPlanMember" format="ixt:numdotdecimal" decimals="INF" unitRef="CADPShares">2.49</ix:nonFraction></span>/share) with 1/3 vesting on
the date of grant, 1/3 on the first anniversary and 1/3 on the second anniversary following the close of the US$<span id="xdx_90F_eifrs-full--ProceedsFromSaleOrIssueOfTreasuryShares_pid_uUSD_c20220101__20221231__ifrs-full--TypesOfSharebasedPaymentArrangementsAxis__custom--StockOptionPlanMember_zj8xt5BwsGz" title="Proceeds from private palcement"><ix:nonFraction name="ifrs-full:ProceedsFromSaleOrIssueOfTreasuryShares" contextRef="From2022-01-012022-12-31_custom_StockOptionPlanMember" format="ixt:numdotdecimal" decimals="0" unitRef="USD">20,000,000</ix:nonFraction></span> private placement.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>

<ix:exclude><!-- Field: Page; Sequence: 92; Value: 2 -->
    <div style="border-bottom: Black 1.5pt solid; margin-bottom: 6pt"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font-size: 10pt"><tr style="vertical-align: top; text-align: left"><td style="text-align: right; width: 100%"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->31<!-- Field: /Sequence --> | PNRL / Year ended 2022 and 2021</td></tr></table></div>
    <div style="break-before: page; margin-top: 6pt"><p style="margin: 0pt">&#160;</p></div>
    <!-- Field: /Page --></ix:exclude>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><img src="fin_001.jpg" alt="" style="height: 72px; width: 514px" /></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt"></p>

<p style="font: 13pt/12.95pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; letter-spacing: -0.3pt"><b><i>Formerly
&#8220;North American Nickel Inc.</i></b></span></p>

<p style="font: 9pt/10.9pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 1.7pt 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Notes
to the Consolidated Financial statements<br />
</b>For the years ended December 31, 2022 and 2021</span></p>

<p style="font: 9pt/10.9pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 1.7pt 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(Expressed in Canadian dollars)</span></p>


<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 10.75pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;<br /></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Upon
the closing of the RTO, all PNRC options were exchanged for options of the Company at a rate of <span id="xdx_907_ecustom--OptionsExchangeRate_iI_c20221231__srt--ConsolidationItemsAxis__custom--ReverseTakeoverTransactionMember_zaDcCowHemta" title="Exchange rate"><ix:nonFraction name="PNRLF:OptionsExchangeRate" contextRef="AsOf2022-12-31_custom_ReverseTakeoverTransactionMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Pure">1.054</ix:nonFraction></span> and vested in full immediately.
Prior to the RTO, PNRC had granted but unvested options of <span id="xdx_904_eifrs-full--NumberOfInstrumentsOtherEquityInstrumentsGranted_uPure_c20220101__20221231__srt--ConsolidationItemsAxis__custom--PreReverseTakeoverTransactionAndPostConsolidationBasisMember_zjgAiV37cnhb" title="Unvested options granted"><ix:nonFraction name="ifrs-full:NumberOfInstrumentsOtherEquityInstrumentsGranted" contextRef="From2022-01-012022-12-31_custom_PreReverseTakeoverTransactionAndPostConsolidationBasisMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Pure">2,512,033</ix:nonFraction></span> (Post RTO, Post-consolidation basis). These options were considered
a replacement awarded under the former plan and modification accounting under IFRS 2 Share based payments was applied. When modification
accounting is applied, the Company revalued those stock options using the Black-Scholes Option Pricing Model.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
fair value of all options, including those granted during the year ended December 31, 2022 as well as the ones granted but not vested
during the year ended December 2021, amounted to $<span id="xdx_901_eifrs-full--ExpenseFromSharebasedPaymentTransactionsWithEmployees_pp0p0_c20220101__20221231__ifrs-full--TypesOfSharebasedPaymentArrangementsAxis__custom--StockOptionPlanMember_zmfDZEhCTfvj" title="Share based payment expense"><ix:nonFraction name="ifrs-full:ExpenseFromSharebasedPaymentTransactionsWithEmployees" contextRef="From2022-01-012022-12-31_custom_StockOptionPlanMember" format="ixt:numdotdecimal" decimals="0" scale="0" unitRef="CAD">7,731,117</ix:nonFraction></span> and was recorded as a share-based payment expense. The weighted average fair
value of options granted is $<span id="xdx_907_ecustom--WeightedAverageFairValuePerOptionsGranted_uUSDPShares_c20220101__20221231__ifrs-full--TypesOfSharebasedPaymentArrangementsAxis__custom--StockOptionPlanMember_zdSqWCwTdIkl" title="Fair value per option granted"><ix:nonFraction name="PNRLF:WeightedAverageFairValuePerOptionsGranted" contextRef="From2022-01-012022-12-31_custom_StockOptionPlanMember" format="ixt:numdotdecimal" decimals="INF" unitRef="USDPShares">1.41</ix:nonFraction></span> per option.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="ifrs-full:DisclosureOfIndirectMeasurementOfFairValueOfGoodsOrServicesReceivedShareOptionsGrantedDuringPeriodExplanatory"><p id="xdx_894_eifrs-full--DisclosureOfIndirectMeasurementOfFairValueOfGoodsOrServicesReceivedShareOptionsGrantedDuringPeriodExplanatory_zFhVxVuMJJAd" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
fair value of stock options granted and vested during the year ended December 31, 2022 was calculated using the following assumptions:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span id="xdx_8BF_zAlhq9QIUmH" style="display: none">SCHEDULE OF INPUTS TO OPTION PRICING MODEL</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></span></span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 80%; margin-left: 0pt">
  <tr style="vertical-align: bottom">
    <td>&#160;</td><td style="font-weight: bold">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">December 31, 2022</td><td style="font-weight: bold">&#160;</td><td style="font-weight: bold">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">December 31, 2021</td><td style="font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left">Latest private placement price</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td>Expected share price volatility</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left">Risk free interest rate</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Expected life of options</td><td>&#160;</td>
    <td style="border-bottom: Black 2.5pt double; text-align: left">&#160;</td><td style="border-bottom: Black 2.5pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span id="xdx_90F_ecustom--ExpectedLifeOfOptionsGranted_dtY_c20220101__20221231__ifrs-full--RangeAxis__ifrs-full--BottomOfRangeMember_zFFQbvmrKto2" title="Expected life of options"><ix:nonNumeric contextRef="From2022-01-012022-12-31_ifrs-full_BottomOfRangeMember" format="ixt-sec:duryear" name="PNRLF:ExpectedLifeOfOptionsGranted">4.16</ix:nonNumeric></span> - <span id="xdx_903_ecustom--ExpectedLifeOfOptionsGranted_dtY_c20220101__20221231__ifrs-full--RangeAxis__ifrs-full--TopOfRangeMember_zL2ZazNz1Pjg" title="Expected life of options"><ix:nonNumeric contextRef="From2022-01-012022-12-31_ifrs-full_TopOfRangeMember" format="ixt-sec:duryear" name="PNRLF:ExpectedLifeOfOptionsGranted">5</ix:nonNumeric></span> years</span></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="border-bottom: Black 2.5pt double; text-align: left">&#160;</td><td style="border-bottom: Black 2.5pt double; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span id="xdx_90E_ecustom--ExpectedLifeOfOptionsGranted_dtY_c20210101__20211231_zBJXJz2mfRP4" title="Expected life of options"><ix:nonNumeric contextRef="From2021-01-012021-12-31" format="ixt-sec:duryear" name="PNRLF:ExpectedLifeOfOptionsGranted">5</ix:nonNumeric></span> years</span></td><td style="text-align: left">&#160;</td></tr>
  </table>

</ix:nonNumeric><p id="xdx_8AB_zun4FpRjpIG3" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Volatility
assumptions for the valuation of options were derived by reference to the volatility of NAN as the stock price of NAN was highly correlated
to the advancement of the BCL assets acquisition following its investment in PNRC.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="ifrs-full:DisclosureOfNumberAndWeightedAverageRemainingContractualLifeOfOutstandingShareOptionsExplanatory"><p id="xdx_897_eifrs-full--DisclosureOfNumberAndWeightedAverageRemainingContractualLifeOfOutstandingShareOptionsExplanatory_z1CWmedecDj6" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Details
of options outstanding as at December 31, 2022 are as follows:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span id="xdx_8B9_zXPNmzk0Eyka" style="display: none">SCHEDULE OF NUMBER AND WEIGHTED AVERAGE REMAINING CONTRACTUAL LIFE OF OUTSTANDING SHARE OPTIONS</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></span></span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 90%">
  <tr style="vertical-align: bottom">
    <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: right; font-weight: bold">Options Outstanding</td><td style="text-align: right; font-weight: bold">&#160;</td><td style="text-align: right; font-weight: bold">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">Options Exercisable</td><td style="text-align: right; font-weight: bold">&#160;</td><td style="text-align: right; font-weight: bold">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: right; font-weight: bold">Expiry Date</td><td style="text-align: right; font-weight: bold">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: right; font-weight: bold">Exercise Price ($)</td><td style="text-align: right; font-weight: bold">&#160;</td><td style="text-align: right">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: right"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: right; text-indent: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Weighted average remaining contractual life</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>(years)</b></span></p></td><td style="text-align: right">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 1%; text-align: left">&#160;</td><td id="xdx_985_eifrs-full--NumberOfOutstandingShareOptions_iI_pid_uShares_c20221231__ifrs-full--TypesOfSharebasedPaymentArrangementsAxis__custom--OptionsExpiringFebruaryTwentyFourTwoThousandTwentyFiveMember__srt--ConsolidationItemsAxis__custom--PostConsolidationBasisMember_zBYDBm46dRK" title="Options outstanding" style="width: 16%; text-align: right"><ix:nonFraction name="ifrs-full:NumberOfOutstandingShareOptions" contextRef="AsOf2022-12-31_custom_OptionsExpiringFebruaryTwentyFourTwoThousandTwentyFiveMember_custom_PostConsolidationBasisMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">900,000</ix:nonFraction></td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 2%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td id="xdx_98C_eifrs-full--NumberOfShareOptionsExercisableInSharebasedPaymentArrangement_iI_pid_uShares_c20221231__ifrs-full--TypesOfSharebasedPaymentArrangementsAxis__custom--OptionsExpiringFebruaryTwentyFourTwoThousandTwentyFiveMember__srt--ConsolidationItemsAxis__custom--PostConsolidationBasisMember_zBUhJTz2BWKe" title="Options exercisable" style="width: 16%; text-align: right"><ix:nonFraction name="ifrs-full:NumberOfShareOptionsExercisableInSharebasedPaymentArrangement" contextRef="AsOf2022-12-31_custom_OptionsExpiringFebruaryTwentyFourTwoThousandTwentyFiveMember_custom_PostConsolidationBasisMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">900,000</ix:nonFraction></td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 2%">&#160;</td>
    <td style="width: 20%; text-align: right">February 24, 2025</td><td style="width: 2%">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: White">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: White">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: right">September 29, 2026</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: White">
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    <td style="text-align: left">&#160;</td><td id="xdx_98E_eifrs-full--NumberOfShareOptionsExercisableInSharebasedPaymentArrangement_iI_pid_uShares_c20221231__ifrs-full--TypesOfSharebasedPaymentArrangementsAxis__custom--OptionsExpiringOctoberTwentyFiveTwoThousandAndTwentySixMember__srt--ConsolidationItemsAxis__custom--PostConsolidationBasisMember_zILofBpZ6RRd" title="Options exercisable" style="text-align: right"><ix:nonFraction name="ifrs-full:NumberOfShareOptionsExercisableInSharebasedPaymentArrangement" contextRef="AsOf2022-12-31_custom_OptionsExpiringOctoberTwentyFiveTwoThousandAndTwentySixMember_custom_PostConsolidationBasisMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">998,794</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: right">October 25, 2026</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td id="xdx_98C_ecustom--ExercisePriceOfStockOption_iI_pid_c20221231__ifrs-full--TypesOfSharebasedPaymentArrangementsAxis__custom--OptionsExpiringOctoberTwentyFiveTwoThousandAndTwentySixMember__srt--ConsolidationItemsAxis__custom--PostConsolidationBasisMember_zFojwIJwS8X7" title="Exercise price" style="text-align: right"><ix:nonFraction name="PNRLF:ExercisePriceOfStockOption" contextRef="AsOf2022-12-31_custom_OptionsExpiringOctoberTwentyFiveTwoThousandAndTwentySixMember_custom_PostConsolidationBasisMember" format="ixt:numdotdecimal" decimals="INF" unitRef="CADPShares">2.00</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td id="xdx_98B_eifrs-full--NumberOfOutstandingShareOptions_iI_pid_uShares_c20221231__ifrs-full--TypesOfSharebasedPaymentArrangementsAxis__custom--OptionsExpiringJanuaryTwentyTwoThousandAndTwentySevenMember__srt--ConsolidationItemsAxis__custom--PostConsolidationBasisMember_zTFi5JdVLQi6" title="Options outstanding" style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction name="ifrs-full:NumberOfOutstandingShareOptions" contextRef="AsOf2022-12-31_custom_OptionsExpiringJanuaryTwentyTwoThousandAndTwentySevenMember_custom_PostConsolidationBasisMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">2,740,400</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td id="xdx_98F_eifrs-full--NumberOfShareOptionsExercisableInSharebasedPaymentArrangement_iI_pid_uShares_c20221231__ifrs-full--TypesOfSharebasedPaymentArrangementsAxis__custom--OptionsExpiringJanuaryTwentyTwoThousandAndTwentySevenMember__srt--ConsolidationItemsAxis__custom--PostConsolidationBasisMember_zuAzQJrQoeNh" title="Options exercisable" style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction name="ifrs-full:NumberOfShareOptionsExercisableInSharebasedPaymentArrangement" contextRef="AsOf2022-12-31_custom_OptionsExpiringJanuaryTwentyTwoThousandAndTwentySevenMember_custom_PostConsolidationBasisMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">2,740,400</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: right">January 20, 2027</td><td>&#160;</td>
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td id="xdx_987_ecustom--WeightedAverageRemainingContractualLifeOfOutstandingWarrant_iI_dtY_c20220101__20221231__ifrs-full--TypesOfSharebasedPaymentArrangementsAxis__custom--OptionsExpiringJanuaryTwentyTwoThousandAndTwentySevenMember__srt--ConsolidationItemsAxis__custom--PostConsolidationBasisMember_z8lynUslm8Bg" title="Weighted average remaining contractual life (years)" style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonNumeric contextRef="From2022-01-012022-12-31_custom_OptionsExpiringJanuaryTwentyTwoThousandAndTwentySevenMember_custom_PostConsolidationBasisMember" format="ixt-sec:duryear" name="PNRLF:WeightedAverageRemainingContractualLifeOfOutstandingWarrant">1.07</ix:nonNumeric></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="border-bottom: Black 2.5pt double; text-align: left">&#160;</td><td id="xdx_980_eifrs-full--NumberOfOutstandingShareOptions_iI_pid_uShares_c20221231__srt--ConsolidationItemsAxis__custom--PostConsolidationBasisMember_zTr03aChqxsc" title="Options outstanding" style="border-bottom: Black 2.5pt double; text-align: right"><ix:nonFraction name="ifrs-full:NumberOfOutstandingShareOptions" contextRef="AsOf2022-12-31_custom_PostConsolidationBasisMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">10,407,044</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="border-bottom: Black 2.5pt double; text-align: left">&#160;</td><td id="xdx_986_eifrs-full--NumberOfShareOptionsExercisableInSharebasedPaymentArrangement_iI_pid_uShares_c20221231__srt--ConsolidationItemsAxis__custom--PostConsolidationBasisMember_zOxHlJi56jK6" title="Options exercisable" style="border-bottom: Black 2.5pt double; text-align: right"><ix:nonFraction name="ifrs-full:NumberOfShareOptionsExercisableInSharebasedPaymentArrangement" contextRef="AsOf2022-12-31_custom_PostConsolidationBasisMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">10,407,044</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td>&#160;</td><td>&#160;</td>
    <td style="border-bottom: Black 2.5pt double; text-align: left">&#160;</td><td style="border-bottom: Black 2.5pt double; text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td style="font-weight: bold">&#160;</td>
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</ix:nonNumeric><p id="xdx_8A0_zVppZ5Hu7sIi" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>e)
DSU Plan</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Effective
December 2022, the Company approved a Deferred Share Unit Plan (&#8220;DSU Plan&#8221;) (&#8220;DSUs&#8221;) that enables the Company
upon approval by the Directors to grant DSUs to eligible non-management directors. The DSUs credited to the account of a director may
only be redeemed following the date upon which the holder ceases to be a director. Depending upon the country of residence of a director,
the DSUs may be redeemed at any time prior to December 15 in the calendar year following the year in which the holder ceases to be a
director and may be redeemed in as many as four installments. Upon redemption, the holder is entitled to a cash payment equal to the
number of units redeemed multiplied by the 5-day-VWAP of the Company&#8217;s common shares on that date. The Company may elect, in its
sole discretion, to settle the value of the DSUs redeemed in the Company&#8217;s common shares on a one-for-one basis, provided shareholder
approval has been obtained on or prior to the relevant redemption date.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


<ix:exclude><!-- Field: Page; Sequence: 93; Value: 2 -->
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    <div style="break-before: page; margin-top: 6pt"><p style="margin: 0pt">&#160;</p></div>
    <!-- Field: /Page --></ix:exclude>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><img src="fin_001.jpg" alt="" style="height: 72px; width: 514px" /></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt"></p>

<p style="font: 13pt/12.95pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; letter-spacing: -0.3pt"><b><i>Formerly
&#8220;North American Nickel Inc.</i></b></span></p>

<p style="font: 9pt/10.9pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 1.7pt 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Notes
to the Consolidated Financial statements<br />
</b>For the years ended December 31, 2022 and 2021</span></p>

<p style="font: 9pt/10.9pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 1.7pt 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(Expressed in Canadian dollars)</span></p>


<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 10.75pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


<ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="PNRLF:DisclosureOfDSUsSharesOutstandingExplanatory"><p id="xdx_897_ecustom--DisclosureOfDSUsSharesOutstandingExplanatory_zsPQ25V2NPS5" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">During
the year ended December 31, 2022, DSUs have been granted as follows:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.15in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;<span id="xdx_8B8_zLeAFPODHpM" style="display: none">SCHEDULE OF DEFERRED SHARE UNIT PLAN HAVE BEEN GRANTED</span></span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-left: auto; border-collapse: collapse; width: 90%; margin-right: auto">
  <tr style="vertical-align: bottom">
    <td>&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" id="xdx_49C_20220101__20221231__ifrs-full--TypesOfSharebasedPaymentArrangementsAxis__custom--DeferredShareUnitPlanMember_zlwmL7tJv1tk" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">2022</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr id="xdx_400_eifrs-full--NumberOfSharesOutstanding_iS_zd1X2ILmUSc2" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Number of DSUs outstanding at the beginning of the fiscal year</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl1498">-</span></td><td style="text-align: left">&#160;</td></tr>
  <tr id="xdx_40E_eifrs-full--IncreaseDecreaseInNumberOfSharesOutstanding_zarVb3FjXbGb" style="vertical-align: bottom; background-color: White">
    <td style="width: 78%; text-align: left; padding-bottom: 1.5pt">Number of DSUs during the year</td><td style="width: 2%; padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; width: 1%; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; width: 18%; text-align: right"><ix:nonFraction name="ifrs-full:IncreaseDecreaseInNumberOfSharesOutstanding" contextRef="From2022-01-012022-12-31_custom_DeferredShareUnitPlanMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">200,000</ix:nonFraction></td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr id="xdx_404_eifrs-full--NumberOfSharesOutstanding_iE_z1GjyIaTjI74" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 2.5pt">Number of DSUs outstanding at the end of the year</td><td style="padding-bottom: 2.5pt">&#160;</td>
    <td style="border-bottom: Black 2.5pt double; text-align: left">&#160;</td><td style="border-bottom: Black 2.5pt double; text-align: right"><ix:nonFraction name="ifrs-full:NumberOfSharesOutstanding" contextRef="AsOf2022-12-31_custom_DeferredShareUnitPlanMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">200,000</ix:nonFraction></td><td style="padding-bottom: 2.5pt; text-align: left">&#160;</td></tr>
  </table>

</ix:nonNumeric><p id="xdx_8A5_z5RPitklLkKe" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">During
the year ended December 31, 2022, the DSU compensation amounted to $<span id="xdx_902_eifrs-full--NumberOfShareOptionsGrantedInSharebasedPaymentArrangement_uShares_c20220101__20221231__ifrs-full--TypesOfSharebasedPaymentArrangementsAxis__custom--DeferredShareUnitPlanMember_z3M1RDi6WYl6" title="Share based compensation"><ix:nonFraction name="ifrs-full:NumberOfShareOptionsGrantedInSharebasedPaymentArrangement" contextRef="From2022-01-012022-12-31_custom_DeferredShareUnitPlanMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">298,000</ix:nonFraction></span> recorded as share based compensation, and a DSU liability
of the same amount.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>f)
Reserve</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
reserve records items recognized as stock-based compensation expense and other share-based payments until such time that the stock options
or warrants are exercised, at which time the corresponding amount will be transferred to share capital. Amounts recorded for forfeited
or expired unexercised options and warrants are transferred to deficit.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">During
the year ended December 31, 2022, the Company recorded $<span id="xdx_90E_eifrs-full--ReserveOfSharebasedPayments_iI_c20221231_z8yxAazgdF9h" title="Reserves"><ix:nonFraction name="ifrs-full:ReserveOfSharebasedPayments" contextRef="AsOf2022-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">7,731,117</ix:nonFraction></span> (December 31, 2021 - $<span id="xdx_904_eifrs-full--ReserveOfSharebasedPayments_iI_c20211231_zlhlQfgacGpe" title="Reserves"><ix:nonFraction name="ifrs-full:ReserveOfSharebasedPayments" contextRef="AsOf2021-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">1,261,891</ix:nonFraction></span>) of share-based payments to reserves
and transferred $<span id="xdx_90D_ecustom--ShareCapitalForExercisedWarrantsAndOptions_iI_c20221231_zSFXQ8nJmfBk" title="Reserves transferred to share capital"><ix:nonFraction name="PNRLF:ShareCapitalForExercisedWarrantsAndOptions" contextRef="AsOf2022-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">3,325,702</ix:nonFraction></span> to share capital for exercised warrants and options (December 31, 2021 &#8211; <span id="xdx_901_ecustom--ShareCapitalForExercisedWarrantsAndOptions_iI_dxL_c20211231_zV0ZS81l8uxa" title="ReservesReserves transferred to share capital::XDX::-"><span style="-sec-ix-hidden: xdx2ixbrl1512">Nil</span></span>).</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

</ix:nonNumeric><ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="ifrs-full:DisclosureOfRelatedPartyExplanatory"><p id="xdx_80A_eifrs-full--DisclosureOfRelatedPartyExplanatory_zmyQg59dJ91i" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>12.
<span id="xdx_82A_zTxDfAy0Fld2">RELATED PARTY TRANSACTIONS</span></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<ix:nonNumeric contextRef="From2022-01-01to2022-12-31" continuedAt="ConU001519-01" escape="true" name="ifrs-full:DisclosureOfTransactionsBetweenRelatedPartiesExplanatory"><p id="xdx_898_eifrs-full--DisclosureOfTransactionsBetweenRelatedPartiesExplanatory_gL3DOTBRPE-QZWOK_zxCCpRw87QJ4" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following amounts due to related parties are included in trade payables and accrued liabilities (note 8).</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span id="xdx_8BC_zmiwO8ORpTN" style="display: none">SCHEDULE OF AMOUNTS DUE TO RELATED PARTIES, INCLUDED IN TRADE PAYABLES AND ACCRUED LIABILITIES</span></span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 90%; margin-left: 0.25in">
  <tr style="vertical-align: bottom">
    <td>&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" id="xdx_491_20221231_zSOLPs4CUoOj" style="border-bottom: Black 1.5pt solid; text-align: right"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 13.5pt 0pt 0; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>December 31,</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 13.5pt 0pt 0; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>2022</b></span></p></td><td style="padding-bottom: 1.5pt">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" id="xdx_493_20211231_zqYWnM1qKeb6" style="border-bottom: Black 1.5pt solid; text-align: right"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 5.4pt 0pt 0; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>December 31,</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 5.4pt 0pt 0; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>2021</b></span></p></td><td style="padding-bottom: 1.5pt">&#160;</td></tr>
  <tr id="xdx_402_eifrs-full--TradeAndOtherCurrentPayablesToRelatedParties_iI_hifrs-full--CategoriesOfRelatedPartiesAxis__custom--DirectorsAndOfficersCompanyMember_zMEb6mpxP6w4" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 60%; text-align: left">Directors and Officers of the Company</td><td style="width: 2%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 16%; text-align: right"><ix:nonFraction name="ifrs-full:TradeAndOtherCurrentPayablesToRelatedParties" contextRef="AsOf2022-12-31_custom_DirectorsAndOfficersCompanyMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">43,235</ix:nonFraction></td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 2%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 16%; text-align: right"><ix:nonFraction name="ifrs-full:TradeAndOtherCurrentPayablesToRelatedParties" contextRef="AsOf2021-12-31_custom_DirectorsAndOfficersCompanyMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">26,759</ix:nonFraction></td><td style="width: 1%; text-align: left">&#160;</td></tr>
  <tr id="xdx_40C_eifrs-full--TradeAndOtherCurrentPayablesToRelatedParties_iI_hifrs-full--CategoriesOfRelatedPartiesAxis__custom--NorthAmericanNickelIncMember_zVhyenKAfKIe" style="vertical-align: bottom; background-color: White">
    <td style="padding-bottom: 1.5pt">NAN</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl1524">-</span></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction name="ifrs-full:TradeAndOtherCurrentPayablesToRelatedParties" contextRef="AsOf2021-12-31_custom_NorthAmericanNickelIncMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">199,145</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr id="xdx_400_eifrs-full--TradeAndOtherCurrentPayablesToRelatedParties_iI_zLP33xd7XjC8" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-bottom: 2.5pt"><span style="display: none; font-family: Times New Roman, Times, Serif; font-size: 10pt">Total</span></td><td style="font-weight: bold; padding-bottom: 2.5pt">&#160;</td>
    <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">&#160;</td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right"><ix:nonFraction name="ifrs-full:TradeAndOtherCurrentPayablesToRelatedParties" contextRef="AsOf2022-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">43,235</ix:nonFraction></td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; padding-bottom: 2.5pt">&#160;</td>
    <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">&#160;</td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right"><ix:nonFraction name="ifrs-full:TradeAndOtherCurrentPayablesToRelatedParties" contextRef="AsOf2021-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">225,904</ix:nonFraction></td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&#160;</td></tr>
  </table>

</ix:nonNumeric><p id="xdx_8A0_zJhyM4nVAeX4" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">These
amounts are unsecured, non-interest bearing and have no fixed terms of repayment.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(a)
Related party transactions</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">During
the year ended December 31, 2022, ThreeD Capital subscribed for a further <span id="xdx_90D_ecustom--SaleOfStockSharesOwnedAfterTransaction_iI_c20221231__ifrs-full--CategoriesOfRelatedPartiesAxis__custom--ThreeDCapitalMember_zN1zBmQrYDYg" title="Number of common shares beneficially owned"><ix:nonFraction name="PNRLF:SaleOfStockSharesOwnedAfterTransaction" contextRef="AsOf2022-12-31_custom_ThreeDCapitalMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">1,213,538</ix:nonFraction></span> common shares of PNRC (<span id="xdx_902_ecustom--SaleOfStockSharesOwnedAfterTransaction_iI_c20221231_ztOvDyegk4g7" title="Number of common shares beneficially owned"><ix:nonFraction name="PNRLF:SaleOfStockSharesOwnedAfterTransaction" contextRef="AsOf2022-12-31" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">1,279,069</ix:nonFraction></span> shares on a post-RTO
and post-consolidation basis), for a further investment of $<span id="xdx_906_eifrs-full--InvestmentsInSubsidiariesJointVenturesAndAssociates_iI_c20221231__srt--ConsolidationItemsAxis__custom--PostConsolidationBasisMember_zePdjLJ8Ypdi" title="Investment"><ix:nonFraction name="ifrs-full:InvestmentsInSubsidiariesJointVenturesAndAssociates" contextRef="AsOf2022-12-31_custom_PostConsolidationBasisMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">3,064,582</ix:nonFraction></span> (US$<span id="xdx_909_eifrs-full--InvestmentsInSubsidiariesJointVenturesAndAssociates_iI_c20221231_zQ2oBDBCWaR" title="Investment"><ix:nonFraction name="ifrs-full:InvestmentsInSubsidiariesJointVenturesAndAssociates" contextRef="AsOf2022-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">2,427,076</ix:nonFraction></span>) (2021 - $<span id="xdx_90B_eifrs-full--InvestmentsInSubsidiariesJointVenturesAndAssociates_iI_c20211231_zDECMXeinpC3" title="Investment"><ix:nonFraction name="ifrs-full:InvestmentsInSubsidiariesJointVenturesAndAssociates" contextRef="AsOf2021-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">374,123</ix:nonFraction></span>). As of December 31, 2022, ThreeD
Capital beneficially owns <span id="xdx_90F_ecustom--SaleOfStockSharesOwnedAfterTransaction_iI_c20221231__ifrs-full--CategoriesOfRelatedPartiesAxis__custom--ThreeDCapitalMember__ifrs-full--RangeAxis__ifrs-full--BottomOfRangeMember_zsTkmFLihI5i" title="Number of common shares beneficially owned"><ix:nonFraction name="PNRLF:SaleOfStockSharesOwnedAfterTransaction" contextRef="AsOf2022-12-31_custom_ThreeDCapitalMember_ifrs-full_BottomOfRangeMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">8,662,347</ix:nonFraction></span> shares (2021 - <span id="xdx_903_ecustom--SaleOfStockSharesOwnedAfterTransaction_iI_c20211231__ifrs-full--CategoriesOfRelatedPartiesAxis__custom--ThreeDCapitalMember__ifrs-full--RangeAxis__ifrs-full--BottomOfRangeMember_zL5lWquWZuxb" title="Number of common shares beneficially owned"><ix:nonFraction name="PNRLF:SaleOfStockSharesOwnedAfterTransaction" contextRef="AsOf2021-12-31_custom_ThreeDCapitalMember_ifrs-full_BottomOfRangeMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">7,383,278</ix:nonFraction></span> shares) in both cases on a post-RTO and post-consolidation basis, constituting
approximately <span id="xdx_905_ecustom--IfrsSaleOfStockPercentageOfOwnershipAfterTransaction_iI_dp_c20221231__ifrs-full--CategoriesOfRelatedPartiesAxis__custom--ThreeDCapitalMember_zCphjSglHoma" title="Number of common shares beneficially owned, percentage"><ix:nonFraction name="PNRLF:IfrsSaleOfStockPercentageOfOwnershipAfterTransaction" contextRef="AsOf2022-12-31_custom_ThreeDCapitalMember" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">7.5</ix:nonFraction>%</span> (2021 &#8211; <span id="xdx_900_ecustom--IfrsSaleOfStockPercentageOfOwnershipAfterTransaction_iI_dp_c20211231__ifrs-full--CategoriesOfRelatedPartiesAxis__custom--ThreeDCapitalMember_zTe1Ot0KBkDh" title="Number of common shares beneficially owned, percentage"><ix:nonFraction name="PNRLF:IfrsSaleOfStockPercentageOfOwnershipAfterTransaction" contextRef="AsOf2021-12-31_custom_ThreeDCapitalMember" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">9.14</ix:nonFraction>%</span>) of the issued and outstanding shares of the Company.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span id="xdx_C0B_gL3DOTBRPE-QZWOK_zDRYk4J9e5Rg"><ix:continuation continuedAt="ConU001519-02" id="ConU001519-01"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></ix:continuation></span></p>

<div id="xdx_C0D_gL3DOTBRPE-QZWOK_zmzUm6kmDNs2"><ix:continuation continuedAt="ConU001519-03" id="ConU001519-02"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span>Between
March 2 and March 3, 2022, PNRC issued promissory notes to its officers and directors as well as its shareholders as below:</span></span></p>

<div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" id="xdx_307_134_zLWzi8FkwLC6" summary="xdx: Disclosure - SCHEDULE OF AMOUNTS DUE TO RELATED PARTIES, INCLUDED IN TRADE PAYABLES AND ACCRUED LIABILITIES (Details)" style="font: 10pt Times New Roman, Times, Serif; margin-left: auto; border-collapse: collapse; width: 90%; margin-right: auto">
  <tr style="display: none; vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td id="xdx_49C_20220303_zZQccC1FViT7" style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr id="xdx_402_eifrs-full--TradeAndOtherCurrentPayablesToRelatedParties_iI_hifrs-full--CategoriesOfRelatedPartiesAxis__custom--DirectorsAndOfficersCompanyMember_zAXozReyTs41" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 78%; text-align: justify">Directors and Officers of the Company</td><td style="width: 2%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 18%; text-align: right"><ix:nonFraction name="ifrs-full:TradeAndOtherCurrentPayablesToRelatedParties" contextRef="AsOf2022-03-03_custom_DirectorsAndOfficersCompanyMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">35,000</ix:nonFraction></td><td style="width: 1%; text-align: left">&#160;</td></tr>
  <tr id="xdx_400_eifrs-full--TradeAndOtherCurrentPayablesToRelatedParties_iI_hifrs-full--CategoriesOfRelatedPartiesAxis__custom--ThreeDCapitalMember_zH8bBH3cPnz8" style="vertical-align: bottom; background-color: White">
    <td style="text-align: justify">ThreeD Capital</td><td>&#160;</td>
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  <tr id="xdx_40C_eifrs-full--TradeAndOtherCurrentPayablesToRelatedParties_iI_hifrs-full--CategoriesOfRelatedPartiesAxis__custom--NorthAmericanNickelIncMember_zoax7mBmm2Xc" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify">NAN</td><td>&#160;</td>
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  <tr id="xdx_400_eifrs-full--TradeAndOtherCurrentPayablesToRelatedParties_iI_zLSa9GHLQ705" style="vertical-align: bottom; background-color: White">
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  </table>


</div></ix:continuation></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span><span id="xdx_C03_gL3DOTBRPE-QZWOK_z7WlWHZzvGKh"><ix:continuation id="ConU001519-03">&#160;</ix:continuation></span></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p>

<ix:exclude><!-- Field: Page; Sequence: 94; Value: 2 -->
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    <!-- Field: /Page --></ix:exclude>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><img src="fin_001.jpg" alt="" style="height: 72px; width: 514px" /></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt"></p>

<p style="font: 13pt/12.95pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; letter-spacing: -0.3pt"><b><i>Formerly
&#8220;North American Nickel Inc.</i></b></span></p>

<p style="font: 9pt/10.9pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 1.7pt 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Notes
to the Consolidated Financial statements<br />
</b>For the years ended December 31, 2022 and 2021</span></p>

<p style="font: 9pt/10.9pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 1.7pt 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(Expressed in Canadian dollars)</span></p>


<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 10.75pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
April 30, 2022, all amounts owing in respect of the above promissory notes were repaid in full by payment of cash in an amount of $<span id="xdx_906_eifrs-full--RepaymentsOfBondsNotesAndDebentures_c20220430__20220430_zdESX2rbiO81" title="Payment of promissory notes"><ix:nonFraction name="ifrs-full:RepaymentsOfBondsNotesAndDebentures" contextRef="From2022-04-302022-04-30" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">2,018,568</ix:nonFraction></span>,
including interest and fees, and by issuing <span id="xdx_902_ecustom--ShareIssuedPriorToRtoInConnectionWithPromissoryNotes_iI_c20220430_zHVePU03Pkt5" title="Share issued prior to RTO in connection with Promissory Notes"><ix:nonFraction name="PNRLF:ShareIssuedPriorToRtoInConnectionWithPromissoryNotes" contextRef="AsOf2022-04-30" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">310,000</ix:nonFraction></span> PNRC Shares (<span id="xdx_90C_ecustom--SaleOfStockSharesOwnedAfterTransaction_iI_c20220430_zu12mVNtd1b7" title="Number of common shares beneficially owned"><ix:nonFraction name="PNRLF:SaleOfStockSharesOwnedAfterTransaction" contextRef="AsOf2022-04-30" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">326,740</ix:nonFraction></span> shares of the Company on a post-RTO and post-consolidation basis).</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(b)
Key management personnel is defined as members of the Board of Directors and senior officers.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="ifrs-full:DisclosureOfAmountsIncurredByEntityForProvisionOfKeyManagementPersonnelServicesProvidedBySeparateManagementEntitiesExplanatory"><p id="xdx_898_eifrs-full--DisclosureOfAmountsIncurredByEntityForProvisionOfKeyManagementPersonnelServicesProvidedBySeparateManagementEntitiesExplanatory_zKrDScGvAME8" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Key management compensation was related
to the following:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span id="xdx_8BD_z36xumfuLTTg" style="display: none">SCHEDULE OF KEY MANAGEMENT COMPENSATION</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></span></span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 90%; margin-left: 0pt">
  <tr style="vertical-align: bottom">
    <td>&#160;</td><td style="font-weight: bold">&#160;</td>
    <td colspan="2" id="xdx_49F_20220101__20221231_zbKdna2ngBOk" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">December 31, 2022</td><td style="font-weight: bold">&#160;</td><td style="font-weight: bold">&#160;</td>
    <td colspan="2" id="xdx_49F_20210101__20211231_zMU04ErrXWOl" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">December 31, 2021</td><td style="font-weight: bold">&#160;</td></tr>
  <tr id="xdx_402_ecustom--KeyManagementPersonnelCompensationManagementFees_maKMPCzhT1_zD6tLs1clzcd" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 60%; text-align: left">Management fees</td><td style="width: 2%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 16%; text-align: right"><ix:nonFraction name="PNRLF:KeyManagementPersonnelCompensationManagementFees" contextRef="From2022-01-01to2022-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">2,418,984</ix:nonFraction></td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 2%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 16%; text-align: right"><ix:nonFraction name="PNRLF:KeyManagementPersonnelCompensationManagementFees" contextRef="From2021-01-012021-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">675,001</ix:nonFraction></td><td style="width: 1%; text-align: left">&#160;</td></tr>
  <tr id="xdx_400_eifrs-full--KeyManagementPersonnelCompensationPostemploymentBenefits_maKMPCzhT1_zULgJm717Oi4" style="vertical-align: bottom; background-color: White">
    <td style="text-align: left">Due diligence BCL</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl1567">-</span></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction name="ifrs-full:KeyManagementPersonnelCompensationPostemploymentBenefits" contextRef="From2021-01-012021-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">131,600</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr id="xdx_408_eifrs-full--KeyManagementPersonnelCompensationOtherLongtermBenefits_maKMPCzhT1_zERN36jsXf5b" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Corporate and administration expenses</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction name="ifrs-full:KeyManagementPersonnelCompensationOtherLongtermBenefits" contextRef="From2022-01-01to2022-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">102,884</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction name="ifrs-full:KeyManagementPersonnelCompensationOtherLongtermBenefits" contextRef="From2021-01-012021-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">108,193</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr id="xdx_40A_eifrs-full--KeyManagementPersonnelCompensationSharebasedPayment_maKMPCzhT1_zApnMD5xZnXa" style="vertical-align: bottom; background-color: White">
    <td>Share base payment</td><td>&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction name="ifrs-full:KeyManagementPersonnelCompensationSharebasedPayment" contextRef="From2022-01-01to2022-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">4,623,089</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction name="ifrs-full:KeyManagementPersonnelCompensationSharebasedPayment" contextRef="From2021-01-012021-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">1,019,932</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr id="xdx_404_eifrs-full--KeyManagementPersonnelCompensation_iT_mtKMPCzhT1_zNCJEaIYCKwk" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td><span style="display: none; font-family: Times New Roman, Times, Serif; font-size: 10pt">Total</span></td><td style="font-weight: bold">&#160;</td>
    <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">&#160;</td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right"><ix:nonFraction name="ifrs-full:KeyManagementPersonnelCompensation" contextRef="From2022-01-01to2022-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">7,144,957</ix:nonFraction></td><td style="font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold">&#160;</td>
    <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">&#160;</td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right"><ix:nonFraction name="ifrs-full:KeyManagementPersonnelCompensation" contextRef="From2021-01-012021-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">1,934,726</ix:nonFraction></td><td style="font-weight: bold; text-align: left">&#160;</td></tr>
  </table>

</ix:nonNumeric><p id="xdx_8AD_z52b9kBnOEo3" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

</ix:nonNumeric><ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="ifrs-full:DisclosureOfFinancialInstrumentsExplanatory"><p id="xdx_805_eifrs-full--DisclosureOfFinancialInstrumentsExplanatory_zH6G3dJl8HU2" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>13. <span id="xdx_82D_zeIs3jnFlPy">FINANCIAL
INSTRUMENTS</span></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company thoroughly examines the various financial instrument risks to which it is exposed and assesses the impact and likelihood of those
risks. These risks may include interest rate risk, credit risk, liquidity risk, market risk and currency risk. The carrying value of
cash and trade payables and accrued liabilities approximate their fair value due to their short-term nature. The fair value of the Promissory
Note, vehicle financing and lease liability are equal to their carrying values as all these amounts carry a fix interest rate. The fair
value of the DSUs is the closing price of the Company&#8217;s common share at the end of each reporting period. Fair value measurements
of financial instruments are required to be classified using a fair value hierarchy that reflects the significance of inputs in making
the measurements. The levels of the fair value hierarchy are defined as follows:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Level
1 &#8211; Quoted prices (unadjusted) in active markets for identical assets or liabilities.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Level
2 &#8211; Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or
indirectly.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Level
3 &#8211; Inputs for the asset or liability that are not based on observable market data.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.15in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
December 31, 2022, the fair value of the Company&#8217;s warrant liabilities are based on Level 3 measurements and the fair value of
cash and DSUs is based on Level 1 measurements.</span></p>
<!-- Field: Split-Segment; Name: 003 -->
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">&#160;</p>

</ix:nonNumeric><ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="ifrs-full:DisclosureOfFinancialRiskManagementExplanatory"><p id="xdx_80A_eifrs-full--DisclosureOfFinancialRiskManagementExplanatory_zsCFthMhTMRe" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>14. <span id="xdx_829_zUI1veI1MX2c">RISK
MANAGEMENT</span></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company&#8217;s exposure to market risk includes, but is not limited to, the following risks:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Interest Rate Risk</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Interest
rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates.
The Company is not subject to significant changes in interest rates.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Foreign
Currency Exchange Rate Risk</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Currency
risk is risk that the fair value of future cash flows will fluctuate because of changes in foreign currency exchange rates. In addition,
the value of cash and other financial assets and liabilities denominated in foreign currencies can fluctuate with changes in currency
exchange rates.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>

<ix:exclude><!-- Field: Page; Sequence: 95; Value: 2 -->
    <div style="border-bottom: Black 1.5pt solid; margin-bottom: 6pt"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font-size: 10pt"><tr style="vertical-align: top; text-align: left"><td style="text-align: right; width: 100%"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->34<!-- Field: /Sequence --> | PNRL / Year ended 2022 and 2021</td></tr></table></div>
    <div style="break-before: page; margin-top: 6pt"><p style="margin: 0pt">&#160;</p></div>
    <!-- Field: /Page --></ix:exclude>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><img src="fin_001.jpg" alt="" style="height: 72px; width: 514px" /></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt"></p>

<p style="font: 13pt/12.95pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; letter-spacing: -0.3pt"><b><i>Formerly
&#8220;North American Nickel Inc.</i></b></span></p>

<p style="font: 9pt/10.9pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 1.7pt 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Notes
to the Consolidated Financial statements<br />
</b>For the years ended December 31, 2022 and 2021</span></p>

<p style="font: 9pt/10.9pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 1.7pt 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(Expressed in Canadian dollars)</span></p>


<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 10.75pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company operates in Canada, Barbados and Botswana and undertakes transactions denominated in foreign currencies such as US dollar and
Botswana Pula, and consequently is exposed to exchange rate risks. Exchange risks are managed by matching levels of foreign currency
balances and related obligations and by maintaining operating cash accounts in non-Canadian dollar currencies.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="PNRLF:DisclosureOfDetailedInformationOfForeignCurrencyFinancialAssetsAndLiabilitiesExplanatory"><p id="xdx_897_ecustom--DisclosureOfDetailedInformationOfForeignCurrencyFinancialAssetsAndLiabilitiesExplanatory_zwgogXt08y5g" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Foreign
currency denominated financial assets and liabilities which expose the Company to currency risk are disclosed below. The amount shown
are those reported and translated into CAD at the closing rate.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;<span id="xdx_8B0_zSX1DL9t59ek" style="display: none">SCHEDULE
OF FOREIGN CURRENCY FINANCIAL ASSETS AND LIABILITIES</span></span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: bottom">
    <td style="text-align: justify">&#160;</td><td style="font-weight: bold">&#160;</td>
    <td colspan="6" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Short -term exposure</td><td style="font-weight: bold">&#160;</td><td style="font-weight: bold">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">Long-term exposure</td><td style="font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-align: justify">&#160;</td><td style="font-weight: bold">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">USD</td><td style="font-weight: bold">&#160;</td><td style="font-weight: bold">&#160;</td>
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    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">BWP</td><td style="font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: justify">December 31, 2022</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
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    <td style="width: 1%; text-align: left">&#160;</td><td id="xdx_983_eifrs-full--CurrentFinancialAssets_iI_uUSD_c20221231_zZ5kMB2Shgs8" title="Financial assets, Short term exposure" style="width: 16%; text-align: right"><ix:nonFraction name="ifrs-full:CurrentFinancialAssets" contextRef="AsOf2022-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">2,834,303</ix:nonFraction></td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 2%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td id="xdx_98E_eifrs-full--CurrentFinancialAssets_iI_uBWP_c20221231_zMkwWX1ynyKb" title="Financial assets, Short term exposure" style="width: 16%; text-align: right"><ix:nonFraction name="ifrs-full:CurrentFinancialAssets" contextRef="AsOf2022-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="BWP">473,980</ix:nonFraction></td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 2%">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify">Financial liabilities</td><td>&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td id="xdx_988_eifrs-full--CurrentFinancialLiabilities_iNI_di_uUSD_c20221231_z6me4ox4ce2" title="Financial liabilities, Short term exposure" style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction name="ifrs-full:CurrentFinancialLiabilities" contextRef="AsOf2022-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">1,246,825</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td id="xdx_987_eifrs-full--NoncurrentFinancialLiabilities_iNI_di_uBWP_c20221231_zOLXU5uv2iSj" title="Financial liabilities, Long term exposure" style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction name="ifrs-full:NoncurrentFinancialLiabilities" contextRef="AsOf2022-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="BWP">1,530,341</ix:nonFraction></td><td style="text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="font-weight: bold; text-align: justify">Total exposure</td><td style="font-weight: bold">&#160;</td>
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  </table>


<p style="margin: 0">&#160;</p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="text-align: justify">&#160;</td><td style="font-weight: bold">&#160;</td>
    <td colspan="6" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Short -term exposure</td><td style="font-weight: bold">&#160;</td><td style="font-weight: bold">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">Long-term exposure</td><td style="font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-align: justify">&#160;</td><td style="font-weight: bold">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">USD</td><td style="font-weight: bold">&#160;</td><td style="font-weight: bold">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">BWP</td><td style="font-weight: bold">&#160;</td><td style="font-weight: bold">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">BWP</td><td style="font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: justify">December 31, 2021</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="width: 40%; text-align: justify">Financial assets</td><td style="width: 2%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td id="xdx_986_eifrs-full--CurrentFinancialAssets_iI_uUSD_c20211231_zPC1mg4tBbjk" title="Financial assets, Short term exposure" style="width: 16%; text-align: right"><ix:nonFraction name="ifrs-full:CurrentFinancialAssets" contextRef="AsOf2021-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">244,154</ix:nonFraction></td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 2%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td id="xdx_982_eifrs-full--CurrentFinancialAssets_iI_uBWP_c20211231_zYvs2vALsiI5" title="Financial assets, Short term exposure" style="width: 16%; text-align: right"><ix:nonFraction name="ifrs-full:CurrentFinancialAssets" contextRef="AsOf2021-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="BWP">155,548</ix:nonFraction></td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 2%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td id="xdx_98A_eifrs-full--NoncurrentFinancialAssets_iI_uBWP_c20211231_z1jPSeUxK35l" title="Financial assets, Long term exposure" style="width: 16%; text-align: right"><ix:nonFraction name="ifrs-full:NoncurrentFinancialAssets" contextRef="AsOf2021-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="BWP">739,767</ix:nonFraction></td><td style="width: 1%; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify">Financial liabilities</td><td>&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td id="xdx_980_eifrs-full--CurrentFinancialLiabilities_iNI_di_uUSD_c20211231_zl5sJ2ziUv1b" title="Financial liabilities, Short term exposure" style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction name="ifrs-full:CurrentFinancialLiabilities" contextRef="AsOf2021-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">34,231</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: White">
    <td style="font-weight: bold; text-align: justify">Total exposure</td><td style="font-weight: bold">&#160;</td>
    <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">&#160;</td><td id="xdx_98D_ecustom--FinancialAssetsAndLiabilitiesNetCurrent_iI_uUSD_c20211231_zlhUFRu942D" title="Total exposure, Short term exposure" style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right"><ix:nonFraction name="PNRLF:FinancialAssetsAndLiabilitiesNetCurrent" contextRef="AsOf2021-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="USD">209,924</ix:nonFraction></td><td style="font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold">&#160;</td>
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  </table>

</ix:nonNumeric><p id="xdx_8AD_zPjhduy5nfm3" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following table illustrates the sensitivity of net loss in relating to the Company&#8217;s financial assets and financial liabilities
and the USD/CAD exchange rate and BWP/CAD exchange rate all other things being equal. It assumes +/- 5% change of the USD/CAD and BWP/CAD
exchange rates for the year ended December 31, 2022 and 2021 respectively.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="PNRLF:DisclosureOfDetailedInformationOfChangesInExchangeRatesExplanatory"><p id="xdx_89F_ecustom--DisclosureOfDetailedInformationOfChangesInExchangeRatesExplanatory_zS2BgRAUO1p9" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
the CAD strengthened against the USD and BWP by 5% respectively, (2021 &#8211; 5 %), it would have had the following impact:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span id="xdx_8BD_zibBqQChrohj" style="display: none">SCHEDULE
OF CHANGES IN EXCHANGE RATES</span></span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: White">
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">&#160;</p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
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  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: White">
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</ix:nonNumeric><p id="xdx_8A8_z4lPDL1CWHtg" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
higher foreign currency exchange rate sensitivity in profit in 2022 compared with 2021 is attributable to an increase in activities of
foreign operations in Botswana and Barbados.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>

<ix:exclude><!-- Field: Page; Sequence: 96; Value: 2 -->
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><img src="fin_001.jpg" alt="" style="height: 72px; width: 514px" /></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt"></p>

<p style="font: 13pt/12.95pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; letter-spacing: -0.3pt"><b><i>Formerly
&#8220;North American Nickel Inc.</i></b></span></p>

<p style="font: 9pt/10.9pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 1.7pt 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Notes
to the Consolidated Financial statements<br />
</b>For the years ended December 31, 2022 and 2021</span></p>

<p style="font: 9pt/10.9pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 1.7pt 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(Expressed in Canadian dollars)</span></p>

<p style="font: 9pt/10.9pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 1.7pt 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Credit
Risk</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Credit
risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an
obligation. The credit risk is primarily associated with liquid financial assets. The Company limits exposure to credit risk on liquid
financial assets by holding cash at highly-rated financial institutions.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Liquidity
Risk</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Liquidity
risk is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities that are settled
by delivering cash or another financial asset. The Company manages the liquidity risk inherent in these financial obligations by regularly
monitoring actual cash flows to annual budget which forecast cash and expected cash availability to meet future obligations</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company will defer discretionary expenditures, as required, in order to manage and conserve cash required for current liabilities.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 14.45pt 0pt 10.75pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;<span id="xdx_8BF_zg0KFJk75nf3" style="display: none">SCHEDULE OF CONTRACTUAL OBLIGATIONS</span></span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
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<tr id="xdx_404_eifrs-full--PayablesForPurchaseOfNoncurrentAssets_iI_zDRKgGerhtTi" style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr id="xdx_40F_eifrs-full--LeaseLiabilities_iI_z3z4DohhTMCa" style="vertical-align: bottom; background-color: White">
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction name="ifrs-full:LeaseLiabilities" contextRef="AsOf2022-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">2,731,394</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr id="xdx_40D_eifrs-full--TradeAndOtherPayablesToRelatedParties_iI_zsGQIjDsdCka" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td><span style="display: none; font-family: Times New Roman, Times, Serif">Total</span></td><td style="font-weight: bold">&#160;</td>
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    <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">&#160;</td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right"><ix:nonFraction name="ifrs-full:TradeAndOtherPayablesToRelatedParties" contextRef="AsOf2022-12-31_ifrs-full_LaterThanOneYearAndNotLaterThanTwoYearsMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">1,415,988</ix:nonFraction></td><td style="font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold">&#160;</td>
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</ix:nonNumeric><p id="xdx_8AB_zJvk9kC4Y2wc" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Capital
Risk Management</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company manages its capital to ensure that it will be able to continue as a going concern, so that adequate funds are available or are
scheduled to be raised to meet its ongoing administrative and operating costs and obligations. This is achieved by the Board of Directors&#8217;
review and ultimate approval of budgets that are achievable within existing resources, and the timely matching and release of the next
stage of expenditures with the resources made available from capital raisings and debt funding from related or other parties. In doing
so, the Company may issue new shares, restructure or issue new debt.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company is not subject to any externally imposed capital requirements imposed by a regulator or a lending institution.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="ifrs-full:DisclosureOfFinancialInstrumentsHeldForTradingExplanatory"><p id="xdx_894_eifrs-full--DisclosureOfFinancialInstrumentsHeldForTradingExplanatory_z0CuLZGZS2sd" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
the management of capital, the Company includes the components of equity (deficiency), loans and borrowings, and other current liabilities,
net of cash.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span id="xdx_8BC_ziROf8UmvBtb" style="display: none">SCHEDULE
OF COMPONENTS OF EQUITY DEFICIENCY, LOANS AND BORROWING, OTHER CURRENT LIABILITIES, NET OF CASH</span></span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td>&#160;</td><td style="font-weight: bold">&#160;</td>
    <td colspan="2" id="xdx_493_20221231_zAwYMn8ZRBOf" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">December 31, 2022</td><td style="font-weight: bold">&#160;</td><td style="font-weight: bold">&#160;</td>
    <td colspan="2" id="xdx_499_20211231_zNB86s8sExh9" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">December 31, 2021</td><td style="font-weight: bold">&#160;</td></tr>
  <tr id="xdx_407_eifrs-full--Equity_iI_maTLAEz2y0_zdpxucxvgfJ8" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 60%; text-align: left">Shareholder&#8217;s equity (deficiency)</td><td style="width: 2%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 16%; text-align: right"><ix:nonFraction name="ifrs-full:Equity" contextRef="AsOf2022-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">27,188,344</ix:nonFraction></td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 2%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 16%; text-align: right">(<ix:nonFraction name="ifrs-full:Equity" contextRef="AsOf2021-12-31" format="ixt:numdotdecimal" decimals="0" sign="-" unitRef="CAD">4,316,964</ix:nonFraction></td><td style="width: 1%; text-align: left">)</td></tr>
  <tr id="xdx_409_eifrs-full--CurrentLiabilities_iI_maTLAEz2y0_zlKTAbBWFnEb" style="vertical-align: bottom; background-color: White">
    <td style="text-align: left">Current liabilities</td><td>&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction name="ifrs-full:CurrentLiabilities" contextRef="AsOf2022-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">12,462,372</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction name="ifrs-full:CurrentLiabilities" contextRef="AsOf2021-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">580,486</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr id="xdx_40D_ecustom--TotalLiabilitiesAndEquity_iTI_mtTLAEz2y0_maMCz53I_zFoJTCcUWzQj" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td><span style="display: none; font-family: Times New Roman, Times, Serif">Total liabilities and equity</span></td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction name="PNRLF:TotalLiabilitiesAndEquity" contextRef="AsOf2022-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">39,650,716</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction name="PNRLF:TotalLiabilitiesAndEquity" contextRef="AsOf2021-12-31" format="ixt:numdotdecimal" decimals="0" sign="-" unitRef="CAD">3,736,478</ix:nonFraction></td><td style="text-align: left">)</td></tr>
  <tr id="xdx_408_eifrs-full--CashAndCashEquivalents_iNI_di_msMCz53I_zLk55WpIaY06" style="vertical-align: bottom; background-color: White">
    <td>Cash</td><td>&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction name="ifrs-full:CashAndCashEquivalents" contextRef="AsOf2022-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">5,162,991</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction name="ifrs-full:CashAndCashEquivalents" contextRef="AsOf2021-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">1,990,203</ix:nonFraction></td><td style="text-align: left">)</td></tr>
  <tr id="xdx_40C_ecustom--ManagementCapital_iTI_mtMCz53I_zzXNZ71FWTXb" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td><span style="display: none; font-family: Times New Roman, Times, Serif">Total</span></td><td style="font-weight: bold">&#160;</td>
    <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">&#160;</td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right"><ix:nonFraction name="PNRLF:ManagementCapital" contextRef="AsOf2022-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">34,487,725</ix:nonFraction></td><td style="font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold">&#160;</td>
    <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">&#160;</td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">(<ix:nonFraction name="PNRLF:ManagementCapital" contextRef="AsOf2021-12-31" format="ixt:numdotdecimal" decimals="0" sign="-" unitRef="CAD">5,726,681</ix:nonFraction></td><td style="font-weight: bold; text-align: left">)</td></tr>
  </table>

</ix:nonNumeric><p id="xdx_8AA_zxpWO5SgkXOh" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>

<ix:exclude><!-- Field: Page; Sequence: 97; Value: 2 -->
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    <div style="break-before: page; margin-top: 6pt"><p style="margin: 0pt">&#160;</p></div>
    <!-- Field: /Page --></ix:exclude>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><img src="fin_001.jpg" alt="" style="height: 72px; width: 514px" /></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt"></p>

<p style="font: 13pt/12.95pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; letter-spacing: -0.3pt"><b><i>Formerly
&#8220;North American Nickel Inc.</i></b></span></p>

<p style="font: 9pt/10.9pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 1.7pt 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Notes
to the Consolidated Financial statements<br />
</b>For the years ended December 31, 2022 and 2021</span></p>

<p style="font: 9pt/10.9pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 1.7pt 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(Expressed in Canadian dollars)</span></p>


<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

</ix:nonNumeric><ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="ifrs-full:DisclosureOfEntitysReportableSegmentsExplanatory"><p id="xdx_809_eifrs-full--DisclosureOfEntitysReportableSegmentsExplanatory_zvMfAOHN7lqh" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>15.
<span id="xdx_82C_zhrctI1r3MG3">SEGMENTED INFORMATION</span></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company operates in one reportable operating segment being that of the acquisition, exploration and development of mineral properties
in three geographic segments being Botswana, Greenland and Canada (note 6). The Company&#8217;s geographic segments are as follows:</span></p>

<ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="ifrs-full:DisclosureOfGeographicalAreasExplanatory"><p id="xdx_89E_eifrs-full--DisclosureOfGeographicalAreasExplanatory_zxklyghIX22c" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span id="xdx_8B0_zrh045JRPPlh" style="display: none">SCHEDULE OF GEOGRAPHIC SEGMENTS</span></span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td>&#160;</td><td style="font-weight: bold">&#160;</td>
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    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">December 31, 2021</td><td style="font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Current assets</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
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    <td style="width: 1%; text-align: left">&#160;</td><td id="xdx_98D_eifrs-full--CurrentAssets_iI_c20221231__ifrs-full--GeographicalAreasAxis__custom--CanadaCountryMember_zDLDLtuEiIYi" title="Current assets" style="width: 16%; text-align: right"><ix:nonFraction name="ifrs-full:CurrentAssets" contextRef="AsOf2022-12-31_custom_CanadaCountryMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">3,198,343</ix:nonFraction></td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 2%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td id="xdx_983_eifrs-full--CurrentAssets_iI_c20211231__ifrs-full--GeographicalAreasAxis__custom--CanadaCountryMember_zjR0922wYAV3" title="Current assets" style="width: 16%; text-align: right"><ix:nonFraction name="ifrs-full:CurrentAssets" contextRef="AsOf2021-12-31_custom_CanadaCountryMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">1,779,117</ix:nonFraction></td><td style="width: 1%; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 10pt">Barbados</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td id="xdx_984_eifrs-full--CurrentAssets_iI_c20221231__ifrs-full--GeographicalAreasAxis__custom--BarbadosCountryMember_zn5h8gXMAZpc" title="Current assets" style="text-align: right"><ix:nonFraction name="ifrs-full:CurrentAssets" contextRef="AsOf2022-12-31_custom_BarbadosCountryMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">493,552</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td id="xdx_985_eifrs-full--CurrentAssets_iI_c20211231__ifrs-full--GeographicalAreasAxis__custom--BarbadosCountryMember_z52yIPEpJ2ba" title="Current assets" style="text-align: right"><ix:nonFraction name="ifrs-full:CurrentAssets" contextRef="AsOf2021-12-31_custom_BarbadosCountryMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">63,677</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="padding-left: 10pt">Botswana</td><td>&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td id="xdx_989_eifrs-full--CurrentAssets_iI_c20221231__ifrs-full--GeographicalAreasAxis__custom--BotswanaCountryMember_zAdsKpmM0uJi" title="Current assets" style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction name="ifrs-full:CurrentAssets" contextRef="AsOf2022-12-31_custom_BotswanaCountryMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">2,746,450</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td id="xdx_98E_eifrs-full--CurrentAssets_iI_c20211231__ifrs-full--GeographicalAreasAxis__custom--BotswanaCountryMember_zKo8CpnTKPb4" title="Current assets" style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction name="ifrs-full:CurrentAssets" contextRef="AsOf2021-12-31_custom_BotswanaCountryMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">295,703</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold">Total</td><td style="font-weight: bold">&#160;</td>
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<p style="margin: 0">&#160;</p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
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31, 2022</b></span></td><td>&#160;</td><td>&#160;</td>
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31, 2021</b></span></td><td>&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: left">Property, plant and equipment </td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
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    <td style="width: 1%; text-align: left">&#160;</td><td id="xdx_98D_eifrs-full--PropertyPlantAndEquipment_iI_c20221231__ifrs-full--GeographicalAreasAxis__custom--CanadaCountryMember_zVbKVY6SOJMb" title="Equipment" style="width: 16%; text-align: right"><ix:nonFraction name="ifrs-full:PropertyPlantAndEquipment" contextRef="AsOf2022-12-31_custom_CanadaCountryMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">10,714</ix:nonFraction></td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 2%; font-weight: bold">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 10pt">Botswana</td><td>&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td id="xdx_981_eifrs-full--PropertyPlantAndEquipment_iI_c20221231__ifrs-full--GeographicalAreasAxis__custom--BotswanaCountryMember_zb1IunZ6ZCH4" title="Equipment" style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction name="ifrs-full:PropertyPlantAndEquipment" contextRef="AsOf2022-12-31_custom_BotswanaCountryMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">3,383,956</ix:nonFraction></td><td style="text-align: left">&#160;</td><td style="font-weight: bold">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&#160;</td><td id="xdx_98A_eifrs-full--PropertyPlantAndEquipment_iI_c20211231__ifrs-full--GeographicalAreasAxis__custom--BotswanaCountryMember_zIJnl5OHHiQk" title="Equipment" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl1725">-</span></td><td style="font-weight: bold; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
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  </table>


<p style="margin: 0">&#160;</p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
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    <td style="border-bottom: Black 2.5pt double; width: 1%; text-align: left">&#160;</td><td id="xdx_98D_eifrs-full--TangibleExplorationAndEvaluationAssets_iI_c20221231__ifrs-full--GeographicalAreasAxis__custom--BotswanaCountryMember_zSkCwLaU1rLg" title="Exploration and evaluation assets" style="border-bottom: Black 2.5pt double; width: 16%; text-align: right"><ix:nonFraction name="ifrs-full:TangibleExplorationAndEvaluationAssets" contextRef="AsOf2022-12-31_custom_BotswanaCountryMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">31,823,982</ix:nonFraction></td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 2%">&#160;</td>
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</ix:nonNumeric><p id="xdx_8A5_zDqKSd1Sqw8h" style="margin-top: 0; margin-bottom: 0">&#160;</p>
<!-- Field: Split-Segment; Name: 004 -->
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">&#160;</p>

</ix:nonNumeric><ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="ifrs-full:DisclosureOfIncomeTaxExplanatory"><p id="xdx_805_eifrs-full--DisclosureOfIncomeTaxExplanatory_zD7YVWHOKs5d" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>16.
<span id="xdx_825_zzsAtWMdiUyd">INCOME TAXES</span></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
reported recovery of income taxes differs from amounts computed by applying the statutory income tax rates to the reported loss before
income taxes as follows:</span></p>

<ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="PNRLF:DisclosureOfEffectiveIncomeTaxRateReconciliationsExplanatory"><p id="xdx_894_ecustom--DisclosureOfEffectiveIncomeTaxRateReconciliationsExplanatory_zb6x80jXsoE2" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span id="xdx_8BE_z0HQpwicYbHl" style="display: none">&#160;SCHEDULE OF RECONCILIATION OF EXPECTED INCOME TAX RECOVERY TO ACTUAL INCOME TAX RECOVERY</span></span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
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  <tr id="xdx_40E_eifrs-full--AccountingProfit_zah5HwlBYanb" style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: White">
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span id="xdx_907_eifrs-full--ApplicableTaxRate_pid_dp_c20220101__20221231_zmPQoYwBfXuh" title="Statutory tax rate"><ix:nonFraction name="ifrs-full:ApplicableTaxRate" contextRef="From2022-01-01to2022-12-31" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">26.50</ix:nonFraction></span></td><td style="text-align: left">%</td><td>&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span id="xdx_909_eifrs-full--ApplicableTaxRate_pid_dp_c20210101__20211231_zYCzbOOmR8Aa" title="Statutory tax rate"><ix:nonFraction name="ifrs-full:ApplicableTaxRate" contextRef="From2021-01-012021-12-31" format="ixt:numdotdecimal" decimals="INF" scale="-2" unitRef="Pure">26.50</ix:nonFraction></span></td><td style="text-align: left">%</td></tr>
  <tr id="xdx_40B_eifrs-full--TaxExpenseIncomeAtApplicableTaxRate_zSSc5RhjTkFg" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Expected income tax recovery at the statutory tax rate</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction name="ifrs-full:TaxExpenseIncomeAtApplicableTaxRate" contextRef="From2022-01-01to2022-12-31" format="ixt:numdotdecimal" decimals="0" sign="-" unitRef="CAD">9,648,774</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
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  <tr id="xdx_404_ecustom--TaxEffectOfPermanentDifferencesAndOther_z3U9SVDUqO4g" style="vertical-align: bottom; background-color: White">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction name="PNRLF:TaxEffectOfPermanentDifferencesAndOther" contextRef="From2021-01-012021-12-31" format="ixt:numdotdecimal" decimals="0" sign="-" unitRef="CAD">6</ix:nonFraction></td><td style="text-align: left">)</td></tr>
  <tr id="xdx_40D_ecustom--TaxEffectRatesStockBasedPayment_zWKAslWh7fCg" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 10pt; text-align: left">Stock based payment</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction name="PNRLF:TaxEffectRatesStockBasedPayment" contextRef="From2022-01-01to2022-12-31" format="ixt:numdotdecimal" decimals="0" sign="-" unitRef="CAD">2,378,349</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction name="PNRLF:TaxEffectRatesStockBasedPayment" contextRef="From2021-01-012021-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">334,401</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr id="xdx_409_ecustom--TaxRateEffectFairValueAdjustmentOnWarrants_zLwuue9prSCg" style="vertical-align: bottom; background-color: White">
    <td style="padding-left: 10pt; text-align: left">Fair value adjustment on warrants</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction name="PNRLF:TaxRateEffectFairValueAdjustmentOnWarrants" contextRef="From2022-01-01to2022-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">2,127,716</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr id="xdx_406_eifrs-full--TaxEffectFromChangeInTaxRate_zCbTHQaV5Iw2" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 10pt; text-align: left">Change in estimates and other</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction name="ifrs-full:TaxEffectFromChangeInTaxRate" contextRef="From2022-01-01to2022-12-31" format="ixt:numdotdecimal" decimals="0" sign="-" unitRef="CAD">520,103</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr id="xdx_408_eifrs-full--TaxEffectOfForeignTaxRates_zNPPaaXrYBa8" style="vertical-align: bottom; background-color: White">
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  <tr id="xdx_409_ecustom--TaxRateEffectAcquisitionLoss_zRt3bWKcDML" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 10pt; text-align: left">Acquisition loss on RTO</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction name="PNRLF:TaxRateEffectAcquisitionLoss" contextRef="From2022-01-01to2022-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">7,731,220</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
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    <td style="padding-left: 10pt; text-align: left">Change in deferred tax assets not recognized</td><td>&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction name="ifrs-full:OtherTaxEffectsForReconciliationBetweenAccountingProfitAndTaxExpenseIncome" contextRef="From2022-01-01to2022-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">2,320,718</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr id="xdx_400_eifrs-full--IncomeTaxExpenseContinuingOperations_zAj8x2oRIak9" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Income tax recovery</td><td>&#160;</td>
    <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl1770">-</span></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl1771">-</span></td><td style="text-align: left">&#160;</td></tr>
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</ix:nonNumeric><p id="xdx_8A0_z8fbLHyD42eh" style="margin-top: 0; margin-bottom: 0">&#160;</p>


<ix:exclude><!-- Field: Page; Sequence: 98; Value: 2 -->
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><img src="fin_001.jpg" alt="" style="height: 72px; width: 514px" /></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt"></p>

<p style="font: 13pt/12.95pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; letter-spacing: -0.3pt"><b><i>Formerly
&#8220;North American Nickel Inc.</i></b></span></p>

<p style="font: 9pt/10.9pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 1.7pt 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Notes
to the Consolidated Financial statements<br />
</b>For the years ended December 31, 2022 and 2021</span></p>

<p style="font: 9pt/10.9pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 1.7pt 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(Expressed in Canadian dollars)</span></p>


<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="ifrs-full:DisclosureOfDeferredTaxesExplanatory"><p id="xdx_89A_eifrs-full--DisclosureOfDeferredTaxesExplanatory_zuIeD0pPENu9" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
at December 31, 2022, the Company has the following deferred tax assets (liabilities):</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 10.75pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;<span id="xdx_8BA_z7sfzTOxNPyg" style="display: none">SCHEDULE OF SIGNIFICANT COMPONENTS OF DEFERRED INCOME TAX ASSETS AND LIABILITIES</span></span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 96%; margin-left: 0.25in">
  <tr style="vertical-align: bottom">
    <td>&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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    <td style="text-align: left; padding-bottom: 2.5pt">Net deferred tax asset (liability)</td><td style="padding-bottom: 2.5pt">&#160;</td>
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</ix:nonNumeric><p id="xdx_8A4_zSVYQTxmKPv6" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 10.75pt">&#160;</p>

<ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="PNRLF:DisclosureOfDeferredTaxesAndLiabilitiesRecognizedExplanatory"><p id="xdx_895_ecustom--DisclosureOfDeferredTaxesAndLiabilitiesRecognizedExplanatory_zPckgdqebSJj" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Deferred
tax assets in excess of deferred tax liabilities have not been recognized in respect of the following attributes because it is not probable
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 10.75pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;<span id="xdx_8B9_zAED3goIwphl" style="display: none">SCHEDULE
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<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 96%; margin-left: 0.25in">
  <tr style="vertical-align: bottom">
    <td>&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr id="xdx_402_ecustom--DeferredTaxAssetsTotalUnrecognizedDeductibleTemporaryDifferences_iI_hifrs-full--TemporaryDifferenceUnusedTaxLossesAndUnusedTaxCreditsAxis__ifrs-full--ExplorationAndEvaluationAssetsMember_zyOc74LG32L4" style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr id="xdx_40D_ecustom--DeferredTaxAssetsTotalUnrecognizedDeductibleTemporaryDifferences_iI_hifrs-full--TemporaryDifferenceUnusedTaxLossesAndUnusedTaxCreditsAxis__ifrs-full--UnusedTaxLossesMember_zNPI3KIgS47e" style="vertical-align: bottom; background-color: White">
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  <tr id="xdx_40F_ecustom--DeferredTaxAssetsTotalUnrecognizedDeductibleTemporaryDifferences_iI_hifrs-full--TemporaryDifferenceUnusedTaxLossesAndUnusedTaxCreditsAxis__custom--ShareIssuanceCostsMember_zCVsVX7T3h3d" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 10pt">Share issuance costs</td><td>&#160;</td>
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  <tr id="xdx_403_ecustom--DeferredTaxAssetsTotalUnrecognizedDeductibleTemporaryDifferences_iI_hifrs-full--TemporaryDifferenceUnusedTaxLossesAndUnusedTaxCreditsAxis__custom--EquipmentsMember_zuOwphmkHy48" style="vertical-align: bottom; background-color: White">
    <td style="padding-left: 10pt; padding-bottom: 1.5pt">Equipment</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction name="PNRLF:DeferredTaxAssetsTotalUnrecognizedDeductibleTemporaryDifferences" contextRef="AsOf2022-12-31_custom_EquipmentsMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">3,397</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="-sec-ix-hidden: xdx2ixbrl1802">-</span></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr id="xdx_40C_ecustom--DeferredTaxAssetsTotalUnrecognizedDeductibleTemporaryDifferences_iI_zhVS98FdCLZg" style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 2.5pt">Total unrecognized deductible temporary differences</td><td style="padding-bottom: 2.5pt">&#160;</td>
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  </table>

</ix:nonNumeric><p id="xdx_8A8_zHQ24rmTtmhk" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 10.75pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="ifrs-full:DisclosureOfTemporaryDifferenceUnusedTaxLossesAndUnusedTaxCreditsExplanatory"><p id="xdx_892_eifrs-full--DisclosureOfTemporaryDifferenceUnusedTaxLossesAndUnusedTaxCreditsExplanatory_zNOPW7OtvEdc" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
tax losses that have not been recognized expire as follows:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 10.75pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span id="xdx_8BF_zmfrETYSPbVj" style="display: none">&#160;SCHEDULE
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<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 60%; margin-left: 0.25in">
  <tr style="vertical-align: bottom">
    <td>&#160;</td><td>&#160;</td>
    <td colspan="2" style="border-bottom: Black 2.5pt double; text-align: right">Losses</td><td>&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 76%; text-align: right">2029</td><td style="width: 2%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td id="xdx_989_eifrs-full--UnusedTaxLossesForWhichNoDeferredTaxAssetRecognised_iI_c20221231__ifrs-full--TemporaryDifferenceUnusedTaxLossesAndUnusedTaxCreditsAxis__custom--CanadianNonCapitalLossesMember__ifrs-full--MaturityAxis__custom--ExpiringInTwoThousandTwentyNineMember_zRFX2owKmVri" title="Deferred tax liability (asset)" style="width: 20%; text-align: right"><ix:nonFraction name="ifrs-full:UnusedTaxLossesForWhichNoDeferredTaxAssetRecognised" contextRef="AsOf2022-12-31_custom_CanadianNonCapitalLossesMember_custom_ExpiringInTwoThousandTwentyNineMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">1,349,090</ix:nonFraction></td><td style="width: 1%; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: right">2039</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td id="xdx_985_eifrs-full--UnusedTaxLossesForWhichNoDeferredTaxAssetRecognised_iI_c20221231__ifrs-full--TemporaryDifferenceUnusedTaxLossesAndUnusedTaxCreditsAxis__custom--CanadianNonCapitalLossesMember__ifrs-full--MaturityAxis__custom--ExpiringInTwoThousandThirtyNineMember_zhIs2ySXSqi4" title="Deferred tax liability (asset)" style="text-align: right"><ix:nonFraction name="ifrs-full:UnusedTaxLossesForWhichNoDeferredTaxAssetRecognised" contextRef="AsOf2022-12-31_custom_CanadianNonCapitalLossesMember_custom_ExpiringInTwoThousandThirtyNineMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">101,573</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: right">2040</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td id="xdx_989_eifrs-full--UnusedTaxLossesForWhichNoDeferredTaxAssetRecognised_iI_c20221231__ifrs-full--TemporaryDifferenceUnusedTaxLossesAndUnusedTaxCreditsAxis__custom--CanadianNonCapitalLossesMember__ifrs-full--MaturityAxis__custom--ExpiringInTwoThousandFortyMember_zK0KOqSTaBu8" title="Deferred tax liability (asset)" style="text-align: right"><ix:nonFraction name="ifrs-full:UnusedTaxLossesForWhichNoDeferredTaxAssetRecognised" contextRef="AsOf2022-12-31_custom_CanadianNonCapitalLossesMember_custom_ExpiringInTwoThousandFortyMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">351,131</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: right">2041</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td id="xdx_981_eifrs-full--UnusedTaxLossesForWhichNoDeferredTaxAssetRecognised_iI_c20221231__ifrs-full--TemporaryDifferenceUnusedTaxLossesAndUnusedTaxCreditsAxis__custom--CanadianNonCapitalLossesMember__ifrs-full--MaturityAxis__custom--ExpiringInTwoThousandFortyOneMember_z3KSyQBLgWe5" title="Deferred tax liability (asset)" style="text-align: right"><ix:nonFraction name="ifrs-full:UnusedTaxLossesForWhichNoDeferredTaxAssetRecognised" contextRef="AsOf2022-12-31_custom_CanadianNonCapitalLossesMember_custom_ExpiringInTwoThousandFortyOneMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">942,144</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: right">2042</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td id="xdx_98D_eifrs-full--UnusedTaxLossesForWhichNoDeferredTaxAssetRecognised_iI_c20221231__ifrs-full--TemporaryDifferenceUnusedTaxLossesAndUnusedTaxCreditsAxis__custom--CanadianNonCapitalLossesMember__ifrs-full--MaturityAxis__custom--ExpiringInTwoThousandFortyTwoMember_z7tX8ZN6F5b3" title="Deferred tax liability (asset)" style="text-align: right"><ix:nonFraction name="ifrs-full:UnusedTaxLossesForWhichNoDeferredTaxAssetRecognised" contextRef="AsOf2022-12-31_custom_CanadianNonCapitalLossesMember_custom_ExpiringInTwoThousandFortyTwoMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">5,351,811</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: right">Indefinite</td><td>&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td id="xdx_980_eifrs-full--UnusedTaxLossesForWhichNoDeferredTaxAssetRecognised_iI_c20221231__ifrs-full--TemporaryDifferenceUnusedTaxLossesAndUnusedTaxCreditsAxis__custom--CanadianNonCapitalLossesMember__ifrs-full--MaturityAxis__custom--IndefiniteMember_zJKTkmehtmEi" title="Deferred tax liability (asset)" style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction name="ifrs-full:UnusedTaxLossesForWhichNoDeferredTaxAssetRecognised" contextRef="AsOf2022-12-31_custom_CanadianNonCapitalLossesMember_custom_IndefiniteMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">1,970,501</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: right"><span style="display: none; font-family: Times New Roman, Times, Serif; font-size: 10pt">Total</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: Black 2.5pt double; text-align: left"><span style="font-size: 10pt">$</span></td><td id="xdx_98E_eifrs-full--UnusedTaxLossesForWhichNoDeferredTaxAssetRecognised_iI_c20221231_zgTDNxm6kqjd" title="Deferred tax liability (asset)" style="border-bottom: Black 2.5pt double; text-align: right"><span style="font-size: 10pt"><ix:nonFraction name="ifrs-full:UnusedTaxLossesForWhichNoDeferredTaxAssetRecognised" contextRef="AsOf2022-12-31" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">10,066,250</ix:nonFraction></span></td><td style="text-align: left"><span style="font-size: 10pt">&#160;</span></td></tr>
  </table>

</ix:nonNumeric><p id="xdx_8AE_z9QVDLJ3AxIc" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 10.75pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
company has approximately Canadian non-capital losses of $<span id="xdx_90D_eifrs-full--DeferredTaxAssets_iI_c20221231__ifrs-full--GeographicalAreasAxis__custom--CanadaCountryMember_z6qQrTC2GYX3" title="Non-capital losses"><ix:nonFraction name="ifrs-full:DeferredTaxAssets" contextRef="AsOf2022-12-31_custom_CanadaCountryMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">6,746,659</ix:nonFraction>
</span></span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">which <span id="xdx_90C_ecustom--NoncapitalLossesExpirationYearDescription_c20220101__20221231__ifrs-full--GeographicalAreasAxis__custom--CanadaCountryMember_z4jKioCR8Kd4" title="Non-capital losses expiration year description"><ix:nonNumeric contextRef="From2022-01-012022-12-31_custom_CanadaCountryMember" name="PNRLF:NoncapitalLossesExpirationYearDescription">expire between 2039 and 2042</ix:nonNumeric></span>.
The Company also has Barbados losses of $<span id="xdx_901_eifrs-full--DeferredTaxAssets_iI_c20221231__ifrs-full--GeographicalAreasAxis__custom--BarbadosCountryMember_zjuIY40CMv8j" title="Non-capital losses"><ix:nonFraction name="ifrs-full:DeferredTaxAssets" contextRef="AsOf2022-12-31_custom_BarbadosCountryMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">1,349,090</ix:nonFraction></span>
</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">which expire in <span id="xdx_90D_ecustom--NoncapitalLossesExpirationYearDescription_c20220101__20221231__ifrs-full--GeographicalAreasAxis__custom--BarbadosCountryMember_zSxwDFPZfyHg" title="Non-capital losses expiration year description"><ix:nonNumeric contextRef="From2022-01-012022-12-31_custom_BarbadosCountryMember" name="PNRLF:NoncapitalLossesExpirationYearDescription">2029</ix:nonNumeric></span></span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">.
Botswana losses of approximately $<span id="xdx_903_eifrs-full--UnusedTaxLossesForWhichNoDeferredTaxAssetRecognised_iI_c20221231__ifrs-full--GeographicalAreasAxis__custom--BotswanaCountryMember__ifrs-full--MaturityAxis__custom--IndefiniteMember_zYO0O1wEx8l4" title="Carried forward Indefinite"><ix:nonFraction name="ifrs-full:UnusedTaxLossesForWhichNoDeferredTaxAssetRecognised" contextRef="AsOf2022-12-31_custom_BotswanaCountryMember_custom_IndefiniteMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">1,970,501</ix:nonFraction>
</span></span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">may be carried forward indefinitely.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 10.75pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

</ix:nonNumeric><ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="ifrs-full:DisclosureOfContingentLiabilitiesInBusinessCombinationExplanatory"><p id="xdx_80B_eifrs-full--DisclosureOfContingentLiabilitiesInBusinessCombinationExplanatory_zWOu4B8potGa" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>17.
<span id="xdx_826_zzDq39cyqgof">CONTINGENT LIABILITIES</span></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.15in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">There
are no environmental liabilities associated with the Selebi Assets and the Selkirk Assets as at the acquisition dates as all liabilities
prior to the acquisitions are the responsibility of the sellers, BCL and TNMC, respectively. The Company has an obligation for the rehabilitation
costs arising subsequent to the acquisitions. As of December 31, 2022, management is not aware of or anticipating any contingent liabilities
that could impact the financial position or performance of the Company related to its exploration and evaluation assets.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.15in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


<ix:exclude><!-- Field: Page; Sequence: 99; Value: 2 -->
    <div style="border-bottom: Black 1.5pt solid; margin-bottom: 6pt"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font-size: 10pt"><tr style="vertical-align: top; text-align: left"><td style="text-align: right; width: 100%"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->38<!-- Field: /Sequence --> | PNRL / Year ended 2022 and 2021</td></tr></table></div>
    <div style="break-before: page; margin-top: 6pt"><p style="margin: 0pt">&#160;</p></div>
    <!-- Field: /Page --></ix:exclude>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><img src="fin_001.jpg" alt="" style="height: 72px; width: 514px" /></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0pt"></p>

<p style="font: 13pt/12.95pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 0 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; letter-spacing: -0.3pt"><b><i>Formerly
&#8220;North American Nickel Inc.</i></b></span></p>

<p style="font: 9pt/10.9pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 1.7pt 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Notes
to the Consolidated Financial statements<br />
</b>For the years ended December 31, 2022 and 2021</span></p>

<p style="font: 9pt/10.9pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 1.7pt 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(Expressed
in Canadian dollars)</span></p>

<p style="font: 9pt/10.9pt Tahoma, Helvetica, Sans-Serif; margin: 0pt 1.7pt 0pt 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company&#8217;s exploration and evaluation assets are affected by the laws and environmental regulations that exist in the various jurisdictions
in which the Company operates. It is not possible to estimate the future contingent liabilities and the impact on the Company&#8217;s
operating results due to future changes in Company&#8217;s development of its projects or future changes in such laws and environmental
regulations.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.15in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

</ix:nonNumeric><ix:nonNumeric contextRef="From2022-01-01to2022-12-31" escape="true" name="ifrs-full:DisclosureOfEventsAfterReportingPeriodExplanatory"><p id="xdx_80B_eifrs-full--DisclosureOfEventsAfterReportingPeriodExplanatory_zEaxZBv7QRk8" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>18.
<span id="xdx_824_z3Fye20PRwU3">SUBSEQUENT EVENTS</span></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.15in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
February 24, 2023, the Company announced it had closed its previously announced &#8220;best efforts&#8221; brokered private placement
offering under which <span id="xdx_900_eifrs-full--NumberOfSharesIssued_iI_c20230224__ifrs-full--NonadjustingEventsAfterReportingPeriodAxis__custom--NonadjustingEventMember__ifrs-full--ComponentsOfEquityAxis__custom--CommonSharesMember_zsx0smeqPmWj" title="Number of shares issued"><ix:nonFraction name="ifrs-full:NumberOfSharesIssued" contextRef="AsOf2023-02-24_custom_NonadjustingEventMember_custom_CommonSharesMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">4,437,184</ix:nonFraction></span> common shares of the Company (the &#8220;Common Shares&#8221;) were issued at a price of $<span id="xdx_900_eifrs-full--ParValuePerShare_iI_c20230224__ifrs-full--NonadjustingEventsAfterReportingPeriodAxis__custom--NonadjustingEventMember__ifrs-full--ComponentsOfEquityAxis__custom--CommonSharesMember_zwoOl0w02YFa" title="Value per common shares"><ix:nonFraction name="ifrs-full:ParValuePerShare" contextRef="AsOf2023-02-24_custom_NonadjustingEventMember_custom_CommonSharesMember" format="ixt:numdotdecimal" decimals="INF" unitRef="CADPShares">1.75</ix:nonFraction></span> per Common
Share for gross proceeds of $<span id="xdx_905_eifrs-full--ProceedsFromIssuingShares_c20230223__20230224__ifrs-full--NonadjustingEventsAfterReportingPeriodAxis__custom--NonadjustingEventMember__ifrs-full--ComponentsOfEquityAxis__custom--CommonSharesMember_zhaXVPvOBT0h" title="Proceeds from issuing shares"><ix:nonFraction name="ifrs-full:ProceedsFromIssuingShares" contextRef="From2023-02-232023-02-24_custom_NonadjustingEventMember_custom_CommonSharesMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">7,765,072.00</ix:nonFraction></span> (the &#8220;Offering&#8221;) through a syndicate of agents. <span id="xdx_908_ecustom--DescriptionForOfferingShares_c20230223__20230224__ifrs-full--NonadjustingEventsAfterReportingPeriodAxis__custom--NonadjustingEventMember__ifrs-full--ComponentsOfEquityAxis__custom--CommonSharesMember_z5uuCIRehey7" title="Description for offering shares"><ix:nonNumeric contextRef="From2023-02-232023-02-24_custom_NonadjustingEventMember_custom_CommonSharesMember" name="PNRLF:DescriptionForOfferingShares">In connection with the Offering,
the Company (i) paid to the agents a cash commission equal to 6% of the gross proceeds (other than on certain president&#8217;s list
purchasers on which a cash commission of 3% was paid), and (ii) issued to the agents that number of non-transferable broker warrants
of the Company (the &#8220;Broker Warrants&#8221;) as is equal to 6% of the number of Common Shares sold under the Offering (other than
on Common Shares issued to president&#8217;s list purchasers on which Broker Warrants equal to 3% were issued)</ix:nonNumeric></span>. Each Broker Warrant is
exercisable to acquire one Common Share at an exercise price of $<span id="xdx_905_ecustom--WarrantExercisePrice_iI_c20230224__ifrs-full--NonadjustingEventsAfterReportingPeriodAxis__custom--NonadjustingEventMember__ifrs-full--ComponentsOfEquityAxis__custom--BrokerWarrantsMember_zBH7GvJglMB8" title="Warrant exercise price"><ix:nonFraction name="PNRLF:WarrantExercisePrice" contextRef="AsOf2023-02-24_custom_NonadjustingEventMember_custom_BrokerWarrantsMember" format="ixt:numdotdecimal" decimals="INF" unitRef="CADPShares">1.75</ix:nonFraction></span> per Common Share until February 24, 2025. A total of of <span id="xdx_909_ecustom--NumberOfWarrantsIssued_uShares_c20230223__20230224__ifrs-full--NonadjustingEventsAfterReportingPeriodAxis__custom--NonadjustingEventMember__ifrs-full--ComponentsOfEquityAxis__custom--BrokerWarrantsMember_zqY9HhdAJ7Xh" title="Number of warrants issued"><ix:nonFraction name="PNRLF:NumberOfWarrantsIssued" contextRef="From2023-02-232023-02-24_custom_NonadjustingEventMember_custom_BrokerWarrantsMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">221,448</ix:nonFraction></span>
broker warrants were issued to the agents of the Private Placement</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.15in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
March 17, 2023, the Company announced that it has entered into an amended and restated promissory note (the &#8220;A&amp;R Promissory
Note&#8221;) extending the maturity of its previously issued $<span id="xdx_906_eifrs-full--ProceedsFromBorrowingsClassifiedAsFinancingActivities_c20230316__20230317__ifrs-full--NonadjustingEventsAfterReportingPeriodAxis__custom--NonadjustingEventMember__ifrs-full--TypesOfContractsAxis__custom--AmendedAndRestatedPromissoryNoteMember_zLS1MagRIbf" title="Proceeds from promissory note"><ix:nonFraction name="ifrs-full:ProceedsFromBorrowingsClassifiedAsFinancingActivities" contextRef="From2023-03-162023-03-17_custom_NonadjustingEventMember_custom_AmendedAndRestatedPromissoryNoteMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">7,000,000</ix:nonFraction></span> promissory note from <span id="xdx_90E_ecustom--BorrowingsExtendedMaturity_c20230316__20230317__ifrs-full--NonadjustingEventsAfterReportingPeriodAxis__custom--NonadjustingEventMember__ifrs-full--TypesOfContractsAxis__custom--AmendedAndRestatedPromissoryNoteMember_zDmlE7JS5Bsj" title="Extend maturity date description"><ix:nonNumeric contextRef="From2023-03-162023-03-17_custom_NonadjustingEventMember_custom_AmendedAndRestatedPromissoryNoteMember" name="PNRLF:BorrowingsExtendedMaturity">March 22, 2023 to November 24, 2023</ix:nonNumeric></span> (the
&#8220;Extension&#8221;). The A&amp;R Promissory Note is held by Pinnacle Island LP, an arm&#8217;s-length limited partnership formed
under the laws of the Province of Ontario (the &#8220;Lender&#8221;). All other terms of the Promissory Note remain the same. In connection
with the Extension and entry into of the A&amp;R Promissory Note, the Company paid an amendment and restatement fee of $<span id="xdx_908_ecustom--RestatementFees_c20230316__20230317__ifrs-full--NonadjustingEventsAfterReportingPeriodAxis__custom--NonadjustingEventMember__ifrs-full--TypesOfContractsAxis__custom--AmendedAndRestatedPromissoryNoteMember_zZKQ78EXgNk8" title="Promissory note restatement fee"><ix:nonFraction name="PNRLF:RestatementFees" contextRef="From2023-03-162023-03-17_custom_NonadjustingEventMember_custom_AmendedAndRestatedPromissoryNoteMember" format="ixt:numdotdecimal" decimals="0" unitRef="CAD">225,000</ix:nonFraction></span> and issued
<span id="xdx_902_ecustom--NontransferrableCommonSharePurchaseWarrants_iI_c20230317__ifrs-full--NonadjustingEventsAfterReportingPeriodAxis__custom--NonadjustingEventMember__srt--TitleOfIndividualAxis__custom--LenderMember_zG4MiBRM5Cbe" title="Non-transferrable common share purchase warrants"><ix:nonFraction name="PNRLF:NontransferrableCommonSharePurchaseWarrants" contextRef="AsOf2023-03-17_custom_NonadjustingEventMember_custom_LenderMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">350,000</ix:nonFraction></span> non-transferrable common share purchase warrants (the &#8220;Warrants&#8221;) to the Lender. Each Warrant is exercisable to acquire
one common share of the Company (the &#8220;Common Shares&#8221;) at a price of $<span id="xdx_907_ecustom--WarrantExercisePrice_iI_c20230317__ifrs-full--NonadjustingEventsAfterReportingPeriodAxis__custom--NonadjustingEventMember__ifrs-full--ComponentsOfEquityAxis__custom--BrokerWarrantsMember__ifrs-full--TypesOfContractsAxis__custom--AmendedAndRestatedPromissoryNoteMember_z49QCjxLsfCb" title="Warrant exercise price"><ix:nonFraction name="PNRLF:WarrantExercisePrice" contextRef="AsOf2023-03-17_custom_NonadjustingEventMember_custom_BrokerWarrantsMember_custom_AmendedAndRestatedPromissoryNoteMember" format="ixt:numdotdecimal" decimals="INF" unitRef="CADPShares">1.75</ix:nonFraction></span> per Common Share for a period of one year from
date of the A&amp;R Promissory Note. In connection with the Extension and issuance of the Warrants, the <span id="xdx_90A_eifrs-full--NumberOfSharesIssued_iI_c20230317__ifrs-full--NonadjustingEventsAfterReportingPeriodAxis__custom--NonadjustingEventMember__ifrs-full--ComponentsOfEquityAxis__custom--WarrantsMember__srt--TitleOfIndividualAxis__custom--LenderMember_zMufO3R6bwE7" title="Number of shares issued"><ix:nonFraction name="ifrs-full:NumberOfSharesIssued" contextRef="AsOf2023-03-17_custom_NonadjustingEventMember_custom_WarrantsMember_custom_LenderMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">119,229</ix:nonFraction></span> common share purchase
warrants previously issued to the Lender in connection with the initial issuance of the promissory note have been cancelled concurrently
with the Extension. The Warrants and any Common Shares issuable on exercise of the Warrants are subject to a statutory four-month hold
period under applicable Canadian securities laws from the date of issue.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.15in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
April 13, 2023, the Company extended to October 16, 2023 the expiry date of a total of <span id="xdx_90A_ecustom--OutstandingWarrants_iI_c20230413__ifrs-full--NonadjustingEventsAfterReportingPeriodAxis__custom--NonadjustingEventMember__ifrs-full--ComponentsOfEquityAxis__custom--WarrantsMember_zNVaNyJ6Axn6" title="Outstanding warrants"><ix:nonFraction name="PNRLF:OutstandingWarrants" contextRef="AsOf2023-04-13_custom_NonadjustingEventMember_custom_WarrantsMember" format="ixt:numdotdecimal" decimals="INF" unitRef="Shares">643,299</ix:nonFraction></span> common share purchase warrants of the
Company (collectively, the &#8220;Subject Warrants&#8221;), which were scheduled to expire on April 16, 2023. <span id="xdx_905_ecustom--DescriptionForSubjectWarrants_c20230412__20230413__ifrs-full--NonadjustingEventsAfterReportingPeriodAxis__custom--NonadjustingEventMember__ifrs-full--ComponentsOfEquityAxis__custom--WarrantsMember_ztPYuUGV2J13" title="Description for subject warrants"><ix:nonNumeric contextRef="From2023-04-122023-04-13_custom_NonadjustingEventMember_custom_WarrantsMember" name="PNRLF:DescriptionForSubjectWarrants">Each of the Subject Warrants
entitles the holder thereof to purchase one common share of the Company at a price of $<span id="xdx_903_ecustom--WarrantExercisePrice_iI_c20230413__ifrs-full--NonadjustingEventsAfterReportingPeriodAxis__custom--NonadjustingEventMember__ifrs-full--ComponentsOfEquityAxis__custom--WarrantsMember_zM6tAys7SMz6" title="Warrant exercise price"><ix:nonFraction name="PNRLF:WarrantExercisePrice" contextRef="AsOf2023-04-13_custom_NonadjustingEventMember_custom_WarrantsMember" format="ixt:numdotdecimal" decimals="INF" unitRef="CADPShares">1.75</ix:nonFraction></span> per share (on a post-consolidation basis).
Other than the extension of the Subject Warrants from April 16, 2023 to October 16, 2023, all other terms and conditions of the Subject
Warrants remain unchanged.</ix:nonNumeric></span></span></p>

</ix:nonNumeric><p id="xdx_818_zZX4Fzultrad" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<!-- Field: Page; Sequence: 100 -->
    <div style="border-bottom: Black 1.5pt solid; margin-bottom: 6pt"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font-size: 10pt"><tr style="vertical-align: top; text-align: left"><td style="text-align: right; width: 100%"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->39<!-- Field: /Sequence --> | PNRL / Year ended 2022 and 2021</td></tr></table></div>
    <div style="break-before: page; margin-top: 6pt; margin-bottom: 0pt"><p style="margin: 0pt">&#160;</p></div>
    <!-- Field: /Page -->

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><img src="form20-f_008.jpg" alt="" style="height: 126px; width: 543px" /></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase"><b>Consolidated
Financial Statements</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>For
the year ended December 31, 2021</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(In
accordance with International Financial Reporting Standards (&#8220;IFRS&#8221;) and stated in thousands of Canadian dollars, unless
otherwise indicated)</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>INDEX</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><a href="#fin2_001"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Management&#8217;s Responsibility for Financial Reporting</span></a></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 22.65pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><a href="#fin2_002"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Report of Independent Registered Public Accounting Firm</span></a></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 22.65pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Consolidated
Financial Statements</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 58.65pt; text-align: justify; text-indent: -0.25in; color: #002060"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></td><td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: #002060">&#9632;</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><a href="#fin2_003"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Consolidated Statements of Financial Position</span></a></td></tr>
<tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif">&#160;</td><td style="font: 10pt Times New Roman, Times, Serif">&#160;</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td></tr>
<tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif"></td><td style="font: 10pt Times New Roman, Times, Serif">&#9632;</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><a href="#fin2_004"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Consolidated Statements of Comprehensive Loss</span></a></td></tr>
<tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif">&#160;</td><td style="font: 10pt Times New Roman, Times, Serif">&#160;</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td></tr>
<tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif"></td><td style="font: 10pt Times New Roman, Times, Serif">&#9632;</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><a href="#fin2_005"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Consolidated Statements of Changes in Equity</span></a></td></tr>
<tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif">&#160;</td><td style="font: 10pt Times New Roman, Times, Serif">&#160;</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td></tr>
<tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif"></td><td style="font: 10pt Times New Roman, Times, Serif">&#9632;</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><a href="#fin2_006"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Consolidated Statements of Cash Flows</span></a></td></tr>
<tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif">&#160;</td><td style="font: 10pt Times New Roman, Times, Serif">&#160;</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td></tr>
<tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif"></td><td style="font: 10pt Times New Roman, Times, Serif">&#9632;</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><a href="#fin2_007"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Notes to the Consolidated Financial Statements</span></a></td></tr></table>

<p style="margin-top: 0; margin-bottom: 0">&#160;</p>


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    <div style="break-before: page; margin-top: 6pt"><p style="margin: 0pt">&#160;</p></div>
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><img src="form20-f_014.jpg" alt="" /></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span id="fin2_001"></span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase"><b>Management
responsibility for financial reporting</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
consolidated financial statements, and the notes thereto, of North American Nickel Inc., and its subsidiary have been prepared by management
in accordance with International Financial Reporting Standards (&#8220;IFRS&#8221;). Management acknowledges responsibility for the preparation
and presentation of the consolidated financial statements, including responsibility for significant accounting judgments and estimates
and the choice of accounting principles and methods that are appropriate to the Company&#8217;s circumstances.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Management,
in discharging these responsibilities, maintains a system of internal controls designed to provide reasonable assurance that its assets
are safeguarded, only valid and authorized transactions are executed and accurate, timely and comprehensive financial information is
prepared. However, any system of internal controls over financial reporting, no matter how well designed and implemented, has inherent
limitations and may not prevent or detect all misstatements.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Board of Directors, principally through the Audit Committee, is responsible for reviewing and approving the consolidated financial statements
together with other financial information of the Company and for ensuring that management fulfils its financial reporting responsibilities.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
consolidated financial statements have been audited by Dale Matheson Carr-Hilton LaBonte LLP, Chartered Professional Accountants, Licensed
Public Accountants, who were appointed by the shareholders to examine the consolidated financial statements and provide an independent
auditor&#8217;s opinion thereon. The report of the independent registered public accounting firm outlines the scope of their examination
and their opinion on the consolidated financial statements. Dale Matheson Carr-Hilton LaBonte LLP has full and free access to the Board
of Directors.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 50%"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#8220;signed&#8221;</b></span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Keith
    Morrison</b></span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>President
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    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p></td>
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    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Sarah
    Zhu</b></span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Chief
    Financial Officer</b></span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td colspan="2" style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">April
    25,</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> 2022</span></td></tr>
  </table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


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    <div style="break-before: page; margin-top: 6pt"><p style="margin: 0pt">&#160;</p></div>
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span>&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><img src="form20-f_015.jpg" alt="" /></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span id="fin2_002"></span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Report
of Independent Registered Public Accounting Firm (PCAOB ID1173)</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">To
the shareholders and the board of directors of North American Nickel Inc.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Opinion
on the Consolidated Financial Statements</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have audited the accompanying consolidated statements of financial position of North American Nickel Inc. (the &#8220;Company&#8221;)
as of December 31, 2021 and 2020, the related consolidated statements of comprehensive loss, changes in equity and cash
flows, for the years ended December 31, 2021, 2020 and 2019, and the related notes (collectively referred to as the &#8220;financial
statements&#8221;). In our opinion, the financial statements present fairly, in all material respects, the financial position of the
Company as of December 31, 2021 and 2020, and its financial performance and its cash flows for the years ended December
31, 2021, 2020 and 2019, in conformity with International Financial Reporting Standards as issued by the International Accounting
Standards Board.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Going
Concern </b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note
1 to the financial statements, the Company has not generated revenues since inception, has incurred losses in developing its business,
and further losses are anticipated. These factors raise substantial doubt about the Company&#8217;s ability to continue as a going concern.
Management&#8217;s plans in this regard are described in Note 1. The financial statements do not include any adjustments that might result
from the outcome of this uncertainty.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Basis
for Opinion</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">These
financial statements are the responsibility of the Company&#8217;s management. Our responsibility is to express an opinion on the Company&#8217;s
financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board
(United States) (&#8220;PCAOB&#8221;) and are required to be independent with respect to the Company in accordance with the U.S. federal
securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company
is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting in accordance with
the standards of the PCAOB. As part of our audits we are required to obtain an understanding of internal control over financial reporting
but not for the purpose of expressing an opinion on the effectiveness of the Company&#8217;s internal control over financial reporting.
Accordingly, we express no such opinion in accordance with the standards of the PCAOB.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error
or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding
the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant
estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits
provide a reasonable basis for our opinion.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Critical
Audit Matter</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">The
critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated
or required to be communicated to the audit committee and (that): (1) relates to accounts or disclosures that are material to the financial
statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters
does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit
matters below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


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    <div style="break-before: page; margin-top: 6pt"><p style="margin: 0pt">&#160;</p></div>
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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    <td style="font: 10pt Times New Roman, Times, Serif; width: 48%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 2%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center; width: 6%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 48%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><img src="form20-f_016.jpg" alt="" /></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>DALE
MATHESON CARR-HILTON LABONTE LLP</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>CHARTERED
PROFESSIONAL ACCOUNTANTS</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have served as the Company&#8217;s auditor since 2005<span style="letter-spacing: -0.1pt">. In 2022, we became the predecessor auditor.</span></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Vancouver,
Canada</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">April
25, 2022</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><img src="fslogo_001.jpg" alt="" /></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase"><b>&#160;</b></span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Nature
of Operations (Note 1)</span></p>

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(Note 6 and 12)</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Subsequent
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
accompanying notes are an integral part of these Consolidated Financial Statements.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Approved
by the Board of Directors on April 25, 2022</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


<!-- Field: Page; Sequence: 105; Value: 1 -->
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span><img src="form20-f_014.jpg" alt="" /></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase"><b>&#160;</b></span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><img src="form20-f_014.jpg" alt="" /></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><br /></span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase"><b>&#160;</b></span></p>

<table cellpadding="0" cellspacing="0" style="font: normal 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: center">8</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: White">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">(287</td><td style="text-align: left">)</td><td style="font-weight: bold">&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">287</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: center">8</td><td>&#160;</td>
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    <td style="text-align: center">8</td><td style="padding-bottom: 1.5pt">&#160;</td>
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">1,781</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
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    <td style="border-bottom: Black 2.5pt double; text-align: left">&#160;</td><td style="border-bottom: Black 2.5pt double; text-align: right">591</td><td style="padding-bottom: 2.5pt; text-align: left">&#160;</td><td style="font-weight: bold; padding-bottom: 2.5pt">&#160;</td>
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    <td style="border-bottom: Black 2.5pt double; text-align: left">&#160;</td><td style="border-bottom: Black 2.5pt double; text-align: right">39,431</td><td style="padding-bottom: 2.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left">Net and comprehensive loss</td><td>&#160;</td>
    <td style="text-align: center">&#160;</td><td style="font-weight: bold">&#160;</td>
    <td style="font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; text-align: right">&#160;</td><td style="font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold">&#160;</td>
    <td style="font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; text-align: right">&#160;</td><td style="font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold">&#160;</td>
    <td style="font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; text-align: right">&#160;</td><td style="font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold">&#160;</td>
    <td style="font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; text-align: right">&#160;</td><td style="font-weight: bold; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(2,741</td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(2,741</td><td style="text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: center">8</td><td>&#160;</td>
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    <td style="font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; text-align: right">-</td><td style="font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold">&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">1,480</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">(124</td><td style="text-align: left">)</td><td style="font-weight: bold">&#160;</td>
    <td style="font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; text-align: right">-</td><td style="font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold">&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(124</td><td style="text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Value allocated to warrants</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">(735</td><td style="text-align: left">)</td><td style="font-weight: bold">&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">735</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">(2,572</td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">2,572</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: center">8</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">969</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">969</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
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    <td style="padding-bottom: 1.5pt; text-align: center">8</td><td style="padding-bottom: 1.5pt">&#160;</td>
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</table>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="display: none; vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td></tr>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">98</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Supplemental
cash flow information (Note 11)</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The accompanying notes are an integral part of these Consolidated Financial Statements.</span></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><img src="form20-f_014.jpg" alt="" /></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: #333333"></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span id="fin2_007"></span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Notes
to the Consolidated Financial Statements</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
the year ended December 31, 2021</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(Expressed
in Canadian dollars)</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
accompanying notes are an integral part of these Consolidated Financial Statements.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"> <span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>1.</b></span> <span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span><span>NATURE AND CONTINUANCE OF OPERATIONS</span></span></b></span></p>



<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 57pt; text-align: justify; text-indent: -57pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">North
American Nickel Inc. (the &#8220;Company&#8221;) was incorporated on September 23, 1983, under the laws of the Province of British Columbia,
Canada. The primary mailing office is located at 3400 &#8211; 100 King Street West, PO Box 130, Toronto, Ontario, M5X 1A4 and the records
office of the Company is located at 666 Burrard Street, Suite 2500, Vancouver BC V6C 2X8. The Company&#8217;s common shares trade on
the TSX Venture Exchange (&#8220;TSXV&#8221;) under the symbol &#8220;NAN&#8221;.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 22.4pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company&#8217;s principal business activity is the exploration and development of mineral properties in Greenland and Canada, as well
as in Botswana through its participation in Premium Nickel Resources (&#8220;Premium Nickel&#8221;). The Company has not yet determined
whether any of these properties contain ore reserves that are economically recoverable. The recoverability of carrying amounts shown
for exploration and evaluation assets is dependent upon a number of factors including environmental risk, legal and political risk, the
existence of economically recoverable mineral reserves, confirmation of the Company&#8217;s interests in the underlying mineral claims,
the ability of the Company to obtain necessary financing to complete exploration and development, and to attain sufficient net cash flow
from future profitable production or disposition proceeds.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">These
consolidated financial statements have been prepared on the assumption that the Company will continue as a going concern, meaning
it will continue in operation for the foreseeable future and will be able to realize assets and discharge liabilities in the ordinary
course of operations. The ability of the Company to continue operations as a going concern is ultimately dependent upon achieving profitable
operations and its ability to raise additional capital. To date, the Company has not generated profitable operations from its resource
activities and will need to invest additional funds in carrying out its planned exploration, development and operational activities.
These uncertainties cast substantial doubt about the Company&#8217;s ability to continue as a going concern. These financial statements
do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities
that might be necessary should the Company be unable to continue as a going concern. Such adjustments could be material.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
exploration and evaluation properties in which the Company currently has an interest are in the exploration stage. As such, the Company
is dependent on external financing to fund its activities. In order to carry out the planned exploration and cover administrative costs,
the Company will use its existing working capital and raise additional amounts as needed. Although the Company has been successful in
its past fundraising activities, there is no assurance as to the success of future fundraising efforts or as to the sufficiency of funds
raised in the future. The Company will continue to assess new properties and seek to acquire interests in additional properties if there
is sufficient geologic or economic potential and if adequate financial resources are available to do so. </span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
coronavirus COVID-19 declared as a global pandemic in March 2020 continued throughout the 2020 year and to date. This contagious disease
outbreak, which continues to spread, and any related adverse public health developments, has adversely affected workforces, economies,
and financial markets globally, potentially leading to an economic downturn. The Company is closely monitoring the impact of the pandemic
on all aspects of its business and COVID-19 has delayed the Company&#8217;s ability to conduct major fieldwork on projects.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
consolidated financial statements were approved and authorized for issuance by the Board of Directors of the Company on April 25,
2022. The related notes to the consolidated financial statements are presented in Canadian dollars except amounts in the tables are
expressed in thousands of Canadian dollars.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"> <span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>2.</b></span> <span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES </b></span></p>



<p style="margin-top: 0; margin-bottom: 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"> <span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(a)</i></span> <span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i><span>Statement of Compliance</span></i></span></p>



<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company&#8217;s consolidated financial statements were prepared in accordance with International Financial Reporting Standards (&#8220;IFRS&#8221;).</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


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    <div style="break-before: page; margin-top: 6pt"><p style="margin: 0pt">&#160;</p></div>
    <!-- Field: /Page -->

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b></b></span><img src="form20-f_014.jpg" alt="" /></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: #333333"></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Notes
to the Consolidated Financial Statements</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
the year ended December 31, 2021</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(Expressed
in Canadian dollars)</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 22.4pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"> <span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(b)</i></span> <span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Basis of Preparation </i></span></p>



<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">These
consolidated financial statements have been prepared under the historical cost convention, modified by the revaluation of any financial
assets and financial liabilities where applicable. The preparation of financial statements in conformity with IFRS requires the use of
certain critical accounting estimates. It also requires management to exercise judgment in the process of applying the Company&#8217;s
accounting policies. These areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant
to the consolidated financial statements and, are disclosed in Note 3.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"> <span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(c)</i></span> <span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Basis of consolidation</i></span></p>



<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">These
consolidated financial statements include the financial statements of the Company and its wholly-owned subsidiary, North American
Nickel (US) Inc. which was incorporated in the State of Delaware on May 22, 2015.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Consolidation
is required when the Company is exposed, or has rights to variable returns from its involvement with the investee and has the ability
to affect those returns through its power over the investee. All intercompany transactions, balances, income and expenses are eliminated
upon consolidation.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(d)
Foreign currency translation</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Foreign
currency transactions are translated into the functional 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.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Exchange
differences arising on the translation of monetary items or on settlement of monetary items are recognized in profit or loss in the consolidated
statement of comprehensive loss in the period in which they arise, except where deferred in equity as a qualifying cash flow or net
investment hedge.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Exchange
differences arising on the translation of non-monetary items are recognized in other comprehensive income in the consolidated
statement of comprehensive loss to the extent that gains and losses arising on those non-monetary items are also recognized in other
comprehensive income. Where the non-monetary gain or loss is recognized in profit or loss, the exchange component is also recognized
in profit or loss.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(e)
Exploration and evaluation assets</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Exploration
and evaluation assets include the costs of acquiring licenses, costs associated with exploration and evaluation activity, and the fair
value (at acquisition date) of exploration and evaluation assets acquired in a business combination. Exploration and evaluation expenditures
are initially capitalized. Costs incurred before the Company has obtained the legal rights to explore an area are recognized in profit
or loss.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Government
tax credits received are generally recorded as a reduction to the cumulative costs incurred and capitalized on the related property.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Exploration
and evaluation assets are assessed for impairment if (i) sufficient data exists to determine technical feasibility and commercial viability,
and (ii) facts, events and circumstances suggest that the carrying amount exceeds the recoverable amount.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Once
the technical feasibility and commercial viability of the extraction of mineral resources in an area of interest are demonstrable, exploration
and evaluation assets attributable to that area of interest are first tested for impairment and then reclassified to mining property
and development assets within equipment.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


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    <!-- Field: /Page -->

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><img src="form20-f_014.jpg" alt="" /></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: #333333"></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Notes
to the Consolidated Financial Statements</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
the year ended December 31, 2021</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(Expressed
in Canadian dollars)</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Recoverability
of the carrying amount of any exploration and evaluation assets is dependent on successful development and commercial exploitation, or
alternatively, sale of the respective areas of interest.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company may occasionally enter into farm-out arrangements, whereby it will transfer part of an interest, as consideration, for an agreement
by the farmee to meet certain exploration and evaluation expenditures which would have otherwise been undertaken by the Company. The
Company does not record any expenditures made by the farmee on its behalf. Any cash consideration received from the agreement is credited
against the costs previously capitalized to the mineral interest given up by the Company, with any excess consideration accounted for
in profit.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">When
a project is deemed to no longer have commercially viable prospects to the Company, exploration and evaluation expenditures in respect
of that project are deemed to be impaired. As a result, those exploration and evaluation expenditure costs, in excess of estimated recoveries,
are written off to the consolidated statement of comprehensive loss/income.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(f)
Restoration and environmental obligations</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company recognizes liabilities for statutory, contractual, constructive or legal obligations associated with the retirement of long-term
assets, when those obligations result from the acquisition, construction, development or normal operation of the assets. The net present
value of future restoration cost estimates arising from the decommissioning of plant and other site preparation work is capitalized to
exploration and evaluation assets along with a corresponding increase in the restoration provision in the period incurred. Discount rates
using a pre-tax rate that reflect the time value of money are used to calculate the net present value. The restoration asset will be
depreciated on the same basis as other mining assets.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company&#8217;s estimates of restoration costs could change as a result of changes in regulatory requirements, discount rates and assumptions
regarding the amount and timing of the future expenditures. These changes are recorded directly to exploration and evaluation assets
with a corresponding entry to the restoration provision. The Company&#8217;s estimates are reviewed annually for changes in regulatory
requirements, discount rates, effects of inflation and changes in estimates.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Changes
in the net present value, excluding changes in the Company&#8217;s estimates of reclamation costs, are charged to profit and loss for
the period.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
costs of restoration projects included in the provision are recorded against the provision as incurred. The costs to prevent and control
environmental impacts at specific properties are capitalized in accordance with the Company&#8217;s accounting policy for exploration
and evaluation assets.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(g)
Impairment of assets</i></span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Impairment
tests on intangible assets with indefinite useful economic lives are undertaken annually at the financial year-end. Other non-financial
assets, including exploration and evaluation assets, are subject to impairment tests whenever events or changes in circumstances indicate
that their carrying amount may not be recoverable. Where the carrying value of an asset exceeds its recoverable amount, which is the
higher of value in use and fair value less costs to sell, the asset is written down accordingly.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Where
it is not possible to estimate the recoverable amount of an individual asset, the impairment test is carried out on the asset&#8217;s
cash-generating unit, which is the lowest group of assets in which the asset belongs and for which there are separately identifiable
cash inflows that are largely independent of the cash inflows from other assets.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">An
impairment loss is charged to the profit or loss, except to the extent the loss reverses gains previously recognized in other comprehensive
loss/income.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><img src="form20-f_014.jpg" alt="" /></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: #333333"></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Notes
to the Consolidated Financial Statements</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
the year ended December 31, 2021</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(Expressed
in Canadian dollars)</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(h)
Financial instruments</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
accordance with IFRS 9, the Company&#8217;s accounting policy is as follows:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Classification
</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company classifies its financial instruments in the following categories: at fair value through profit and loss (&#8220;FVTPL&#8221;),
at fair value through other comprehensive income (loss) (&#8220;FVTOCI&#8221;), or at amortized cost. The Company determines the classification
of financial assets at initial recognition. The classification of debt instruments is driven by the Company&#8217;s business model for
managing the financial assets and their contractual cash flow characteristics. Equity instruments that are held for trading are classified
as FVTPL. For other equity instruments, on the day of acquisition the Company can make an irrevocable election (on an instrument-by-instrument
basis) to designate them as at FVTOCI. Financial liabilities are measured at amortized cost, unless they are required to be measured
at FVTPL (such as instruments held for trading or derivatives) or the Company has opted to measure them at FVTPL.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following table shows the classification of the Company&#8217;s financial assets and liabilities:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 90%; border-collapse: collapse; margin-left: 0.25in">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="width: 8%">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left; width: 41%"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Financial
                                            asset/</b></span><b>liability</b></p></td>
    <td style="text-align: left; width: 2%">&#160;</td>
    <td style="width: 8%">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left; width: 41%"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b></b></span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Classification</b></span></p></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td>&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Cash
    </span></td>
    <td style="text-align: left">&#160;</td>
    <td>&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">FVTPL</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td>&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Other
    receivable</span></td>
    <td style="text-align: left">&#160;</td>
    <td>&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Amortized
    cost</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td>&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Trade
    payables</span></td>
    <td style="text-align: left">&#160;</td>
    <td>&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Amortized
    cost</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td>&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Advance</td>
    <td style="text-align: left">&#160;</td>
    <td>&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0">Amortized
                                            cost</p></td></tr>
  </table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Measurement
</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Financial
assets and liabilities at amortized cost </i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Financial
assets and liabilities at amortized cost are initially recognized at fair value plus or minus transaction costs, respectively, and subsequently
carried at amortized cost less any impairment.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Financial
assets and liabilities at FVTPL </i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Financial
assets and liabilities carried at FVTPL are initially recorded at fair value and transaction costs are expensed in profit or loss. Realized
and unrealized gains and losses arising from changes in the fair value of the financial assets and liabilities held at FVTPL are included
in the consolidated statements of comprehensive loss in the period in which they arise.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Impairment
of financial assets at amortized cost </i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">An
&#8216;expected credit loss&#8217; impairment model applies which requires a loss allowance to be recognized based on expected credit
losses. The estimated present value of future cash flows associated with the asset is determined and an impairment loss is recognized
for the difference between this amount and the carrying amount as follows: the carrying amount of the asset is reduced to estimated present
value of the future cash flows associated with the asset, discounted at the financial asset&#8217;s original effective interest rate,
either directly or through the use of an allowance account and the resulting loss is recognized in profit or loss for the period.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
a subsequent period, if the amount of the impairment loss related to financial assets measured at amortized cost decreases, the previously
recognized impairment loss is reversed through profit or loss to the extent that the carrying amount of the investment at the date the
impairment is reversed does not exceed what the amortized cost would have been had the impairment not been recognized.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Derecognition
</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Financial
assets </i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company derecognizes financial assets only when the contractual rights to cash flows from the financial assets expire, or when it transfers
the financial assets and substantially all of the associated risks and rewards of ownership to another entity. Gains and losses on derecognition
are generally recognized in the consolidated statements of comprehensive loss.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Investments
are derecognized when the rights to receive cash flows from the investments have expired or the Company has transferred the financial
asset and the transfer qualifies for derecognition.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>


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    <div style="break-before: page; margin-top: 6pt"><p style="margin: 0pt">&#160;</p></div>
    <!-- Field: /Page -->

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i><img src="form20-f_014.jpg" alt="" /></i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: #333333"></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Notes
to the Consolidated Financial Statements</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
the year ended December 31, 2021</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(Expressed
in Canadian dollars)</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Financial
liabilities </i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Financial
liabilities are derecognized when, and only when, the Company&#8217;s obligations are discharged, cancelled or they expire. The difference
between the carrying amount of the financial liability derecognized and the consideration paid and payable is recognized in the consolidated
statement of comprehensive loss.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(i)
Loss per share</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company uses the treasury stock method to compute the dilutive effect of options, warrants and similar instruments. Under this method,
the dilutive effect on loss per common share is recognized on the use of the proceeds that could be obtained upon exercise of options,
warrants and similar instruments. It assumes that the proceeds would be used to purchase common shares at the average market price during
the period.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Basic
loss per common share is calculated using the weighted average number of common shares outstanding during the period and does not include
outstanding options and warrants. Dilutive loss per common share is not presented differently from basic loss per share as the conversion
of outstanding stock options and warrants into common shares would be anti-dilutive.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(j)
Income taxes</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Income
tax expense comprises current and deferred tax. Current tax and deferred tax are recognized in net income except to the extent that it
arises in a business combination, or from items recognized directly in equity or other comprehensive loss/income.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Current
income tax assets and liabilities for the current period are measured at the amount expected to be recovered from or paid to the taxation
authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting
date, in the countries where the Company operates and generates taxable income.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Current
income tax relating to items recognized directly in other comprehensive income or equity is recognized in other comprehensive income
or equity and not in profit or loss. Management periodically evaluates positions taken in the tax returns with respect to situations
in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Deferred
income tax is provided using the asset and liability method of temporary differences at the reporting date between the tax bases of assets
and liabilities and their carrying amounts for financial reporting purposes.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
carrying amount of deferred income tax assets is reviewed at the end of each reporting period and recognized only to the extent that
it is probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilized.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Deferred
income 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 tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting
period.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify; text-indent: 0.1pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Deferred
income tax assets and deferred income tax liabilities are offset, only if a legally enforceable right exists to set off current tax assets
against current income tax liabilities and the deferred income taxes relate to the same taxable entity and the same taxation authority.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify; text-indent: 0.1pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.25in 0pt 0; text-indent: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Flow-through
shares</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.25in 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Any
premium received by the Company on the issuance of flow-through shares is initially recorded as a liability (&#8220;flow-through tax
liability&#8221;). Upon renouncement by the Company of the tax benefits associated with the related expenditures, a flow-through share
premium liability is recognized and the liability will be reversed as eligible expenditures are made. If such expenditures are capitalized,
a deferred tax liability is recognized. To the extent that suitable deferred tax assets are available, the Company will reduce the deferred
tax liability.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>


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    <div style="break-before: page; margin-top: 6pt"><p style="margin: 0pt">&#160;</p></div>
    <!-- Field: /Page -->

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><img src="form20-f_014.jpg" alt="" /></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: #333333"></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Notes
to the Consolidated Financial Statements</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
the year ended December 31, 2021</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(Expressed
in Canadian dollars)</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(k)
Share-based payments</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Where
equity-settled share options are awarded to employees, the fair value of the options at the date of grant is recognized over the vesting
period. Performance vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each
reporting date so that, ultimately, the cumulative amount recognized over the vesting period is based on the number of options that eventually
vest. Non-vesting conditions and market vesting conditions are factored into the fair value of the options granted. As long as all other
vesting conditions are satisfied, a charge is made irrespective of whether these non-vesting and market vesting conditions are satisfied.
The cumulative expense is not adjusted for failure to achieve a market vesting condition or where a non-vesting condition is not satisfied.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Where
the terms and conditions of options are modified, the increase in the fair value of the options, measured immediately before and after
the modification, is also recognized over the remaining vesting period.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Where
equity instruments are granted to non-employees, they are recorded at the fair value of the goods or services received. Amounts related
to the issuance of shares are recorded as a reduction of share capital.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">When
the value of goods and services received in exchange for the share-based payment cannot be reliably estimated, the fair value is measured
by use of a valuation model. The expected life used in the model is adjusted, based on management&#8217;s best estimate, for the effects
of non-transferability, exercise restrictions, and behavioural considerations.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">All
equity-settled share-based payments are reflected in share-based payments reserve, until exercised. Upon exercise shares are issued from
treasury and the amount reflected in share-based payments reserve is credited to share capital along with any consideration paid.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(l)
Share capital</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company&#8217;s common shares, preferred shares and share warrants shares are classified as equity instruments.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Incremental
costs directly attributable to the issue of new shares or options are shown in equity as a deduction from the proceeds.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Proceeds
received on the issuance of units, consisting of common shares and warrants are allocated to share capital. </span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(m)
Flow-through shares</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 5.5pt 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Resource
expenditure deductions for income tax purposes related to exploratory activities funded by flow-through share arrangements are renounced
to investors in accordance with income tax legislation. Pursuant to the terms of the flow-through share agreements, these shares transfer
the tax deductibility of qualifying resource expenditures to investors. On issuance, the Company bifurcates the flow-through share into
a flow-through share premium, equal to the estimated premium, if any, investors pay for the flow-through feature, which is recognized
as a liability and share capital. Upon expenses being incurred, the Company derecognizes the liability and recognizes a deferred tax
liability for the amount of tax reduction renounced to the shareholders. The premium is recognized as other income and the related deferred
tax is recognized as a tax provision.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 5.5pt 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Proceeds
received from the issuance of flow-through shares are restricted to be used only for Canadian resource property exploration expenditures
within a two-year period. The portion of the proceeds received but not yet expended at the end of the period is disclosed separately
as flow- through share proceeds, if any.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 5.5pt 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company may also be subject to a Part XII.6 tax on flow-through proceeds renounced under the look-back Rule, in accordance with Government
of Canada flow-through regulations. When applicable, this tax is accrued as a financing expense until qualifying expenditures are incurred.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 5.5pt 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


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    <!-- Field: /Page -->

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><img src="form20-f_014.jpg" alt="" /></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: #333333"></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Notes
to the Consolidated Financial Statements</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
the year ended December 31, 2021</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(Expressed
in Canadian dollars)</i></span></p>


<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 5.5pt 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify; text-indent: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(n)
Equipment</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify; text-indent: -22.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify; text-indent: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Equipment
is stated at historical cost less accumulated depreciation and accumulated impairment losses.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify; text-indent: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify; text-indent: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Subsequent
costs are included in the asset&#8217;s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that
future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying
amount of a significant replaced part is derecognized. All other repairs and maintenance are charged to the consolidated statement
of comprehensive loss during the financial period in which they are incurred. Gains and losses on disposals are determined by
comparing the proceeds with the carrying amount and are recognized in profit or loss.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify; text-indent: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Depreciation
and amortization are calculated on a straight-line method to charge the cost, less residual value, of the assets to their residual values
over their estimated useful lives. The depreciation and amortization rate applicable to each category of equipment is as follows:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span><span style="display: none">SCHEDULE
OF DEPRECIATION AND AMORTIZATION RATE</span></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span style="text-transform: uppercase"></span></b></span></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 90%; border-collapse: collapse; margin-left: 0.25in">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; width: 40%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Equipment
    </b></span></td>
    <td style="padding-bottom: 1.5pt; width: 2%">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right; width: 40%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Depreciation
    rate</b></span></td>
    <td style="width: 18%">&#160;</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Exploration
    equipment</span></td>
    <td>&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">20%</span></td>
    <td>&#160;</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Computer
    software</span></td>
    <td>&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">50%</span></td>
    <td>&#160;</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Computer
    equipment</span></td>
    <td>&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">55%</span></td>
    <td>&#160;</td></tr>
  </table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(o)
Equity investment</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Investments
in entities over which the Company has a significant influence, but not control, are accounted for by the equity method, whereby the
original cost of the investment is adjusted for the Company&#8217;s proportionate share of the investee&#8217;s income or loss. When
the Company&#8217;s equity investee issues its own shares to outside interest, a dilution gain or loss arises as a result of the difference
between the Company&#8217;s proportionate share of the proceeds and the carrying value of the underlying equity. When net accumulated
losses from an equity accounted investment exceed its carrying amount, the investment balance is reduced to zero and additional losses
are not provided for unless the Company is committed to provide financial support to the investee.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(p)
Accounting standards and amendments issued but not yet effective</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Certain
accounting standards or amendments to existing accounting standards that have been issued but have future effective dates are either
not applicable or are not expected to have a significant impact on the Company&#8217;s consolidated financial statements.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">IAS
16 - &#8220;Property, Plant and Equipment&#8221;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
IASB issued an amendment to IAS 16, Property, Plant and Equipment to prohibit the deducting from property, plant and equipment amounts
received from selling items produced while preparing an asset for its intended use. Instead, sales proceeds and its related costs must
be recognized in profit or loss. The amendment will require companies to distinguish between costs associated with producing and selling
items before the item of property, plant and equipment is available for use and costs associated with making the item of property, plant
and equipment available for its intended use. The amendment is effective for annual periods beginning on or after January 1, 2022, with
earlier application permitted. The amendment is not currently applicable.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">IAS
1 &#8211; &#8220;Presentation of Financial Statements&#8221;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
IASB issued an amendment to IAS 1, Presentation of Financial Statements to clarify one of the requirements under the standard for classifying
a liability as non-current in nature, specifically the requirement for an entity to have the right to defer settlement of the liability
for at least 12 months after the reporting period. The amendment includes: (i) specifying that an entity&#8217;s right to defer settlement
must exist at the end of the reporting period; (ii) clarifying that classification is unaffected by management&#8217;s intentions or
expectations about whether the entity will exercise its right to defer settlement; (iii) clarifying how lending conditions affect classification;
and (iv) clarifying requirements for classifying liabilities an entity will or may settle by issuing its own equity instruments. An assessment
will be performed prior to the effective date of January 1, 2023 to determine the impact to the Company&#8217;s financial statements.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


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    <!-- Field: /Page -->

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><img src="form20-f_014.jpg" alt="" /></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: #333333"></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Notes
to the Consolidated Financial Statements</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
the year ended December 31, 2021</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(Expressed
in Canadian dollars)</i></span></p>


<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"> <span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>3.</b></span> <span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>CRITICAL ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS</b></span></p>



<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21pt; text-align: justify; text-indent: -21pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
preparation of the financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that
can affect reported amounts of assets, liabilities revenues and expenses and the accompanying disclosures. Estimates and assumptions
are continuously evaluated and are based on management&#8217;s historical experience and on other assumptions believed to be reasonable
under the circumstances. However, different judgments, estimates and assumptions could result in outcomes that require a material adjustment
to the carrying amount of assets or liabilities affected in future periods.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated
financial statements are:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(a)
Recoverability of Exploration and Evaluation Assets </i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
ultimate recoverability of the exploration and evaluation assets with a carrying value of $39,099,000 </span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">at
December 31, 2021, is dependent upon the Company&#8217;s ability to obtain the necessary financing and permits to complete the
development and commence profitable production at its projects, or alternatively, upon the Company&#8217;s ability to dispose of its
interests therein on an advantageous basis. A review of the indicators of potential impairment is carried out at least at each
period end.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Management
undertakes a periodic review of these assets to determine whether any indication of impairment exists. Where an indicator of impairment
exists, a formal estimate of the recoverable amount of the assets is made. An impairment loss is recognized when the carrying value of
the assets is higher than the recoverable amount and when mineral license tenements are relinquished or have lapsed. In undertaking this
review, management of the Company is required to make significant estimates of, among other things, discount rates, commodity prices,
availability of financing, future operating and capital costs and all aspects of project advancement. These estimates are subject to
various risks and uncertainties, which may ultimately have an effect on the expected recoverability of the carrying values of the assets.
During the year ended December 31, 2021, the Company recorded write-off of its Quetico claims of $71,466 and Lingman Lake of $27,657.
During the year ended December 31, 2020, the Company recorded a write- off of its Loveland Nickel property of $437,897</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(b)
Restoration Provisions</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Management&#8217;s
best estimates regarding the restoration provisions are based on the current economic environment. Changes in estimates of contamination,
restoration standards and restoration activities result in changes to provisions from period to period. Actual restoration provisions
will ultimately depend on future market prices for future restoration obligations. Management has determined that the Company has restoration
obligations at December 31, 2021 of $Nil
</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(December 31, 2020 - $267,000</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">)
</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">related to its Greenland exploration and evaluation
asset.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(c)
Valuation of Share-Based Compensation</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company estimates the fair value of convertible securities such as warrants and options using the Black-Scholes Option Pricing Model
which requires significant estimation around assumptions and inputs such as expected term to maturity, expected volatility and expected
forfeiture rates. The accounting policies in Note 2(k) and Note 8 of the consolidated financial statements contain further details
of significant assumptions applied to these areas of estimation.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(d)
Going Concern</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Financial
statements are prepared on a going concern basis unless management either intends to liquidate the Company or to cease trading, or has
no realistic alternative to do so. Assessment of the Company&#8217;s ability to continue as a going concern requires the consideration
of all available information about the future, which is at least, but not limited to, twelve months from the end of the reporting period.
This information includes estimates of future cash flows and other factors, the outcome of which is uncertain. When management is aware,
in making its assessment, of material uncertainties related to events or conditions that may cast substantial doubt upon the Company&#8217;s
ability to continue as a going concern those uncertainties are disclosed.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>


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    <div style="break-before: page; margin-top: 6pt"><p style="margin: 0pt">&#160;</p></div>
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><img src="form20-f_014.jpg" alt="" /></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: #333333"></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Notes
to the Consolidated Financial Statements</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
the year ended December 31, 2021</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(Expressed
in Canadian dollars)</i></span></p>


<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(e)
Equity investment</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Management
determines its ability to exercise significant influence over an investee by looking at its percentage interest and other qualitative
factors including but not limited to its voting rights, representation on the board of directors, participation in policymaking processes,
material transactions between the Company and the investee, interchange of managerial personnel, provision of essential technical information
and operating involvement.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">At
December 31, 2021, the Company&#8217;s percentage holding in its private investee was 10%, with significant influence over the private
investee and has used the equity method of accounting for this investment.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"> <span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>4.</b></span> <span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>RECEIVABLES AND OTHER CURRENT ASSETS</b></span></p>



<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21pt; text-align: justify; text-indent: -21pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
summary of the receivables and other current assets as of December 31, 2021 and 2020 is detailed in the table below:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(All
amounts in table are expressed in thousands of Canadian dollars)</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;<span style="display: none">SCHEDULE OF RECEIVABLES AND OTHER CURRENT ASSETS</span></i></span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21pt; text-align: justify; text-indent: -21pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"> <span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>5.</b></span> <span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span>EQUIPMENT</span></b></span></p>



<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21pt; text-align: justify; text-indent: -21pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;<span></span></b></span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span><span style="display: none">SUMMARY
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21pt; text-align: justify; text-indent: -21pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


<!-- Field: Page; Sequence: 117; Value: 1 -->
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><img src="form20-f_014.jpg" alt="" /></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: #333333"></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Notes
to the Consolidated Financial Statements</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
the year ended December 31, 2021</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(Expressed
in Canadian dollars)</i></span></p>


<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"> <span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>6.</b></span> <span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>EXPLORATION AND EVALUATION ASSETS </b></span></p>



<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

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<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="display: none; vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: White">
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">5</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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    <td style="font-size: 11pt; text-align: left">&#160;</td><td style="font-size: 11pt; text-align: right">&#160;</td><td style="font-size: 11pt; text-align: left">&#160;</td><td style="font-size: 11pt">&#160;</td>
    <td style="font-size: 11pt; text-align: left">&#160;</td><td style="font-size: 11pt; text-align: right">&#160;</td><td style="font-size: 11pt; text-align: left">&#160;</td><td style="font-size: 11pt">&#160;</td>
    <td style="font-size: 11pt; text-align: left">&#160;</td><td style="font-size: 11pt; text-align: right">&#160;</td><td style="font-size: 11pt; text-align: left">&#160;</td><td style="font-size: 11pt">&#160;</td>
    <td style="font-size: 11pt; text-align: left">&#160;</td><td style="font-size: 11pt; text-align: right">&#160;</td><td style="font-size: 11pt; text-align: left">&#160;</td><td style="font-size: 11pt">&#160;</td>
    <td style="font-size: 11pt; text-align: left">&#160;</td><td style="font-size: 11pt; text-align: right">&#160;</td><td style="font-size: 11pt; text-align: left">&#160;</td><td style="font-size: 11pt">&#160;</td>
    <td style="font-size: 11pt; text-align: left">&#160;</td><td style="font-size: 11pt; text-align: right">&#160;</td><td style="font-size: 11pt; text-align: left">&#160;</td><td style="font-size: 11pt">&#160;</td>
    <td style="font-size: 11pt; text-align: left">&#160;</td><td style="font-size: 11pt; text-align: right">&#160;</td><td style="font-size: 11pt; text-align: left">&#160;</td></tr>
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    <td style="font-size: 11pt; text-align: left">&#160;</td><td style="font-size: 11pt; text-align: right">&#160;</td><td style="font-size: 11pt; text-align: left">&#160;</td><td style="font-size: 11pt">&#160;</td>
    <td style="font-size: 11pt; text-align: left">&#160;</td><td style="font-size: 11pt; text-align: right">&#160;</td><td style="font-size: 11pt; text-align: left">&#160;</td><td style="font-size: 11pt">&#160;</td>
    <td style="font-size: 11pt; text-align: left">&#160;</td><td style="font-size: 11pt; text-align: right">&#160;</td><td style="font-size: 11pt; text-align: left">&#160;</td><td style="font-size: 11pt">&#160;</td>
    <td style="font-size: 11pt; text-align: left">&#160;</td><td style="font-size: 11pt; text-align: right">&#160;</td><td style="font-size: 11pt; text-align: left">&#160;</td><td style="font-size: 11pt">&#160;</td>
    <td style="font-size: 11pt; text-align: left">&#160;</td><td style="font-size: 11pt; text-align: right">&#160;</td><td style="font-size: 11pt; text-align: left">&#160;</td><td style="font-size: 11pt">&#160;</td>
    <td style="font-size: 11pt; text-align: left">&#160;</td><td style="font-size: 11pt; text-align: right">&#160;</td><td style="font-size: 11pt; text-align: left">&#160;</td><td style="font-size: 11pt">&#160;</td>
    <td style="font-size: 11pt; text-align: left">&#160;</td><td style="font-size: 11pt; text-align: right">&#160;</td><td style="font-size: 11pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">7</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; text-align: right">-</td><td style="font-weight: bold; text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">42</td><td style="text-align: left">&#160;</td></tr>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">13</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">39</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Balance, December 31, 2021</td><td style="padding-bottom: 1.5pt">&#160;</td>
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">265</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">119</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">-</td><td style="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: White">
    <td style="font-size: 11pt; text-align: justify">&#160;</td><td style="font-size: 11pt">&#160;</td>
    <td style="font-size: 11pt; text-align: left">&#160;</td><td style="font-size: 11pt; text-align: right">&#160;</td><td style="font-size: 11pt; text-align: left">&#160;</td><td style="font-size: 11pt">&#160;</td>
    <td style="font-size: 11pt; text-align: left">&#160;</td><td style="font-size: 11pt; text-align: right">&#160;</td><td style="font-size: 11pt; text-align: left">&#160;</td><td style="font-size: 11pt">&#160;</td>
    <td style="font-size: 11pt; text-align: left">&#160;</td><td style="font-size: 11pt; text-align: right">&#160;</td><td style="font-size: 11pt; text-align: left">&#160;</td><td style="font-size: 11pt">&#160;</td>
    <td style="font-size: 11pt; text-align: left">&#160;</td><td style="font-size: 11pt; text-align: right">&#160;</td><td style="font-size: 11pt; text-align: left">&#160;</td><td style="font-size: 11pt">&#160;</td>
    <td style="font-size: 11pt; text-align: left">&#160;</td><td style="font-size: 11pt; text-align: right">&#160;</td><td style="font-size: 11pt; text-align: left">&#160;</td><td style="font-size: 11pt">&#160;</td>
    <td style="font-size: 11pt; text-align: left">&#160;</td><td style="font-size: 11pt; text-align: right">&#160;</td><td style="font-size: 11pt; text-align: left">&#160;</td><td style="font-size: 11pt">&#160;</td>
    <td style="font-size: 11pt; text-align: left">&#160;</td><td style="font-size: 11pt; text-align: right">&#160;</td><td style="font-size: 11pt; text-align: left">&#160;</td><td style="font-size: 11pt">&#160;</td>
    <td style="font-size: 11pt; text-align: left">&#160;</td><td style="font-size: 11pt; text-align: right">&#160;</td><td style="font-size: 11pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: left">Total, December 31, 2020</td><td style="font-weight: bold; padding-bottom: 2.5pt">&#160;</td>
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    <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">&#160;</td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">-</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; padding-bottom: 2.5pt">&#160;</td>
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    <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">&#160;</td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">-</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; padding-bottom: 2.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: White">
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  <tr style="display: none; vertical-align: bottom; background-color: White">
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</table>


<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><img src="form20-f_014.jpg" alt="" /></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: #333333"></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Notes
to the Consolidated Financial Statements</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
the year ended December 31, 2021</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(Expressed
in Canadian dollars)</i></span></p>


<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following is a description of the Company&#8217;s exploration and evaluation assets and the related spending commitments:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Post
Creek </b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
December 23, 2009 and as last amended on March 12, 2013, the Company completed the required consideration and acquired the rights to
a mineral claim known as the Post Creek Property located within the Sudbury Mining District of Ontario. </span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Commencing
August 1, 2015, the Company is obligated to pay advances on net smelter return royalties (&#8220;NSR&#8221;) of $10,000 per annum. The
Company paid the required $10,000 during the year ended December 31, 2021 (December 31, 2020 - $10,000). The total of the advances will
be deducted from any payments to be made under the NSR. </span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">During
the year ended December 31, 2021, the Company incurred acquisition and exploration expenditures totalling $22,732
</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(December 31, 2020 - $41,004</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">)
on the Post Creek Property.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 21.2pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Halcyon
</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
December 31, 2015, the Company completed the required consideration of the option agreement and acquired rights to a mineral claim known
as the Halcyon Property located within the Sudbury Mining District of Ontario, subject to certain NSR and advance royalty payments. </span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Commencing
August 1, 2015, the Company is obligated to pay advances on the NSR of $8,000 per annum. The Company paid the required $8,000 during
the year ended December 31, 2021 (December 31, 2020 - $8,000). The total of the advances will be deducted from any payments to be made
under the NSR. </span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">During
the year ended December 31, 2021, the Company incurred $20,732 (December 31, 2020 - $27,317) in acquisition and exploration expenditures
on the Halcyon Property.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Quetico</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
April 26 and May 17, 2018, the Company acquired the right to certain mineral claims known as Quetico located within the Sudbury Mining
District of Ontario.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company had no minimum required exploration commitment for the years ended December 31, 2021 2020 and 2019 as it is not
required to file any geoscience assessment work between the initial recording of a mining claim and the first anniversary date of the
mining claim and two one-year exclusions were granted as a result of the COVID-19 pandemic. </span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
April 2020, the Company applied for a one - year exclusion under a COVID-19 relief program offered by the Ontario Ministry of Energy,
Northern Development and Mine (ENDM). The one-year exclusion was granted on September 1, 2020, thus adjusting the work requirement due
dates to April and May of 2021. The COVID-19 relief program was offered again in 2021, and the Company lodged a second set of applications
on March 29, 2021 and April 21, 2021 to extend the tenure of the claim blocks. The additional one-year exclusions were granted on May
14 and May 20, 2021 thus adjusting the work requirement due dates to April and May of 2022.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">By
the second anniversary of the recording of a claim and by each anniversary thereafter, a minimum of $400 worth of approved exploration
activity per claim unit must be reported to the Provincial Recording Office. Alternately, the Company could maintain mining claims by
filing an Application to Distribute Banked Assessment Work Credits form before any due date. Payments in place of reporting assessment
work may also be used to meet yearly assessment work requirements, provided the payments are not used for the first unit of assessment
work. The total annual work requirement for Quetico project after April 26, 2021 is $324,000 should the Company maintain the current
size of the claims. Work reports for 2020 were filed and total expenditures of $61,783 were approved on June 4, 2021.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">During
the year ended December 31, 2021, the Company incurred $11,668 (December 31, 2020 - $102,715) in exploration and license related expenditures
on the Quetico Property.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><img src="form20-f_014.jpg" alt="" /></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: #333333"></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Notes
to the Consolidated Financial Statements</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
the year ended December 31, 2021</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(Expressed
in Canadian dollars)</i></span></p>


<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">IFRS
6 requires management to assess the exploration and evaluation assets for impairment. Accordingly, at December 31, 2021, management believed
that facts and circumstances existed to suggest that the carrying amount of Quetico claims exceeded its recoverable amount. As a result,
management determined the Quetico claims should be impaired by $71,466 and its recoverable amount was reduced to $124,348 at the end
of December 31, 2021.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Loveland
Nickel (Enid Creek) Property</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
September 25, 2019, the Company entered into earn in agreement to acquire a 100% interest, subject to a 1% NSR, in certain claims known
as the Loveland Nickel (Enid Creek) Property located in Timmins, Ontario. Consideration included acquisition costs of $1,525,000 in cash
and the issuance of 300,000 common shares. During the year ended December 31, 2019, the Company paid $25,000 and issued 300,000 common
shares at a fair value of $51,000. Exploration expenditures of $4,500,000 were to be incurred over a period ending September 25, 2024.
</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of December 31, 2020, the Company incurred an aggregate exploration and acquisition expenditures of $437,897. Based on the results of
the exploration program completed in April 2020, management elected not to proceed with further exploration on the property and terminated
the agreement. Accordingly, all acquisition and exploration related costs were impaired as at December 31, 2020, totalling $437,897.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Lingman
Lake Property</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">During
the year ended December 31, 2019, the Company staked certain mineral claims known as Lingman Lake located northwest of Thunder Bay, Ontario.
The Company incurred total acquisition and related costs of $Nil
</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(December 31, 2020 - $Nil</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">)
during the year ended December 31, 2021. As at December 31, 2021, management elected not to proceed with further exploration on the property.
Accordingly, all acquisition and exploration related costs were impaired as at December 31, 2021, totalling $27,657</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Section
35 Property</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
January 4, 2016, the Company entered into a 10-year Metallic Minerals Lease (the &#8220;Lease&#8221;) with the Michigan Department of
Natural Resources for an area covering approximately 320 acres. The terms of the Lease required annual rental fees. </span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">At
the end of the fiscal year 2019, management of the Company made a decision to relinquish the mineral lease. As a result, all cumulative
exploration related costs of $11,393 were written-off as at December 31, 2019. The Company applied and received approval for a refund
of a $13,016 (US $10,000) reclamation deposit held by the Department of Natural Resources in Michigan. The reclamation deposit was received
during the year ended December 31, 2020. </span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Maniitsoq</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company has been granted certain exploration licenses, by the Bureau of Minerals and Petroleum (&#8220;BMP&#8221;) of Greenland for exclusive
exploration rights of an area comprising the Maniitsoq Property, located near Ininngui, Greenland. The Maniitsoq Property is subject
to a 2.5% NSR. The Company can reduce the NSR to 1% by paying $2,000,000 on or before 60 days from the decision to commence commercial
production. </span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">At
the expiration of the first license period, the Company may apply for a second license period (years 6-10), and the Company may apply
for a further 3-year license for years 11 to 13. Thereafter, the Company may apply for additional 3-year licenses for years 14 to 16,
17 to 19 and 20 to 22. The Company will be required to pay additional license fees and will be obligated to incur minimum eligible exploration
expenses for such years.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company may terminate the licenses at any time, however any unfulfilled obligations according to the licenses will remain in force, regardless
of the termination.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Future
required minimum exploration expenditures will be adjusted each year on the basis of the change to the Danish Consumer Price Index.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">During
the year ended December 31, 2021, the Company spent in aggregate of $133,772 in acquisition and exploration expenditures on the Maniitsoq
Property, which is comprised of the Sulussugut, Ininngui, Carbonatite and 2020/05 Licenses.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><img src="form20-f_014.jpg" alt="" /></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: #333333"></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Notes
to the Consolidated Financial Statements</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
the year ended December 31, 2021</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(Expressed
in Canadian dollars)</i></span></p>


<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">During
the year ended December 31, 2020, the Company has recorded a $267,000 provision for camp site cleanup and restoration obligations. The
cost accrued was based on the current best estimate of restoration activities that would be required on the Maniitsoq Property. The Company&#8217;s
provision for future cleanup was based on the level of known disturbance at the reporting date and known requirements. It was not possible
to estimate the impact on operating results, if any, and the actual amount of any economic outflow related to this obligation is dependent
upon future events and cannot be reliably measured. The Company fulfilled the obligation during the year ended December 31, 2021 and
recorded provision recovery of $94,606 since the actual costs incurred were lower than the provision.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">IFRS
6 requires management to assess the exploration and evaluation assets for impairment. No facts or circumstances existed at December 31,
2021 and December 31, 2020 to suggest impairment on the Maniitsoq property. The valuation was based on historical drilling results
and management&#8217;s future exploration plans on the Maniitsoq Property. The Company intends to plan and budget for further exploration
on the Maniitsoq Property in the future. </span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Further
details on the licenses comprising the Maniitsoq Property and related expenditures are outlined below:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 13.5pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Sulussugut
License (2011/54)</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 13.5pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 13.5pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(All
references to amounts in Danish Kroners, &#8220;DKK&#8221;)</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 13.5pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 13.5pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Effective
August 15, 2011, the Company was granted an exploration license (the &#8220;Sulussugut License&#8221;) by the BMP of Greenland for exclusive
exploration rights of an area located near Sulussugut, Greenland. The Company paid a license fee of $5,742 (DKK 31,400) upon granting
of the Sulussugut License. The application for another 5-year term on the Sulussugut License was submitted to the Greenland Mineral License
&amp; Safety Authority which was effective on April 11, 2016, with December 31, 2017 being the seventh year. During the year ended December
31, 2016, the Company paid a license fee of $7,982 (DKK 40,400) which provided for renewal of the Sulussugut License until 2020. </span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 13.5pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 13.5pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">During
the year ended December 31, 2021, the Company received a license extension, which provides for renewal period until December 31,
2022.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 13.5pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">To
December 31, 2015, under the terms of a preliminary license, the Company completed the exploration requirements of an estimated minimum
of DKK 83,809,340 (approximately $15,808,386) between the years ended December 31, 2011 to 2015 by incurring $26,115,831 on the Sulussugut
License. As of December 31, 2021, the Company has spent $56,367,505 on exploration costs for the Sulussugut License.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 13.5pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company had no minimum required exploration commitment for the year ended December 31, 2021 and available credits of DKK 285,866,733
</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(approximately $57,026,697</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">)
</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">at the end of December 31, 2021. During the
year ended December 31, 2021, the Company had approved exploration expenditures of DKK 1,921,180
</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(approximately $384,236</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">).
</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
credits available from each year may be carried forward for 3 years plus a 2-year extension and expire between December 31, 2022
to December 2024</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">. The Company has no exploration
commitment for the 2022 fiscal year.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 13.5pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 13.5pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">During
the year ended December 31, 2021, the Company spent a total of $104,538
</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(December 31, 2020 - $117,756</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">)
in exploration and license related expenditures on the Sulussugut License and recorded a $54,556
</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">camp site cleanup provision recovery. </span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 13.5pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 13.5pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">To
December 31, 2021 and 2020, the Company has completed all obligations with respect to required reduction of the area
of the license.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


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    <div style="break-before: page; margin-top: 6pt"><p style="margin: 0pt">&#160;</p></div>
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i><img src="form20-f_014.jpg" alt="" /></i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: #333333"></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Notes
to the Consolidated Financial Statements</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
the year ended December 31, 2021</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(Expressed
in Canadian dollars)</i></span></p>


<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 13.5pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Ininngui
License (2012/28)</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 13.5pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 13.5pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Effective
March 4, 2012, the Company was granted an exploration license (the &#8220;Ininngui License&#8221;) by the BMP of Greenland for exclusive
exploration rights of an area located near Ininngui, Greenland. The Company paid a license fee of $5,755
</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(DKK 32,200</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">)
upon granting of the Ininngui License. The
Ininngui License was valid for an initial 5 years until December 31, 2016, with December 31, 2012 being the first year. The license was
extended for a further 5 years, until December 31, 2021, with December 31, 2017 being the first year. During the year ended December
31, 2021, the Company received a license extension, which provides for a renewal period until December 31, 2023</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 13.5pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 13.5pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Ininngui License is contiguous with the Sulussugut License.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 13.5pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 13.5pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Should
the Company not incur the minimum exploration expenditures on the license in any one year from years 2-5, the Company may pay 50% of
the difference in cash to BMP as full compensation for that year. This procedure may not be used for more than 2 consecutive calendar
years and as at December 31, 2021, the Company has not used the procedure for the license. </span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 13.5pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company had no minimum required exploration commitment for the year ended December 31, 2021. As of December 31, 2021, the Company has
spent $5,221,333
</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">on exploration costs for the Ininngui License
and exceeded the minimum requirement with a total cumulative surplus credit of DKK 30,515,237
</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(approximately $6,087,393</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">).
</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
credits available from each year may be carried forward for 3 years plus a 2-year extension and expire between December 31, 2022
to December 2024</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">. The Company has no exploration
commitment for the 2022 fiscal year.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 13.5pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">During
the year ended December 31, 2021, the Company spent a total of $21,755
</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(December 31, 2020 - $19,424</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">)
in exploration and license related expenditures and recorded a $26,700
</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">camp site cleanup provision recovery. </span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 14.2pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 14.2pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Carbonatite
License (2018/21)</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 14.2pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 13.5pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Effective
May 4, 2018, the Company was granted an exploration license (the &#8220;Carbonatite License&#8221;) by the BMP of Greenland for exclusive
exploration rights of an area located near Maniitsoq in West Greenland. The Company paid a license fee of $6,523
</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(DKK 31,000</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">)
upon granting of the Carbonatite License. The
Carbonatite License is valid for 5 years until December 31, 2022, with December 31, 2020 being the third year. During the year ended
December 31, 2021, the Company received a license extension, which provides for renewal period until 2024</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 13.5pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company had no minimum required exploration obligation for the year ended December 31, 2021. As of December 31, 2021, the Company has
spent $1,511,400
</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">on exploration costs for the Carbonatite License.
To December 31, 2021, the Company&#8217;s expenditures exceeded the minimum requirement and the Company has a total surplus credit of
DKK 10,577,191
</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(approximately $2,110,012</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">).
</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
credit available from each year may be carried forward 3 years plus a 1-year extension and expire between December 31, 2023 to
December 2024</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">. The Company has no exploration
commitment for the 2022 fiscal year.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 13.5pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 13.5pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">During
the year ended December 31, 2021, the Company spent a total of $7,083
</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(December 31, 2020 - $6,527</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">)
</span>in exploration and license related expenditures and recorded a $13,350
camp site cleanup provision recovery.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 14.2pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>West
Greenland Prospecting License (2020/05)</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 14.2pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 13.6pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
February 18, 2020, the
Company was granted new prospective license No. 2020/05, by the BMP of Greenland for a period of 5 years ending December 31, 2024</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">.
The Company paid a granting fee of $4,301
</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(DKK 21,900</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">).
There were $396 exploration related costs incurred during the year ended December 31, 2021 (December 31, 2020 - $Nil).</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 13.6pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span style="text-decoration: underline">High
Atlas Project in Morocco</span></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
2018, the Company&#8217;s geologists identified a project opportunity in the high Atlas Mountains of Morocco. There is no modern
geophysical coverage and no drilling on the property. In 2019, the Company signed an MOU with ONHYM (Office National des
Hydrocarbons et des Mines), a government entity and single largest current permit holder in Morocco. Through this alliance, the
Company was given access to confidential exploration data to develop nickel projects in the High Atlas Region of Morocco. In
November and December 2021, the Company lodged applications for five permits in Morocco. In December, three of the five permits were
awarded to the Company with the decision on the fourth and fifth permit pending.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">During
the year ended December 31, 2021, the Company spent a total of $26,652 (December 31, 2020 &#8211; $31,630) on the project and recorded
it as property investigation expense in the consolidated statements of comprehensive loss.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; width: 0%"></td><td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>7.</b></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>TRADE
                                            PAYABLES AND ACCRUED LIABILITIES</b></span></td></tr></table>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21pt; text-align: justify; text-indent: -21pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21pt; text-align: justify; text-indent: -21pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(All
amounts in table are expressed in thousands of Canadian dollars)</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21pt; text-align: justify; text-indent: 20pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;<span style="display: none">SUMMARY
OF TRADE PAYABLES AND ACCRUED LIABILITIES</span></span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="font-weight: bold; text-align: justify"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b></b></span></p></td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: White">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  </table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


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    <div style="break-before: page; margin-top: 6pt"><p style="margin: 0pt">&#160;</p></div>
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><img src="form20-f_014.jpg" alt="" /></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: #333333"></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Notes
to the Consolidated Financial Statements</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
the year ended December 31, 2021</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(Expressed
in Canadian dollars)</i></span></p>


<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"> <span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>8.</b></span> <span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>SHARE CAPITAL, WARRANTS AND OPTIONS</b></span></p>



<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21pt; text-align: justify; text-indent: -21pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
authorized capital of the Company comprises an unlimited number of common shares without par value and 100,000,000 Series 1 convertible
preferred shares without par value. </span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></td><td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">a)</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Common
                                            shares issued and outstanding</span></td></tr></table>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 40.4pt; text-align: justify; text-indent: -0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify; text-indent: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>2021</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 21pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify; text-indent: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">During
the year ended December 31, 2021, the Company issued 13,080,314
</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">common shares on exercise of warrants and options
and received $1,641,675
</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">in proceeds from the exercise of 12,580,314
</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">warrants and $112,000
</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">from the exercise of 500,000
</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">options. There were no
</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">warrants or options exercised during the year
ended December 31, 2020. </span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify; text-indent: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
at December 31, 2021, the Company has 131,204,627 common shares issued and outstanding, (December 31, 2020 &#8211; 109,833,648).</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 22.5pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify; text-indent: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
April 20, 2021 the Company closed a non-brokered private placement consisting of an aggregate of 8,290,665
</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">units of the Company (the &#8220;Units&#8221;)
at a price of $0.24
</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">per unit, for aggregate gross proceeds of $1,989,760</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">.
Each unit consists of one common share in the capital of the Company and one half transferable common share purchase warrant (&#8220;Warrant&#8221;)
of the Company. Each full Warrant entitles the holder to acquire one common share of the Company within twenty-four (24) months following
its issuance date, at a price of $0.35. The warrants are subject to an acceleration clause such that if the closing market price of the
common shares on the TSX-V is greater than $0.60 per common share for a period of 10 consecutive trading days at any time after the four-month
anniversary of the closing of the placement, the Company may, at its option, accelerate the warrant expiry date to within 30 days.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify; text-indent: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
connection with the private placement, the Company has paid eligible finders (the &#8220;Finders&#8221;): (i) cash commission equal to
6% of the gross proceeds raised from subscribers introduced to the Company by such Finders, being an aggregate of $65,830, and (ii) a
number of common share purchase warrants (the &#8220;Finder Warrants&#8221;) equal to 6% of the units attributable to the Finders under
the private placement, being an aggregate of 274,289 Finder Warrants. Each Finder Warrant entitles the Finder to acquire one common share
of the Company for a period of twenty-four (24) months following its issuance date, at an exercise price of $0.35.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify; text-indent: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company allocated a $464,493
</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">fair value to the warrants issued in conjunction
with the private placement and $30,735
</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">to agent&#8217;s warrants. The fair value
of warrants was determined using the Black-Scholes Option Pricing Model with the following assumptions; expected life of 1.5
</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">years, expected dividend yield of 0%</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">,
a risk-free interest rate of 0.29%
</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">and an expected volatility of 132%</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 22.5pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify; text-indent: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>2020</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 21pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify; text-indent: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
August 13, 2020, the Company closed the first tranche of its non-brokered private placement equity financing consisting of 15,481,077
units of the Company at a price of $0.07 per unit, for aggregate gross proceeds of $1,083,675. On August 31, 2020, the Company closed
the second and final tranche of its non-brokered private placement equity financing consisting of 5,661,780 units of the Company at a
price of $0.07 per unit, for aggregate gross proceeds of $396,325. Each unit consists of one common share in the capital of the Company
and one transferable common share purchase warrant of the Company. Each warrant will entitle the holder to acquire one common share of
the Company at an exercise price of $0.09 for a period of 24 months from its date of issuance. The warrants are subject to an acceleration
clause such that if the closing market price of the common shares on the TSX-V is greater than $0.12 per common share for a period of
10 consecutive trading days at any time after the four-month anniversary of the closing of the placement, the Company may, at its option,
accelerate the warrant expiry date to within 30 days.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 21pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify; text-indent: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
connection with the non-brokered private financing, the Company incurred total share issuance costs of $124,222</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">.
The Company issued an aggregate of 588,154
</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">common share purchase warrants. Each warrant
will entitle the holder to acquire one common share of the Company at an exercise price of $0.09 for a period of 24 months from its date
of issuance. </span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify; text-indent: 0pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company allocated a $716,055
</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">fair value to the warrants issued in conjunction
with the private placement and $18,547
</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">to agent&#8217;s warrants. The fair value
of warrants was determined using the Black-Scholes Option Pricing Model with the following assumptions; expected life of 2
years</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">, expected dividend yield of 0%</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">,
a risk-free interest rate of 0.28%
</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">to 0.31%
</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">range and an expected volatility of 158%
</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">to 158.53%
</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">range.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.25in; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 21pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 21pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>2019</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21pt; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
October 24, 2019 the TSXV approved the filing of the earn in agreement for the Loveland Nickel Property. As a result, on December 9,
2019, the Company issued 300,000 common shares at fair value of $51,000 (note 6).</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
December 18, 2019, the Company closed a non-brokered private placement equity financing of 7,373,265 units at a price of $0.18 and 2,224,666
flow-through common shares at a price of $0.18 and raised aggregate gross proceeds of $1,727,628. Each unit issued consisted of one common
share in the capital of the Company and one-half of one common share purchase warrant. Each warrant will entitle the holder to acquire
one common share of the Company at an exercise price of $0.25 for a period of 24 months from its date of issuance. All Securities issued
pursuant to this offering were subject to a hold period which expired on April 19, 2020. The Company incurred total share issuance costs
of $343,639. The Company allocated a $265,217 fair value to the warrants issued in conjunction with the private placement and $21,445
to 298,099 agent&#8217;s warrants. The fair value of warrants was determined using the Black-Scholes Option Pricing Model with the following
assumptions; expected life of 2 years, expected dividend yield of 0%, a risk-free interest rate of <span style="font: 10pt Times New Roman, Times, Serif">1.73%</span> and an expected volatility of
147.26%.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
issuance, the Company bifurcated the flow-through shares into i) a flow-through share premium of $88,987 that investors paid for the
flow-through feature, which is recognized as a liability and; ii) share capital of $311,453. To December 31, 2020, the Company expended
$400,440 (December 31, 2019 &#8211; $Nil) in eligible exploration expenditures and, accordingly, the flow-through liability was reduced
to $Nil.</span></p>


<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 21pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>


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    <div style="break-before: page; margin-top: 6pt"><p style="margin: 0pt">&#160;</p></div>
    <!-- Field: /Page -->

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><img src="form20-f_014.jpg" alt="" /></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21pt; text-align: justify"></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: #333333"></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Notes
to the Consolidated Financial Statements</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
the year ended December 31, 2021</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(Expressed
in Canadian dollars)</i></span></p>


<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></td><td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">b)</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Preferred
                                            shares issued and outstanding</span></td></tr></table>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -13.6pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
at December 31, 2021, December 31, 2020 and December 31, 2019 there are 590,931
</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">series 1 preferred shares outstanding. </span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -13.6pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
rights and restrictions of the preferred shares are as follows:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">i)</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">dividends
shall be paid at the discretion of the directors;</td></tr>
                                                                                                                                      <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.5in"></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ii)</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
                                            holders of the preferred shares are not entitled to vote except at meetings of the holders
                                            of the preferred shares, where they are entitled to one vote for each preferred share held;</span></td></tr>
<tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">iii)</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
                                            shares are convertible at any time after 6 months from the date of issuance, upon the holder
                                            serving the Company with 10 days written notice; and</span></td></tr>
<tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">iv)</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></td><td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">c)</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Warrants</span></td></tr></table>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
summary of common share purchase warrants activity during the years ended December 31, 2021, December 31, 2020 and December
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 22.5pt; text-align: justify"><span style="display: none; font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;SCHEDULE OF NUMBER AND WEIGHTED AVERAGE EXERCISE PRICES OF WARRANTS</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 90%; margin-left: 0.5in">
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    <td style="text-align: center">&#160;</td>
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    <td style="text-align: right">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">(12,580,314</td><td style="text-align: left">)</td><td>&#160;</td>
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    <td>&#160;</td>
    <td style="text-align: right">&#160;</td>
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    <td style="text-align: right">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: White">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  </table>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><img src="form20-f_014.jpg" alt="" /></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: #333333"></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Notes
to the Consolidated Financial Statements</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
the year ended December 31, 2021</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(Expressed
in Canadian dollars)</i></span></p>


<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">At
December 31, 2021, the Company had outstanding common share purchase warrants exercisable to acquire common shares of the Company as
follows:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;<span style="display: none">SCHEDULE OF NUMBER AND WEIGHTED AVERAGE REMAINING CONTRACTUAL LIFE OF OUTSTANDING WARRANTS</span></span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 90%; margin-left: 0.5in">
  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom; background-color: White">
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    <td style="text-align: right; padding-bottom: 1.5pt">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt; text-align: right">&#160;</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 15pt; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><sup>1</sup></span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>The warrants
are subject to an acceleration clause such that if the volume-weighted average trading price of the Company&#8217;s common shares on
the TSX-V exceeds $0.12 per common share for a period of 10 consecutive trading days at any date before the expiration date of such warrants,
the Company may, at its option, accelerate the warrant expiry date to within 30 days. To December 31, 2021, the Company&#8217;s common
shares have met the criterion for acceleration. The Company, however, has not accelerated the warrant expiry date.</i></span></td>
</tr></table>

<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i></i></span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></td><td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">d)</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Stock
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

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Company adopted a Stock Option Plan (the &#8220;Plan&#8221;), providing the authority to grant options to directors, officers, employees
and consultants enabling them to acquire up to 10% of the issued and outstanding common stock of the Company. Under the Plan, the exercise
price of each option equals the market price or a discounted price of the Company&#8217;s stock as calculated on the date of grant. The
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;<span style="display: none">SCHEDULE OF NUMBER AND WEIGHTED AVERAGE EXERCISE PRICES OF SHARE OPTIONS</span></span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 90%; margin-left: 0.5in">
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    <td>&#160;</td>
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    <td>&#160;</td>
    <td>&#160;</td>
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">During
the year ended December 31, 2021, the Company granted an aggregate total of 8,178,972
</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">stock options to employees, directors and consultants
with a maximum term of 5
</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">years. All options vest immediately and are exercisable
as to 3,185,000
</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">options at $0.32
</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">per share and 4,993,972
</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">options at $0.40
</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">per share. The Company calculates the fair value
of all stock options using the Black-Scholes Option Pricing Model. The fair value of options granted during the year ended December 31,
2021 amounted to $2,530,706
</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">and was recorded as a share-based payment expense.
The weighted average fair value of options granted during the year ended December 31, 2021 is $0.31 per option.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">During
the year ended December 31, 2020, the Company granted an aggregate total of 7,850,000 stock options to employees, directors and consultants
with a maximum term of 5 years. All options vest immediately and are exercisable as to 6,650,000 options at $0.16 per share and 1,200,000
options at $0.09 per share. The Company calculates the fair value of all stock options using the Black-Scholes Option Pricing Model.
The fair value of options granted during the year ended December 31, 2020 amounted to $969,391 and was recorded as a share-based payment
expense. </span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">There
were no incentive stock options granted during the year ended December 31, 2019.</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><img src="form20-f_014.jpg" alt="" /></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: #333333"></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Notes
to the Consolidated Financial Statements</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
the year ended December 31, 2021</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(Expressed
in Canadian dollars)</i></span></p>


<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
fair value of stock options granted and vested during the years ended December 31, 2021, 2020 and 2019 was calculated using
the following assumptions:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;<span style="display: none">SCHEDULE OF INPUTS TO OPTION PRICING MODEL</span></span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 90%; margin-left: 0.5in">
  <tr style="vertical-align: bottom">
    <td style="padding-bottom: 1.5pt; text-align: justify">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;<span style="display: none">SCHEDULE OF NUMBER AND WEIGHTED AVERAGE REMAINING CONTRACTUAL LIFE OF OUTSTANDING SHARE OPTIONS</span></span></p>

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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="border-bottom: Black 2.5pt double; text-align: left">&#160;</td><td style="border-bottom: Black 2.5pt double; text-align: right">15,054,597</td><td style="padding-bottom: 2.5pt; text-align: left">&#160;</td><td style="padding-bottom: 2.5pt">&#160;</td>
    <td style="border-bottom: Black 2.5pt double; text-align: left">&#160;</td><td style="border-bottom: Black 2.5pt double; text-align: right">15,054,597</td><td style="padding-bottom: 2.5pt; text-align: left">&#160;</td><td style="padding-bottom: 2.5pt">&#160;</td>
    <td style="text-align: right; padding-bottom: 2.5pt">&#160;</td><td style="padding-bottom: 2.5pt">&#160;</td>
    <td style="padding-bottom: 2.5pt; text-align: left">&#160;</td><td style="padding-bottom: 2.5pt; text-align: right">&#160;</td><td style="padding-bottom: 2.5pt; text-align: left">&#160;</td><td style="padding-bottom: 2.5pt">&#160;</td>
    <td style="border-bottom: Black 2.5pt double; text-align: left">&#160;</td><td style="border-bottom: Black 2.5pt double; text-align: right">3.95</td><td style="padding-bottom: 2.5pt; text-align: left">&#160;</td></tr>
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 15pt; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i><sup>*</sup></i></span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Subsequently expired,
                                                                                                                                                                                unexercised.</i></span></td>
</tr></table>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
average share price at the dates the options were exercised in 2021 was $0.485.</span></p>

<p style="margin-top: 0pt; margin-bottom: 0pt">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></td><td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">e)</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Reserve</span></td></tr></table>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
reserve records items recognized as stock-based compensation expense and other share-based payments until such time that the stock
options or warrants are exercised, at which time the corresponding amount will be transferred to share capital. Amounts recorded for
forfeited or expired unexercised options and warrants are transferred to deficit. During the year ended December 31, 2021, the
Company transferred $203,865</span> <span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(December
31, 2020 - $3,782,706</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">) (December
31, 2019 - $3,860,656) to deficit for expired options and warrants and $666,478 </span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">to
share capital for exercised warrants and options (December 31, 2020 and 2019 - $Nil</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">).</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">During
the year ended December 31, 2021, the Company recorded $2,530,706
</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(December 31, 2020 - $969,391</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">)
of share-based payments to reserves. There were no share-based payments during the year ended December 31, 2019.</span></p>
<!-- Field: Split-Segment; Name: 001 -->
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"> <span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>9.</b></span> <span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>INVESTMENT IN PREMIUM NICKEL RESOURCES INC.</b></span></p>



<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
September 30, 2019, the Company entered into a Memorandum of Understanding (&#8220;MOU&#8221;) with Premium Nickel. Pursuant to the MOU,
the Company and Premium Nickel set forth their interests in negotiating and acquiring several of the assets of BCL
Limited, a private company with operations in Botswana that is currently in liquidation. </span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Concurrent
with the MOU, the Company initially subscribed for 2,400,000
</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">common shares of Premium Nickel at $0.01</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">,
for a total investment of $24,000</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">.
The Company&#8217;s initial investment included a provision that gives the Company the right to nominate two directors to the board of
directors of Premium Nickel. The
Company&#8217;s initial investment also included Premium Nickel issuing the Company a non-transferable share purchase warrant (the &#8220;Warrant&#8221;),
which entitles the Company to purchase common shares of Premium Nickel, for up to 15% of the capital of Premium Nickel upon payment of
US $10 million prior to the fifth anniversary of the date of issue</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">.
At December 31, 2019, the Company&#8217;s investment was recorded as an advance, as the Company had not yet been issued the common
share certificate nor the Warrant. The initial common share certificate and Warrant were issued during the year ended December 31,
2020.<br /> <br /> </span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">To
December 31, 2020, the Company subscribed for an additional 4,657,711 </span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">common
shares of Premium Nickel, for a further investment of $154,164</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">.
The common shares underlying the investment are restricted (&#8220;Restricted&#8221;) from being traded before such date that is 4
months after the later of (a) the date of issuance and (b) the date at which Premium Nickel becomes a reporting issuer in any
province or territory. As of December 31, 2020 the underlying common shares were Restricted. During year ended December 31, 2021,
the Company invested an additional $441,446 </span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">and
as of December 31, 2021, the Company held a 10%
equity interest in Premium Nickel (December 31, 2020 &#8211; 11.01</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">%)</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>


<!-- Field: Page; Sequence: 126; Value: 1 -->
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    <div style="break-before: page; margin-top: 6pt"><p style="margin: 0pt">&#160;</p></div>
    <!-- Field: /Page -->

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><img src="form20-f_014.jpg" alt="" /></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: #333333"></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Notes
to the Consolidated Financial Statements</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
the year ended December 31, 2021</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(Expressed
in Canadian dollars)</i></span></p>


<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of December 31, 2021, the Company was providing the corporate management and technical expertise to Premium Nickel on a contractual
basis, had two directors representing the Company on the Board, who were actively participating in the day-to-day activities of Premium
Nickel and actively contributing to Premium Nickel&#8217;s financial and operational strategies. Accordingly, the Company determined that
it has significant influence in Premium Nickel and has used equity accounting for the investment. Premium Nickel&#8217;s financial
information at December 31, 2021 was net assets of $4,770,937
</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">which was comprised primarily of cash, and
a total comprehensive loss of $1,688,310
</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">was recorded for the year ended December
31, 2021.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Details
of the Company&#8217;s investment at December 31, 2021 is as follows:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;<span style="display: none">SCHEDULE OF INVESTMENT</span></span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 70%">
  <tr style="vertical-align: bottom">
    <td style="text-align: justify">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">Investment</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 76%; text-align: justify">Balance, December 31, 2020</td><td style="width: 2%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 20%; text-align: right">48</td><td style="width: 1%; text-align: left">&#160;</td></tr>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">50</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify">Investment</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">392</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: justify; padding-bottom: 1.5pt">Share of loss of Premium Nickel</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(169</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: justify; padding-bottom: 2.5pt">Total</td><td style="padding-bottom: 2.5pt">&#160;</td>
    <td style="border-bottom: Black 2.5pt double; text-align: left">&#160;</td><td style="border-bottom: Black 2.5pt double; text-align: right">321</td><td style="padding-bottom: 2.5pt; text-align: left">&#160;</td></tr>
  </table>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
January 1, 2020, the Company entered into a Management and Technical Services Agreement (&#8220;the Services Agreement&#8221;) with Premium
Nickel whereby the Company will provide certain technical, corporate, administrative and clerical, office and other services to Premium
Nickel during the development stage of the contemplated arrangement. The
Company will charge Premium Nickel for expenses incurred and has the right to charge a 2% administrative fee on third party expenses.
The Company will invoice Premium Nickel on a monthly basis and payment shall be made by Premium Nickel no later than 15 days after receipt
of such invoice. The term of the Service Agreement is for an initial period of 3 years and can be renewed for an additional 1 year period.
The Service Agreement can be terminated within 30 days notice, for non-performance, by the Company giving 6 months notice or Premium
Nickel within 90 days provided the Company no longer owns at least 10% of the outstanding common shares of Premium Nickel.</span>
<span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If Premium Nickel defaults on making payments, the outstanding
balance shall be treated as a loan to Premium Nickel, to be evidenced by a promissory note. The promissory note will be payable upon
demand and bear interest at a rate equal to the then current lending rate plus 1%, calculated from the date of default. Subsequent payment
by Premium Nickel will be first applied to accrued interest and then principle of the invoice. During the year ended December 31, 2021,
pursuant to the Services Agreement, the Company charged Premium Nickel $2,370,444
</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(December 31, 2020 - $647,164</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">)
for services and charged, $42,315
</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(December 31, 2020 - $8,495</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">)
in administrative fees, received $2,225,589
</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(December 31, 2020 &#8211; $701,305</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">)
and recorded $199,145
</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">in due from Premium Nickel (December 31, 2020
- $54,619</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">).
Subsequent to December 31, 2021, the Company received the $199,145
</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">in full from Premium Nickel. </span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21pt; text-align: justify; text-indent: -21pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"> <span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>10.</b></span> <span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>RELATED PARTY TRANSACTIONS </b></span></p>



<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21pt; text-align: justify; text-indent: -21pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following amounts due to related parties are included in trade payables and accrued liabilities (Note 7):</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(All
amounts in table are expressed in thousands of Canadian dollars)</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 31.5pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;<span style="display: none">SCHEDULE OF AMOUNTS DUE TO RELATED PARTIES, INCLUDED IN TRADE PAYABLES AND ACCRUED LIABILITIES</span></span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 90%; margin-left: 0.5in">
  <tr style="vertical-align: bottom">
    <td style="text-align: justify">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right"><p style="margin-top: 0; margin-bottom: 0">December 31,</p>
                                                                                <p style="margin-top: 0; margin-bottom: 0">2020</p></td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 60%; text-align: justify">Directors and officers of the Company</td><td style="width: 2%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 16%; text-align: right">28</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 2%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 16%; text-align: right">21</td><td style="width: 1%; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: justify">Related company</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">5</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">7</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify">Total</td><td style="padding-bottom: 2.5pt">&#160;</td>
    <td style="border-bottom: Black 2.5pt double; text-align: left">&#160;</td><td style="border-bottom: Black 2.5pt double; text-align: right">33</td><td style="padding-bottom: 2.5pt; text-align: left">&#160;</td><td style="padding-bottom: 2.5pt">&#160;</td>
    <td style="border-bottom: Black 2.5pt double; text-align: left">&#160;</td><td style="border-bottom: Black 2.5pt double; text-align: right">28</td><td style="padding-bottom: 2.5pt; text-align: left">&#160;</td></tr>
  </table>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 22.5pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 22.5pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">These
amounts are unsecured, non-interest bearing and have no fixed terms of repayment.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 22.5pt; text-align: justify">&#160;</p>


<!-- Field: Page; Sequence: 127; Value: 1 -->
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    <div style="break-before: page; margin-top: 6pt"><p style="margin: 0pt">&#160;</p></div>
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><img src="form20-f_014.jpg" alt="" /></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 22.5pt; text-align: justify"></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: #333333"></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Notes
to the Consolidated Financial Statements</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
the year ended December 31, 2021</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(Expressed
in Canadian dollars)</i></span></p>


<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 22.5pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following amount due from related party and advance represent as well as the investment in Premium Nickel a private company incorporated
in Ontario, in which certain directors and officers of the Company also hold offices and minority investments.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(All
amounts in table are expressed in thousands of Canadian dollars)</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 31.5pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 90%; margin-left: 0.5in">
  <tr style="vertical-align: bottom">
    <td style="text-align: justify">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">December 31, 2020</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 60%; text-align: justify">Due from related party</td><td style="width: 2%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 16%; text-align: right">199</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 2%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 16%; text-align: right">55</td><td style="width: 1%; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: justify">Advance</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">50</td><td style="text-align: left">&#160;</td></tr>
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">321</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">48</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: justify">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify; padding-bottom: 2.5pt">Total</td><td style="padding-bottom: 2.5pt">&#160;</td>
    <td style="border-bottom: Black 2.5pt double; text-align: left">&#160;</td><td style="border-bottom: Black 2.5pt double; text-align: right">520</td><td style="padding-bottom: 2.5pt; text-align: left">&#160;</td><td style="padding-bottom: 2.5pt">&#160;</td>
    <td style="border-bottom: Black 2.5pt double; text-align: left">&#160;</td><td style="border-bottom: Black 2.5pt double; text-align: right">153</td><td style="padding-bottom: 2.5pt; text-align: left">&#160;</td></tr>
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></td><td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(a)</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Related
                                            party transactions</span></td></tr></table>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>2021</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Sentient
Executive GP IV Limited (&#8220;Sentient&#8221;) and Contemporary Amperex Technology Limited (&#8220;CATL&#8221;) have historically subscribed
to private placements of the Company.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of December 31, 2021, Sentient beneficially owns 36,980,982 common shares, constituting approximately 28.19% of the currently issued
and outstanding common shares of the Company. </span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of December 31, 2021, CATL beneficially owns 22,944,444 common shares, constituting approximately 17.49% of the currently issued and
outstanding shares of the Company. CATL has pre-emptive rights and the right to nominate one director to the board of directors of the
Company.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>2020</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Sentient
Executive GP IV Limited (&#8220;Sentient&#8221;) and Contemporary Amperex Technology Limited (&#8220;CATL&#8221;) have historically subscribed
to private placements of the Company.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of December 31, 2020, Sentient beneficially owns 36,980,982 common shares, constituting approximately 33.66% of the currently issued
and outstanding common shares of the Company. </span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of December 31, 2020, CATL beneficially owns 22,944,444 common shares, constituting approximately 20.89% of the currently issued and
outstanding shares of the Company. CATL has pre-emptive rights and the right to nominate one director to the board of directors of the
Company.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">During
the year ended December 31, 2020, the Company recorded $185,706 in fees charged by a legal firm in which the Company&#8217;s former chairman
is a consultant. </span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>2019</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; background-color: white"></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
                                            of December 31, 2019, Sentient beneficially owns 36,980,982 common shares, constituting approximately
                                            41.70% of the currently issued and outstanding common shares of the Company.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
December 18, 2019, CATL subscribed for a total of 2,944,444 units under a bought deal private placement financing transaction described
in Note 9 for a total net proceeds of $530,000. As part of the subscription, CATL was granted 1,472,222 common share purchase warrants
exercisable at $0.25 until December 18, 2021. As of December 31, 2019, CATL beneficially owns 22,944,444 common shares, constituting
approximately 25.87% of the currently issued and outstanding shares of the Company. CATL has pre-emptive rights and the right to nominate
one director to the board of directors of the Company.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">During
the year ended December 31, 2019, the Company recorded $370,127 (2018 - $174,224), (2017 - $244,285) in fees charged by a legal firm
in which the Company&#8217;s former chairman is a consultant.</span></p>


<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><img src="form20-f_014.jpg" alt="" /></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: #333333"></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Notes
to the Consolidated Financial Statements</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
the year ended December 31, 2021</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(Expressed
in Canadian dollars)</i></span></p>


<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; width: 18pt"></td><td style="font: 10pt Times New Roman, Times, Serif; width: 3.2pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(b)</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Key
                                            management personnel are defined as members of the Board of Directors and senior officers.</span></td></tr></table>

<p style="margin-top: 0; margin-bottom: 0">&#160;&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Key
management compensation was:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(All
amounts in table are expressed in thousands of Canadian dollars)</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 31.5pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;<span style="display: none">SCHEDULE OF KEY MANAGEMENT COMPENSATION</span></span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 90%; margin-left: 0.5in">
  <tr style="vertical-align: bottom">
    <td style="padding-bottom: 1.5pt; text-align: justify">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">December 31, 2021</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">December 31, 2020</td>
    <td style="padding-bottom: 1.5pt">&#160;</td>
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                                            31, 2019</b></p></td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 40%; text-align: justify">Geological consulting fees &#8211; expensed</td><td style="width: 2%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 16%; text-align: right">-</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 2%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 16%; text-align: right">5</td>
    <td style="width: 1%">&#160;</td>
    <td style="width: 2%">&#160;</td>
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    <td style="text-align: right; width: 16%">136</td><td style="width: 1%; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">531</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">478</td>
    <td>&#160;</td>
    <td>&#160;</td>
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    <td style="text-align: right">747</td><td style="text-align: left">&#160;</td></tr>
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    <td style="text-align: justify">Salaries - expensed</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">182</td>
    <td>&#160;</td>
    <td>&#160;</td>
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    <td style="text-align: right">185</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: justify; padding-bottom: 1.5pt">Share-based payments</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">2,314</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">756</td>
    <td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: right">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: justify; padding-bottom: 2.5pt">Total</td><td style="font-weight: bold; padding-bottom: 2.5pt">&#160;</td>
    <td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&#160;</td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">2,845</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; padding-bottom: 2.5pt">&#160;</td>
    <td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&#160;</td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">1,421</td>
    <td style="padding-bottom: 2.5pt">&#160;</td>
    <td style="padding-bottom: 2.5pt">&#160;</td>
    <td style="border-bottom: Black 2.5pt double; text-align: right"></td>
    <td style="border-bottom: Black 2.5pt double; text-align: right"><b>1,068</b></td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&#160;</td></tr>
  </table>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"> <span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>11.</b></span> <span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>SUPPLEMENTAL CASH FLOW INFORMATION </b></span></p>



<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Changes
in working capital for the year ended December 31, 2021, 2020 and 2019 are as follows:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(All
amounts in table are expressed in thousands of Canadian dollars)</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;<span style="display: none">SCHEDULE OF CHANGES IN WORKING CAPITAL</span></span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 90%; margin-left: 0.5in">
  <tr style="vertical-align: bottom">
    <td style="padding-bottom: 1.5pt; text-align: justify">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">December 31, 2021</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">December 31, 2020</td>
    <td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: right"><p style="text-align: right; margin-top: 0; margin-bottom: 0"><b>December
                                            31, 2019</b></p></td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 40%; text-align: justify">(Increase) decrease in due from related party </td><td style="width: 2%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 16%; text-align: right">(143</td><td style="width: 1%; text-align: left">)</td><td style="width: 2%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 16%; text-align: right">102</td>
    <td style="width: 1%">&#160;</td>
    <td style="width: 2%">&#160;</td>
    <td style="text-align: right; width: 1%">&#160;</td>
    <td style="text-align: right; width: 16%">(126</td><td style="width: 1%; text-align: left">)</td></tr>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">(17</td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">7</td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: right">&#160;</td>
    <td style="text-align: right">3</td><td style="text-align: left">&#160;</td></tr>
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    <td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(122</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(155</td>
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    <td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: right">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: right">134</td><td style="padding-bottom: 1.5pt; text-align: left"></td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="padding-bottom: 2.5pt; font-weight: bold; text-align: justify">Total changes in working capital</td><td style="font-weight: bold; padding-bottom: 2.5pt">&#160;</td>
    <td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&#160;</td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">(282</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left">)</td><td style="font-weight: bold; padding-bottom: 2.5pt">&#160;</td>
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    <td style="padding-bottom: 2.5pt">&#160;</td>
    <td style="border-bottom: Black 2.5pt double; text-align: right"></td>
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  </table>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">During
the year ended December 31, 2021, the Company:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.5in"></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">i)</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">transferred
                                            $203,865 from reserve to deficit;</span></td></tr>
<tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ii)</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">recorded
                                            $67,532
                                            </span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">as
                                            the net change for accrued exploration and evaluation expenditures;</span></td></tr>
<tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">iii)</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">recorded
                                            $94,606 provision recovery for restoration obligation;</span></td></tr>
<tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">iv)</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">reclassed
                                            $50,000 from advance to investment;</span></td></tr></table>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 40.5pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">During
the year ended December 31, 2020, the Company:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.5in"></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">v)</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">transferred
                                            $3,782,706 from reserve to deficit;</span></td></tr>
<tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">vi)</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">recorded
                                            $6,506 as the net change for accrued exploration and evaluation expenditures;</span></td></tr>
<tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">vii)</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">recorded
                                            $267,000 as a provision for restoration obligation;</span></td></tr>
<tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">viii)</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">reclassed
                                            $24,000 from advance to investment;</span></td></tr>
<tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ix)</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">offset
                                            $33,735 from due to related party to investment; and</span></td></tr>
<tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">x)</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">offset
                                            $7,500 in trade payables to proceeds from issuance of common stock.</span></td></tr></table>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">During
the year ended December 31, 2019, the Company:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">i)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">transferred
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<tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">recorded
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<tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">iii)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">paid
    $51,000 as non-cash consideration for exploration and evaluation expenditures; and</span></td></tr>
<tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">iv)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">recorded
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</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"> <span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>12.</b></span> <span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>COMMITMENTS AND CONTINGENCIES</b></span></p>



<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21pt; text-align: justify; text-indent: -21pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company has certain commitments to meet the minimum expenditures requirements on its exploration and evaluation assets. Further, the
Company has a site restoration obligation with respect to its Greenland exploration and evaluation asset.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Effective
July 1, 2014, the Company had changes to management and entered into the following agreements for services with directors of the Company
and a company in which a director has an interest:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.5in"></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">i)</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Directors&#8217;
                                            fees: $2,000 stipend per month for independent directors and $3,000 stipend per month for
                                            the chairman of the board, and $2,500 for committee chairmen.</span></td></tr>
<tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td></tr>
<tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ii)</span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Management
                                            fees: $19,106 per month effective January 1, 2020 and $30,951 per month effective June 2018
                                            up to December 31, 2019. </span></td></tr></table>

<p style="margin-top: 0; margin-bottom: 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.5pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Effectively
on June 1, 2018, the Company changed the terms with Keith Morrison, the CEO, from direct employment to contracted consultant and entered
into a service agreement with his company. </span></p>

<p style="margin-top: 0; margin-bottom: 0">&#160;</p>


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    <div style="break-before: page; margin-top: 6pt"><p style="margin: 0pt">&#160;</p></div>
    <!-- Field: /Page -->

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><img src="form20-f_014.jpg" alt="" /></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: #333333"></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Notes
to the Consolidated Financial Statements</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
the year ended December 31, 2021</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(Expressed
in Canadian dollars)</i></span></p>


<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Each
of the agreements shall be continuous and may only be terminated by mutual agreement of the parties, subject to the provisions that in
the event there is a change of effective control of the Company, the party shall have the right to terminate the agreement, within sixty
days from the date of such change of effective control, upon written notice to the Company. Within thirty days from the date of delivery
of such notice, the Company shall forward to the party the amount of money due and owing to the party hereunder to the extent accrued
to the effective date of termination.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21pt; text-align: justify; text-indent: -21pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"> <span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>13.</b></span> <span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>RISK MANAGEMENT</b></span></p>



<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21pt; text-align: justify; text-indent: -21pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company&#8217;s exposure to market risk includes, but is not limited to, the following risks:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i><span style="text-decoration: underline">Interest
Rate Risk</span></i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Interest
rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates.
The Company is not subject to significant changes in interest rate.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i><span style="text-decoration: underline">Foreign
Currency Exchange Rate Risk</span></i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Currency
risk is risk that the fair value of future cash flows will fluctuate because of changes in foreign currency exchange rates. In addition,
the value of cash and other financial assets and liabilities denominated in foreign currencies can fluctuate with changes in currency
exchange rates.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company operates in Canada and Greenland and undertakes transactions denominated in foreign currencies such as United States dollar,
Euros and Danish Krones, and consequently is exposed to exchange rate risks. Exchange risks are managed by matching levels of foreign
currency balances and related obligations and by maintaining operating cash accounts in non-Canadian dollar currencies. The rate published
by the Bank of Canada at the close of business on December 31, 2021 was 1.2794 USD to CAD, 1.4462 EUR to CAD and 0.1936 DKK to CAD.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company&#8217;s Canadian dollar equivalent of financial assets and liabilities that are denominated in Danish Krones consist of accounts
payable of $6,776 (2020 - $7,349) and $3,032 in USD currency (2020 - $1,798).</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i><span style="text-decoration: underline">Credit
Risk</span></i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Credit
risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an
obligation. The credit risk is primarily associated with liquid financial assets. The Company limits exposure to credit risk on liquid
financial assets by holding cash at highly-rated financial institutions. The credit risk associated with due from related party is
low as it&#8217;s solely due from Premium Nickel and the outstanding amount was always settled within 30 days upon invoicing.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i><span style="text-decoration: underline">Price
Risk</span></i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company is exposed to price risk with respect to commodity prices. Commodity price risk is defined as the potential adverse impact on
earnings and economic value due to commodity price movements and volatilities. To mitigate price risk, the Company closely monitors commodity
prices of precious metals and the stock market to determine the appropriate course of action to be taken by the Company.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i><span style="text-decoration: underline">Liquidity
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Liquidity
risk is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities that are settled
by delivering cash or another financial asset. The Company manages the liquidity risk inherent in these financial obligations by regularly
monitoring actual cash flows to annual budget which forecast cash needs and expected cash availability to meet future obligations.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company will defer discretionary expenditures, as required, in order to manage and conserve cash required for current liabilities.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


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    <div style="break-before: page; margin-top: 6pt"><p style="margin: 0pt">&#160;</p></div>
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><img src="form20-f_014.jpg" alt="" /></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: #333333"></span>&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Notes
to the Consolidated Financial Statements</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(Expressed
in Canadian dollars)</i></span></p>


<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(All
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;<span style="display: none">SCHEDULE OF CONTRACTUAL OBLIGATIONS</span></span></p>

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<p style="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i><span style="text-decoration: underline">Capital
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font: normal 10pt Times New Roman, Times, Serif">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company manages its capital to ensure that it will be able to continue as a going concern, so that adequate funds are available or are
scheduled to be raised to carry out the Company&#8217;s exploration program and to meet its ongoing administrative and operating costs
and obligations. This is achieved by the Board of Directors&#8217; review and ultimate approval of budgets that are achievable within
existing resources, and the timely matching and release of the next stage of expenditures with the resources made available from capital
raisings and debt funding from related or other parties. In doing so, the Company may issue new shares, restructure or issue new debt.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
the management of capital, the Company includes the components of equity, loans and borrowings, other current liabilities, net of cash.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(All
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;<span style="display: none">SCHEDULE OF COMPONENTS OF EQUITY, LOANS AND BORROWINGS, AND OTHER CURRENT LIABILITIES</span></span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-left: auto; border-collapse: collapse; width: 90%; margin-right: auto">
  <tr style="display: none; vertical-align: bottom">
    <td style="text-align: justify">&#160;</td><td style="font-weight: bold">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center">2021</td><td style="font-weight: bold">&#160;</td><td style="font-weight: bold">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center">2020</td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: right">2019&#160;</td><td style="font-weight: bold">&#160;</td></tr>
<tr style="vertical-align: bottom">
    <td style="padding-bottom: 1.5pt; text-align: justify">&#160;</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td>
    <td colspan="6" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">As at December 31,</td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: right">&#160;</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="padding-bottom: 1.5pt; text-align: justify">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2021</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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    <td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: center"><b>2019</b></td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
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    <td style="width: 52%; text-align: justify">Equity</td><td style="width: 2%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 12%; text-align: right">41,203</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 2%">&#160;</td>
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    <td style="width: 1%">&#160;</td>
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    <td style="text-align: right; width: 12%">39,431</td><td style="width: 1%; text-align: left">&#160;</td></tr>
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    <td style="padding-bottom: 1.5pt">&#160;</td>
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    <td style="border-bottom: Black 1.5pt solid; text-align: right">608</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">39,644</td>
    <td>&#160;</td>
    <td>&#160;</td>
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    <td style="text-align: right">40,039</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
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    <td style="border-bottom: Black 1.5pt solid; text-align: left"></td><td style="border-bottom: Black 1.5pt solid; text-align: right">(1,973</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left"></td><td style="border-bottom: Black 1.5pt solid; text-align: right">(308</td>
    <td style="padding-bottom: 1.5pt">)</td>
    <td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid"></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: right">(1,098</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
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    <td style="text-align: justify; padding-bottom: 1.5pt"><span style="display: none; font-family: Times New Roman, Times, Serif; font-size: 10pt">Equity
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    <td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left"></td><td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">39,710</td><td style="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left"></td><td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">39,336</td>
    <td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid"></td>
    <td style="border-bottom: Black 1.5pt solid; text-align: right"><b>38,941</b></td><td style="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&#160;</td></tr>
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<p style="margin-top: 0; margin-bottom: 0">&#160;</p>
<!-- Field: Split-Segment; Name: 002 -->
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; width: 0%"></td><td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>14.</b></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>FINANCIAL
                                            INSTRUMENTS</b></span></td></tr></table>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Fair
value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants
at the measurement date. The fair value hierarchy establishes three levels to classify the inputs to valuation techniques used
to measure the fair value.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
three levels of the fair value hierarchy are:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 34pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Level
1 &#8211; Unadjusted quoted prices in active markets for identical assets or liabilities</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 34pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Level
2 &#8211; Inputs other than quoted prices that are observable either directly or indirectly</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 34pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Level
3 &#8211; Inputs that are not based on observable market data</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 34pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 22.5pt; text-align: justify; text-indent: -22.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Cash
is measured using level 1.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 22.5pt; text-align: justify; text-indent: -22.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


<!-- Field: Page; Sequence: 131; Value: 1 -->
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    <div style="break-before: page; margin-top: 6pt"><p style="margin: 0pt">&#160;</p></div>
    <!-- Field: /Page -->

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><img src="form20-f_014.jpg" alt="" /></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 22.5pt; text-align: justify; text-indent: -22.5pt"></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: #333333"></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Notes
to the Consolidated Financial Statements</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
the year ended December 31, 2021</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(Expressed
in Canadian dollars)</i></span></p>


<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 22.5pt; text-align: justify; text-indent: -22.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; width: 0"></td><td style="font: 10pt Times New Roman, Times, Serif; width: 21pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>15.</b></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>SEGMENTED
                                            INFORMATION</b></span></td></tr></table>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21pt; text-align: justify; text-indent: -21pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company operates in one reportable operating segment being that of the acquisition, exploration and development of mineral properties
in two geographic segments being Canada and Greenland (note 6). The Company&#8217;s geographic segments are as follows:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(All
amounts in table are expressed in thousands of Canadian dollars)</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 31.5pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;<span style="display: none">SCHEDULE OF GEOGRAPHIC SEGMENTS</span></span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 90%; margin-left: 0.5in">
  <tr style="vertical-align: bottom">
    <td style="text-align: justify">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: right"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>December
31,</b></span></p>
                                                                                <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"></p>
                                                                                <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b></b></span><b>2021</b></p></td><td style="padding-bottom: 1.5pt">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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31,&#160;</p>
                                                                                <p style="margin-top: 0; margin-bottom: 0">2020</p></td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify">Equipment</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="padding-left: 10pt; width: 56%; text-align: justify">Canada</td><td style="width: 2%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 18%; text-align: right">4</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 2%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 18%; text-align: right">6</td><td style="width: 1%; text-align: left">&#160;</td></tr>
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">12</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: White">
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    <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">&#160;</td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">16</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; padding-bottom: 2.5pt">&#160;</td>
    <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">&#160;</td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">21</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&#160;</td></tr>
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 90%; margin-left: 0.5in">
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    <td style="text-align: justify">Exploration and evaluation assets</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: White">
    <td style="font-weight: bold; text-align: justify; padding-bottom: 2.5pt">Total</td><td style="font-weight: bold; padding-bottom: 2.5pt">&#160;</td>
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; width: 0%"></td><td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>16.</b></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>INCOME
                                            TAXES </b></span></td></tr></table>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21pt; text-align: justify; text-indent: -21pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(All
amounts in tables are expressed in thousands of Canadian dollars)</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>&#160;</i><span style="display: none">SCHEDULE
OF RECONCILIATION OF EXPECTED INCOME TAX RECOVERY TO ACTUAL INCOME TAX RECOVERY</span></span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 90%; margin-left: 0.5in">
  <tr style="vertical-align: bottom">
    <td style="text-align: justify">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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                                                                                <p style="margin-top: 0; margin-bottom: 0">2021</p></td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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                                                                                <p style="margin-top: 0; margin-bottom: 0">2020</p></td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 56%; text-align: left">Net loss</td><td style="width: 2%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 18%; text-align: right">(3,996</td><td style="width: 1%; text-align: left">)</td><td style="width: 2%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 18%; text-align: right">(2,741</td><td style="width: 1%; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">Permanent differences and other</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">479</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">222</td><td style="text-align: left">&#160;</td></tr>
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  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left">Net deferred income tax recovery</td><td style="padding-bottom: 2.5pt">&#160;</td>
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
significant components of the Company&#8217;s deferred income tax assets and liabilities are as follows:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;<span style="display: none">SCHEDULE OF SIGNIFICANT COMPONENTS OF DEFERRED INCOME TAX ASSETS AND LIABILITIES</span></span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 90%; margin-left: 0.5in">
  <tr style="vertical-align: bottom">
    <td style="text-align: justify">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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                                                                                <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>December 31,</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>2021</b></span></p></td><td style="padding-bottom: 1.5pt">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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                                                                                <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>December 31,</b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>2020</b></span></p></td><td style="padding-bottom: 1.5pt">&#160;</td></tr>
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  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: justify">Loss carry-forwards</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">5,351</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify">Share issuance costs</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">84</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">175</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: justify">Cumulative eligible capital</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">81</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">35</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: justify; padding-bottom: 1.5pt">Equipment</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">13,022</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: justify; padding-bottom: 1.5pt">Valuation allowance</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(13,022</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(12,422</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify; padding-bottom: 2.5pt">Net deferred tax asset</td><td style="padding-bottom: 2.5pt">&#160;</td>
    <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">-</td><td style="padding-bottom: 2.5pt; text-align: left">&#160;</td><td style="padding-bottom: 2.5pt">&#160;</td>
    <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">-</td><td style="padding-bottom: 2.5pt; text-align: left">&#160;</td></tr>
  </table>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


<!-- Field: Page; Sequence: 132; Value: 1 -->
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    <div style="break-before: page; margin-top: 6pt"><p style="margin: 0pt">&#160;</p></div>
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><img src="form20-f_014.jpg" alt="" /></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: #333333"></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Notes
to the Consolidated Financial Statements</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
the year ended December 31, 2021</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(Expressed
in Canadian dollars)</i></span></p>


<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
tax pools relating to these deductible temporary differences expire as follows:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;<span style="display: none">SCHEDULE OF TAX POOLS RELATING TO DEDUCTIBLE TEMPORARY DIFFERENCES AND THEIR EXPIRATIONS</span></span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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                                                                                <p style="margin-top: 0; margin-bottom: 0">resource pools</p></td><td style="padding-bottom: 1.5pt">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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                                                                                <p style="margin-top: 0; margin-bottom: 0">share issue costs</p></td><td style="padding-bottom: 1.5pt">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 28%; text-align: left">2022</td><td style="width: 2%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 14%; text-align: right">-</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 2%">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: White">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">112</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">43</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">696</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">517</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21pt; text-align: justify; text-indent: -21pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21pt; text-align: justify; text-indent: -21pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; width: 0%"></td><td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>18.</b></span></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>SUBSEQUENT
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21pt; text-align: justify; text-indent: -21pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" border="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt">
<tr style="vertical-align: top">
    <td style="width: 0.25in">&#160;</td>
  <td style="text-align: justify; width: 0.25in">a)</td>
  <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On February 17, 2022, the
  Company announced that it has executed a non-binding letter of intent (&#8220;Non-Binding LOI&#8221;) providing for a business
  combination of Premium Nickel and the Company, (&#8220;Merger&#8221;). Under the policies of TSXV, Premium Nickel is a
  &#8220;Non-Arm&#8217;s Length Party&#8221; of the Company. The Non-Binding LOI will form the basis upon which Premium Nickel and the
  Company will negotiate one or more definitive agreements governing the proposed Merger. It is currently anticipated that the Merger
  will be completed by way of a triangular amalgamation involving Premium Nickel, the Company and a wholly-owned subsidiary of the
  Company to be formed; provided, however that the definitive structure of the Merger will be determined based on further tax and
  structuring advice to be received prior to the execution of definitive agreements governing the proposed Merger. The company is the
  Resulting Issuer after the closing of the Merger.</span></td></tr>
</table>


<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


<!-- Field: Page; Sequence: 133; Value: 1 -->
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    <div style="break-before: page; margin-top: 6pt"><p style="margin: 0pt">&#160;</p></div>
    <!-- Field: /Page -->

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><img src="form20-f_014.jpg" alt="" /></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: #333333"></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Notes
to the Consolidated Financial Statements</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
the year ended December 31, 2021</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(Expressed
in Canadian dollars)</i></span></p>


<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration: underline">Proposed
Transaction Terms </span></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> currently owns approximately 9.8%
</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">of the outstanding common shares of Premium
Nickel on a basic, undiluted basis, and a warrant entitling the Company to purchase an additional 15%
</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">of the equity in Premium Nickel, on an
undiluted basis, for US$10
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</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Warrant&#8221;). While a definitive exchange ratio
remains subject to ongoing due diligence, under the terms of the Non-Binding LOI, each common share of Premium Nickel outstanding
immediate prior to the closing of the Merger, other than any common share of Premium Nickel held by the Company,
would be exchanged for 5.27
</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">common shares of the Resulting Issuer (before
giving effect to any Consolidation) and the 15%
</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Warrant and the common shares of Premium Nickel
held by the Company would be extinguished. Following completion of the Merger, approximately 25%
</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">of the outstanding common shares of the Resulting
Issuer are expected to be held by the current shareholders of the Company and approximately 75%
</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">of the outstanding common shares of the Resulting
Issuer are expected to be held by the current shareholders of Premium Nickel (other than the Company).</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
connection with the proposed Merger, and subject to any required shareholder and regulatory approvals, the Company is expected
to seek the requisite shareholder and regulatory approvals to change the name and stock ticker symbol of the Resulting Issuer as part
of the Merger to such name and ticker symbol as may be requested by Premium Nickel, acting reasonably, consolidate the
common shares of the Resulting Issuer (the &#8220;Consolidation&#8221;) and reconstitute the board of directors of the Resulting Issuer.
The Non-Binding LOI provides for an exclusivity period ending at 11:59 p.m. (Toronto time) on April 2, 2022, which has been extended
to April 29 by mutual written consent of the parties, to allow parties to complete their due diligence and negotiate definitive
agreements for the proposed Merger.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" border="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt">
<tr style="vertical-align: top">
    <td style="width: 0.25in">&#160;</td>
  <td style="text-align: justify; width: 0.25in">b)</td>
  <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On March 3, 2022, the Company entered into a promissory note
loan agreement with Premium Nickel, whereby Premium Nickel borrowed US $1,000,000
</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">from the Company and promises to pay back
the loan in full on the maturity date, being April
30, 2022</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">. Interest accruing at 10%
</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">per annum shall also be paid on maturity date
together with the principal amount of the loan. In addition, Premium Nickel agreed to pay the Company a lender fee being
3%
</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">of the principal amount, which shall be due and
payable to the Company on the maturity date.</span></td></tr>
</table>


<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" border="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt">
<tr style="vertical-align: top">
    <td style="width: 0.25in">&#160;</td>
  <td style="text-align: justify; width: 0.25in">c)</td>
  <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On April 2, 2022, the
  Company entered into an agreement with Paradigm Capital Inc. (the &#8220;Agent&#8221;) to act as lead agent and sole bookrunner, on
  behalf of a syndicate, on a &#8220;best efforts&#8221; basis, for a private placement offering of subscription receipts of the
  Company (the &#8220;Subscription Receipts&#8221;) for gross proceeds of $5,000,000 </span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(the
  &#8220;Offering&#8221;) at a price of $0.48 </span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">per
  Subscription Receipt (the &#8220;Issue Price&#8221;). On April 8, 2022, the Offering was upsized to total gross proceeds of up
  to $10,000,320</span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">.</span></td></tr>
</table>


<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Each
Subscription Receipt shall be deemed to be automatically exercised, without payment of any additional consideration and without further
action on the part of the holder thereof, into a Resulting Issuer Share. on a one-for one basis, upon satisfaction of the Escrow Release
Conditions (as defined below), subject to adjustment in certain events.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;Escrow
Release Conditions&#8221; shall mean each of the following conditions, which conditions may be waived in whole or in part jointly by the
Company and the Lead Agent:</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"></p>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="width: 0.75in">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in">i)</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">receipt
    of all required corporate, shareholder, regulatory and third-party approvals, if any, required in connection with the Offering and
    the Merger Transaction;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td>&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td>&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif">ii)</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
    completion, satisfaction or waiver of all conditions precedent, undertakings, and other matters to be satisfied, completed and otherwise
    met or prior to the completion of the Merger Transaction (other than delivery of standard closing documentation) have been satisfied
    or waived in accordance with the definitive agreement relating to the Merger Transaction, to the satisfaction of the Agents acting
    reasonably (other than the release of the Escrowed Funds);</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td>&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td>&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif">iii)<span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">written
    confirmation to the Agents from each of the Company and PNR that all conditions of the Merger Transaction have been satisfied or
    waived, other than release of the Escrowed Funds, and that the Merger Transaction shall be completed without undue delay upon release
    of the Escrowed Funds;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td>&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td>&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">iv)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
    common shares of the Resulting Issuer being conditionally approved for listing on the TSXV; and</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td>&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td>&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif">v)</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
    Company and the Agents having delivered a joint notice and direction to the Escrow Agent, confirming that the conditions set forth
    in i) to iv) above have been met or waived.</span></td></tr>
  </table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Offering is expected to close on or about April 28, 2022 (the &#8220;Closing Date&#8221;), or such other date as the Lead Agent and
the Company may mutually agree. on the Closing Date, the proceeds of the Offering will be held in escrow pending the earlier of (i)
the satisfaction of the Escrow Release Conditions and (ii) the occurrence of a termination event, of which can be terminated by the
Company any time after 120 days following the agreement entered with the Agent or by the Agent upon written notification immediately.</span></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>


<!-- Field: Page; Sequence: 134; Options: Last -->
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    <!-- Field: /Page -->

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>
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[{"type": "20-F", "sequence": "1", "filename": "form20-f.htm", "secsgml_size_bytes": 2608173}]
{"company-data": {"conformed-name": "Premium Nickel Resources Ltd.", "cik": "0000795800", "assigned-sic": "1000", "irs-number": "000000000", "state-of-incorporation": "A6", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "20-F", "act": "34", "file-number": "000-14740", "film-number": "23923664"}, "business-address": {"street1": "100 KING STREET WEST", "street2": "SUITE 3400", "city": "TORONTO", "state": "A6", "zip": "M5X1A4", "phone": "604-770-4334"}, "mail-address": {"street1": "3400 - ONE FIRST CANADIAN PLACE, PO BOX", "street2": "100 KING STREET WEST", "city": "TORONTO", "state": "A6", "zip": "M5X1A4"}, "former-company": [{"former-conformed-name": "North American Nickel Inc.", "date-changed": "20100420"}, {"former-conformed-name": "Widescope Resources Inc.", "date-changed": "20060714"}, {"former-conformed-name": "INTERNATIONAL GEMINI TECHNOLOGY INC", "date-changed": "19940706"}]}
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
20-F
☐
REGISTRATION
    STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
☒
ANNUAL
    REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
    the fiscal year ended
December 31
,
2022
OR
☐
TRANSITION
    REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
☐
SHELL
    COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission
file number:
000-14740
Premium
    Nickel Resources Ltd.
(Exact
    name of Registrant as specified in its charter)
Province
    of Ontario,
Canada
(Jurisdiction
    of incorporation or organization)
One
    First Canadian Place,
100 King Street West
,
Suite 3400
,
Toronto
,
Ontario
,
Canada
M5X 1A4
(Address
    of principal executive offices)
Securities
registered or to be registered pursuant to Section 12(b) of the Act.
Title
    of each class
Name
    of each exchange on which registered
None
None
Securities
registered or to be registered pursuant to Section 12(g) of the Act.
Common Shares
Securities
for which there is a reporting obligation pursuant to Section 15(d) of the Act.
None
Indicate
the number of outstanding shares of each of the issuer's classes of capital or common shares as of the close of the period
covered by the annual report:
116,534,474
inclusive of the conversion of the outstanding Series 1 Convertible Preferred Shares
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
☐
Yes ☒
No
If
this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section
13 or 15(d) of the Securities Exchange Act of 1934.
☐
Yes ☒
No
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
☒
Yes
☐ No
Indicate by check mark whether the registrant
has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405
of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
☒
Yes
☐ No
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth
company. See the definitions of "large accelerated filer," "accelerated filer," and "emerging growth company"
in Rule 12b-2 of the Exchange Act.
Large
    accelerated filer ☐
Accelerated
    filer ☐
Non-accelerated
    filer
☒
Emerging
    growth company
☐
If
an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant
has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided
pursuant to Section 13(a) of the Exchange Act. ☐
†
The term "new or revised financial accounting standard" refers to any update issued by the Financial Accounting Standards
Board to its Accounting Standards Codification after April 5, 2012.
Indicate by check mark whether the registrant has
filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial
reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b) by the registered public accounting firm that prepared or
issued its audit report. ☐
If securities are registered pursuant to Section 12(b)
of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of
an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error
corrections are restatements that required a recovery analysis of incentive based received by any of the registrant's executive
officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark which basis of accounting the
registrant has used to prepare the financial statements included in this filing:
U.S.
    GAAP ☐
International Financial Reporting Standards
Other
    ☐
as
    issued by the International Accounting Standards Board ☒
If "Other" has been checked in response to the previous question,
indicate
by check mark which financial statement item the registrant has elected to follow.
☐
Item 17 ☐ Item 18
If
this is an annual report, indicate by check mark whether the registrant is a shell company as defined in Rule 12b-2 of the Exchange Act.
☐
Yes ☒
No
Unless
otherwise indicated, all references herein are expressed in Canadian dollars and United States currency is stated as "US$".
SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This
annual report on Form 20-F ("Annual Report") of Premium Nickel Resources Ltd. ("PNRL" or the "Company")contains forward-looking statements, meaning statements that reflect the Company's current
expectations and views of future events and future financial performance. These forward-looking statements are made under the applicable
safe-harbor provisions of United States and Canadian securities laws. In some cases, you can identify forward-looking statements by terminology
such as "estimate", "project", "believe", "anticipate", "intend", "expect",
"plan", "predict", "may", "should", "potential", or "continue",
the negative thereof or other variations thereon or comparable terminology. These forward-looking statements include, but are not limited
to, statements about: anticipated assay results; the ability of exploration results (including
drilling) to accurately predict mineralization; the significance of exploration (including drilling) results; the objectives of the first
phase of drilling; the ability of the Company to prepare a PEA on its Selebi mine in Botswana; the ability of the Company to transition
to underground resource drilling at the Selebi mine; the ability of assay results to indicate mine horizons and mineralization, at all,
including beyond the limits of legacy production; the ability of the Company to use exploration drifts; the ability of the Company to
verify historic data; the potential for establishing a mineral resource estimate on the Selebi deposit at depth; the Company's ability
to re-characterize the historic work on the Selebi mine; the potential for continuity and significant mineralization expansion of the
Selebi mine; the potential of the Selebi mine, in general, including related infrastructure; the veracity of previously unsampled core;
the Company's ability to identify additional mineral resources; and the business and prospects of the Company.
Such
forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance
or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by
such forward-looking statements. There can be no assurance that the forward-looking statements will prove to be accurate as actual results
and future events could differ materially from those anticipated in such statements.
Known
and unknown risks, uncertainties and other factors include, but are not limited to, those discussed under "Risk Factors"
in this Annual Report, other reports the Company files with the U.S. Securities and Exchange Commission and Canadian securities regulators, and
the following: the Company largely relies on financing to maintain and continue operations; the Company is dependent on the business
and technical expertise of its management team; and the Company relies on one mineral project for the majority of its potential future
revenues.
Table
of Contents:
Part
    I
ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
1
ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE
1
ITEM 3. KEY INFORMATION
1
ITEM 4. INFORMATION ON THE COMPANY
8
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS
14
ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
25
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS.
29
ITEM 8. FINANCIAL INFORMATION
31
ITEM 9. THE OFFER AND LISTING
33
ITEM 10. ADDITIONAL INFORMATION
35
ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
53
ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
53
Part
    II
ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
53
ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
53
ITEM 15. CONTROLS AND PROCEDURES
53
ITEM 16. A. Audit Committee Financial Expert
54
ITEM 16. B. Code of Ethics
55
ITEM 16. C. Principal Accounting Fees and Services
55
ITEM 16. D. Exemption From the Listing Standards for Audit Committees
56
ITEM 16. E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers
56
ITEM 16. F. Change in the Registrant's Certifying Accountant
56
ITEM 16. G. Corporate Governance
56
ITEM 16. H. Mine Safety Disclosure
56
ITEM 16. I. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
56
ITEM 16. J. Insider Trading Policies
56
Part
    III
ITEM 17. FINANCIAL STATEMENTS
56
ITEM 18. FINANCIAL STATEMENTS
56
ITEM 19. EXHIBITS
57
ITEM
1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
A.
Not applicable.
B.
Not applicable.
C.
The name of the Company's auditor is MNP LLP for the year ending December 31, 2022. MNP LLP, an accounting firm registered with the
Canadian Public Accountability Board, became the Company's auditors on December 5, 2022. MNP LLP's address is Suite 800, 1600 Carling
Avenue, Ottawa, Ontario K1Z 1G3. From January 1, 2020 to August 31, 2022, the Company's auditors were Dale Matheson Carr-Hilton Labonte
LLP. Their address is 1500 – 1140 West Pender St., Vancouver, BC V6E 4G1.
ITEM
2. OFFER STATISTICS AND EXPECTED TIMETABLE
Not
applicable.
ITEM
3. KEY INFORMATION
A.
[Reserved]
B.
Not required.
C.
Not required.
D.
Risk factors.
The
business of the Company entails significant risks, and an investment in the securities of the Company should be considered highly speculative.
An investment in the securities of the Company should only be undertaken by persons who have sufficient financial resources to enable
them to assume such risks. The following is a general description of all material risks, which can adversely affect the business and
in turn the financial results, ultimately affecting the value of an investment the Company. T
he risks and uncertainties set out below are not the only ones the Company
is facing. There are additional risks and uncertainties that the Company does not currently know about or that the Company currently considers
immaterial which may also impair the Company's business operations and cause the price of the common share's, without par value of
the Company (the "
Common Shares
") to decline. If any of the following risks actually occur, the Company's business
may be harmed and the Company's financial condition and results of operations may suffer significantly. Additionally, investors
should not interpret the disclosure of a risk to imply that the risk has not already materialized.
The
Company largely relies on financing to maintain and continue operations
The
Company's ability to continue will largely be reliant on its continued attractiveness to equity investors and its ability to
obtain additional financing to maintain and grow operations. Should the Company require additional capital to continue its
operations, failure to raise such capital could result in the Company going out of business, which may result in investors losing all or a significant portion of
their investment in the Company. There can be no assurance that
additional capital or other types of financing will be available if needed or that, if available, the terms of such financing will
be favourable to the Company.
1
From
time to time, the Company may issue new shares, seek debt financing, dispose of assets, or enter into transactions to acquire assets
or shares of other corporations. These transactions may be financed wholly or partially with debt, which may temporarily increase the
Company's debt levels above industry standards.
The
Company is dependent on the business and technical expertise of its management team
The
Company is dependent on the business and technical expertise of its management team. If the Company is unable to retain key members of
its management team, if it is unable to rely on this business and technical expertise, or if any of the expertise is inadequately performed,
the business, financial condition and results of the operations of the Company could be materially adversely affected until such time
as the expertise could be replaced.
The
Company depends on key personnel to operate its business effectively in the mineral mining industry
The Company's success largely depends upon
on the performance of the directors and officers and the Company's continuing ability to attract and retain highly qualified personnel.
The loss of the services of these persons, or the failure to attract highly qualified personnel in the future, may have a material adverse
effect on the Company's business and prospects. Moreover, the Company's competitors may hire and gain access to the expertise of former
employees, or former employees may compete with us. There is no assurance that the Company will be successful in attracting, integrating,
motivating, and retaining key personnel or that former employees will not compete with the Company in the future. If the Company is unable
to retain key personnel and attract additional qualified personnel as and when needed, the Company's business may be adversely affected.
The
market price of the Common Shares may be volatile
The
price of the Common Shares may be affected by global macroeconomic developments and market perceptions of the
attractiveness of particular industries and location of assets, which may increase the volatility of share prices. The price of the Common Shares will also be affected by the Company's financial condition or
results of operations as reflected in its liquidity position and earnings reports.
Other
factors unrelated to the Company's operations and performance that may have an affect on the price of the Common Shares include, but are not limited to:
●
the lessening in trading volume and general market interest
in the Company's securities may affect an investor's ability to trade significant numbers of shares;
●
the size of the Company's public float may limit the
ability of some institutions to invest in the Company's securities;
●
rumors and market speculation involving us or other companies in our industry
;
●
the public's reaction to our press releases, other public announcements,
and filings with the U.S. Securities and Exchange Commission (the "SEC");
●
changes in the financial projections we may provide to the public or our
failure to meet these projections;
●
actual or anticipated developments in our business, our competitors'
businesses or the competitive landscape generally;
●
actual or anticipated changes in applicable laws or regulations;
●
actual or perceived privacy or data security incidents; and
●
risks related to the organic and inorganic growth of our business and the
timing of expected business milestones, including those related to announced or completed acquisitions of businesses, products, services,
or technologies by us or our competitors.
As
a result of any of these factors and others, the market price of the Company's shares at any given point in time may not accurately
reflect the Company's long-term value. Securities class action litigation has been brought against companies following
periods of volatility in the market price of their securities. The Company may in the future be the target of similar litigation, which could result in substantial costs and damages and divert management's attention and
resources.
The
Company relies on one mineral project for the majority of its potential future revenues
The Company's flagship Selebi mine in Botswana includes two shafts,
the Selebi and Selebi North shafts (together, the "Selebi Mine") and related infrastructure such as rail, power and roads (together
with the Selebi Mine, the "Selebi Assets").
The
Selebi Mine is the Company's only material property and accounts for the majority of the
Company's potential for future generation of revenue. Any adverse development affecting the progress or exploration of the
Selebi Mine, including but not limited to, unusual and unexpected geologic formulations, seismic activity, rock bursts, cave-ins,
flooding and other conditions involved in the drilling and removal of material, any of which could result in damage to, or
destruction of, mines and other producing facilities, damage to life or property, environmental damage, hiring suitable personnel
and engineering contractors, or securing supply agreements on commercially suitable terms, may have a material adverse effect on the
Company's financial performance and results of operations.
2
The Company's business and financial condition may be significantly
impacted by volatility
of commodity prices, and particularly volatility in the prices of nickel, copper and cobalt
The
development of the Company's material property, the Selebi Mine (and any of the Company's portfolio
of mineral projects) is dependent on the future prices of minerals and metals, particularly the prices of nickel, copper and cobalt, which are sold in
an active global market and traded on commodity exchanges, such as the London Metals Exchange and the New York Mercantile Exchange. Should any of the Company's
properties eventually enter commercial production, the Company's profitability will be significantly affected by changes in the
market prices of minerals and metals.
Base
and precious metals prices are subject to significant fluctuations, which can be material and occur over short periods of time and
which are affected by numerous factors, all of which are beyond the Company's control. Such factors include, but are not
limited to, actual and expected macroeconomic and political conditions, interest and exchange rates, inflation or deflation, foreign
exchange rate, levels of supply and demand, speculative trading, the costs of and levels of base and precious metals production, the
availability and costs of substitutes, input costs, inventory levels, investments by commodity funds and other actions of
participants in the commodity markets. The effect of these factors on the prices of base and precious metals, and therefore the
economic viability of any of the Company's exploration projects, cannot be accurately determined.
In particular, nickel, copper and cobalt prices have fluctuated widely,
particularly in recent years, driven in part due to renewable energy and clean technology applications. Consequently, the economic viability
of the Selebi Mine cannot be accurately predicted and may be adversely affected by fluctuations in commodity prices. Fluctuations in commodity
prices and future price declines could cause the development of (and any future commercial production from) the Company's properties to
be impracticable or uneconomical.
As such, the Company may
determine that it is not economically feasible to commence commercial production at some or all of its properties, which could have
a material adverse impact on the Company's financial condition and results of operations. In such a circumstance, the Company
may also curtail or suspend some or all of its exploration and development activities.
The
Company's ownership rights and boundaries of its resource properties may be subject to loss or dispute
There
is no assurance that the rights of ownership and other rights in concessions to be held by the Company are not subject to loss or dispute,
particularly because such rights may be subject to prior unregistered agreements or transfers or other land claims and may be affected
by defects and adverse laws and regulations which have not been identified by the Company. There is no guarantee that title to the properties
will not be challenged or impugned. The Company's property interest may be subject to prior unregistered agreements or transfers
or native land claims and title may be affected by undetected defects.
All
of the Company's current mineral projects will be at their exploration stages, which involves significant risks, and there is no assurance that
such projects will develop into economically viable operating mines
The
Company's projects are each in their exploration stage. The exploration of mineral deposits involves significant financial
risks over a prolonged period of time, which may not be eliminated even through a combination of careful evaluation, experience and
knowledge. Substantial expenses are required to establish mineral resources and mineral
reserves through drilling, to develop metallurgical processes to extract metal from ore and to develop the mining and processing facilities
and infrastructure at any site chosen for mining. No assurance can be given that minerals will be discovered in sufficient quantities
to justify commercial operation or that the funds required for development can be obtained on a timely basis.
Development
of the Company's properties will occur only after obtaining satisfactory exploration results. Few properties that are explored
are ultimately developed into economically viable operating mines. There is no assurance that the Company's mineral exploration
activities will result in the discovery of a body of commercial ore on its exploration properties. Several years may pass between the
discovery and development of commercial mineable mineralized deposits.
Most
exploration projects do not result in the discovery of commercially-mineralized deposits. The commercial viability of exploiting any
precious or base-metal deposit is dependent on a number of factors including infrastructure, mineral markets and processing equipment, and governmental regulations, including
those relating to environment, taxes, royalties, allowable production and import and export of minerals. Depending on the price of minerals produced, the Company may determine
that it is impractical to commence or continue commercial production. No assurance can be given that minerals will be discovered of sufficient
quality, size and grade on any of the Company's properties to justify a commercial operation.
Exploration
projects also face significant operational risks including but not limited to an inability to obtain access rights to properties, accidents,
equipment breakdowns, labour disputes (including work stoppages and strikes), impact of health epidemics and other outbreaks of communicable
diseases and other unanticipated interruptions.
3
The operation, development and exploration of the Company's properties
is subject to substantial governmental
regulation, including environmental regulations, and any future adverse changes in
such regulation may adversely impact the Company's business and results of operations
Operations,
development and exploration on the Company's properties will be affected to varying degrees by: (i) government regulations
relating to such matters as environmental protection, health, safety and labor; (ii) mining law reform; (iii) restrictions on
production, price controls, and tax increases; (iv) maintenance of claims; (v) tenure; and (vi) expropriation of property. There is
no assurance that future changes in such regulation, if any, will not adversely affect the Company's operations. Changes in
such regulation could result in additional expenses and capital expenditures, limitations on availability of capital, competition,
reserve uncertainty, potential conflicts of interest, title risks, dilution, and restrictions and delays in operations, the extent
of which cannot be predicted.
The
Company is at the exploration stage on all of its properties. Exploration on the Company's properties requires responsible
best-exploration practices to comply with the Company's policies, government regulations, and maintenance of claims and tenure.
If
any of the Company's projects advance to the development stage, those operations will also be subject to various laws concerning
development, production, taxes, labour standards, environmental protection, mine safety and other matters. In addition, new laws governing
operations and activities of mining companies could have a material adverse impact on any project in the mine development stage that
the Company may possess.
Additionally,
environmental legislation is evolving in a manner which requires stricter standards and enforcement, increased fines and penalties
for non-compliance, more stringent environmental assessments of proposed properties and a heightened degree of responsibility for
companies and their officers, directors and employees. There is no assurance that future changes in environmental regulations, if
any, will not adversely affect the Company's operations. The cost of compliance with changes in governmental regulations has
the potential to preclude entirely the economic development of a property. The Company will adopt environmental practices designed
to ensure that it will comply with or exceed all environmental regulations currently applicable to it. All of the Company's
activities will be in compliance in all material respects with applicable environmental legislation.
Changes
in tax legislation or accounting rules could affect the profitability of the Company
Changes
to, or differing interpretation of, taxation laws in Canada, Barbados, Botswana or any of the countries in which the Company's
assets or relevant contracting parties are located, could result in some or all of the Company's profits being subject to
additional taxation. No assurance can be given that new taxation rules or accounting policies will not be enacted or that existing
rules will not be applied in a manner which could result in the Company's profits being subject to additional taxation or
which could otherwise have a material adverse effect on the Company's profitability, results of operations, financial
condition and the trading price of the Company's securities. In addition, the introduction of new tax rules or accounting
policies, or changes to, or differing interpretations of, or application of, existing tax rules or accounting policies, such as the
International Financial Reporting Standards ("IFRS"), could make acquiring additional resource properties by the Company
less attractive to counterparties. Such changes could adversely affect the Company's ability to acquire new assets or make
future investments.
The Company
currently reports its financial results under IFRS, which differs in certain significant respects from U.S. GAAP
Currently,
the Company reports its financial statements under IFRS. There have been and there may in the future be certain significant differences
between IFRS and U.S. generally accepted accounting principles ("
U.S. GAAP
"), including differences related to
revenue recognition, share-based compensation expense, income tax and earnings per share. As a result, the Company's financial information and
reported earnings for historical or future periods could be significantly different if they were prepared in accordance with U.S.
GAAP. In addition, the Company does not intend to provide a reconciliation between IFRS and U.S. GAAP unless it is required under applicable
law. As a result, you may not be able to meaningfully compare the Company's financial statements under IFRS with those of companies that
prepare financial statements under U.S. GAAP.
As
a foreign private issuer, the Company is subject to different U.S. securities laws and rules than a U.S. domestic issuer, which may
limit the information publicly available to U.S. investors
The
Company is a "foreign private issuer", under applicable U.S. federal securities laws, and is, therefore, not subject
to the same requirements that are imposed upon U.S. domestic issuers by the SEC. Under the Securities Exchange Act of 1934, as amended
(the "US Exchange Act"), the Company is subject to reporting obligations that, in certain respects, are less detailed
and less frequent than those of U.S. domestic reporting companies. As a result, the Company does not file the same reports that a
U.S. domestic issuer would file with the SEC, although the Company is required to file with or furnish to the SEC the continuous
disclosure documents that it is required to file in Canada under Canadian securities laws. In addition, the Company's officers,
Directors, and principal shareholders are exempt from the reporting and short-swing profit recovery provisions of Section 16 of the U.S.
Exchange Act. Therefore, the Company's shareholders may not know on as timely a basis as with U.S. domestic issuers when the
Company's officers, Directors, and principal shareholders purchase or sell Common Shares, as the reporting periods under the
corresponding Canadian insider reporting requirements are longer. As a foreign private issuer, the Company is exempt from the rules
and regulations under the U.S. Exchange Act related to the furnishing and content of proxy statements. The Company is also exempt
from Regulation FD, which prohibits issuers from making selective disclosures of material non-public information. While the Company
complies with the corresponding requirements relating to proxy statements and disclosure of material non-public information under Canadian
securities laws, these requirements differ from those under the U.S. Exchange Act and Regulation FD and shareholders should not expect
to receive the same information at the same time as such information is provided by U.S. domestic companies. In addition, the Company
may not be required under the U.S. Exchange Act to file annual and quarterly reports with the SEC as promptly as U.S. domestic companies
whose securities are registered under the U.S. Exchange Act. In addition, as a foreign private issuer, the Company has the option
to follow certain Canadian corporate governance practices, except to the extent that such laws would be contrary to U.S. securities laws,
and provided that the Company discloses the requirements it is not following and describes the Canadian practices it follows instead.
The Company has elected to follow home country practices in Canada with regard to certain corporate governance matters. As a result,
the Company's shareholders may not have the same protections afforded to shareholders of U.S. domestic companies that are subject
to all corporate governance requirements.
4
Inability
of the Company to realize the expected business synergies arising from the RTO
Achieving
the benefits of the reverse takeover transaction (the "RTO") completed on August
3, 2022 between former TSX Venture Exchange (the "TSXV") listed company, North American Nickel Inc. ("NAN") and
private Canadian company Premium Nickel Resources Corporation ("PNRC") depends in part on the ability of the Company to effectively capitalize on its scale, to realize the anticipated
capital, as well as operating and financial synergies, to profitably sequence the growth prospects of its asset base and to maximize
the potential of its improved growth opportunities and capital funding opportunities. A variety of factors, including those risk factors
set forth in this Annual Report on Form 20-F may adversely affect the ability of the Company to achieve the anticipated benefits of the
RTO.
The
Company does not have established mineral resources or reserves
The
Company is a junior resource company focused primarily in the exploration and subsequent development of the Selebi Mine located in Botswana.
The Company's properties have no established mineral resources or mineral reserves at this time. The historical South African Code for the Reporting of Exploration Results, Mineral Resources
and Mineral Reserves compliant
resource (the "Historic SAMREC Resource") that was calculated for the Selebi Mine in 2016 is considered to be historical
in nature has not been prepared in accordance with NI 43-101 and should not be relied upon as a current mineral resource estimate. While
management believes that the Historic SAMREC Resource could be indicative of the presence of mineralization on the Selebi deposit, a
qualified person has not completed sufficient work to classify the historical mineral estimate as a current mineral resource estimate
and the Company is not treating the historical mineral estimates as current mineral resource estimate.
There
is no assurance that any of the Company's projects can be mined profitably. Accordingly, it is not assured that the Company will
realize any profits in the short to medium term, if any at all. Any profitability in the future from the business of the Company will be
dependent upon development and commercially mining an economic deposit minerals, which in itself is subject to numerous risk factors.
The
exploration and development of mineral deposits involves a high degree of financial risk over a significant period of time that even
a combination of management's careful evaluation, experience and knowledge may not eliminate. Few properties that are explored
are ultimately developed into producing mines. Major expenses may be required to establish resources and reserves by drilling and to
construct mining and processing facilities at a particular site. It is impossible to ensure that current work programs of the Company
will result in profitable commercial mining operations. The profitability of the Company's operations will be, in part, directly
related to the cost and success of its work programs, which may be affected by a number of factors, including, but not limited to market conditions, availability of funding,
regularity environment, exploration success, geopolitical risk and availability of skilled labour. Substantial expenditures are required
to establish mineral reserves that are sufficient to support commercial mining operations and there is no guarantee that such commercial mining operations will be profitable once established.
The
Company is exposed to financial risk relating to its financial instruments and as a result of foreign currency
exchange rate fluctuations
The
Company is also exposed to risks relating to its financial instruments and foreign currency. It is anticipated that the Company will
operate in Canada, Greenland and Botswana and undertake transactions denominated in foreign currencies such as United States dollars,
Euros, Danish Krones and the Botswanan Pula, and consequently is exposed to exchange rate risks. The Company will also be exposed to
equity price risk and the movements in individual equity prices or general movements in the level of the stock market may potentially
have an adverse impact on the Company's earnings. The Company closely monitors individual equity movements and the stock market
to determine the appropriate course of action to be taken.
The
Company is subject to additional risks by doing business outside of Canada
The
Selebi Mine, which is the Company's only material property, is located in Botswana. The
Company's operations outside North America could subject the Company to a variety of additional risks that may negatively
impact its business and operations including any of the following: changes in rules and regulations (including required royalties); failure
of local parties to honour contractual relations; delays in obtaining or the inability to obtain necessary governmental permits; opposition
to mining from environmental or other non-governmental organizations; limitations on foreign ownership; limitations on the repatriation
of earnings; economic or tax policies; tariffs and trade barriers; regulations related to customs and import/export matters; longer payment
cycles; tax issues; currency fluctuations and exchange controls; rates of inflation; challenges in collecting accounts receivable; cultural
and language differences; employment regulations; crimes, strikes, riots, civil disturbances, terrorist attacks and wars; and deterioration
of political relations with Canada or other governments or sanctions imposed by Canada or other governments. There will also be currency
exchange risks in connection with the operations of the Company's foreign mineral assets, including the Selebi Mine.
5
In
addition, Botswana is considered an emerging market. Emerging market investments generally pose a greater degree of risk than investments
in more mature market economies because the economies in the developing world are more susceptible to destabilization resulting from
domestic and international developments. Further, the current or a future government may adopt substantially different policies, take
arbitrary action which might halt exploration or production, re-nationalize private assets or cancel contracts, or cancel mining or exploration
rights, any of which could result in a material and adverse effect on the Company's results of operations and financial condition.
The
Company may face risks related to health epidemic and other outbreaks of communicable diseases
The
Company may face risks related to health epidemics and other outbreaks of communicable diseases, which could significantly disrupt
its operations and may materially and adversely affect its business and financial conditions. While the COVID-19 outbreak no longer
remains a salient risk for the Company, COVID-19 has in the past led to a large number of temporary business closures, travel bans, self-imposed
quarantine periods, and physical distancing, all of which have contributed to a general reduction in consumer activity and material disruptions to
businesses globally resulting in an economic slowdown. Public health crises can result in volatility and disruptions in the supply and demand
for Ni-Cu-Co and other metals and minerals, global supply chains and financial markets, as well as declining trade and market
sentiment and reduced mobility of people, all of which could affect commodity prices, interest rates, credit ratings, credit risk,
share prices and inflation, which could have an adverse effect on the demand for Ni-Cu-Co and the Company's future
prospects.
In
addition, such health crises may be a threat to maintaining a skilled workforce in the mining industry in Botswana and could be a challenge
to the Company's operations. The Company could lose members of its workforce or see its workforce man-hours reduced or incur increased
medical costs as a result of these health risks, which could have a material and adverse effect on the Company's future cash flows,
earnings, results of operations and financial condition.
There
can be no assurance that the Company's personnel will not be impacted by these pandemic diseases and ultimately see its workforce
productivity reduced or incur increased medical costs / insurance premiums as a result of these health risks.
In
addition, the re-emergence of COVID-19 could adversely affect global economies and financial markets resulting in an economic downturn
that could have an adverse effect on the demand for precious metals and the Company's future prospects.
6
Since
certain of the Company's officers and directors are located in Canada and outside the United States, it may be difficult to enforce any United
States judgment for claims brought against such officers and directors
The
Company is organized under the laws of the Province of Ontario, Canada and certain of the Company's officers and directors are residents of Canada.
While a cross border treaty exists between the United States and Canada relating to the enforcement of foreign judgments, the enforcement
process is cumbersome and, in some cases, has prevented the enforcement of judgments. As a result, while actions may be brought in Canada,
it may be impossible to affect service of process within the United States on the Company's officers and directors or to enforce
against these persons any judgments in civil and commercial matters, including judgments under United States federal securities laws.
In addition, a Canadian court may not permit an original action in Canada or enforce in Canada a judgment of a United States court based
on civil liability provisions of United States federal securities laws.
There
is substantial doubt as to whether the Company will continue operations. If the Company discontinues operations, you could lose your investment.
The
Company's consolidated financial statements have been prepared on the going concern basis, which assumes that the Company will
be able to realize its assets and discharge its liabilities in the normal course of business. However, as at December 31, 2022, the
Company has not generated significant revenue or cash flow from operations since inception. As at December 31, 2022, the Company had
a working capital deficiency of $6,024,026 and an accumulated deficit of $78,092,605. The Company anticipates that it will incur increased
expenses and there is a risk that the Company will not realize sufficient revenues to offset those expenses. The Company's ability to continue its
operations is dependent on obtaining additional financing and generating future revenues, and no assurance can be given that the Company will
successfully be able to do so. Accordingly, the Company's consolidated financial statements contain disclosure regarding management's substantial doubt about the Company's ability to continue as a going concern. Importantly, the inclusion in the Company's
consolidated financial statements of a going concern reference may negatively impact the Company's ability to raise future financing and
achieve future revenue. The reference regarding the substantial doubt about The Company's ability to continue as a going concern will be
removed only when, in the opinion of management, revenues have reached a level that is able to sustain the Company's business
operations, or the Company has raised substantial additional funds through the Company's financing efforts.
The
Company may lose its foreign private issuer status in the future, which could result in significant additional costs and expenses to
the Company
In
order to maintain its status as a foreign private issuer, a majority of the Common Shares must be either directly
or indirectly owned by non-residents of the U.S. unless the Company also satisfies one of the additional requirements necessary to
preserve this status. The Company may in the future lose its foreign private issuer status if a majority of its Common Shares are
held in the U.S. and if the Company fails to meet the additional requirements necessary to avoid loss of its foreign private issuer
status. The regulatory and compliance costs under U.S. federal securities laws as a U.S. domestic issuer may be significantly more than
the costs incurred as a Canadian foreign private issuer. If the Company is not a foreign private issuer, it would not be eligible
to use the Multijurisdictional Disclosure System ("MJDS") or other foreign issuer forms and would be required to file periodic
and current reports and registration statements on U.S. domestic issuer forms with the SEC, which are more detailed and extensive than
the forms available to a foreign private issuer, and would be required to file financial statements prepared in accordance with United
States generally accepted accounting principles. In addition, the Company may lose the ability to rely upon exemptions from Nasdaq
corporate governance requirements that are available to foreign private issuers.
The
Company may not be able to raise funds in the future to continue its operations
While
the Company may have been successful in raising funds in the past, there is no guarantee that future fundraising efforts will be successful
or that the funds raised will be sufficient to meet the Company's needs.
7
ITEM
4. INFORMATION ON THE COMPANY
A.
History and development of the Company.
The
Company, formerly NAN, resulted from the closing of the RTO whereby PNRC and 1000178269 Ontario Inc., a wholly-owned subsidiary of NAN,
amalgamated by way of a triangular amalgamation under the Business Corporations Act (Ontario) (the "OBCA") on August 3, 2022.
NAN
was incorporated on September 23, 1983 under the name Widescope Resources Inc., and following a series of name changes ultimately changed
its name to North American Nickel Inc. effective April 19, 2010. NAN's principal business activity was the exploration of natural
resource properties in Greenland, Canada and Morocco. Prior to the RTO, the common shares of NAN were listed and posted for trading on
the TSXV under the symbol "NAN". In connection with the RTO, the Company completed (i) a share consolidation of the Company's issued and outstanding
Common Shares,
on the basis of one (1) post-consolidation Common Share for every five (5) pre-consolidation common shares issued and outstanding effective July 27, 2022, (ii) a continuation from under
the
Business Corporations Act
(British Columbia) to under the OBCA and changed its name to "Premium Nickel Resources Ltd."
effective July 29, 2022, and (iii) changed its stock exchange ticker symbol from "NAN" to "PNRL" at the resumption
of trading subsequent to the RTO.
Prior
to the RTO, PNRC was a private corporation existing under the OBCA which seeks to evaluate, acquire, improve and reopen, assuming economic
feasibility, a combination of certain assets of BCL Limited ("BCL") and Tati Nickel Mining Company ("TNMC") that
were in liquidation in Botswana.
The
Company's source of funding was mainly equity financing. The Maniitsoq property in Greenland was owned by NAN prior to the RTO
and the Company spent an aggregate of $63M on the project since 2012. Upon the closing of the RTO, The Company has switched its focus
to development of its Botswana assets. During the year ended December 31, 2022, the Company incurred $28.7M
on its Botswana assets.
The
SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that
file electronically with the SEC at http://www.sec.gov. The Company's website address is
www.premiumnickelresources.ca.
Nothing on the Company's website and the information contained on, or
that can be accessed through, such website shall be deemed to be incorporated by reference herein unless indicated otherwise, and is
not considered part of, this Annual Report on Form 20-F.
B.
Business overview
PNRL's
global strategy is to identify high quality nickel-copper-cobalt-platinum group elements ("
Ni-Cu-Co-PGE
") projects
and acquire opportunities that offer high prospectivity in mining friendly jurisdictions located in low-risk countries with supportive
foreign investment and resource legislation as well as rule-of-law. The current portfolio includes global projects in Botswana, Greenland,
Canada and Morocco, with the projects in Botswana being the Company's significant assets.
Currently,
the Company's principal business activity is the exploration and development of
its
flagship asset, the Ni-Cu-Co sulphide
Selebi M
ine in Botswana and, separately, the
Company's Selkirk Ni-Cu-Co-PGE sulphide mine (the "Selkirk Mine"), also in Botswana.
Summary
of Activities
The
Selebi and Selkirk deposits are permitted with 10-year mining licenses and benefit from significant local infrastructure. PNRL concluded
the 2022 exploration and drilling program at the Selebi Mine in January 2023. This initial drilling program was focused on an area at
the western down dip edge of the Historic SAMREC Resource estimate. The primary objective of this first phase of surface drilling and
borehole electromagnetics ("BHEM") program at Selebi was to provide the Company with the relevant information to demonstrate
that the mine horizons could be well mineralized beyond the limits of legacy production, and to support the transition to underground
resource drilling at both the Selebi North and Selebi deposits.
The
BHEM data acquired as of the date of this report demonstrates that there are multiple sizable anomalies detected on the northern extension
of the Selebi Mine. Additionally, the results of the drilling, in conjunction with the BHEM program, have provided compelling evidence
that the Selebi and Selebi North deposits are part of a large mineralized system, with multiple mineralized horizons present across the
three kilometre area between the Selebi historical mine workings to the south and the Selebi North historic mine workings to the north.
8
The
Company sees significant potential for expanding Historic SAMREC Resource. In 2023, PNRL is planning to undertake a combination of resource
and continued exploration drilling at the Selebi Mine to demonstrate the size potential of the Selebi Mine mineral system and ultimately
establish a maiden mineral resource estimate prepared in accordance with NI 43-101
as
well
as completing a preliminary economic assessment. The exploration drilling will be on-going, and the resource drilling at the Selebi Mine
is expected to start underground from the Selebi North shaft. Upon completion of the underground development program at Selebi North,
the Company will shift its development work three kilometres south to the Selebi area with the intention of utilizing a combination of
surface and underground drilling methods
.
Concurrently,
PNRL will continue its work at the Selkirk Mine and its surrounding prospecting licenses, which is the Company's second asset in
Botswana, located approximately 75 kilometres north of the Selebi Mine. The focus of this work will be to understand the legacy work
done by previous owners, which had advanced Selkirk to a bankable feasibility study for redevelopment as an open-pit mine. The Company
plans to include drilling, geoscience, and metallurgical work to support a mineral resource estimate prepared under NI 43-101. Additionally,
the Company is pursuing an alternative ore processing and tailings management strategy to those used in previous economic studies
.
Disclosure
regarding the Company's mineral properties, including with respect to mineral reserve and mineral resource estimates included in
this Annual Report, was prepared in accordance with NI 43-101. NI 43-101 is a rule developed by the Canadian Securities Administrators
that establishes standards for all public disclosure an issuer makes of scientific and technical information concerning mineral projects.
In
accordance with NI 43-101, the terms "mineral reserve", "proven mineral reserve" and "probable mineral
reserve" are Canadian mining terms as defined in accordance with NI 43- 101 and the Canadian Institute of Mining, Metallurgy and
Petroleum ("CIM") - CIM Definition Standards on Mineral Resources and Mineral Reserves (the "CIM Definition Standards"),
adopted by the CIM Council, as amended.
The
SEC adopted amendments to its disclosure rules (the "SEC Modernization Rules") to modernize the mineral property disclosure
requirements for issuers whose securities are registered with the SEC under the U.S. Exchange Act, which are codified in Regulation S-K
subpart 1300. Under the SEC Modernization Rules, the historical property disclosure requirements for mining registrants included in SEC
Industry Guide 7 have been replaced. As a foreign private issuer under United States securities laws that files its Annual Report on
Form 20-F with the SEC pursuant to the multi-jurisdictional disclosure system ("MJDS"), the Company is not required to provide
disclosure on its mineral properties under the SEC Modernization Rules and will continue to provide disclosure under NI 43-101 and the
CIM Definition Standards.
The
SEC Modernization Rules include the adoption of terms describing mineral reserves and mineral resources that are substantially similar
to the corresponding terms under the CIM Definition Standards. As a result of the adoption of the SEC Modernization Rules, the SEC now
recognizes estimates of "measured mineral resources", "indicated mineral resources" and "inferred mineral
resources". In addition, the SEC has amended its definitions of "proven mineral reserves" and "probable mineral
reserves" to be substantially similar to the corresponding CIM Definition Standards.
Shareholders
resident in the United States are cautioned that while terms are substantially similar to CIM Definition Standards, there are differences
in the definitions and standards under the SEC Modernization Rules and the CIM Definition Standards. Accordingly, there is no assurance
any mineral reserves or mineral resources that the Company may report as "proven reserves", "probable reserves",
"measured mineral resources", "indicated mineral resources" and "inferred mineral resources" under
NI 43-101 will be the same as the reserve or resource estimates prepared under the standards adopted under the SEC Modernization Rules.
Shareholders
resident in the United States are also cautioned that while the SEC now recognizes "measured mineral resources", "indicated
mineral resources" and "inferred mineral resources", investors should not assume that any part or all of the mineralisation
in these categories will ever be converted into a higher category of mineral resources or into mineral reserves. Mineralisation described
using these terms has a greater amount of uncertainty as to their existence and feasibility than mineralisation that has been characterized
as reserves. Accordingly, investors are cautioned not to assume that any "measured mineral resources", "indicated mineral
resources", or "inferred mineral resources" on the Company's projects are or will be economically or legally
mineable.
Further,
"inferred resources" have a greater amount of uncertainty as to their existence and as to whether they can be mined legally
or economically. Therefore, shareholders resident in the United States are also cautioned not to assume that all or any part of the inferred
resources exist. In accordance with Canadian rules, estimates of "inferred mineral resources" cannot form the basis of feasibility
or other economic studies, except in limited circumstances where permitted under NI 43-101.
Accordingly,
information contained in this Annual Report containing descriptions of mineral deposits may not be comparable to similar information
made public by United States companies subject to the reporting and disclosure requirements under the United States federal securities
laws and the rules and regulations thereunder. Shareholders resident in the United States are urged to consider closely the disclosure
on technical terminology in this Annual Report.
Corporate
Social Responsibility
PNRL
is committed to conducting its business in a socially responsible and sustainable manner, with a focus on environmental stewardship,
health and safety, community engagement, and ethical conduct. The Company has established policies and procedures to ensure compliance
with applicable laws and regulations, as well as industry standards for responsible mining. PNRL recognizes the importance of stakeholder
engagement and works closely with local communities, indigenous groups, and other stakeholders to ensure their concerns and perspectives
are heard and addressed.
9
C.
Organizational structure
The
following corporate structure chart sets out details of the direct and indirect ownership of the principal subsidiaries of the Company.
Notes
:
(1)
Premium
    Nickel Resources Proprietary Limited owns the Selebi Mine.
(2)
Premium
    Nickel Group Proprietary Limited owns the Selkirk mine.
D.
Property, plant and equipment.
Selebi
Mine, Botswana
The
Selebi Mine was acquired on January 31, 2022 through an asset purchase agreement with the liquidator of BCL. The Selebi Mine is comprised
of a single mining license covering an area of 11,504 hectares located near the town of Selebi Phikwe, approximately 150 kilometres southeast
of the city of Francistown, and 410 kilometres northeast of the national capital Gaborone. The Selebi Mine includes two shafts (Selebi
and Selebi North with a total combined capacity of 5,100 tons per day)) as well as all related surface (rail, power and roads) and underground
infrastructures. The Selebi deposit began production in 1980 and Selebi North began production in 1990. Mining terminated at both operations
in 2016 due to a failure in the separate Phikwe smelter processing facility and was subsequently placed under liquidation in 2017.
At
the time of liquidation, Historic SAMREC Resource compliant mineral resources within the Selebi Mine were reported as
in-situ
and depleted for mining as of December 31, 2016
.
These historical measured and indicated
mineral resources used a nickel equivalent (NiEq)
1
cut-off grade of 0.4% and were estimated to total 17.83 Mt at grades of
0.87% Ni and 1.42% Cu containing 155, 000 tonnes (t) Ni and 253,000 t Cu. Historical inferred mineral resources were estimated to total
15.34 Mt at grades of 0.71% Ni and 0.89% Cu containing 109,000 t Ni and 136,000 t Cu. Nickel and copper prices used were US$8.00/lb Ni
and US$3.00/lb Cu, respectively. This estimate, which has not been prepared in accordance with NI 43-101, is considered to be historical
in nature and should not be relied upon. However, management believes that it could be indicative of the presence of mineralization on
the Selebi Mine property. A qualified person has not completed sufficient work to classify the historical mineral estimate as a current
mineral resource estimate and the Company is not treating the historical mineral estimates as a current mineral resource estimate. Readers
are cautioned that mineral resources are not mineral reserves and do not have demonstrated economic viability. As of the date of this report, the Company considers the Selebi Mine as
its only material property within the meaning of NI 43-101.
1
The NiEq cut-off grade was based on a ratio of nickel and copper prices where NiEq = %Ni + (Cu price/Ni price)*%Cu.
10
Exploration
and Development Activities
The
Company initiated a drilling program in March 2022, with holes targeting the area down plunge of Selebi Mine workings. Concurrent with
the drill program, data compilation and verification continued. The program of re-opening historic holes that began in October 2021 is
ongoing and up to three drills have been cleaning historic holes to facilitate the collection of new gyro and BHEM geophysical data.
Collars of drillholes have been located using a differential Global Positioning System ("DGPS"). An initial downhole program
of televiewer and physical property logging has also been completed to support the creation of a structural model. Level plans were digitized,
and after significant effort, the Company now has a 3D model of the Selebi and Selebi North underground infrastructure. The gathering
of geological information to build a 3D model is ongoing. Information from handwritten drill logs was merged into the BCL drill hole
database, and the historic core is being re-logged.
As
of December 31, 2022, Mitchell Drilling completed a total of 14,627.36 metres. To date, a total of eight new holes and the extension
of one historic hole have reached target depth and intersected mineralized amphibolite; assay results from 477 core samples in seven
of these holes have been received from ALS Chemex laboratories in South Africa and results have been released. A total of 38 historic
holes have been opened and surveyed with gyro. BHEM surveys have been completed in 44 new and historic holes. Collars of 241 historic
holes have been located using DGPS and coordinates collected at another 105 sites where evidence of drilling was found, but no drill
hole was seen. Televiewer and physical property surveys have been completed in five holes.
The
results from the drilling and geophysical surveys indicate that there is structural thickening at the western down-dip extent of the
mineralized amphibolite, and drilling continues in this area to define the plunge and extent of this mineralization.
During
the year ended December 31, 2022, the Company incurred $28,046,746 in acquisition and exploration expenditures on the Selebi Assets (December
31, 2021 - $3,099,926).
Outlook
– Exploration and Development
The
proposed work plan for the Selebi Mine includes underground drilling at Selebi North and the surface/underground diamond drilling
program at Selebi, expected to commence in July 2023. Drilling will be ongoing for up to 15 months, with the specific objective of
delivering a mineral resource estimate prepared in accordance with NI 43-101 for the Selebi Mine. During that time, data compilation
and verification efforts will continue, with additional hole re-openings, downhole gyro, BHEM and televiewer surveys, digitization
of historic data, re-logging of historic core and updating of the 3D geological and structural model. In addition to this work,
additional metallurgical samples will be collected and sent for detailed studies. The underground infrastructure at Selebi North
will be upgraded to support the underground drilling program as well as improve health & safety.
Selkirk
Mine, Botswana
The
Selkirk Mine was acquired in August 2022 through an asset purchase agreement with the Liquidator of TNMC. The Selkirk property consists
of a single mining licence covering an area of approximately 14.6 square kilometres and four prospecting licenses cover 126.7 square
kilometres. The project is situated 28 kilometres south-east of the town of Francistown, and 75 kilometres north of the Selebi Mine.
Exploration
and Development Activities
The
Company has been carrying out due diligence on the Selkirk Mine since 2021. The results of the data verification efforts include examination
and sampling of mineralized drill core, sampling from underground workings, collecting DGPS coordinates of drill collars and quality
assessment of information in databases.
11
During
the Selkirk core review, five unsampled HQ sized core (63.5 millimeters) holes, drilled immediately prior to the closure of operations
by TNMC were identified. These five holes were taken to the core processing facility at Phikwe, where they were sampled in approximately
1 metre intervals, bagged and sent for assays. A total of 56 samples from DSLK278 used for metallurgical testing were analyzed at SGS
Canada for nickel and copper and pulps were sent to ALS in Vancouver for a full suite of analyses. The remaining 1010 core samples were
sent to ALS Global in Johannesburg for analyses. Results were reported in Q3 and Q4, 2022.
Company
geologists also examined underground workings and confirmed continuous visible sulphides along an exploration drift extending 144 metres
across the interpreted primary sulphide horizon, in a southwestern direction from the previous mining operations. PNRL collected and
submitted twenty 10-kilogram grab samples from this exploration drift for assay to determine the variability in the grade of the mineralization.
In November, the Company released results of the exploration drift sampling.
Additionally,
the Company completed a concept level metallurgical study to assess if readily marketable copper and nickel concentrates could be produced
and, if so, at what metal recovery levels. The Selkirk test program was carried out at SGS Canada in Lakefield, Ontario and followed
a similar program conducted on samples from the Selebi Mine, which demonstrated potential for these metallurgical objectives to be achieved.
The source of the material was previously unsampled HQ sized drill core from 2016 drill hole DSLK278, positioned 50m from historic mine
workings. Highlights of the metallurgical study include: the ability to produce salable market nickel and copper concentrates, nickel
concentrate grade of 10% nickel and 6% copper, copper concentrate grade of 33% copper, 0.32% nickel, recoveries of 63% nickel, 85% copper,
concentrates clean of deleterious elements and with low (<1%) MgO levels, and attractive amounts of PGE present in the concentrates
(36.0 g/t Pd in copper concentrate, 9.0 g/t Pd in nickel concentrate).
The
Company filed a voluntarily technical report, prepared in accordance with NI 43-101 for the Selkirk Mine on April 12,
2023. As of the date of this report, the Company does not consider the Selkirk Mine to be a property material to the Company
within the meaning of NI 43-101.
During
the year ended December 31, 2022, the Company incurred $677,310 in acquisition and due diligence expenditures on the Selkirk assets (December
31, 2021 - $nil).
Outlook
– Exploration and Development
The
Company currently anticipates that a work plan will be proposed for the Selkirk Mine re-development that will include drilling to better
define the existing resources and search for additional resources, develop a 3D geological and structural model, and complete additional
metallurgical studies focused on improving recoveries.
Maniitsoq
Nickel-Copper-PGM Project, Southwest Greenland
The
Maniitsoq project is centred on the 75 kilometre by 15 kilometre Greenland Norite Belt which hosts numerous high-grade nickel-copper
sulphide occurrences associated with mafic and ultramafic intrusions. The property is located 100 kilometres north of Nuuk, the capital
of Greenland and is accessible year-round either by helicopter or by boat from Nuuk or Maniitsoq, the latter located on the coast approximately
15 kilometres to the west. The Company acquired the Maniitsoq project in 2011 due to its potential for the discovery of significant magmatic
sulfide deposits in a camp-scale belt. The Maniitsoq property consists of three exploration licences, Sulussagut No. 2011/54 and Ininngui
No. 2012/28 comprising 2,689 and 296 square kilometres, respectively and the Carbonatite property No. 2018/21 (63 square kilometres),
and a prospecting licence, No. 2020/05, for West Greenland. The Greenland properties have no mineral resources or reserves.
The
three licences, 2011/54, 2012/28 and 2018/31 have sufficient accrued work credits to keep the property in good standing until December
2023, at which time a reduction in the size of the property will be required. Prospecting licence 2011/54 expired in December 31, 2022
and the Company has applied for its renewal. The prospecting licence is in effect until December 31, 2024.
12
Exploration
and Development Activities
No
exploration work was carried out in Greenland in 2022. Remaining targets were reviewed and prioritized in preparation for a
potential field program in 2023.
Prior
to the closing of RTO on August 3, 2022, the Maniitsoq property had a book value of $36,692,516. As the
RTO
is accounted for
as a capital transaction with NAN being identified as the accounting acquiree, the net assets of NAN should be measured at fair value.
Upon the completion of the RTO, the Company has switched its focus to development of the Botswana assets with the result that limited
resources (management time, capital etc.) have since been allocated or will be allocated to the Greenland assets. Management believes
that facts and circumstances exist to suggest that the carrying amount of the Maniitsoq property at August 3, 2022 exceeds its fair value.
As a result, the carrying value of the Greenland assets has been reduced to nil as of August 3, 2022, for a total impairment of $36,692,516.
From
August 3
, 2022
to December 31, 2022, the Company spent an additional $48,001 in acquisition and exploration expenditures on the Maniitsoq property,
which is comprised of the Sulussugut, Ininngui, Carbonatite and 2020/05 licenses. These expenditures were recorded as general exploration
expense in the consolidated statements of comprehensive loss.
Canadian
Nickel Projects - Sudbury, Ontario
Post
Creek Property
The
Post Creek property is located 35 kilometres east of Sudbury in Norman, Parkin, Alymer and Rathburn townships and consists of 73 unpatented
mining claim cells in two separate blocks, covering a total area of 912 hectares held by the Company. The Company acquired the property
through an option agreement in April 2010, subsequently amended in March 2013. As at the date of this Annual Report, the Company holds a 100%
interest in the Post Creek property and is obligated to pay advances on a net smelter returns royalty ("NSR") of $10,000 per annum, which will be deducted from any
payments to be made under the NSR.
The
Post Creek property lies adjacent to the Whistle Offset Dyke Structure which hosts the past–producing Whistle Offset and Podolsky
Cu-Ni-PGM mines. Post Creek lies along an interpreted northeast extension of the corridor containing the Whistle Offset Dyke and Footwall
deposits account for a significant portion of all ore mined in the Sudbury nickel district and, as such, represent favourable exploration
targets. Key lithologies are Quartz Diorite and metabreccia related to offset dykes and Sudbury Breccia associated with Footwall rocks
of the Sudbury Igneous Complex which both represent potential controls on mineralization.
No
exploration work was completed in 2022 on the Post Creek Property. The claims have sufficient work credits to keep them in good standing
until 2025.
Halcyon
Property
The
Halcyon property is located 35 kilometres northeast of Sudbury in the Parkin and Aylmer townships, and consists of 63 unpatented mining
cells for a total of 864 hectares. Halcyon is adjacent to the Post Creek property and is approximately 2 kilometres north of the producing
Podolsky Mine of FNX Mining. The property was acquired through an option agreement and as at the date of this Annual Report, the Company holds
a 100% interest in the Halcyon property and is obligated to pay advances on the NSR of $8,000 per annum, which will be deducted from
any payments to be made under the NSR.
No
exploration work was completed on the Halcyon Property in 2022. The claims are in good standing through 2025.
Quetico
Property
The
Quetico property is located within the Thunder Bay mining district of Ontario and consists of 99 claim cells in two blocks. Cells were
acquired to assess (i)
the Quetico Sub-province corridor, which hosts intrusions with Ni-Cu-Co-PGM
mineralization related to a late 2690 Ma Archean magmatic event, and (ii). the Neoproterozoic (1100 Ma MCR) magmatic event and related
intrusions.
13
No
work was carried out on the Quetico property in 2022. all  99 claims were expire in April 2023.
Immediately
prior to completion of the RTO, total book value of the Canadian assets was $2,535,873 which has been written off effective as at August
3, 2022, the closing date of the RTO as the Company has switched its focus to development of the Botswana assets with the result that
limited management time and capital resources have been allocated or will be allocated to the Canada assets. During the period from August
3
, 2022
to December 31, 2022, the Company incurred an additional $21,739 in exploration and license related expenditures for the Canadian properties
and the expenditures were recorded as general exploration expense in the consolidated statements of comprehensive loss.
High
Atlas Project
The
High Atlas property includes four permits acquired in December 2021 and one permit acquired in February 2022. The property is located
in the high Atlas Mountains of Morocco. Jurassic aged troctolitic and gabbroic intrusions occur at the margin of a significant trans-lithospheric
structure over a strike length greater than 100 kilometres. The intrusions are host to three major nickel-copper occurrences and another
ten minor occurrences. There is no modern geophysical coverage and no drilling on the property.
No
exploration work was carried out in 2022.
The
exploration and license related expenditures for the project is recorded as property investigation expense in the consolidated statements
of comprehensive loss. The Company has spent $nil on the project during the period from August 3
, 2022
to December 31, 2022.
ITEM
5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS
The
following discussion and analysis should be read in conjunction with the financial statements and notes thereto included herein.
Overview
The
Company is an international mineral exploration and resource development company listed on the TSXV and trading under the symbol PNRL.
The Company's principal business activity is the exploration and development of PNRL's flagship asset, the Selebi Ni-Cu-Co
sulphide mine in Botswana. In addition, the Company's project pipeline is also includes the Selkirk Ni-Cu-Co-PGE sulphide mine also located in Botswana.
A.
Operating Results
Going
Concern
The
Company's consolidated financial statements have been prepared on a going concern basis, which presumes that
the Company will continue realizing its assets and discharging its liabilities in the normal course of business for the foreseeable future.
The Company has incurred significant operating losses and negative cash flows from operations since inception. To date, the Company has
financed its operations primarily through the public offering and private placement of its securities, consisting of Common Shares and
warrants, and convertible debt. For the twelve-month period ended December 31, 2022, the Company incurred a net loss of $36.4 million
and negative working capital deficiency of $6.0 million, and had an accumulated deficit of $78.1 million as of December 31, 2022. Furthermore,
as at December 31, 2022, the Company's current liabilities and expected level of expenses for the next twelve months exceed cash
on hand of $5.2 million and its total current liabilities exceed its total current assets. Accordingly, the Company is required to actively
manage its liquidity and expenses and payments of payables are not being made as the amounts become due for certain suppliers.
As
of the date the consolidated financial statements for the twelve-month period ended December 31, 2022, the available cash balance is
expected to be sufficient to operate the business for the next six months under the current business plan. The Company requires
funding in the very near term in order to continue its operations. If the Company is unable to obtain funding in the near-term, it
may have to cease operations and liquidate its assets.
14
These
conditions cast substantial doubt about the Company's ability to continue as a going concern.
As at December 31,
2022, the Company had $5,162,991 in available cash (December 31, 2021— $1,990,203). There are no sources of operating cash flows.
Given the Company's current financial position and the ongoing exploration and evaluation expenditures, the Company will need to
raise additional capital through issuances of equity or other available financing alternatives to continue funding its operating, exploration
and evaluation activities, and eventual development of mineral properties. Although the Company has been successful in its past fund-raising
activities, there is no assurance as to the success of future fundraising efforts or as to the sufficiency of funds raised in the future.
The
consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and
classification of liabilities that might be necessary should the going concern basis not be valid. These adjustments could be material.
The
Company is an exploration and development stage entity and has not yet achieved profitable operations. The Company has shown losses for
the past several years. These losses result largely from having no revenue and significant exploration and administrative expenses related
to operations.
Year
Ended December 31, 2022 and December 31, 2021
The
Company incurred a net loss of $36,410,469 in the 2022 fiscal year ("FY2022") compared to a net loss of $9,359,605 in the
2021 fiscal year ("FY2021") , resulting in an increased loss of $27,050,864 (year-over-year). The net loss in FY 2022 was
mainly driven by a loss on the RTO transaction of $29,174,415, and also to the following events:
●
The share-based payment
    expenses were $7,731,117 and were $6,469,226 higher compared to $1,261,891 in FY 2021 due to the revaluation of the vesting options
    upon completion of the RTO transaction.
●
Corporate and administrative
    expenses were $3,317,039 and were higher by $2,752,373 compared to $564,666 incurred in FY 2021. Activities related to undertaking
    the RTO were the key contributing factors to higher costs in FY 2022.
●
Management fees were $2,418,984
    in FY 2022 and were higher by $1,743,983 compared to $675,001 in FY 2021. This increase is a direct result of increased operational
    activities in Botswana following the purchase of the Selebi Assets and the Selkirk Mine, expansion of consultancy management in support
    of the re-development of the Selebi Assets as well as activities in Barbados, which did not exist during FY 2021.
●
Advisory and consultancy
    fees were $1,895,004 and were higher by $1,537,024 compared to $357,980 incurred in FY 2021. Higher fees were due to activities related
    to the closing of Selebi and Selkirk acquisitions in January and August 2022, respectively.
●
Interest and bank charges
    were $93,937 in FY 2022 and were higher by $91,426 compared to $2,511 in FY 2021. Higher interest costs relate to lease interest
    that commenced in August 2022 and did not exist in FY 2021.
●
Interest expense was $416,703
    in FY 2022 compared to interest expense of $nil in FY 2021. The interest was a result of bridge loan financing.
●
Depreciation expense was
    $96,543 during FY 2022 compared to $nil in FY 2021.
The
higher loss in FY 2022 was partially offset by the following lower expenditures in FY 2022 compared to FY 2021:
●
The 15% warrant held by
    NAN was cancelled upon the completion of the RTO, resulting in a reversal of the fair value of the 15% warrant by $8,974,901 compared
    to a fair value increase of $6,345,310 recorded in FY 2021
●
Foreign exchange gain totaled
    $143,777 and was higher by $157,088 compared to $13,311 loss in FY 2021.
●
Due diligence related expenditures
    totaled $18,039 in FY 2022 and were lower by $120,896 compared to $138,935 costs in FY 2021. Higher costs in FY 2021 resulted from
    commencing capitalization of these costs in late FY 2021 upon the Company being awarded exclusivity to acquire the assets.
Twelve
Months Ended December 31, 2021, and December 31, 2020
The
Company incurred a net loss of $9,408,511 FY 2021 compared to a net loss of $3,859,729 in FY 2020 resulting in an increased loss of $5,548,782
(year-over-year). The higher loss in FY 2021 was due to the following events with warrant fair value and share-based payment being the
most significant:
●
Valuation
                                            of warrant resulted in fair value of $6,345,310 in FY 2021 and was higher by $3,715,719 compared
                                            to $2,629,591 fair value in FY 2020.
●
Share-based
                                            payment resulting stock options issuance was $1,261,891 in FY 2021 compared to $nil amount
                                            in FY 2020. There were no stock options issued during FY 2020.
●
Corporate
                                            and administrative costs of $564,666 during FY 2021 were higher by $433,683 compared to $130,983
                                            expenses during FY 2020. Increased corporate and administrative expenses during FY 2021 were
                                            consistent and directly related to increased activities in due diligence process in connection
                                            with the acquisition of certain assets in Botswana, the key activity in 2021. The key costs
                                            that increased in FY 2021 within the corporate and administrative category mainly related
                                            to legal fees, accounting and tax consultancy, investor relations and administrative fees.
●
Management
                                            fees were $675,001 in FY 2021 and were higher by $463,116 compared to $211,885 costs in FY
                                            2020.
●
Advisory
                                            and consultancy were $357,980 in FY 2021 and were higher by $353,835 compared to $4,145 in
                                            FY 2020.
●
Exchange
                                            differences on translation of foreign operations were $48,906 in FY 2021 compared to $nil
                                            amount in FY 2020. Foreign operations in Botswana and Barbados commenced during FY 2021.
●
Foreign
                                            exchange loss totaled $13,311 during FY 2021 and was higher by $10,586 compared to $2,725
                                            loss in FY 2020. The higher loss in FY 2021 was due to increased volume in transactions denominated
                                            in foreign currencies.
The
higher loss in FY 2021 was offset by the following lower expenditures in FY 2021 compared to FY 2020:
●
Due
                                            diligence related expenditures totaled $877,844 in FY 2020 and were lower by $738,909 compared
                                            to $138,935 costs in FY 2021. Higher costs in FY 2020 resulted from commencing capitalization
                                            of these costs in early 2021 upon the Company being awarded exclusivity to acquire the assets
                                            and started to incur cost directly association with the acquisition.
●
Interest
                                            and bank charges were slightly lower by $45 in FY 2021 of $2,511 compared to $2,556 in FY
                                            2020.
15
B.
Liquidity and Capital Resources
As of December 31, 2022, the Company had a working capital deficiency of $6,024,026 (December 31, 2021 – $1,558,011 positive working
capital) and reported an accumulated deficit of $78,092,605 (FY 2020 - $13,482,624). The Company will require additional funds to continue
its planned operations and meet its obligations.
As
at December 31, 2022, the Company had $5,162,991 in available cash (December 31, 2021— $1,990,203). There are no sources of operating
cash flows. Given the Company's current financial position and the ongoing exploration and evaluation expenditures, the Company
will need to raise additional capital through issuances of equity or other available financing alternatives to continue funding its
operating, exploration and evaluation activities, and eventual development of mineral properties. Although the Company has been successful
in its past fund-raising activities, there is no assurance as to the success of future fundraising efforts or as to the sufficiency of
funds raised in the future.
As
noted, these conditions raise substantial doubt about the Company's ability to continue as a going concern. The financial statements
do not include any adjustment that might arise from that uncertainty. Note 1 in the consolidated financial statements includes an explanatory paragraph regarding
the Company's ability to continue as a going concern.
In
April 2022, PNRC completed a non-brokered private placement of 8,865,619 shares at a price of US$2.00 per share for gross proceeds
of $22,388,599 (US$17,731,238). In connection with the private placement, the Company has paid to eligible finders
("Finders") (i) cash commission equal to 6% of the gross proceeds raised from subscribers introduced to the Company by
such Finders, being an aggregate of $1,535,727, and (ii) a number of
Common Shares
equal to 6% of the units attributable to the
Finders under the private placement, being an aggregate of 70,548 shares with total value of $176,398 at the offer price of the
private placement.
In April 2022, NAN completed a private placement offering of 21,118,000
subscription receipts (the "
Subscription Receipts
") at a price of $0.48 per Subscription Receipt (in each case, prior
to giving effect to the Company's 5:1 consolidation of its Common Shares), including the partial exercise of the agents 'option, for total
gross proceeds of $10,136,640. Upon the closing of the RTO on August 3, 2022, the Subscription Receipts were converted into 4,223,600
Common Shares (post-consolidation), and the net subscription proceeds were released from escrow and delivered to the Company.
On
November 25, 2022, the Company closed a $7 million bridge loan financing from Pinnacle Island LP with net proceeds of $6,740,000. The
bridge loan is evidenced by the issuance of a promissory note by the Company to the lender with a principal amount of $7 million and
bears interest at a rate of 10% per annum, calculated monthly and initially payable on February 22, 2023, being the maturity date of
the Promissory Note. The Company extended the maturity to March 22, 2023 and subsequently to November 24, 2023.
During
FY 2022 year, the Company received additional cash inflow of $569,399 from exercised warrants and $723,076 from exercised options.
On
February 24, 2023, the Company closed a brokered private placement offering under which 4,437,184 Common Shares were issued
at a price of $1.75 per share for gross proceeds of $7,765,072.
C.
Research and development, patents and licenses, etc.
Not
applicable.
D.
Trend information
The major trends affecting the
Company and its business include: the impact of commodity prices and demand for nickel, copper and cobalt; volatility in capital markets;
globalization of commodity supplies; critical metals supply chain stabilization; increasing domestic expectations surrounding in-country
ores and concentrates; and moves to increasing alternative energy solutions in an effort to reduce carbon footprints.
Impact
of Inflation
The
Company believes that inflation had minimal effect on costs related to its exploration activities in the 12 months ending December 31,
2022.
Quantitative
and Qualitative Disclosures about Market Risk
Not
applicable.
16
E.
Critical Accounting Estimates
Basis
of preparation and accounting policies
The
consolidated financial statements have been prepared under the historical cost convention, modified by the revaluation of any financial
assets and financial liabilities where applicable. The preparation of financial statements in conformity with IFRS requires the use of
certain critical accounting estimates. It also requires management to exercise judgment in the process of applying the Company's
accounting policies. These areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant
to the consolidated financial statements, are disclosed in Note 3 of the audited annual financial statements for the years ended December 31, 2022 and 2021.
Basic
of consolidation
The
consolidated financial statements include the financial statements of the Company and its wholly-owned subsidiaries (collectively, the "Group"). All
intercompany transactions, balances, income and expenses are eliminated upon consolidation.
Effective
August 3, 2022, NAN completed the 100% acquisition of the outstanding shares of PNRC (Note 4 of the consolidated financial statements). As the shareholders of PNRC obtained
control of the Company through the exchange of their shares of PNRC for shares of NAN, the acquisition of PNRC has been accounted
for in the consolidated financial statements as a reverse takeover. Consequently, the consolidated statements of comprehensive loss and
cash flows reflect the results from the operations and cash flows of PNRC, the legal subsidiary, for the year ended December 31,
2022 and 2021, combined with those of NAN, the legal parent, from the acquisition on August 3, 2022 to December 31, 2022, in
accordance with IFRS for reverse takeovers. The comparative balance sheet reflects the balance
sheet of PNRC as at December 31, 2021.
Foreign
currency translation
The
Company's functional and presentation currency is the Canadian dollar. Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the date of the transaction. Foreign currency monetary items are translated at the year-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.
17
Exchange
differences arising on the translation of monetary items or on settlement of monetary items are recognized in profit or loss in the statement
of comprehensive loss in the period in which they arise, except where deferred in equity as a qualifying cash flow or net investment
hedge.
Exchange
differences arising on the translation of non-monetary items are recognized in other comprehensive income in the statement of comprehensive
loss to the extent that gains and losses arising on those non-monetary items are also recognized in other comprehensive income. Where
the non-monetary gain or loss is recognized in profit or loss, the exchange component is also recognized in profit or loss.
Foreign
operations
In
the Group's financial statements, all assets, liabilities and transactions of Group entities with a functional currency other than
Canadian dollar are translated into Canadian dollar upon consolidation. The functional currencies of entities within the Group have remained
unchanged during the reporting period. On consolidation, assets and liabilities have been translated into Canadian at the closing rate
at the reporting date. Fair value adjustments arising on the acquisition of a foreign entity have been treated as assets and liabilities
of the foreign entity and translated into Canadian dollar at the closing rate. Income and expenses have been translated into Canadian
dollar at the average rate over the reporting period. Exchange differences are charged or credited to other comprehensive income and
recognized in the currency translation reserve in equity. On disposal of a foreign operation, the related cumulative translation differences
recognized in equity are reclassified to profit or loss and are recognized as part of the gain or loss on disposal.
Financial
instruments
Classification
The
Company classifies its financial instruments in the following categories: at fair value through profit and loss ("FVTPL"),
at fair value through other comprehensive income (loss) ("FVTOCI") or at amortized cost. The Company determines the classification
of financial assets at initial recognition. The classification of debt instruments is driven by the Company's business model for
managing the financial assets and their contractual cash flow characteristics. Equity instruments that are held for trading are classified
as FVTPL. For other equity instruments, on the day of acquisition, the Company can make an irrevocable election (on an instrument-by-instrument
basis) to designate them as at FVTOCI. Financial liabilities are measured at amortized cost, unless they are required to be measured
at FVTPL (such as instruments held for trading or derivatives) or the Company has opted to measure them at FVTPL.
The
following table shows the classification of the Company's financial assets and liabilities:
Financial
    asset/liability
Classification
Cash
FVTPL
Trade
    payables and accrued liabilities
Amortized
    cost
Lease
    liability
Amortized
    cost
Promissory
    note
Amortized
    cost
Vehicle
    financing
Amortized
    cost
Financial
    liability – warrant
FVTPL
Deferred
    share unit liability
FVTPL
Measurement
Financial
assets and liabilities at amortized cost.
Financial
assets and liabilities at amortized cost are initially recognized at fair value plus or minus transaction costs, respectively, and subsequently
carried at amortized cost less any impairment.
Financial
assets and liabilities at FVTPL
Financial
assets and liabilities carried at FVTPL are initially recorded at fair value and transaction costs are expensed in profit or loss. Realized
and unrealized gains and losses arising from changes in the fair value of the financial assets and liabilities held at FVTPL are included
in the consolidated statements of comprehensive loss in the period in which they arise.
18
Impairment
of financial assets at amortized cost
An
'expected credit loss' impairment model applies that requires a loss allowance to be recognized based on expected credit
losses. The estimated present value of future cash flows associated with the asset is determined and an impairment loss is recognized
for the difference between this amount and the carrying amount as follows: the carrying amount of the asset is reduced to estimated present
value of the future cash flows associated with the asset, discounted at the financial asset's original effective interest rate,
either directly or through the use of an allowance account and the resulting loss is recognized in profit or loss for the period.
In
a subsequent period, if the amount of the impairment loss related to financial assets measured at amortized cost decreases, the previously
recognized impairment loss is reversed through profit or loss to the extent that the carrying amount of the investment at the date the
impairment is reversed does not exceed what the amortized cost would have been had the impairment not been recognized.
Derecognition
Financial
assets
The
Company derecognizes financial assets only when the contractual rights to cash flows from the financial assets expire, or when it transfers
the financial assets and substantially all of the associated risks and rewards of ownership to another entity. Gains and losses on derecognition
are generally recognized in the statements of comprehensive loss.
Investments
are derecognized when the rights to receive cash flows from the investments have expired or the Company has transferred the financial
asset and the transfer qualifies for derecognition.
Financial
liabilities
Financial
liabilities are derecognized when, and only when, the Company's obligations are discharged, cancelled or they expire. The difference
between the carrying amount of the financial liability derecognized and the consideration paid and payable is recognized in the Statement
of Comprehensive Loss.
Exploration
and evaluation assets
Exploration
and evaluation assets include the costs of acquiring licenses, costs associated with exploration and evaluation activity, and the fair
value (at acquisition date) of exploration and evaluation assets acquired in a business combination. Exploration and evaluation expenditures
are initially capitalized. Costs incurred before the Company has obtained the legal rights to explore an area are recognized in profit
or loss.
Government
tax credits received are recorded as a reduction to the cumulative costs incurred and capitalized on the related property.
Exploration
and evaluation assets are assessed for impairment if (i) sufficient data exists to determine technical feasibility and commercial viability,
and (ii) facts, events and circumstances suggest that the carrying amount exceeds the recoverable amount.
Once
the technical feasibility and commercial viability of the extraction of mineral resources in an area of interest are demonstrable, exploration
and evaluation assets attributable to that area of interest are first tested for impairment and then reclassified to mining property
and development assets within equipment.
Recoverability
of the carrying amount of any exploration and evaluation assets is dependent on successful development and commercial exploitation, or
alternatively, sale of the respective areas of interest.
The
Company may occasionally enter into farm-out arrangements, whereby it will transfer part of the interest, as consideration, for an agreement
by the farmee to meet certain exploration and evaluation expenditures which would have otherwise been undertaken by the Company. The
Company does not record any expenditures made by the farmee on its behalf. Any cash consideration received from the agreement is credited
against the costs previously capitalized to the mineral interest given up by the Company, with any excess consideration accounted for
in profit.
19
When
a project is deemed to no longer have commercially viable prospects to the Company, exploration and evaluation expenditures in respect
of that project are deemed to be impaired. As a result, those exploration and evaluation expenditure costs, in excess of estimated recoveries,
are written off to the statement of comprehensive loss.
Impairment
of assets
Impairment
tests on non-financial assets, including exploration and evaluation assets, property, plant and equipment, are subject to impairment
tests whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Where the carrying value
of an asset exceeds its recoverable amount, which is the higher of value in use and fair value less costs to sell, the asset is written
down accordingly.
Where
it is not possible to estimate the recoverable amount of an individual asset, the impairment test is carried out on the asset's
cash-generating unit, which is the lowest group of assets in which the asset belongs for which there are separately identifiable cash
inflows that are largely independent of the cash inflows from other assets.
An
impairment loss is charged to the profit or loss, except to the extent they reverse gains previously recognized in other comprehensive
loss.
Leases
At
commencement of a contract, the Company assesses whether a contract is, or contains, a lease by determining whether the contract conveys
the right to control the use of an identified asset for a period of time in exchange for consideration. A right-of-use (the "ROU
") asset and lease liability are recognized at the lease commencement date. The lease liability is initially measured at the present
value of all future lease payments that have not been paid as of the commencement date of the lease, discounted using the Company's
incremental borrowing rate, unless the rate implicit in the lease is readily determinable. The ROU asset is initially measured at cost,
which is calculated as the initial amount of the lease liability, with an adjustment for any initial direct costs incurred, plus adjustments
for any lease payments made in advance of the commencement date, and less any lease incentives received. Subsequent to initial recognition,
the ROU asset is depreciated on a straight-line basis over the term of the lease or the estimated useful life, with inclusion for any
options to extend that the Company reasonably expects to exercise.
ROU
assets are tested for impairment in accordance with IAS 36 Impairment of Assets. The right-of-use asset is periodically reduced by impairment
losses, if any, and adjusted for certain remeasurements of the lease liability. The lease liability is remeasured when there is a change
in future lease payments arising from a change in an index or rate, if there is a change in the Company's estimate of the amount
expected to be payable under a residual value guarantee, or if the Company changes its assessment of whether it will exercise a purchase,
extension or termination option. These adjustments are recorded through profit or loss.
Property,
Plant and Equipment
Property,
plant and equipment is stated at historical cost less accumulated depreciation and accumulated impairment losses.
Subsequent
costs are included in the asset's carrying amount or recognized as a separate asset, as appropriate, only when it is probable that
future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying
amount of a significant replaced part is derecognized. All other repairs and maintenance are charged to the consolidated statement of
comprehensive loss during the financial period in which they are incurred. Gains and losses on disposals are determined by comparing
the proceeds with the carrying amount and are recognized in profit or loss.
20
Depreciation
is calculated on a straight-line method to charge the cost, less residual value, of the assets to their residual values over their estimated
useful lives. The depreciation rate applicable to each category of Property, plant and equipment is as follows:
Equipment
Estimated
    useful life (years)
Exploration
    equipment
5
Computer
    software
2
Computer
    equipment
1-2
Vehicles
4
Furniture
    and fixture
10
Building
25
Share
capital
The
Common Shares and warrants to purchase Common Shares are classified as equity instruments.
Incremental
costs directly attributable to the issue of new shares, warrants or options are shown in equity as a deduction from the proceeds.
Proceeds
received on the issuance of units, consisting of Common Shares and warrants are allocated to share capital.
Share-based
payments
Where
equity-settled share options are awarded to employees, the fair value of the options at the date of grant is recognized over the vesting
period. Performance vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each
reporting date so that, ultimately, the cumulative amount recognized over the vesting period is based on the number of options that eventually
vest. Non-vesting conditions and market vesting conditions are factored into the fair value of the options granted. As long as all other
vesting conditions are satisfied, a charge is made irrespective of whether these non-vesting and market vesting conditions are satisfied.
The cumulative expense is not adjusted for failure to achieve a market vesting condition or where a non-vesting condition is not satisfied.
Where
the terms and conditions of options are modified, the increase in the fair value of the options, measured immediately before and after
the modification, is also recognized over the remaining vesting period.
Where
equity instruments are granted to non-employees, they are recorded at the fair value of the goods or services received. Amounts related
to the issuance of shares are recorded as a reduction of share capital.
When
the value of goods and services received in exchange for the share-based payment cannot be reliably estimated, the fair value is measured
by use of a valuation model. The expected life used in the model is adjusted, based on management's best estimate, for the effects
of non-transferability, exercise restrictions, and behavioural considerations.
All
equity-settled share-based payments are reflected in share-based payments reserve, until exercised. Upon exercise shares are issued from
the treasury and the amount reflected in share-based payments reserve is credited to share capital along with any consideration paid.
Deferred
Share Units ("DSUs")
In
the year ended December 31, 2022, the Company approved the adoption of a DSU plan (the "DSU Plan"). In accordance with IFRS 2 Share Based Payments,
this plan is a cash-settled share-based compensation program whereby the Company records the fair value of the liability at the date
upon which it is incurred and adjusts the liability to the fair value at the end of each reporting period and at the date of
settlement, with any changes in fair value recognized in profit or loss for the period.
The
DSU Plan enables the Company upon approval by the directors to grant DSU's to eligible non-management directors. Upon granting
DSU's, the Company records stock-based compensation based on the amount of units granted multiplied by the volume weighted
average price of Common Shares for the last five trading days on the TSXV (the "5-day-VWAP") immediately preceding the
date of the grant.
21
The DSUs credited to the account of a director may only be redeemed following the date upon which the holder ceases
to be a director. Depending upon the country of residence of a director, the DSUs may be redeemed at any time prior to December 15 in
the calendar year following the year in which the holder ceases to be a director, and may be redeemed in as many as four installments.
Upon redemption, the holder is entitled to a cash payment equal to the number of units redeemed multiplied by the 5-day-VWAP of the Company's
common shares on that date. The Company may elect, in its sole discretion, to settle the value of the DSUs redeemed in the Company's
common shares on a one-for-one basis, provided shareholder approval has been obtained on or prior to the relevant redemption date.
Loss
per share
The
Company uses the treasury stock method to compute the dilutive effect of options, warrants and similar instruments. Under this method
the dilutive effect on loss per Common Share is recognized on the use of the proceeds that could be obtained upon exercise of options,
warrants and similar instruments. It assumes that the proceeds would be used to purchase Common Shares at the average market price during
the period.
Basic
loss per Common Share is calculated using the weighted average number of Common Shares outstanding during the period and does not include
outstanding options and warrants. Dilutive loss per Common Share is not presented differently from basic loss per share as the conversion
of outstanding stock options and warrants into Common Shares would be anti-dilutive.
Income
taxes
Income
tax expense comprises current and deferred tax. Current tax and deferred tax are recognized in net income except to the extent that it
arises in a business combination, or from items recognized directly in equity or other comprehensive loss.
Current
income tax assets and liabilities for the current period are measured at the amount expected to be recovered from or paid to the taxation
authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting
date, in the countries where the Company operates and generates taxable income.
Current
income tax relating to items recognized directly in other comprehensive loss or equity is recognized in other comprehensive lost or equity
and not in profit or loss. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable
tax regulations are subject to interpretation and establishes provisions where appropriate.
Deferred
income tax is provided using the asset and liability method of temporary differences at the reporting date between the tax bases of assets
and liabilities and their carrying amounts for financial reporting purposes.
The
carrying amount of deferred income tax assets is reviewed at the end of each reporting period and recognized only to the extent that
it is probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilized.
Deferred
income 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 tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting
period.
Deferred
income tax assets and deferred income tax liabilities are offset, only if a legally enforceable right exists to set off current tax assets
against current income tax liabilities and the deferred income taxes relate to the same taxable entity and the same taxation authority.
Accounting
standards and amendments issued but not yet effective:
Certain
pronouncements were issued by the IASB or the IFRIC that are mandatory for accounting periods commencing on or after January 1, 2023.
Many are not applicable or do not have a significant impact to the Company and have been excluded. The following have not yet been
adopted and are being evaluated to determine their impact on the Company.
22
IAS
1 – Presentation of Financial Statements ("IAS 1") was amended in January 2020 to provide a more general approach to
the classification of liabilities under IAS 1 based on the contractual arrangements in place at the reporting date. The amendments clarify
that the classification of liabilities as current or non-current is based solely on a company's right to defer settlement at the
reporting date. The right needs to be unconditional and must have substance. The amendments also clarify that the transfer of a company's
own equity instruments is regarded as settlement of a liability, unless it results from the exercise of a conversion option meeting the
definition of an equity instrument. The amendments are effective for annual periods beginning on January 1, 2024.
IAS
1 – In February 2021, the IASB issued 'Disclosure of Accounting Policies' with amendments that are intended to help
preparers in deciding which accounting policies to disclose in their financial statements. The amendments are effective for year ends
beginning on or after January 1, 2023.
IAS
8 – In February 2021, the IASB issued 'Definition of Accounting Estimates' to help entities distinguish between accounting
policies and accounting estimates. The amendments are effective for year ends beginning on or after beginning on or after January 1,
2023.
Critical
accounting judgments, estimates and assumptions
The
preparation of the consolidated financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions
that can affect reported amounts of assets, liabilities, revenue and expenses and the accompanying disclosures. Estimates and assumptions
are continuously evaluated and are based on management's historical experience and on other assumptions believed to be reasonable
under the circumstances. However, different judgments, estimates and assumptions could result in outcomes that require a material adjustment
to the carrying amount of assets or liabilities affected in future periods.
The
area involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated
financial statements are:
RTO
– fair value
Fair
value considerations for the RTO transactions are assessed in accordance with IFRS. These considerations are based on various factors
such as the fair value of the assets acquired or liabilities assumed, the fair value of equity instruments issued, and any related acquisition
costs.
The
assumptions and estimates used in arriving at fair value figures are based on management's judgments and relevant market data.
The fair value of the equity instruments issued is determined based on market prices or valuation techniques that take into account factors
such as expected share price volatility.
Recoverability
of exploration and evaluation assets
The
ultimate recoverability of the exploration and evaluation assets with a carrying value of $31,823,982 at December 31, 2022, is dependent
upon the Company's ability to obtain the necessary financing to complete the exploration and development and commence profitable
production at its projects, or alternatively, upon the Company's ability to dispose of its interests therein on an advantageous
basis. A review of the indicators of potential impairment is carried out at least at each period end.
Management
undertakes a periodic review of these assets to determine whether any indication of impairment exists. Where an indicator of impairment
exists, a formal estimate of the recoverable amount of the assets is made. An impairment loss is recognized when the carrying value of
the assets is higher than the recoverable amount and when mineral license tenements are relinquished or have lapsed. In undertaking this
review, management of the Company is required to make significant estimates of, among other things, discount rates, commodity prices,
availability of financing, future operating and capital costs and all aspects of project advancement. These estimates are subject to
various risks and uncertainties, which may ultimately have an effect on the expected recoverability of the carrying values of the assets.
23
Restoration
provisions
Management's
best estimates regarding the restoration provisions are based on the current economic environment. Changes in estimates of contamination,
restoration standards and restoration activities result in changes to provisions from period to period. Actual restoration provisions
will ultimately depend on future market prices for future restoration obligations. Management has determined that the Company has no
restoration obligations at December 31, 2022.
Going
concern
Consolidated
financial statements are prepared on a going concern basis unless management either intends to liquidate the Company or has no realistic
alternative to do so. Assessment of the Company's ability to continue as a going concern requires the consideration of all available
information about the future, which is at least, but not limited to, twelve months from the end of the reporting period. This information
includes estimates of future cash flows and other factors, the outcome of which is uncertain. When management is aware, in making its
assessment, of material uncertainties related to events or conditions that may cast substantial doubt upon the Company's ability
to continue as a going concern those uncertainties are disclosed.
Valuation
of share-based compensation
The
Company estimates the fair value of warrants and options using the Black-Scholes Option Pricing Model which requires significant estimation
around assumptions and inputs such as expected term to maturity, expected volatility and expected forfeiture rates. Note 8 of the consolidated
financial statements contains further details of significant assumptions applied to these areas of estimation.
Deferred
income tax
Tax
benefits from uncertain tax positions may be recognized when it is probable that the Company will be able to use deductible temporary
differences against taxable profit: (i) whether a tax position, based solely on its technical merits, is probable to be sustained upon
examination, and (ii) measuring the tax benefit as the expected value or most likely amount taking into consideration which method better
predicts the realized amounts upon ultimate settlement.
Furthermore,
the Company uses the asset and liability method in accounting for deferred income taxes and mining duties. Under this method, deferred
income taxes are recognized for future income tax.
In
preparing these estimates, management is required to interpret substantially enacted legislation as well as economic and business conditions
along with management's tax and corporate structure plans which may impact taxable income in future periods.
Estimated
useful lives and depreciation of property, plant and equipment
Depreciation
of property, plant and equipment is dependent upon estimates of useful lives which are determined through the exercise of judgment. The
assessment of any impairment of these assets is dependent upon estimates of recoverable amounts that take into account factors such as
economic and market conditions and the useful lives of the assets.
24
ITEM
6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
The names, place of residence, positions within the Company and the principal
occupations of the directors and senior officers of the Company are set out below. Directors are elected annually by a majority vote of the shareholders and hold office until the next general meeting of
the shareholders. Officers are appointed by, and serve at the discretion of, the board of directors.
A.
Directors and senior management.
Name,
Municipality of Residence Principal Occupation and Position and Position with the Company
Age
During
    the Past Five Years
Charles
    Riopel
Montreal,
    QC
Director,
    Executive Chairman
56
Director
    of PNRL, and prior to the RTO, he was Chairman of NAN since Jun 2019; founder and managing partner at Latitude 45, a mining private
    equity fund; board member of PNRC, Aligo Innovation, Meridian Mining SA. Previously, Senior Investment Director at The Sentient
    Group, a private equity fund specialized in mining.
John
    Hick
Toronto,
    ON
Lead
    Director
73
Director
    of PNRL, and prior to RTO, he was director of NAN since February 2021; currently independent corporate director of a number of
    publicly listed and private companies, including Diamond Estates Wines & Spirits Inc.; and Mako Mining Corp. Previously, board and/or senior management positions with a number of other Canadian mining companies,
    including Medoro Resources Ltd., St. Andrew Goldfields Ltd., First Uranium Corp., Defiance Mining Corp./Geomaque Explorations Ltd,
    TVX Gold Inc., Cambior Inc., Rio Narcea Gold Mines Ltd, Rayrock Resources Inc., Revett Minerals Inc. and Placer Dome
    Inc.
William
    O'Reilly
Toronto,
    ON
Director
73
Director
    of PNRL since Aug 3, 2022. Managing Partner and a member of the Management Committee of Davies Ward Phillips & Vineberg LLP from
    1997 until his retirement in May 2010; Director of Russel Metals Inc. since May 2009, and at various times served as Chair of its
    Nominating and Corporate Governance Committee, its Management Resources and Compensation Committee and its Environmental Management
    and Health and Safety Committee.
Don
    Newberry
Avon
    Lake, OH
Director
46
Director
    of PNRL since October 12, 2022; currently the Chief Financial Officer at Ohio Truck Sales; spent most of his career working internationally
    in the mining industry for Diavik Diamond Mines, Cleveland Cliffs, and Nyrstar.
Keith
    Morrison
Burlington,
    ON
Director,
    Chief Executive Officer
63
Director
    and CEO of PNRL, and prior to the RTO, he was director and CEO of NAN since December 2014; Director of Era Resources Inc.,
    Non-Executive Chairman of Security Devices International Inc., Non-Executive Chairman of Osgood Mountain Gold Ltd., Non-Executive chairman of ZEN Graphene Solution Ltd..
Sean
    Whiteford
Toronto,
    ON
President
54
President
    of PNRL since March 2, 2023; most recently the Vice President, Business Development at Burgundy Diamond Mines Ltd and a Director
    of PNRL; previously held various corporate, operational and technical roles at BHP, Rio Tinto and Cliffs Natural Resource.
Sarah-Wenjia
    Zhu
Montreal,
    QC
Chief
    Financial Officer
48
CFO
    of PNRL, and prior to the RTO, she was CFO of NAN since May 2018, formerly an investment manager at The Sentient Group;
    equity analyst/associate at private equity fund and bank; Deloitte China.
Timothy
    Moran
Toronto,
    ON
Chief
    Legal Officer and Corporate Secretary
60
Timothy
    Moran is a Canadian corporate and securities law professional with over 30 years of experience advising domestic and international
    public and private companies. Prior to acting as Chief Legal Officer and Corporate Secretary for PNRL, Timothy was the Senior Vice
    President, Corporate Development and Chief Legal Officer of Gedex Systems Inc., a pre-revenue high technology company specializing
    in airborne geophysics exploration. Prior to Gedex Systems Inc., Timothy was a partner for many years at Davies Ward Phillips &
    Vineberg LLP with a practice specializing in the corporate, mergers and acquisitions, takeover bids and securities law areas.
25
B.
Compensation.
Management
compensation is determined by the Board of Directors for services provided. During the year ended December 31, 2022, aggregate compensation
paid or accrued to all directors and officers, including private companies controlled by directors and officers, as a group, was $2,418,984.
The
following table presents information concerning all compensation paid, payable, awarded, granted, given, or otherwise provided, directly
or indirectly, to each officer and director by the Company and its subsidiaries for services in all capacities to the Company during
the 2022 financial year:
Table of Compensation
Name and Position
Year
(1)
Salary, consulting fee, retainer or commission ($)
Bonus ($)
Committee or meeting fees
($)
Option-based awards
($)
Value of all Other Compensation
(10)
($)
Total Compensation ($)
Keith Morrison
(2)
Director and CEO
2022
331,941
—
—
528,228
—
860,169
Sean Whiteford
(3)
President
2022
—
—
—
—
74,000
74,000
Sarah Zhu
(4)
CFO
2022
243,048
—
—
264,114
—
507,162
Timothy Moran
(5)
CLO
2022
190,675
—
—
264,114
—
454,789
Charles Riopel
(6)
Executive Chairman and Director
2022
252,500
—
—
528,228
—
780,728
John Hick
(7)
Director
2022
15,000
—
—
—
88,800
103,800
William O'Reilly
(8)
Director
2022
—
—
—
—
74,000
74,000
Don Newberry
(9)
Director
2022
—
—
—
—
59,200
59,200
Notes:
(1)
Financial year ended December 31.
(2)
Paid to Breniklan Limited and Breniklan Botswana Pty, the private companies controlled by Mr. Morrison, which provide the services of Mr. Morrison as the Company's Chief Executive Officer. Mr. Morrison did not receive any compensation for his services as a director of the Company or its subsidiaries in 2022.
(3)
Mr. Whiteford was the Director of the Company from August 3, 2022 to March 1, 2023 and was appointed as President of the Company on March 2, 2023.
(4)
Paid to Consultations WJZHU Inc., a private company controlled by Ms. Zhu, which provides the services of Ms. Zhu as the Chief Financial Officer of the Company.
(5)
Paid to Moran Professional Corporation, a private company controlled by Mr. Moran, which provides the services of Mr. Moran as the Chief Legal Officer of the Company.
(6)
Paid to Latitude 45, a private company controlled by Mr. Riopel, which provides the services of Mr. Riopel as Executive Chairman. Mr. Riopel did not receive any compensation for his services as a director of the Company or its subsidiaries in 2022.
(7)
Mr. Hick was appointed to the board of directors of the Company on February 26, 2020.
(8)
Mr. O'Reilly was appointed to the board of directors of the Company on August 3, 2022.
(9)
Mr. Newberry was appointed to the board of directors of the Company on October 12, 2022.
(10)
Value of the DSU based on 5-day-VWAP of the Company's common shares on December 31, 2022.
For
the year ended December 31, 2022, the Company paid $373,472 (including cash and DSUs) in compensation to non-executive directors for acting
as directors. The Company does not have any pension or retirement plans, nor does the Company compensate its directors and officers by
way of any material bonus or profit sharing plans.
In
connection with the RTO, the Company adopted an amended Incentive Stock Option Plan providing the authority to grant options to
directors, officers, employees and consultants enabling them to acquire, in aggregate, up to 22,600,000 stock options of the
Company. Under the Incentive Stock Option Plan, the exercise price of each option typically equals the market price or a discounted
price of the Company's stock as calculated on the date of grant. The options can be granted for a maximum term of 10
years.
During
the year ended December 31, 2022, the Company granted an aggregate total of 2,600,000 stock options to employees, directors and
consultants with a maximum term of 5 years. All such options then outstanding vested immediately upon the completion of the RTO and
are exercisable at $2.62 per share. The Company calculates the fair value of all stock options using the Black-Scholes Option
Pricing Model. The fair value of all options, including those granted during the year ended December 31, 2022 as well as the ones
granted in prior year but not vested until the completion of the RTO, amounted to $7,731,117 and was recorded as a share-based
payment expense.
Effective
December 2022, the Company approved a DSU Plan that enables the Company
upon approval by the directors to grant DSUs to eligible non-management directors. The DSUs credited to the account of a director may
only be redeemed following the date upon which the holder ceases to be a director. Depending upon the country of residence of a director,
the DSUs may be redeemed at any time prior to December 15 in the calendar year following the year in which the holder ceases to be a
director and may be redeemed in as many as four installments. Upon redemption, the holder is entitled to a cash payment equal to the
number of units redeemed multiplied by the 5-day-VWAP of the Common Shares on that date. The Company may elect, in its
sole discretion, to settle the value of the DSUs redeemed in the Common Shares on a one-for-one basis, provided shareholder
approval has been obtained on or prior to the relevant redemption date.
During
the year ended December 31, 2022, the Company granted 200,000 DSUs to the non-management directors at a fair value of $298,000 recorded
as share based compensation, and a DSU liability of the same amount.
C.
Board practices.
Pursuant
to the provisions of the OBCA, the Company's directors are elected annually at the regularly scheduled annual general meeting of
shareholders. Each elected director is elected for a one-year term.
The
Company has no arrangements in place for provision of benefits to its directors or upon their retirement except DSUs.
26
The
Company has five committees of its Board of Directors in place:
1.
Audit and Risk Management
    Committee ("ARMC");
2.
HR and Compensation Committee
    ("HRCC");
3.
Technical Oversight Committee;
4.
Corporate Governance &
    Nominating Committee ("CGNC"); and
5.
Disclosure
    Committee.
The
ARMC is made up of Don Newberry (Chair), John Hick and William O'Reilly. The ARMC is responsible for providing oversight
of the Company's financial reporting, internal controls, and risk management processes. Key responsibilities include ensuring
the accuracy, completeness, and reliability of the financial statements and disclosures, effectiveness of internal controls,
overseeing risk management processes, ensuring compliance with applicable laws, regulations, and internal policies and
procedures.
The
HRCC is made up of John Hick (Chair), Don Newberry and William O'Reilly. In addition to making recommendations to the Board of
Directors of the Company as to appropriate salary and other compensation for senior executives and directors of the Company, the
HRCC makes recommendations to the Board of Directors of the Company as to the level of stock option compensation and DSUs granted by
the Company.
The
Technical Oversight Committee is made up of Don Newberry, Keith Morrison and Charles Riopel. The Technical Oversight Committee
provides general oversight and support to the Geological team and identifies technical issues and tasks necessary to support the
activities of the Company.
The
CGNC is made up of William O'Reilly (Chair), Don Newberry and John Hick. The CGNC is responsible for ensuring that the
Company's governance practices are effective, transparent, and aligned with best practices. Key responsibilities include board
composition and nominations, governance policies and practices, director orientation and education as well as board evaluation and
succession planning.
The
Disclosure Committee is made up of John Hick, Charles Riopel and Keith Morrison, and includes Sean Whiteford and Sarah Zhu as
representatives from management. The purpose of the Disclosure Committee is to oversee the Company's implementation of
programs, policies and procedures that are designed to respond to the various compliance and regulatory risks facing the Company.
The Disclosure Committee meets as required to oversee the dissemination of all corporate material.
D.
Employees.
Botswana
Upon
the closing of the asset acquisition of the Selebi Mine, the Company started to develop its own local workforce. As of December 31,
2022, The Company had 106 employees at its Botswana operations, of which 95 were engaged in technical work including geology,
drilling, geophysics, engineering and care and maintenance, and 11 were engaged in back-office support and logistics. There were no
salaried employee in Botswana prior to 2022.
The
Company is committed to promoting a safe and healthy workplace environment, and actively participates in training programs to ensure
employees are aware of proper safety and health procedures. The Company also provides resources and support for employees' mental
and emotional wellbeing.
The
Company values diversity and inclusivity and strives to create a workplace culture that respects and values all employees' backgrounds
and identities.
The
Company offers competitive compensation and benefits packages, including housing allowance, health insurance, and employee assistance
programs. The employees receive performance evaluations and feedback regularly, and the Company encourages ongoing professional development
and training.
The
Company has implemented measures to protect employee data privacy and maintain confidentiality, in accordance with applicable laws and
regulations.
Canada
and Barbados
As
of December 31, 2022, the Company had no salaried employees at its Canadian or Barbados operations, only contracted
consultants.
27
E.
Share ownership.
The
following table sets forth certain information regarding beneficial ownership of the Company's shares as of the date of this report
by each of the Company's directors and executive officers and all current directors and executive officers as a group. The table
does not reflect Common Shares held of record by depositories.
Name of Officers and Directors
Number of Shares (post-consolidation)
Percent
Keith Morrison
7,233,523
(1)
5.98
%
Charles Riopel
1,496,122
1.24
%
John Hick
130,042
0.11
%
William O'Reilly
238,100
0.20
%
Don Newberry
95,000
0.08
%
Sean Whiteford
160,000
0.13
%
Sarah-Wenjia Zhu
276,589
0.23
%
Timothy Moran
1,027,650
0.85
%
All Officers and Directors as a Group (eight persons)
10,657,026
8.81
%
(1)
includes
    3,608,763 shares held through Breniklan Ltd.
The
Company adopted an Incentive Stock Option Plan providing the authority to grant options to directors, officers, employees and
consultants enabling them to acquire up to 22,600,000 stock options of the Company. Under the Incentive Stock Option Plan, the
exercise price of each option typically equals to the last closing price per share on the trading day immediately preceding the day
on which the Company announces the grant of the option, less applicable discount, if any, permitted by the policies of the TSXV and
approved by the Board of Directors. The options can be granted for a maximum term of 10 years. The following table sets forth
certain information regarding options granted to the Company's directors and executive officers.
Name of Officers and Directors
Number of option grant (post-consolidation)
Excise price
Expiry date
Keith Morrison
120,000
$
0.80
February 24, 2025
240,000
$
0.45
August 19, 2025
120,000
$
1.60
February 25, 2026
998,794
$
2.00
October 25, 2026
895,900
$
0.39
January 26, 2026
263,500
$
2.40
January 20, 2027
2,638,194
Charles Riopel
160,000
$
0.80
February 24, 2025
60,000
$
1.60
February 25, 2026
527,000
$
0.39
January 26, 2026
316,200
$
0.91
September 29, 2026
263,500
$
2.40
January 20, 2027
1,326,700
John Hick
60,000
$
1.60
February 25, 2026
Sarah-Wenjia Zhu
120,000
$
0.80
February 24, 2025
60,000
$
1.60
February 25, 2026
316,200
$
0.39
January 26, 2026
131,750
$
2.40
January 20, 2027
627,950
Timothy Moran
131,750
$
0.39
January 26, 2026
131,750
$
2.40
January 20, 2027
263,500
A
total of twenty percent (20%) of the Common Shares outstanding from time to time to a maximum of 22,6000,000 are
reserved for issuance pursuant to stock options under the Incentive Stock Option Plan. During the year 2022, the
Company granted an aggregate total of 2,600,000 stock options to directors, officers, employees and consultants.
28
ITEM
7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS.
A.
Major shareholders.
The
following table sets forth certain information regarding beneficial ownership of the Company's shares as of the date of this
report by each person who is known to own beneficially more than 5% of the outstanding Common Shares. The table does
not reflect Common Shares held of record by depositories but does include currently exercisable options and warrants which are
included in the calculation of percentage of class ownership for each individual holder. As of the date of this Annual Report, there
were 120,958,527 Common Shares issued and outstanding, 65,659 preferred shares outstanding, 10,407,044 exercisable options,
1,510,399 warrants and 322,905 DSUs. On a fully-diluted basis on the date of the report, there were 133,212,006 Common Shares outstanding.
Name of Beneficial Owner
Number of Shares (post-consolidation)
Percentage of
Outstanding Shares
John Chisholm
7,740,396
(1)
6.40
%
Keith Morrison
7,233,523
(2)
5.98
%
ThreeD Capital Inc.
6,644,950
5.49
%
Sheldon Inwentash
6,292,394
5.20
%
(1)
Includes 6,477,793 shares held through 2412503 Ontario Inc.
(2)
Includes 3,608,763 shares held through Breniklan Ltd.
The
change in the percentage ownership held by major shareholders during the past three years is as follows:
Percentage ownership
Name of Beneficial Owner
As at May 15, 2023
As at April 25, 2022
As at April 30, 2021
John Chisholm
6.40
%
-
%
-
%
Keith Morrison
5.98
%
1.30
%
1.20
%
ThreeD Capital Inc.
5.49
%
-
%
-
%
Sheldon Inwentash
5.20
%
-
%
-
%
Sentient Group GP IV
-
%
27.62
%
29.73
%
Contemporary Amperex Technology Ltd. (CATL)
3.79
%
17.14
%
18.44
%
No major shareholder listed in this section has different voting rights than any other shareholders of the Company, which is one
vote per Common Share owned.
Effective
August 3, 2022, in connection with the closing of the RTO, the Company completed a share consolidation of the Company's issued
and outstanding Common Shares on the basis of one (1) post-consolidation Common Share for every five (5) pre-consolidation
common shares issued and outstanding.
29
On
August 3, 2022, PNRC combined with NAN in a reverse takeover transaction whereby shareholders of PNRC exchanged their shares at a rate
of 1.054 shares of NAN for each share of PNRC, after giving effect to a 5-to-1 share consolidation for each outstanding share of NAN.
The
Company issued 82,157,536 Common Shares (on a post-consolidation basis) in exchange for 77,948,368 outstanding shares
of PNRC immediately prior to the effective time of the RTO. Immediately after giving effect
to the RTO, the Company was owned approximately 72.1% by persons who were shareholders of PNRC prior to the RTO and 27.9%
by persons who were shareholders of NAN prior to the RTO.
As
at December 31, 2022, the Company had 116,521,343 Common Shares issued and outstanding, (December 31, 2021 – 80,820,623 and
December 31, 2020 – 67,543,995).
B.
Related party transactions.
Related
party transactions were in the normal course of business and have been recorded at the exchange amount which is the fair value agreed
to between the parties. Amounts due to related parties are unsecured, non-interest bearing and without specific terms of repayment.
Related
party balances - The following amounts due to related parties are included in trade payables and accrued liabilities:
(All
amounts in table are expressed in thousands of Canadian dollars)
December 31,
December 31,
December 31,
2022
2021
2020
Directors and officers of the Company
$
43
$
27
$
11
Related company
-
199
54
$
43
$
226
65
These
amounts are unsecured, non-interest bearing and have no fixed terms of repayment.
During
the year ended December 31, 2022, ThreeD Capital Inc. subscribed for a further 1,213,538 common shares of PNRC (1,279,069 shares on a
post-RTO and post-consolidation basis), for a further investment of US$2,427,076 (2021 - $374,123). As of December 31, 2022, ThreeD Capital
Inc. beneficially owned 8,662,347 shares (2021 - 7,383,278 shares) on a post-RTO and post-consolidation basis, constituting approximately
7.5% (2021 – 9.14%) of the current issued and outstanding shares of the Company.
Between
March 2, 2022 and March 3, 2022, to meet its short-term liquidity needs, PNRC issued promissory notes to its officers and directors as well as its shareholders as
below:
(All
amounts in table are expressed in thousands of Canadian dollars)
Directors and Officers of the Company
35
ThreeD Capital Inc.
762
NAN
1,270
2,067
The promissory notes had an interest rate of 10% per annum and the holder had an option to convert the principal amount
thereunder plus any accrued interest thereon to common shares of PNRC prior to April 30, 2022.
On
April 30, 2022, all amounts owing in respect of the above promissory notes were repaid in full by payment of cash in an amount of
$2,018,568, including interest and fees, and by issuing 310,000 common shares of PNRC (326,740 Common Shares on a
post-RTO and post-consolidation basis).
30
(b)
Key Management Compensation
Key
management personnel are defined as members of the Board of Directors and senior officers.
Key
management compensation was:
(All
amounts in table are expressed in thousands of Canadian dollars)
December 31, 2022
December 31, 2021
December 31, 2020
Management fees — expensed
2,419
675
212
Due diligence (Botswana assets)
-
132
31
Corporate and administration expense
103
108
44
Share-base payments
4,623
1,020
-
Total
7,145
1,935
287
C.
Interests of experts and counsel
Not
required.
ITEM
8. FINANCIAL INFORMATION
A.
Consolidated Statements and Other Financial Information
See
Item 17 and the financial statements and accompanying notes beginning on page F-1.
B.
Significant Changes
On
April 26, 2022, PNRC and NAN entered into a definitive amalgamation agreement (the "Amalgamation Agreement") in respect of
their previously-announced RTO transaction, pursuant to which PNRC would be the surviving public entity following the closing of the RTO.
Transaction
Particulars
Pursuant
to the Amalgamation Agreement:
●
NAN's
    subsidiary, 1000178269 Ontario Inc. ("NAN Subco"), amalgamated with PNRC under Section 174 of the OBCA to form one corporation;
●
Holders
    of PNRC shares exchanged their shares at a rate of 1.054 shares of NAN for each share of PNRC (the "Exchange Ratio"),
    after giving effect to a 5-to-1 share consolidation for each outstanding share of NAN; and
●
the
    transactions resulted in an RTO of the Company in accordance with the policies of the TSXV, all in the manner contemplated by, and
    pursuant to, the terms and conditions of the Amalgamation Agreement.
In
connection with the RTO, NAN has, among other things: (i) changed its name to "Premium Nickel Resources Ltd."; (ii) changed
its stock exchange ticker symbol to "PNRL"; and (iii) reconstituted the Board of Directors and management of the Company.
The outstanding options of PNRC immediately prior to the effective time of the RTO were exchanged and adjusted pursuant to the terms
of the Amalgamation Agreement such that holders thereof were entitled to acquire, following the closing of the RTO, options of the Company
after giving effect to the Exchange Ratio, as applicable.
31
Before
the closing of the RTO, NAN owned 7,667,707 common shares of PNRC and a common shares purchase warrant which entitled NAN to
purchase common shares of PNRC, for up to 15% of the capital of PNRC, upon payment of US $10,000,000 prior to the fifth anniversary
of the date of issue (the "15% Warrant"). Prior to the date that the amalgamation became effective, the PNRC shares and the 15% warrant held by NAN were
contributed to NAN Subco, resulting in such securities being cancelled by operation of the
triangular amalgamation.
Pursuant
to the Amalgamation Agreement, the Company issued 82,157,536 Common Shares (on a post-consolidation basis) in exchange
for 77,948,368 outstanding shares of PNRC immediately prior to the effective time of the RTO. Immediately after giving effect to the
RTO, the Company was owned approximately 72.1% by persons who were shareholders of PNRC prior to the RTO and 27.9% by persons
who were shareholders of NAN prior to the RTO.
Prior
to this exchange, NAN had 31,748,399 shares outstanding (on a post-consolidation basis). Taking into account the composition of the
Board of Directors and senior management and the relative ownership percentages of NAN and PNRC shareholders in the newly combined
enterprise, from an accounting perspective PNRC is considered to have acquired NAN, and hence the transaction has been recorded as a
reverse takeover.
For
financial reporting purposes, the Company is considered to be a continuation of PNRC, the legal subsidiary, except with regard to the
authorized and issued share capital, which is that of NAN, the legal parent. The consolidated statements of operations and cash flows
for the year ended December 31, 2022 include the results of operations and cash flows of PNRC for the period from January 1, 2022
to August 3, 2022, and the results of operations and cash flows of both PNRC and NAN for the period from August 3, 2022 to December 31,
2022. The primary reason for the business combination was to create a leading international nickel-copper-cobalt mineral exploration
company. With a portfolio of nickel-copper cobalt assets, the Company will have the ability to execute a phased strategy and focus in
the short term on developing the Selebi Mine in Botswana, its material property.
The
substance of the transaction is a reverse acquisition of a non-operating company. The transaction does not constitute a business acquisition
as the amalgamation does not meet the definition of a business combination under IFRS 3. As a result, the transaction is accounted for
as a capital transaction with NAN being identified as the accounting acquiree and the equity consideration being measured at fair value
("FV").
The
purchase price has been determined based on the number of shares that PNRC would have had to issue on the date of closing to give the
owners of NAN the same percentage equity (27.9%) of the combined entity as they hold subsequent to the reverse takeover.
The
costs of the acquisition have been allocated as follows:
FV of shares transferred
$
77,431,152
FV of options, warrants and agent warrants
9,665,577
FV of preferred shares
31,516
Settlement of pre-existing relationship – 15% warrant and shares*
(47,985,862
)
Total FV of consideration transferred
$
39,142,383
Cash
$
11,051,917
Trade and other receivables
450,522
Property, plant and equipment
14,111
Trade payables and accrued liabilities
(1,548,582
)
Net assets acquired
9,967,968
Loss on acquisition
29,174,415
$
39,142,383
32
*Pre-existing
relationship:
Before the closing of the RTO, NAN owned 7,667,707 common shares of PNRC and a 15% warrant which entitled NAN to
purchase common shares of PNRC, for up to 15% of the then outstanding capital of PNRC, upon payment of US $10,000,000 prior to the
fifth anniversary of the date of issue. Prior to the date that the amalgamation became effective, the PNRC shares and the 15%
warrant held by NAN were contributed to NAN Subco, as part of the securities contribution, resulting in such securities being
cancelled by operation of the triangular amalgamation.
Prior
to the RTO, the fair value of the 15% warrant and the shares held by NAN were $28,275,255 and $19,710,608, respectively. The fair value
of the shares was calculated based on the last offer price of PNRC financing prior to the RTO, and the fair value of the warrants was
calculated using the Black-Sholes Model with the following assumptions: expected life of 2.57 years, expected dividend yield of 0%, a
risk-free rate of 3.14% and an expected volatility of 141.63%. As they were the securities contributed by NAN on the closing of the RTO,
the fair value of the warrants and shares were included as part of the consideration on the acquisition date.
Pursuant
to the RTO, an aggregate of 8,827,250 options to purchase Common Shares ("Replacement Options") were issued
(on a post 5:1 consolidation basis) to the former holders of options to purchase common shares of PNRC (prior to the RTO) ("PNRC
Options") in exchange for 8,375,000 PNRC Options. The Replacement Options issued to the former holders of PNRC Options were on
the same terms and conditions as those exchanged by PNRC holders except all the previously unvested options vested immediately. Immediately
prior to the completion of the RTO, PNRC had 2,383,333 unvested options outstanding which re-evaluated at a FV of $5,138,022 upon the
completion of the RTO according to IFRS 2.
Given
that the RTO has been accounted for as a reverse takeover of NAN by PNRC, from an accounting perspective, PNRC is deemed to have issued
options and warrants to the former security holders of NAN. On August 3, 2022, NAN had 2,995,794 options and 2,228,340 warrants outstanding,
respectively, as well as 118,186 preferred shares that could be converted to 13,131 common shares of NAN (on a post-consolidation basis).
The aggregate fair value of such 2,995,794 options, 2,228,340 warrants and 118,186 preferred shares of NAN was $9,665,577, and this amount
has been included as a component of the purchase price. Costs related to the transaction were $2,327,125 and were expensed as incurred.
For
purposes of determining the fair value of the share consideration exchanged on the RTO, the shares of PNRC were valued at US$2.00 per
share, the offering price for the PNRC shares on the last PNRC equity financing prior to the RTO.
The
RTO resulted in a loss of $29,174,415 with respect to the fair value of the consideration transferred over the fair value of identifiable
net assets, which has been recorded as a loss during the year in other income.
ITEM
9. THE OFFER AND LISTING
Effective
December 21, 2006, the Company's common shares became quoted on the United States OTC Bulletin Board, under the symbol "WSCRF".
On May 30, 2011, the common shares began trading under the symbol "NAN" on the TSXV. The trading in common
shares of NAN on the TSXV was halted following the announcement of the RTO on February 17, 2022, with the closing share price of $0.58
per share. The Common Shares resumed trading on the TSXV on August 18, 2022, under the symbol "PNRL" and commenced trading on the OTCQX Best Market ("OTCQX") on January 20, 2023. The
table below sets forth the high and low prices expressed in Canadian dollars on the TSX-V and in United States dollars on the OTC in
the United States for the Common Shares for the past five years, for each quarter for the last two fiscal years, and
for the last six months. Note this trading data does not take into account the effect of the RTO and the 5-old for 1-new consolidation
which occurred on August 3, 2022.
33
High
Low
High
Low
(Canadian Dollars)
(United States Dollars)
Last Five Fiscal Years
2022
2.58
0.44
2.25
0.19
2021
0.65
0.14
0.518
0.113
2020
0.30
0.06
0.332
0.045
2019
0.40
0.10
0.372
0.023
2018
0.085
0.030
0.075
0.020
2022
Fourth Quarter ended December 31, 2022
2.09
1.18
1.53
0.52
Third Quarter ended September 30, 2022
2.58
0.58
2.25
0.19
Second Quarter ended June 30, 2022
0.58
0.58
0.476
0.476
First Quarter ended March 31, 2022
0.64
0.44
0.512
0.343
2021
Fourth Quarter ended December 31, 2021
0.65
0.315
0.518
0.247
Third Quarter ended September 30, 2021
0.35
0.225
0.278
0.178
Second Quarter ended June 30, 20201
0.29
0.215
0.24
0.172
First Quarter ended March 31, 2021
0.39
0.14
0.30
0.113
Last Six Months
March 2023
1.78
1.27
1.489
0.95
February 2023
1.82
1.56
1.47
1.15
January 2023
2.23
1.54
1.90
0.90
December 2022
1.90
1.19
1.51
0.80
November 2022
2.33
1.18
1.53
0.90
October 2022
1.85
1.29
1.40
0.52
The
closing price of the Common Shares on the TSXV on December 31, 2022 was C$1.60. The closing price of the
Common Shares on the OTC Bulletin Board on December 31, 2022 was US$1.197.
The Common Shares are issued in registered form. Computershare Investor Services Inc. is the registrar and transfer agent
for the Common Shares.
The
Company has no outstanding securities not listed on a marketplace other than incentive stock options, warrants and DSUs.
Since
the beginning of the most recently completed financial year, warrants issued to purchase an aggregate 295,652 Common Shares were issued.
The following table outlines the detail of each issuance:
Number of Warrants
Exercise Price
Grant Date
(CDN $)
295,652
$
2.40
August 3, 2022
295,625
Since
the beginning of the most recently completed financial year, options issued to purchase an aggregate 2,740,400 Common Shares were issued.
The following table outlines the detail of each issuance:
Number of Options
Exercise Price
Grant Date
(CDN $)
2,740,400
2.62
January 20, 2022
2,7,40,400
34
ITEM
10. ADDITIONAL INFORMATION
A.
Share capital
The
authorized capital of the Company comprises an unlimited number of
Common Share
s and 100,000,000 Series 1 convertible
preferred shares without par value.
Effective July 27, 2022, in connection with the RTO, the Company completed a share consolidation of the Company's issued
and outstanding common shares, on the basis of one (1) post-consolidation Common Share without par value for every five (5) pre-consolidation
common shares issued and outstanding.
a)
Common Shares Issued and Outstanding
On
August 3, 2022, PNRC combined with NAN in a reverse takeover transaction whereby shareholders of PNRC exchanged their shares at a
rate of 1.054 shares of NAN for each share of PNRC, after giving effect to a 5-to-1 share consolidation for each outstanding share
of NAN (Note 4 of the consolidated financial statements). The following table provides a continuity of share capital presented in the consolidation financial
statements:
PNRC common shares
Common Shares
Number
Amount
Number
Amount
December 31, 2020
64,083,487
$
1,468,174
-
-
Share capital issued through private placement (net of issue costs)
12,596,421
6,484,501
-
-
December 31, 2021
76,679,908
7,952,675
-
-
Share capital issued through private placement (net of issue costs)
8,936,167
20,852,872
-
-
Cancel PNRC shares held by NAN
(7,667,707
)
-
-
(19,710,608
)
Shares exchanged on the RTO
(77,948,368
)
(28,805,547
)
82,157,536
28,805,547
Share capital of the Company immediately post RTO
31,748,399
77,431,152
Shares issued for exercised warrants
1,236,408
2,890,913
Shares issued for exercised options
1,379,000
1,727,264
Balance as at December 31, 2022
-
$
-
116,521,343
$
91,144,268
2022
In
April 2022, PNRC completed a non-brokered private placement of 8,865,619 shares at a price of US$2.00 per share for gross proceeds
of $22,388,599 (US$17,731,238). In connection with the private placement, the Company has paid to Finders
(i) cash commission equal to 6% of the gross proceeds raised from subscribers introduced to the Company by such Finders, being an aggregate
of $1,535,727, and (ii) a number of
Common Shares
equal to 6% of the units attributable to the Finders under the private placement, being
an aggregate of 70,548 shares with total value of $176,398 at the offer price of the private placement.
In
April 2022, NAN completed a private placement offering of 21,118,000 Subscription Receipts at a price of $0.48 per Subscription Receipt (in each case, prior to giving effect to the Company's 5:1 consolidation of its common
shares), including the partial exercise of the agents' option, for total gross proceeds of $10,136,640. Upon the closing of
the RTO on August 3, 2022, the Subscription Receipts were converted into 4,223,600 Common Shares
(post-consolidation), and the net subscription proceeds were released from escrow and delivered to the Company.
35
On
August 3, 2022, the date of the RTO, a total of 82,157,536 common shares of NAN were issued in exchange for 77,948,368 shares of PNRC.
These shares were added to the current NAN shares outstanding balance of 31,748,399 for total shares outstanding of 113,905,935 upon
closing of the RTO.
Before
the closing of the RTO, NAN owned 7,667,707 common shares of PNRC and a non-transferrable common share purchase which entitled NAN to purchase common shares of PNRC,
for up to 15% of the capital of PNRC at the time of such purchase, upon payment of US $10,000,000 prior to the fifth anniversary of the
date of issue. Prior to the date that the amalgamation became effective, the PNRC shares and the 15% warrant held by NAN were contributed
to NAN Subco,  resulting in such securities being cancelled by operation of the triangular amalgamation.
Prior
to the RTO, the fair value of the 15% Warrant and the shares held by NAN were $28,275,255 and $19,710,608, respectively. The fair value
of the shares was calculated based on the last offer price of PNRC financing prior to the RTO, the fair value of the 15% Warrant was
calculated using the Black-Sholes Model with the following assumptions: expected life of 2.57 years, expected dividend yield of 0%, a
risk free rate of 3.14% and an expected volatility of 141.63%. As the securities were contributed by NAN and cancelled on completion
of the RTO, the fair value was included as part of the consideration on the acquisition date.
Post
RTO, during the period from August 3 to December 31, 2022, a total of 1,236,408
Common Shares
were issued upon the
exercise of warrants at prices between $0.45 and $1.75 per share for total cash proceeds of $569,399. As a result of these
exercises, $2,880,376 was transferred from reserve to share capital.
Post
RTO, during the period from August 3, 2022  to December 31, 2022, a total of 1,379,000
Common Shares
were issued upon the exercise
of options at prices between $0.39 and $1.60 per share for total cash proceeds of $723,076. As a result of these exercises, $1,004,188
was transferred from reserve to share capital.
As
at December 31, 2022, the Company had 116,521,343
Common Share
s issued and outstanding (December 31, 2021 – 80,820,623 on a post-RTO
and post -consolidation basis).
2021
During
the year 2021, PNRC closed two non-broker private placement equity financings totalling 12,596,421 shares (pre-RTO, pre-share-consolidation
basis) at a price of $0.40 and $0.95, respectively, and raised aggregate gross proceeds of $6,771,729. The Company incurred total share
issuance costs of $287,228, including the fair value of $7,000 for 17,000 shares issued to the agent in conjunction with the first private
placement.
As
at December 31, 2021, PNRC had 76,679,908 common shares issued and outstanding (pre-RTO, pre-share-consolidation basis).
2020
On
February 26, 2020, PNRC closed the seed financing of 24,900,000 shares at a price of $0.01 and raised aggregate gross proceeds of $249,000,
with $145,000 received prior to the year-end of 2019.
Subsequently
during 2020, PNRC closed three non-broker private placement equity financing of total 39,183,487 common shares at a price of $0.02,
$0.05, and $0.15, respectively, and raised aggregate gross proceeds of $1,219,174. The Company incurred total share issuance cost of
$7,086, including the fair value of $7,000 for 350,000 shares issued to the agent in conjunction with the private placement.
As
at December 31, 2020, PNRC had 64,083,487 common shares issued and outstanding (pre-RTO, pre-share-consolidation basis).
36
b)
Preferred shares issued and outstanding
As
at December 31, 2022 and December 31, 2021 there are 118,186 series 1 preferred shares of the Company outstanding (on a post-RTO and
post-consolidation basis).
The
rights and restrictions of the preferred shares are as follows:
i)
dividends
    shall be paid at the discretion of the directors;
ii)
the
    holders of the preferred shares are not entitled to vote except at meetings of the holders of the preferred shares, where they are
    entitled to one vote for each preferred share held;
iii)
the
    shares are convertible at any time after six months from the date of issuance, upon the holder serving the Company with 10 days written
    notice; and
iv)
the
    number of the common shares to be received on conversion of each preferred share is to be determined by dividing the conversion value
    of the share, $1 per share, by $9.00.
c)
Warrants
On
February 26, 2021, PNRC issued NAN the 15% Warrant.,
The
15% Warrant was classified as a derivative financial liability that should be measured at fair value, with changes in value recorded
in profit or loss. Prior to the RTO, on Jun 30, 2022, the Company reassessed the fair value of the warrant at $28,275,256 and
recorded the amount as a long-term financial liability. The fair value of the 15% Warrant did not change up to the date of the RTO
as the underline assumptions remained the same.
The
fair value of the liability of the 15% Warrant was estimated using the Black-Scholes Option Pricing Model with the following
assumptions:
December 31,
2022
December 31,
2021
Expected dividend yield
0
%
0
%
Latest private placement price
$
2.49
$
0.95
Expected share price volatility
141.63
%
144.13
%
Risk free interest rate
3.14
%
1.02
%
Remaining life of warrants
2.66 years
3.16 years
Volatility
assumptions for the valuation of the 15% Warrant were derived by reference to the volatility of NAN as the stock price of NAN was
highly correlated to the advancement of the BCL assets acquisition following its investment in PNRC.
Prior
to the date that the amalgamation became effective, the PNRC shares and the 15% Warrant held by NAN were contributed to NAN Subco,
resulting in such securities being cancelled by operation of the triangular amalgamation. The fair value of the 15% Warrant was
written off upon the closing of the RTO. PNRC had no other issued and outstanding warrants prior to the RTO.
Warrant
activity, after converting for the Exchange Ratio, for the year ended December 31, 2022 was as follows:
Premium Nickel Resources Ltd.
Number Outstanding
(Post-consolidation basis)
Weighted Average Exercise Price
($)
December 31, 2021
-
-
Adjustment pursuant to the
RTO
2,228,340
1.11
Issued
119,229
2.04
Exercised
(1,236,408
)
0.46
Cancelled / expired
(12,375
)
-
Balance as at December 31, 2022
1,098,786
1.96
PNRC
had no warrants as at December 31, 2021 except the 15% Warrant granted to NAN that was subsequently cancelled upon the
RTO.
37
At
December 31, 2022, the Company had outstanding common share purchase warrants exercisable to acquire
Common Shares
as
follows:
Warrants Outstanding
Expiry Date
Exercise Price ($)
Weighted Average remaining contractual life (years)
683,905
April 16, 2023
1.75
0.18
295,652
August 3, 2024
2.40
0.43
119,229
November 25, 2023
2.04
0.10
1,098,786
0.71
d)
Stock options
The
Company adopted the
Incentive Stock Option
Plan providing the authority to grant
options to directors, officers, employees and consultants enabling them to acquire up to 22,600,000 stock options of the Company.
Under the Incentive Stock Option Plan, the exercise price of each option typically equals the last closing price per share on the
trading day immediately preceding the da
te of the grant of the option, less applicable
discount, if any, permitted by the policies of the TSXV and approved by the Board of Directors. The options can be granted for a maximum term of
10 years.
The
outstanding options of each company prior to the completion of the RTO were as follows:
North American Nickel
Number Outstanding
(post-consolidation basis)
Weighted Average Exercise Price ($)
December 31, 2021
3,010,919
1.35
Cancelled/expired
(15,125
)
6.00
Balance as at August 3, 2022 prior to business combination with PNRC
2,995,794
1.33
Premium Nickel Resources Corp.
Number Outstanding
Weighted Average Exercise Price ($)
December 31, 2021
5,775,000
0.52
Granted
2,600,000
2.49
Balance as at August 3, 2022 prior to business combination with NAN
8,375,000
1.13
Subsequent
to the RTO, the outstanding options of the Company were as follows:
Premium Nickel Resources Ltd.
Number Outstanding
Weighted Average Exercise Price ($)
Balance as at August 3, 2022 prior to business combination with PNRC
2,995,794
1.33
Issued pursuant to RTO in exchange for options of PNRC
8,827,250
1.16
Options exercised
(1,416,000
)
0.46
Balance as at December 31, 2022
10,407,044
1.10
During
the year ended December 31, 2022, prior to the RTO, PNRC granted an aggregate total of 2,600,000 stock options to employees,
directors and consultants with a term of five years. The options are exercisable at US$2.00 per share (C$2.49/share) with 1/3
vesting on
January 20, 2022,
1/3 on
January 20,
2023
and 1/3 on
January 20, 2024
the second anniversary following the close of
the US$20,000,000 private placement.
38
Upon
the closing of the RTO, all PNRC options were exchanged for options of the Company at a rate of 1.054 and vested in full immediately.
Prior to the RTO, PNRC had granted but unvested options of 2,512,033 (Post RTO, Post-consolidation basis). These options were considered
a replacement awarded under the former plan and modification accounting under IFRS2 Share based payments was applied. When modification
accounting is applied, the Company revalued those stock options using the Black-Scholes Option Pricing Model.
The
fair value of all options, including those granted during the year ended December 31, 2022 as well as the ones granted but not vested
during the year ended December 2021, amounted to $7,731,117 and was recorded as a share-based payment expense. The weighted average fair
value of options granted is $1.41 per option.
The
fair value of stock options granted and vested during the year ended December 31, 2022 was calculated using the following assumptions:
December 31, 2022
December 31, 2021
Expected dividend yield
0
%
0
%
Latest private placement price
$0.40 - $2.53
$
0.95
Expected share price volatility
125.83%-129.48%
125.18%-127.03%
Risk free interest rate
0.42% - 2.85%
0.42% - 1.11%
Expected life of options
4.16 - 5 years
5 years
Volatility
assumptions for the valuation of options were derived by reference to the volatility of NAN as the stock price of NAN was highly correlated
to the advancement of the BCL assets acquisition following its investment in PNRC.
Details
of options outstanding as at December 31, 2022 are as follows:
Options
Outstanding
Options
Exercisable
Expiry
Date
Exercise
Price ($)
Weighted average remaining contractual life (years)
900,000
900,000
February 24, 2025
0.80
0.19
240,000
240,000
August 19, 2025
0.45
0.06
3,689,000
3,689,000
January 26, 2026
0.39
1.09
495,000
495,000
February 25, 2026
1.60
0.15
1,343,850
1,343,850
September 29, 2026
0.91
0.48
998,794
998,794
October 25, 2026
2.00
0.37
2,740,400
2,740,400
January 20, 2027
2.62
1.07
10,407,044
10,407,044
3.41
e)
DSU Plan
Effective
December 2022, the Company approved a DSU plan (the "DSU Plan") that enables the Company
upon approval by the directors to grant DSUs to eligible non-management directors. The DSUs credited to the account of a director may
only be redeemed following the date upon which the holder ceases to be a director. Depending upon the country of residence of a director,
the DSUs may be redeemed at any time prior to December 15 in the calendar year following the year in which the holder ceases to be a
director and may be redeemed in as many as four installments. Upon redemption, the holder is entitled to a cash payment equal to the
number of units redeemed multiplied by the 5-day-VWAP of the Common Shares on that date. The Company may elect, in its
sole discretion, to settle the value of the DSUs redeemed in the Common Shares on a one-for-one basis, provided shareholder
approval has been obtained on or prior to the relevant redemption date.
During
the year ended December 31, 2022, DSUs have been granted as follows:
2022
Number of DSUs outstanding at the beginning of the fiscal year
-
Number of DSUs during the year
200,000
Number of DSUs outstanding at the end of the year
200,000
39
During
the year ended December 31, 2022, the DSU compensation amounted to $298,000 recorded as share based compensation, and a DSU liability
of the same amount.
f)
Reserve
The
reserve records items recognized as stock-based compensation expense and other share-based payments until such time that the stock options
or warrants are exercised, at which time the corresponding amount will be transferred to share capital. Amounts recorded for forfeited
or expired unexercised options and warrants are transferred to deficit.
During
the year ended December 31, 2022, the Company recorded $7,731,117 (December 31, 2021 - $1,261,891) of share-based payments to reserves
and transferred $3,325,702 to share capital for exercised warrants and options
(December
31, 2021 – Nil).
B.
Memorandum and articles of association
B.
Articles
    of Continuance
Set
out below is a description of the Company's Articles of Continuance (the "Articles"), the Company's by-laws,
and of certain provisions of the OBCA (as currently in effect) related to the Company's Articles. The Company's Articles
and by-laws are filed as exhibits to this Annual Report.
Incorporation
PNRL
is organized under the OBCA. PNRL's Ontario corporation number is 1000269814.
Objects
and Purposes of the Company
The
Company's Articles do not contain and are not required to contain a description of the Company's objects and purposes. There
is no restriction contained in the Company's Articles of the business that the Company may carry on.
Voting
on Certain Proposal, Arrangement, Contract or Compensation by Directors
Pursuant
to the Company's by-laws, a director who is a party to a material contract or transaction or proposed material contract or proposed
transaction with the Company, or who is a director or an officer of, or has a material interest in, any person who is a party to a material
contract or transaction or proposed material contract or proposed transaction with the Company, shall disclose, in writing to the Company
or by requesting to have entered in the minutes of meetings of directors, the nature and extent of his or her interest at the time and
in the manner provided in the OBCA. Except as provided in the OBCA, no such director of the Company shall attend any part of a meeting
of directors during which the contract or transaction is discussed, and no such director shall vote on any resolution to approve such
contract or transaction.
Subject
to the foregoing, neither the Company's Articles nor the Company's by-laws restrict a directors' power to vote with
regard to compensation payable to themselves or any other members of their body in the absence of an independent quorum. Additionally,
a director is not required to hold a share in the Company's capital as qualification for his or her office but must be qualified
as required by the OBCA to become, act or continue to act as a director. The Company's Articles and by-laws do not provide for
an age limit requirement for the retirement or non-retirement of directors other than as provided in the OBCA.
Directors
are authorized from time to time, without authorization of the shareholders, to borrow money on the credit of the Company, limit or increase
the amount to be borrowed, issue, reissue, sell or pledge bonds, debentures, notes or other debt obligations of the Company for such
sums and at such prices as may be deemed expedient, give a guarantee on behalf of the Company to secure payment or performance of an
obligation of any person, mortgage, hypothecate, charge, pledge or otherwise create a security interest in all or any currently owned
or subsequently acquired real and personal, movable and immovable, property of the Company and the undertaking and rights of the Company,
to secure any such bonds, debentures, notes or other debt obligations, or to secure any present or future borrowing, liability or obligation
of the Company, including any guarantee.
40
Share
Rights
The
holders of Common Shares are entitled to receive notice of and to attend all annual and special meetings of the shareholders of the Company
and to one vote in respect of each Common Share held at such meetings. Exhibit 2.6 –
Description of Securities Registered Under
Section 12 of the Exchange Act
to this Annual Report contains a summary of certain other rights attached to the Company's shares,
including rights to dividends and rights upon liquidation or dissolution of the Company.
Procedures
to Change the Rights of Shareholders
The
rights, privileges, restrictions and conditions attaching to the Common Shares are contained in the Company's Articles and such
rights, privileges, restrictions and conditions may be changed by amending such Articles. In order to amend such Articles, the OBCA requires
a resolution to be passed by a majority of not less than two-thirds of the votes cast by the shareholders entitled to vote thereon. In
addition, if the Company resolves to make certain amendments to its Articles, a holder of Common Shares may dissent with regard to such
resolution and, if such shareholder so elects, the Company would have to pay such shareholder the fair value of the Common Shares so
held. The types of amendment that would be subject to dissent rights include without limitation: (a) to add, remove or change restrictions
on the issue, transfer or ownership of shares of a class or series of the Company's shares; and (b) to add, remove or change any
restriction upon the business that the Company may carry on or upon the powers the Company may exercise.
Meetings
Each
director holds office until the next annual general meeting or until his or her office is earlier vacated in accordance with the provisions
of the OBCA. A director appointed or elected to fill a vacancy on the Board of Directors also holds office until the Company's
next annual general meeting.
Annual
meetings of shareholders must be held at such time in each year not more than fifteen (15) months after the last annual meeting, as the
Board of Directors may determine. Pursuant to the Company's by-laws, notice of the time and place of a meeting of shareholders
must be sent not less than twenty-one (21) days so long as the Company remains an "offering corporation" (as defined in the
OBCA), or in the case of a non-offering corporation not less than 10 days, but in either case not more than fifty (50) days before such
meeting.
The
only persons entitled to be present at a meeting of shareholders shall be those entitled to vote thereat, the directors and auditor of
the Company and others who, although not entitled to vote, are entitled or required under any provision of the OBCA or the Articles or
the by-laws to be present at the meeting. Any other person may be admitted only on the invitation of the chairman of the meeting or with
the consent of the meeting.
The
OBCA provides that shareholders may requisition a special meeting in accordance with the OBCA. The OBCA provides that the holders of
not less than five (5) percent of the Company's issued shares that carry the right to vote at a meeting may requisition the Company's
directors to call a special meeting of shareholders for the purposes stated in the requisition.
Under
the Company's by-laws, the quorum for the transaction of business at a meeting of shareholders is two persons present that hold
or represent by proxy not less than 10% of the votes attached to the shares entitled to vote at the meeting.
Limitations
on Ownership of Securities
Except
as provided in the
Investment Canada Act
(Canada), there are no limitations specific to the rights of non-Canadians to hold or
vote the Common Shares under the laws of Canada or Ontario, or in the Company's Articles or by-laws.
Change
in Control
There
are no provisions in the Company's Articles or by-laws that would have the effect of delaying, deferring or preventing a change
in control of the Company, and that would operate only with respect to a merger, acquisition or corporate restructuring involving the
Company or any of the Company's subsidiaries.
Ownership
Threshold
Neither
the Company's by-laws nor the Company's Articles contain any provisions governing the ownership threshold above which shareholder
ownership must be disclosed. In addition, securities legislation in Canada requires that the Company disclose in its management information
circular for the Company's annual meeting and certain other disclosure documents filed by the Company under such legislation, holders
who beneficially own more than ten (10) percent of the Company's issued and outstanding Common Shares.
Advance
Notice By-Laws
The
Company has included certain advance notice provisions with respect to the election of directors in the Company's by-laws (the
"Advance Notice Provisions"). The Advance Notice Provisions are intended to: (a) facilitate orderly and efficient annual
general meetings or, where the need arises, special meetings of shareholders; (b) ensure that all shareholders receive adequate notice
of board nominations and sufficient information with respect to all nominees; and (c) allow shareholders to register an informed vote.
Only persons who are nominated by shareholders in accordance with the Advance Notice Provisions will be eligible for election as directors
at any annual meeting of shareholders, or at any special meeting of shareholders if one of the purposes for which the special meeting
was called was the election of directors.
41
Under
the Advance Notice Provisions, a shareholder wishing to nominate a director would be required to provide the Company notice, in the prescribed
form, within the prescribed time periods. These time periods include (a) in the case of an annual meeting of shareholders (including
annual and special meetings), not less than 30 days nor more than 65 days prior to the date of such meeting; provided that, if the first
public announcement of the date of the annual meeting of shareholders (the "Notice Date") is less than 50 days before the
meeting date, not later than the close of business on the 10th day following the Notice Date and (b) in the case of a special meeting
(which is not also an annual meeting) of shareholders called for any purpose which includes electing directors, not later than the close
of business on the 15th day following the Notice Date.
C.
Material contracts
On
September 28, 2021, PNRC executed a definitive asset purchase agreement (the "Selebi APA") with the liquidator of BCL to
acquire the Selebi and Selebi North Ni-Cu-Co deposits and related infrastructure formerly operated by BCL. On January 31, 2022, PNRC
closed the transaction and ownership of the assets was transferred to PNRC.
PNRC
also negotiated a separate asset purchase agreement to finalize terms for any prioritized assets formerly operated by TNMC. On August
22, 2022, the Company announced the completion of its acquisition of the Ni-Cu-Co-PGE Selkirk mine in Botswana, together with associated
infrastructure and four surrounding prospecting licenses. The acquisition was completed pursuant to the Company's previously-announced
asset purchase agreement with the liquidator of TNMC on January 20, 2022. With the acquisition complete, ownership of the Selkirk assets
was transferred to the Company in August 22, 2022.
Pursuant
to the Selebi APA, the aggregate purchase price payable to the seller for the Selebi assets, was the sum of US$56,750,000 to be paid in three instalments:
●
US$1,750,000 payable on the closing date. This payment has been made.
●
US$25,000,000 upon the earlier of: a) approval by the Ministry of Mineral Resources, Green Technology and Energy Security ("MMRGTES")
of the Company's Section 42 and Section 43 Applications (further extension of the mining license and conversion of the mining license
into an operating license respectively), and b) on the expiry date of the study phase, January 31, 2025, which can be extended for one
year with written notice.
●
The third instalment of US$30,000,000 is payable on the completion of mine construction and production start-up (commissioning) by the
Company on or before January 31, 2030, but not later than four years after the approval by the Minister of MMRGTES of the Company's
Section 42 and Section 43 Applications.
●
Payment of care and maintenance funding contribution in respect of the Selkirk assets for a total of US$5,178,747 from March 22, 2021
to the closing date. This payment has been made.
As
per the term and conditions of the Selebi APA, the Company has the option to cancel the second and third payments and give back the Selkirk
assets to the liquidator in the event where the exploration program determines that the Selkirk assets are not economical. PNRL also
has an option to pay in advance the second and third payments in the event where the exploration program determines that the Selkirk
assets are economical. The Company's accounting policy, as permitted by IAS 16 – Property, Plant and Equipment, is to measure
and record contingent consideration when the conditions associated with the contingency are met. As of December 31, 2022, none of the
conditions of the second and third instalment are met. Hence, these amounts are not accrued in the condensed interim consolidated financial
statements.
42
In
addition to the above purchase price, the Company agreed to pay to the seller interest in 12 equal monthly instalments of $13,657,
followed by 12 monthly instalments of $6,828.
On
November 25, 2022, the Company issued a promissory note (the "Promissory Note") to Pinnacle Island LP (the "Lender")
in connection with its bridge loan (the "Bridge Loan") financing. The Promissory Note has a principal amount of $7 million
and bears interest at a rate of 10% per annum with an original maturity date of February 23, 2023. The obligations of the Company under
the Promissory Note are fully and unconditionally guaranteed by each of the Company's existing and future subsidiaries. No assets
of the Company were pledged as collateral under the Promissory Note. In connection with the Bridge Loan, the Company paid a commitment
fee of $260,000 to the Lender and issued it 119,229 common share purchase warrants, each of which was exercisable to acquire one Common
Share at a price of $2.04 per share until November 25, 2023, which were subsequently cancelled and replaced as detailed
below.
Under
the terms of the Promissory Note, the Company extended the maturity date from February 23, 2023 to March 22, 2023. On March 17, 2023,
the Company entered into an amended and restated promissory note (the "A&R Promissory Note") extending the maturity date
from March 22, 2023 to November 24, 2023. In connection with the entering into of the A&R Promissory Note, the Company paid a fee
of $225,000 and issued 350,000 non-transferrable common share purchase warrants to the Lender (the original 119,229 warrants originally
issued in connection with the Promissory Note were cancelled). Each warrant is exercisable to acquire one Common Share
at a price of $1.75 per Common Share for a period of one year from date of the A&R Promissory Note.
On
February 24, 2023, the Company closed a "best efforts" brokered private placement offering under which 4,437,184 Common Shares were issued at a price of $1.75 per Common Share for gross proceeds of $7,765,072.00 (the
"Offering"). Paradigm Capital Inc. acted as lead agent and sole bookrunner (the "Lead Agent") for the Offering, on behalf of a syndicate of agents (collectively, with the Lead Agent, the "Agents"),
pursuant to an agency agreement between the Company and each of the Agents. In connection with the Offering, the Company (i) paid to
the Agents a cash commission equal to 6% of the gross proceeds (other than on certain president's list purchasers on which a
cash commission of 3% was paid), and (ii) issued to the Agents that number of non-transferable broker warrants of the Company (the
"Broker Warrants") as is equal to 6% of the number of Common Shares sold under the Offering (other than on Common Shares
issued to president's list purchasers on which Broker Warrants equal to 3% were issued). Each Broker Warrant is exercisable to
acquire one Common Share at an exercise price of $1.75 per Common Share until February 24, 2025.
43
D.
Exchange Controls
This
summary is of a general nature only and is not intended to be, and should not be interpreted as, legal advice to any prospective purchaser.
Accordingly, prospective purchasers of the Company's shares should consult with their own advisors with respect to their individual
circumstances.
There
are no laws or governmental decrees or regulations in Canada that restrict the export or import of capital, or which affect the remittance
of dividends, interest or other payments to holders of the Company's securities who are not residents of Canada, other than withholding
tax requirements.
There
are no limitations imposed by the laws of Canada, the laws of Ontario or by the charter or other governing documents of the Company on
the right of a non-resident to hold or vote Common Shares, other than as provided in the Investment Canada Act (the "Investment
Act") and the potential requirement for a Competition Act Review.
The
following summarizes the principal features of the Investment Act and the Competition Act Review for a non-resident who proposes to acquire
Common Shares. This summary is of a general nature only and is not intended to be, nor is it, a substitute for independent advice from
an investor's own advisor. This summary does not anticipate statutory or regulatory amendments.
The
Investment Canada Act
The
Investment Canada Act (the "ICA") requires any person that is non-Canadian (as defined in the ICA) who acquires "control"
(as defined in the ICA) of an existing Canadian business to file a pre-closing application for review with Innovation, Science and Economic
Development Canada, where prescribed financial thresholds are exceeded. By way of example, for a direct acquisition of control of a Canadian
business by a non-Canadian that is controlled by nationals of a specified trade agreement state (including the US and the European Union,
the United States, Mexico, Australia, Brunei, Chile, Colombia, Honduras, Japan, Malaysia, New Zealand, Panama, Peru, Singapore, South
Korea, the United Kingdom or Vietnam) this threshold is that the enterprise value of the Canadian business must exceed C$1.931 billion
(in 2023; indexed annually). This threshold is C$1.287 billion (in 2023; indexed annually) for investors controlled by nationals of a
World Trade Organization ("WTO") member state that is not a trade agreement state. Different review thresholds apply if the
investor and sellers are not trade agreement/WTO nationals or if the investor is a state-owned enterprise, or if there is an acquisition
of a Canadian cultural business. In these situations, much lower thresholds apply and are based on the total worldwide book value assets
of the Canadian business, rather than its enterprise value. If a proposed investment is reviewable, the relevant minister will assess
whether the investment is likely to be of "net benefit" to Canada.
Where
the acquisition of control of a Canadian business by a non-Canadian does not meet the prescribed review thresholds, the investor is required
to file a notification no later than 30 days after the completion of the investment.
The
Canadian government also has the discretion to review most investments on the grounds that it could be "injurious to Canada's
national security," regardless of whether it is "net benefit" reviewable. Review on national security grounds may occur
on a pre- or post-closing basis.
44
Canadian
Competition Act Review
Investments
giving rise to the acquisition or establishment, directly or indirectly, by one or more persons of control over, or a significant
interest in the whole or part of a business of a competitor, supplier, customer or other person are subject to substantive review by
Canada's Commissioner of Competition (the "Commissioner"). If the Commissioner concludes that a merger, prevents
or lessens, or is likely to prevent or lessen competition substantially, the Commissioner may apply to the Competition Tribunal for
a remedial order. Such substantive merger
review power applies to all mergers for up to one year after closing, whether or not they meet limits for pre-notification under the Competition Act.
In
addition to substantive merger review, the Competition Act provides for a pre-notification regime respecting mergers of a certain size.
The regime applies in respect of share acquisitions, asset acquisitions, amalgamations and combinations. For ease of reference, this
filing refers specifically to share acquisition, although the pre-notification regime applies, with the appropriate modification, to
other types of acquisition of control as well.
Pre-merger notification under the Competition Act
is generally required for the acquisition of voting shares of corporations when each of three thresholds is exceeded:
(i)
the parties to the transaction, together with their legal affiliates under the Competition Act, must have assets in Canada, or gross revenue from sales in, from or into Canada, that in the aggregate exceed C$400 million
(ii)
the aggregate value of the assets in Canada owned by the target, including entities controlled by the target, or the gross revenues from sales in or from Canada generated from those assets, must exceed C$93 million; and
(iii)
the acquirer must, as a result of the transaction, own more than 20% of the target's voting shares, if the target is publicly traded, or more than 35% of the voting shares of privately-owned corporations. (If the acquirer already owns between 20% (or 35% for privately-owned corporations) and 50% of the target, notification would also be required in connection with a transaction which would result in the acquirer owning more than 50% of the target's voting shares.)
Where a notification is required, the Competition
Act prohibits completion of the acquisition until the expiration of the applicable statutory waiting period, unless compliance with the
waiting period has been waived or the Commissioner has issued an advance ruling certificate under section 102 of the Competition Act.
The Commissioner's review of a notifiable transaction for substantive competition law considerations may take longer than the statutory
waiting period.
45
E.
Taxation
Canadian
Federal Income Tax Considerations
The
following is, as of the date hereof, a summary of the principal Canadian federal income tax considerations under the
Income Tax Act
(Canada) (the "
Canadian Tax Act
") and the regulations thereunder (the "
Canadian Tax Regulations
")
generally applicable to a holder of Common Shares (referred to in this summary as "
Shares
") who holds
Shares as beneficial owner and who, for the purposes of the Canadian Tax Act and the Canadian Tax Regulations and at all relevant times,
is or is deemed to be resident in Canada, deals at arm's length with the Company, is not affiliated with the Company, and acquires
and holds the Shares as capital property (a "
Canadian Resident Holder
"). Generally, Shares will be considered to be
capital property to a Canadian Resident Holder provided that the Canadian Resident Holder does not hold the Shares in the course of carrying
on a business or as part of an adventure or concern in the nature of trade. A Canadian Resident Holder whose Shares might not otherwise
qualify as capital property may be entitled to make an irrevocable election permitted by subsection 39(4) of the Canadian Tax Act to
deem the Shares and every other "Canadian security" (as defined in the Canadian Tax Act) held or subsequently acquired by
such person, in the taxation year of the election and each subsequent taxation year to be capital property. Canadian Resident Holders
should consult their own tax advisors as to whether this election is available or advisable in their particular circumstances.
This
summary does not apply to a Canadian Resident Holder (i) that is a "financial institution" for the purposes of the mark-to-market
rules contained in the Canadian Tax Act; (ii) that is a "specified financial institution" as defined in the Canadian Tax
Act; (iii) an interest in which would be a "tax shelter investment" as defined in the Canadian Tax Act; (iv) that has made
a functional currency reporting election under the Canadian Tax Act; (v) that is exempt from tax under Part I of the Canadian Tax Act;
(vi) that has entered or will enter into a "derivative forward agreement" or a "synthetic disposition arrangement",
as those terms are defined in the Canadian Tax Act, with respect to the Shares or (vii) that receives dividends on the Shares under or
as part of a "dividend rental arrangement", as defined in the Canadian Tax Act. In addition, this summary does not address
the deductibility of interest by a Canadian Resident Holder that has borrowed money or otherwise incurred indebtedness in connection
with the acquisition of Shares. Such Canadian Resident Holders should consult their own tax advisors with respect to the tax considerations
in respect of acquiring, holding and disposing of Shares.
Additional
considerations, not discussed herein, may be applicable to a Canadian Resident Holder that is a corporation ‎resident in Canada (for
the purposes of the Canadian Tax Act), and is, or becomes (or does not deal at arm's length for purposes of the Canadian Tax Act
with a corporation resident in Canada that is or becomes) as part of a transaction or event or series of transactions or ‎events
that includes the acquisition of Shares, controlled by a non-resident person, or a group of non-resident persons not dealing with each
other at arm's length, for purposes of the "foreign affiliate dumping" rules in section 212.3 of the Canadian Tax Act.
Such Canadian Resident Holders should consult their tax advisors with respect to the consequences of acquiring Shares.
This
summary is based upon the current provisions of the Canadian Tax Act and the Canadian Tax Regulations in force as of the date hereof
and an understanding of the current administrative policies and assessing practices of the Canada Revenue Agency (the "
CRA
")
published in writing by the CRA prior to the date hereof. This summary takes into account all specific proposals to amend the Canadian
Tax Act and the Canadian Tax Regulations publicly announced by or on behalf of the Minister of Finance (Canada) prior to the date hereof
(the "
Tax Proposals
") and assumes that the Tax Proposals will be enacted in the form proposed, although no assurance
can be given that the Tax Proposals will be enacted in their current form or at all.
Other
than the Tax Proposals, this summary does not otherwise take into account or anticipate any changes in law, whether by legislative, governmental,
administrative or judicial decision or action, nor does it take into account or consider any income tax considerations of any province
or territory of Canada or of any other jurisdiction, which considerations may differ significantly from the Canadian federal income tax
considerations discussed in this summary. This summary also does not take into account any change in the administrative policies or assessing
practices of the CRA.
46
This
summary is of a general nature only, is not exhaustive of all possible Canadian federal income tax considerations and is not intended
to be, nor should it be construed to be, legal or tax advice to any particular Canadian Resident Holder. Canadian Resident Holders should
consult their own tax advisors with respect to their particular circumstances.
Currency
In
general, for purposes of the Canadian Tax Act, all amounts relating to the acquisition, holding or disposition of Shares (including dividends,
adjusted cost base and proceeds of disposition) must, to the extent such amounts are not otherwise expressed in Canadian dollars, be
converted into Canadian dollars based on an exchange rate quoted by the Bank of Canada for the date such amount arose or such other rate
of exchange that is acceptable to the CRA.
Dividends
Dividends
received or deemed to be received on the Shares will be included in computing a Canadian Resident Holder's income. In the case
of an individual (other than certain trusts), such dividends will be subject to the gross-up and dividend tax credit rules normally applicable
in respect of "taxable dividends" received from corporations resident in Canada for purposes of the Canadian Tax Act. An
enhanced gross-up and dividend tax credit will be available to individuals (other than certain trusts) in respect of "eligible
dividends" designated by the Company to the Canadian Resident Holder in accordance with the provisions of the Canadian Tax Act.
There may be limitations on the ability of the Company to designate dividends as "eligible dividends".
Dividends
received or deemed to be received on the Shares by a Canadian Resident Holder that is a corporation must be included in computing its
income but generally will be deductible in computing its taxable income. In certain circumstances, subsection 55(2) of the Canadian Tax
Act will treat a taxable dividend received or deemed to be received by a Canadian Resident Holder that is a corporation as proceeds of
disposition or a capital gain. Canadian Resident Holders that are corporations should consult their own tax advisors having regard to
their own circumstances.
A
Canadian Resident Holder that is throughout the relevant taxation year a "Canadian-controlled private corporation" (as defined
in the Canadian Tax Act) also may be liable to pay an additional tax (refundable in certain circumstances) on its "aggregate investment
income" (as defined in the Canadian Tax Act) for the year, but which excludes dividends or deemed dividends deductible in computing
taxable income. Tax Proposals released on August 9, 2022 extend this additional tax and refund mechanism in respect of "aggregate
investment income" to "substantive CCPCs" as defined in the Tax Proposals. Canadian Resident Holders should consult
their own advisors with respect to the application of the Tax Proposals.
A
Canadian Resident Holder that is a "private corporation" (as defined in the Canadian Tax Act) or a "subject corporation"
(as defined in subsection 186(3) of the Canadian Tax Act) may be liable to pay an additional tax (refundable in certain circumstances)
under Part IV of the Canadian Tax Act on dividends received or deemed to be received on the Shares to the extent such dividends are deductible
in computing taxable income.
Dispositions
of Shares
Upon
a disposition or a deemed disposition of a Share (other than a disposition to the Company that is not a sale in the open market in the
manner in which shares would normally be purchased by any member of the public in an open market), a Canadian Resident Holder generally
will realize a capital gain (or a capital loss) equal to the amount by which the proceeds of disposition, net of any reasonable costs
of disposition, are greater (or are less) than the adjusted cost base of such share to the Canadian Resident Holder. The adjusted cost
base to a Canadian Resident Holder of a Share will be determined by averaging the cost of that share with the adjusted cost base of all
other common shares of the Company held as capital property at that time by the Canadian Resident Holder. The tax treatment of capital
gains and capital losses is discussed in greater detail below under the subheading "
Capital gains and capital losses
".
47
Capital
gains and capital losses
Generally,
a Canadian Resident Holder is required to include in computing its income for a taxation year one-half of the amount of any capital gain
(a "
taxable capital gain
") realized in the year. Subject to and in accordance with the provisions of the Canadian
Tax Act, a Canadian Resident Holder is required to deduct one-half of the amount of any capital loss (an "
allowable capital
loss
") realized in a taxation year from taxable capital gains realized in the year by such Canadian Resident Holder. Allowable
capital losses in excess of taxable capital gains realized in a taxation year may be carried back and deducted in any of the three preceding
taxation years or carried forward and deducted in any following taxation year against taxable capital gains realized in such year to
the extent and under the circumstances described in the Canadian Tax Act.
The
amount of any capital loss realized on the disposition or deemed disposition of Shares by a Canadian Resident Holder that is a corporation
may be reduced by the amount of dividends received or deemed to have been received by it on such Shares or shares substituted for such
shares, to the extent and in the circumstances specified by the Canadian Tax Act. Similar rules may apply where a Share is owned by a
partnership or trust of which a corporation, trust or partnership is a member or beneficiary. Canadian Resident Holders to whom these
rules may be relevant should consult their own tax advisors.
A
Canadian Resident Holder that is throughout the relevant taxation year a "Canadian-controlled private corporation" (as defined
in the Canadian Tax Act) also may be liable to pay an additional tax (refundable in certain circumstances) on its "aggregate investment
income" (as defined in the Canadian Tax Act) for the year, which will include taxable capital gains. Tax Proposals released on
August 9, 2022 extend this additional tax and refund mechanism in respect of "aggregate investment income" to "substantive
CCPCs" as defined in the Tax Proposals. Canadian Resident Holders should consult their own advisors with respect to the application
of the Tax Proposals.
Minimum
tax
Capital
gains realized and dividends received by a Canadian Resident Holder that is an individual or a trust, other than certain specified trusts,
may give rise to minimum tax under the Canadian Tax Act. Canadian Resident Holders should consult their own advisors with respect to
the application of the minimum tax.
Certain
U.S. Federal Income Tax Considerations
Subject
to the limitations and qualifications stated herein, this discussion sets forth material U.S. federal income tax considerations relating
to the acquisition, ownership and disposition by U.S. Holders (as hereinafter defined) of the Common Shares. The discussion is based
on the
Internal Revenue Code of 1986
, as amended (the "Code"), its legislative history, existing and proposed regulations
thereunder, published rulings and court decisions, and the
Canada-United States Income Tax Convention (1980)
as amended (the "Treaty")
all as currently in effect and all subject to change at any time, possibly with retroactive effect. This summary applies only to U.S.
Holders. This discussion of a U.S. Holder's tax consequences addresses only those persons that acquire Common Shares in an offering
and that hold those Common Shares as capital assets (generally, property held for investment). In addition, it does not describe all
of the tax consequences that may be relevant in light of a U.S. Holder's particular circumstances, including state and local tax
consequences, estate and gift tax consequences, alternative minimum tax consequences, and tax consequences applicable to U.S. Holders
subject to special rules, such as:
●
banks,
    insurance companies, and certain other financial institutions;
●
U.S.
    expatriates and certain former citizens or long-term residents of the United States;
●
dealers
    or traders in securities who use a mark-to-market method of tax accounting;
●
persons
    holding Common Shares as part of a hedging transaction, "straddle," wash sale, conversion transaction or integrated transaction
    or persons entering into a constructive sale with respect to Common Shares;
●
persons
    whose "functional currency" for U.S. federal income tax purposes is not the U.S. dollar;
●
brokers,
    dealers or traders in securities, commodities or currencies;
●
tax-exempt
    entities or government organizations;
●
partnerships
    or other entities or arrangements classified as partnerships for U.S. federal income tax purposes;
●
regulated
    investment companies or real estate investment trusts;
●
persons
    who acquired the Common Shares pursuant to the exercise of any employee stock option or otherwise as compensation;
●
persons
    holding the Common Shares in connection with a trade or business, permanent establishment, or fixed base outside the United States; and
●
persons
    who own (directly or through attribution) 10% or more (by vote or value) of the outstanding Common Shares.
If
an entity that is classified as a partnership for U.S. federal income tax purposes holds Common Shares, the U.S. federal income tax treatment
of a partner will generally depend on the status of the partner and the activities of the partnership. Partnerships holding Common Shares
and partners in such partnerships are encouraged to consult their tax advisers as to the particular U.S. federal income tax consequences
of holding and disposing of Common Shares.
48
A
"U.S. Holder" is a holder who, for U.S. federal income tax purposes, is a beneficial owner of Common Shares and is:
●
an
    individual who is a citizen or individual resident of United States;
●
a
    corporation, or other entity taxable as a corporation, created or organized in or under the laws of the United States, any state
    therein or the District of Columbia;
●
an
    estate the income of which is subject to U.S. federal income taxation regardless of its source; or
●
a
    trust if  (1) a U.S. court is able to exercise primary supervision over the administration of the trust and one or more U.S.
    persons have authority to control all substantial decisions of the trust or (2) the trust has a valid election in effect to be treated
    as a U.S. person under applicable United States Treasury Regulations.
PERSONS
CONSIDERING AN INVESTMENT IN COMMON SHARES SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE PARTICULAR TAX CONSEQUENCES APPLICABLE TO
THEM RELATING TO THE ACQUISITION, OWNERSHIP AND DISPOSITION OF THE COMMON SHARES, INCLUDING THE APPLICABILITY OF U.S. FEDERAL, STATE
AND LOCAL TAX LAWS.
Passive
Foreign Investment Company Rules
If
the Company is classified as a passive foreign investment company (a "PFIC") in any taxable year, a U.S. Holder will
be subject to special rules generally intended to reduce or eliminate any benefits from the deferral of U.S. federal income tax that
a U.S. Holder could derive from investing in a non-U.S. company that does not distribute all of its earnings on a current basis.
A
non-U.S. corporation will be classified as a PFIC for any taxable year in which, after applying certain look-through rules, either:
●
at
    least 75% of its gross income is passive income (which generally includes dividends, interest, rents or royalties (other than certain
    rents or royalties earned in the conduct of an active business) and investment gains); or
●
at
    least 50% of its gross assets (determined on the basis of a quarterly average) is attributable to assets that produce passive income
    or are held for the production of passive income.
The
Company will be treated as owning its proportionate share of the assets and earning its proportionate share of the income of any
other corporation, the equity of which it owns, directly or indirectly, 25% or more (by value).
Based
on the composition of the Company's income and the value of its assets, the Company believes that it was a PFIC for United
States federal income tax purposes for the 2022 taxable year, and, further, the determination of the Company's status as a
PFIC for the 2023 tax year cannot be made at this time. A separate determination must be made after the close of each taxable year
as to whether the Company is a PFIC for that year, and as a result, its PFIC status may change from year to year. The total value of
the Company's assets for purposes of the asset test generally will be calculated using the market price of the Common Shares,
which may fluctuate considerably.
Fluctuations
in the market price of the Common Shares may result in the Company being a PFIC for any taxable year. Because of the uncertainties
involved in establishing the Company's PFIC status, there can be no assurance regarding if the Company currently is treated
as a PFIC, or may be treated as a PFIC in the future.
If
the Company is classified as a PFIC in any year with respect to which a U.S. Holder owns the Common Shares, the Company will continue
to be treated as a PFIC with respect to such U.S. Holder in all succeeding years during which the U.S. Holder owns the Common Shares, regardless
of whether the Company continues to meet the tests described above unless the Company ceases to be a PFIC and either (x) the
U.S. Holder has made a "deemed sale" election under the PFIC rules or (y) for the period immediately preceding the Company's
ceasing to be a PFIC the Common Shares were subject to a mark-to-market election. If the "deemed sale" election is made, a U.S.
Holder will be deemed to have sold the Common Shares the U.S. Holder holds at their fair market value and any gain from such deemed sale would
be subject to the rules described below. After the deemed sale election, so long as the Company does not become a PFIC in a subsequent
taxable year, the U.S. Holder's Common Shares with respect to which such election was made will not be treated as shares in a PFIC and
the U.S. Holder will not be subject to the rules described below with respect to any "excess distribution" the U.S. Holder
receives from the Company or any gain from an actual sale or other disposition of the Common Shares. U.S. Holders should consult their
tax advisors as to the possibility and consequences of making a deemed sale election if the Company ceases to be a PFIC and such
election becomes available.
49
For
each taxable year the Company is treated as a PFIC with respect to U.S. Holders, U.S. Holders will be subject to special tax rules
with respect to any "excess distribution" such U.S. Holder receives and any gain such U.S. Holder recognizes from a sale
or other disposition (including, under certain circumstances, a pledge) of Common Shares, unless (i) such U.S. Holder makes a qualified electing
fund election (a "QEF Election") or (ii) the Common Shares constitute "marketable" securities, and such U.S. Holder
makes a mark-to-market election as discussed below. Absent the making of a QEF Election or a mark-to-market election, distributions a
U.S. Holder receives in a taxable year that are greater than 125% of the average annual distributions a U.S. Holder received during the
shorter of the three preceding taxable years or the U.S. Holder's holding period for the Common Shares will be treated as an excess
distribution. Under these special tax rules:
●
the
    excess distribution or gain will be allocated ratably over a U.S. Holder's holding period for the Common Shares;
●
the
    amount allocated to the current taxable year, and any taxable year prior to the first taxable year in which the Corporation became
    a PFIC, will be treated as ordinary income; and
●
the
    amount allocated to each other year will be subject to the highest tax rate in effect for that year and the interest charge generally
    applicable to underpayments of tax will be imposed on the resulting tax attributable to each such year.
The
tax liability for amounts allocated to years prior to the year of disposition or "excess distribution" cannot be offset by
any net operating losses for such years, and gains (but not losses) realized on the sale of the Common Shares cannot be treated as capital,
even if a U.S. Holder holds the Common Shares as capital assets.
In
addition, if the Company is a PFIC, a U.S. Holder will generally be subject to similar rules with respect to distributions the Company
receives from, and the Company's dispositions of the stock of, any of the Company's direct or indirect subsidiaries
that also are PFICs, as if such distributions were indirectly received by, and/or dispositions were indirectly carried out by, such U.S.
Holder. U.S. Holders should consult their tax advisors regarding the application of the PFIC rules to the Company's subsidiaries.
If
a U.S. Holder makes an effective QEF Election, the U.S. Holder will be required to include in gross income each year, whether or not
the Company makes distributions, as capital gains, such U.S. Holder's pro rata share of the Company's net capital
gains and, as ordinary income, such U.S. Holder's pro rata share of the Company's earnings in excess of the Company's
net capital gains. U.S. Holders should be aware that, for each tax year, if any, that the Company is a PFIC, the Company can
provide no assurances that it will satisfy the record keeping requirements of a PFIC, or that the Company will make available to
U.S. Holders the information such U.S. Holders require to make a QEF Election with respect to the Company, and as a result, a QEF
Election may not be available to U.S. Holders.
U.S.
Holders also can avoid the interest charge on excess distributions or gain relating to the Common Shares by making a mark-to-market election
with respect to the Common Shares, provided that the Common Shares are "marketable." Common shares will be marketable if they are "regularly
traded" on certain U.S. stock exchanges or on a foreign stock exchange that meets certain conditions. For these purposes, the Common Shares
will be considered regularly traded during any calendar year during which they are traded, other than in de minimis quantities, on at
least 15 days during each calendar quarter. Any trades that have as their principal purpose meeting this requirement will be disregarded.
The Common Shares are listed on the
OTCQX
, which is a qualified exchange for
these purposes. Consequently, if the Common Shares remain listed on the
OTCQX
and are regularly traded, and you are a holder of Common Shares, the Company expects the mark-to-market election would be available to
U.S. Holders if the Company is a PFIC. Each U.S. Holder should consult its tax advisor as to the whether a mark-to-market election
is available or advisable with respect to the Common Shares.
A
U.S. Holder that makes a mark-to-market election must include in ordinary income for each year an amount equal to the excess, if any,
of the fair market value of the Common Shares at the close of the taxable year over the U.S. Holder's adjusted tax basis in the Common Shares.
An electing holder may also claim an ordinary loss deduction for the excess, if any, of the U.S. Holder's adjusted basis in the
Common Shares over the fair market value of the Common Shares at the close of the taxable year, but this deduction is allowable only to the extent
of any net mark-to-market gains for prior years. Gains from an actual sale or other disposition of the Common Shares will be treated as ordinary
income, and any losses incurred on a sale or other disposition of the shares will be treated as an ordinary loss to the extent of any
net mark-to-market gains for prior years. Once made, the election cannot be revoked without the consent of the Internal Revenue Service
(the "IRS"), unless the Common Shares cease to be marketable.
However,
a mark-to-market election generally cannot be made for equity interests in any lower-tier PFICs that the Company owns, unless shares
of such lower-tier PFIC are themselves "marketable." As a result, even if a U.S. Holder validly makes a mark-to-market election
with respect to the Common Shares, the U.S. Holder may continue to be subject to the PFIC rules (described above) with respect to its indirect
interest in any of the Company's investments that are treated as an equity interest in a PFIC for U.S. federal income tax purposes.
50
U.S.
HOLDERS SHOULD CONSULT THEIR TAX ADVISORS TO DETERMINE WHETHER ANY OF THESE ELECTIONS WOULD BE AVAILABLE AND IF SO, WHAT THE CONSEQUENCES
OF THE ALTERNATIVE TREATMENTS WOULD BE IN THEIR PARTICULAR CIRCUMSTANCES.
Each
U.S. shareholder of a PFIC is required to file a Form 8621,
Information Return by a Shareholder of a Passive Foreign Investment Company
or Qualified Electing Fund
containing such information as the United States Treasury Department (the "U.S. Treasury")
may require. U.S. Holders should consult their tax advisors regarding the requirements of filing such information returns under these
rules.
THE
CORPORATION STRONGLY URGES YOU TO CONSULT YOUR TAX ADVISOR REGARDING THE IMPACT OF THE CORPORATION'S PFIC STATUS ON YOUR INVESTMENT
IN THE COMMON SHARES AS WELL AS THE APPLICATION OF THE PFIC RULES TO YOUR INVESTMENT IN THE COMMON SHARES.
Cash
Dividends and Other Distributions
Subject
to the discussion under "Passive Foreign Investment Company Rules" above, to the extent there are any distributions made
with respect to the Common Shares, a U.S. Holder generally will be required to include in its gross income distributions received with
respect to its Common Shares (including the amount of Canadian taxes withheld, if any) as dividend income, but only to the extent that
the distribution is paid out of the Company's current or accumulated earnings and profits (computed using U.S. federal income
tax principles), with the excess treated first as a non-taxable return of capital to the extent of the holder's adjusted tax basis
in its Common Shares and, thereafter, as capital gain recognized on a sale or exchange on the day actually or constructively received
by the holder (as described below under "Sale or Disposition of Common Shares"). There can be no assurance that the Company
will maintain calculations of the Company's earnings and profits in accordance with U.S. federal income tax accounting principles.
U.S. Holders should therefore assume that any distribution with respect to the Common Shares will constitute ordinary dividend income.
Dividends paid on the Common Shares will not be eligible for the dividends received deduction allowed to U.S. corporations.
Dividends
paid to a non-corporate U.S. Holder by a "qualified foreign corporation" may be subject to reduced rates of taxation if certain
holding period and other requirements are met. A qualified foreign corporation generally includes a foreign corporation if  (i)
its Common Shares are readily tradable on an established securities market in the United States or it is eligible for benefits under
a comprehensive U.S. income tax treaty that includes an exchange of information program and which the U.S. Treasury has determined is
satisfactory for these purposes and (ii) if such foreign corporation is not a PFIC (as discussed above) for either the taxable year in
which the dividend is paid or the preceding taxable year. The Common Shares are readily tradable on the
OTCQX
,
an established securities market in the United States, and the Company may be eligible for the benefits of the Treaty. Accordingly,
subject to the PFIC rules discussed above, a non-corporate U.S. Holder may qualify for the reduced rate on dividends so long as the applicable
holding period requirements are met. U.S. Holders should consult their own tax advisors regarding the availability of the reduced tax
rate on dividends in light of their particular circumstances.
Distributions
paid in a currency other than U.S. dollars will be included in a U.S. Holder's gross income in a U.S. dollar amount based on the
spot exchange rate in effect on the date of actual or constructive receipt, whether or not the payment is converted into U.S. dollars
at that time. The U.S. Holder will have a tax basis in such currency equal to such U.S. dollar amount, and any gain or loss recognized
upon a subsequent sale or conversion of the foreign currency for a different U.S. dollar amount will generally be U.S. source ordinary
income or loss. If the dividend is converted into U.S. dollars on the date of receipt, a U.S. Holder generally should generally not be
required to recognize foreign currency gain or loss in respect of the dividend income.
If
a U.S. Holder is subject to Canadian withholding taxes (at the rate applicable to such U.S. Holder) with respect to dividends paid on
the Common Shares, such U.S. Holder may be entitled to receive either a deduction or a foreign tax credit for such Canadian taxes paid.
Complex limitations apply to the foreign tax credit. Dividends paid by the Company generally will constitute "foreign source"
income and generally will be categorized as "passive category income." Because the foreign tax credit rules are complex,
each U.S. Holder should consult its own tax advisor regarding the foreign tax credit rules.
Sale
or Disposition of Common Shares
A
U.S. Holder generally will recognize gain or loss on the taxable sale or exchange of the Common Shares in an amount equal to the difference
between the U.S. dollar amount realized on such sale or exchange (determined in the case of the Common Shares sold or exchanged for currencies
other than U.S. dollars by reference to the spot exchange rate in effect on the date of the sale or exchange or, if the Common Shares
sold or exchanged are traded on an established securities market and the U.S. Holder is a cash basis taxpayer or an electing accrual
basis taxpayer, which election must be applied consistently from year to year and cannot be changed without the consent of the IRS, the
spot exchange rate in effect on the settlement date) and the U.S. Holder's adjusted tax basis in the Common Shares determined in
U.S. dollars. The initial tax basis of the Common Shares to a U.S. Holder will be the U.S. Holder's U.S. dollar purchase price
for the Common Shares (determined by reference to the spot exchange rate in effect on the date of the purchase, or if the Common Shares
purchased are traded on an established securities market and the U.S. Holder is a cash basis taxpayer or an electing accrual basis taxpayer,
which election must be applied consistently from year to year and cannot be changed without the consent of the IRS, the spot exchange
rate in effect on the settlement date). An accrual basis U.S. Holder that does not make the special election will recognize exchange
gain or loss to the extent attributable to the difference between the exchange rates on the sale date and the settlement date, and such
exchange gain or loss generally will constitute ordinary income or loss.
Subject
to the discussion under "Passive Foreign Investment Company Rules" above, such gain or loss will be capital gain or loss
and will be long-term gain or loss if the Common Shares have been held for more than one year. Under current law, long-term capital gains
of non-corporate U.S. Holders generally are eligible for reduced rates of taxation. The deductibility of capital losses is subject to
limitations. Capital gain or loss, if any, recognized by a U.S. Holder generally will be treated as U.S. source income or loss for U.S.
foreign tax credit purposes. U.S. Holders are encouraged to consult their own tax advisors regarding the availability of the U.S. foreign
tax credit in their particular circumstances.
51
Net
Investment Income Tax
Certain
U.S. Holders that are individuals, estates or certain trusts must pay a 3.8% tax on their "net investment income." Net investment
income generally includes, among other things, dividend income and net gains from the disposition of stock. A U.S. Holder that is an
individual, estate or trust should consult its tax advisor regarding the applicability of the net investment income tax to its income
and gains in respect of its investment in the Common Shares.
Information
Reporting and Backup Withholding
Payments
of dividends and sales proceeds that are made within the United States or through certain U.S.-related financial intermediaries generally
are subject to information reporting, and may be subject to backup withholding, unless (i) the U.S. Holder is a corporation or other
exempt recipient or (ii) in the case of backup withholding, the U.S. Holder provides a correct taxpayer identification number and certifies
that it is not subject to backup withholding on a duly executed IRS Form W-9 or otherwise establishes an exemption.
Backup
withholding is not an additional tax. The amount of any backup withholding from a payment to a U.S. Holder will be allowed as a credit
against the U.S. Holder's U.S. federal income tax liability and may entitle the U.S. Holder to a refund, provided that the required
information is timely furnished to the IRS.
Certain
Reporting Requirements
In
addition to the reporting described above that may be required if the Company is a PFIC, U.S. Holders paying more than US$100,000
for the Common Shares generally may be required to file IRS Form 926 reporting the payment of the offer price for the Common Shares to
the Company. Substantial penalties may be imposed upon a U.S. Holder that fails to comply. Each U.S. Holder should consult its own
tax advisor as to the possible obligation to file IRS Form 926.
Certain
U.S. Holders who are individuals (and, under regulations, certain entities) may be required to report information relating to the Common
Shares, subject to certain exceptions (including an exception for Common Shares held in accounts maintained by certain U.S. financial
institutions), by filing IRS Form 8938 (Statement of Specified Foreign Financial Assets) with their federal income tax return. Such U.S.
Holders who fail to timely furnish the required information may be subject to a penalty. Additionally, if a U.S. Holder does not file
the required information, the statute of limitations with respect to tax returns of the U.S. Holder to which the information relates
may not close until three years after such information is filed. U.S. Holders should consult their tax advisers regarding their reporting
obligations with respect to their ownership and disposition of the Common Shares.
F.
Dividends and Paying Agents
Not
required.
G.
Statement by Experts
Not
required.
H.
Documents on display
All
documents referenced in this Form 20-F may be viewed at the offices of the Company during business hours at One First Canadian Place,
100 King Street West, Suite 3400, Toronto, Ontario, Canada M5X 1A4.
I.
Subsidiary Information
Not applicable.
52
ITEM
11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not
required.
ITEM
12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
Not
required.
ITEM
13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
Not
applicable.
ITEM
14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
Not
applicable.
ITEM
15. CONTROLS AND PROCEDURES
Disclosure
Controls and Procedures
At
the end of the period covered by this Annual Report, an evaluation of the effectiveness of the design and operation of the
Company's "disclosure controls and procedures" (as such term is defined in Rules 13a-15(e) under the
U.S. Exchange Act) was carried out by the Company's principal executive officer and principal financial officer. Based upon
that evaluation, the Company's CEO and CFO have concluded that, as of the end of the period covered by this report, the
design and operation of the Company's disclosure controls and procedures are effective.
It
should be noted that while the Company's CEO and CFO believe that the Company's disclosure controls and procedures
provide a reasonable level of assurance that they are effective, they do not expect that the Company's disclosure controls
and procedures will prevent all errors and fraud. A control system, no matter how well conceived or operated, can provide only reasonable,
not absolute, assurance that the objectives of the control system are met.
53
Management's
Report on Internal Control over Financial Reporting
Management
is responsible for establishing and maintaining adequate internal control over financial reporting (as such term is defined in Rule 13a-15(f) and
Rule 15d-15(f) under the U.S. Exchange Act) and has designed such internal control over financial reporting to provide reasonable
assurance regarding the reliability of financial reporting and preparation of financial statements for external purposes in accordance
with International Financial Reporting Standards as issued by the International Accounting Standards Board.
In
designing and evaluating the Company's internal control over financial reporting, the Company's management recognizes
that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their
objectives and management necessarily applies its reasonable judgment in evaluating the cost-benefit relationship of possible controls
and procedures. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Projections of any evaluation of effectiveness to future periods are subject to the risks that controls may become inadequate because
of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.
Management
conducted an evaluation of the effectiveness of the Company's internal control over financial reporting as of December 31,
2022. In making this assessment, management used the criteria set forth in "Internal Control – Integrated Framework (2013)"
issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this evaluation, management concluded
that the Company's internal control over financial reporting was effective as of December 31, 2022.
Changes
in Internal Control Over Financial Reporting
There
were no changes in the Company's internal controls over financial reporting that occurred during the period covered by this Annual
Report on Form 20-F that have materially affected, or are reasonably likely to materially affect the Company's internal controls over financial
reporting.
ITEM
16.
A.
Audit Committee Financial Expert
The
Board of Directors of the Company has determined that Mr. Don Newberry, a member of the Board's ARMC qualifies as an
"audit committee financial expert." The Board of Directors has determined that Mr. Newberry is "independent"
under applicable standards. Mr. Don Newberry has over 20 years of experience in a variety of senior financial and project management
leadership roles and he is currently the Chief Financial Officer at Ohio Truck Sales. Mr. Newberry has spent most of his career
working internationally in the mining industry for Diavik Diamond Mines, Cleveland Cliffs and Nyrstar. He is experienced in
overseeing large mining projects from studies through to execution, risk management, M&A, integration, and implementing
financial controls and oversight of company's assets. Mr. Newberry completed his Bachelor of Commerce (Accounting) at Ottawa
University, Master of Business Administration (MBA) in Global Management at University of Phoenix, and he also completed the Program
for Leadership Development (PLD) at Harvard Business School. He is a Chartered Professional Accountant / Certified Management
Accountant (CPA, CMA).
Mr.
John Hick has over 40 years of experience in the mining industry in both senior management positions and as an independent director.
He currently serves as an independent director, and in some cases the non-executive Chairman, to a number of publicly listed
companies, including Diamond Estates Wines & Spirits Inc. and Mako Mining Corp. Previously, Mr. Hick has held board and/or
senior management positions with a number of other Canadian mining companies, including Quebec Precious Metals Corp., Medoro
Resources Ltd., St. Andrew Goldfields Ltd., First Uranium Corp., Defiance Mining Corp./Geomaque Explorations Ltd, TVX Gold Inc.,
Cambior Inc., Rio Narcea Gold Mines Ltd, Rayrock Resources Inc., Revett Minerals Inc. and Placer Dome Inc. Mr. Hick holds a B.A.
from the University of Toronto, and a LLB from the University of Ottawa.
54
Mr.
William O'Reilly was Managing Partner and a member of the Management Committee of Davies Ward Phillips & Vineberg LLP, a
leading Canadian law firm, from 1997 until his retirement from those positions on May 31, 2010. In his capacity as Managing Partner
at Davies, Mr. O'Reilly had primary responsibility for a wide range of firm management matters, including firm strategy,
delivery of legal services, client relationships, other business development initiatives, lawyer recruitment, regulatory compliance,
financial reporting, professional education and partner compensation. Since 2009, Mr. O'Reilly has served as a director of
Russel Metals Inc., a public company listed on the Toronto Stock Exchange.
B.
Code of Ethics
The
Company has adopted a code of ethics applicable to its directors, principal executive officer, principal financial officer, principal
accounting procedures, and persons performing similar functions. A copy of the Company's Code of Ethics will be made available
to anyone who requests it in writing from the Company's head office.
C.
Principal Accounting Fees and Services
(a)
Audit Fees
Dale
Matheson Carr-Hilton LaBonte LLP, Chartered Professional Accountants ("DMCL") billed NAN $45,549 in the year ended December
31, 2022 (2021 - $42,512).
(b)
Audit Related Fees
DMCL
billed $29,000 for audit related services in the year ended December 31, 2022 (2021 – Nil).
(c)
Tax Fees
DMCL
billed the Company $5,300 for the tax year 2021 and $3,400 for the tax year 2021.
(d)
All Other Fees
No
other fees were billed by DMCL.
(e)
Audit Committee Pre-Approval Policies and Procedures
To
ensure continuing auditor objectivity and to safeguard the independence of its auditors, the Company's audit committee has determined
a framework for the type and authorization of non-audit services which its auditors may provide. The audit committee has adopted policies
for the pre-approval of specific services that may be provided by its auditors. The dual objectives of these policies are to ensure that
the Company benefit in a cost effective manner from the cumulative knowledge and experience of its auditors, while also ensuring that
the auditors maintain the necessary degree of independence and objectivity.
The
Company's audit committee approved the engagement of MNP LLP to render audit and non-audit services before they were engaged by
the Company.
55
D.
Exemption From the Listing Standards for Audit Committees
Not
Applicable.
E.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
Not
Applicable.
F.
Change in the Registrant's Certifying Accountant
Effective August 31,
2022, DMCL
, the Company's former independent registered public accounting firm, resigned from its appointment
due to the requirements of the Canadian Public Accountability Board. Effective December 5, 2022, the Company appointed MNP LLP as the Company's independent
registered public accounting firm. The details of the Company's change of auditor were previously described in its report of foreign
private issuer on Form 6-K filed with the Securities and Exchange Commission on December 21, 2022 (File No. 001-14740), which is attached
as Exhibit 15.2 to this Annual Report and incorporated by reference herein.
G. Corporate Governance
Not applicable.
H.
Mine Safety Disclosure
Not applicable.
I.
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not
applicable.
J.
Insider Trading Policies
Not
applicable.
PART
III
ITEM
17. FINANCIAL STATEMENTS
The
financial statements and notes thereto as required by Item 17 are attached hereto and found immediately after the text of this Annual Report. The auditors' report of MNP LLP, independent registered public accountants, on the audited
financial statements and notes thereto is included immediately preceding the audited financial statements.
Independent Auditors' Report.
Consolidated
Statements of financial position as at December 31, 2022 and 2021.
Consolidated
Statements of comprehensive loss for the years ended December 31, 2022 and 2021.
Consolidated
Statement of changes in shareholders' equity for the years ended December 31, 2022 and 2021
Consolidated
Statements of cash flows for the years ended December 31,2022 and 2021
Notes
to the consolidated financial statements for the years ended December 31, 2022 and 2021
Independent Auditors' Report
Consolidated Statements of financial position as at December 31, 2021 and 2020.
Consolidated Statements of comprehensive loss for the years ended December 31, 2021 and 2020.
Consolidated Statement of changes in shareholders' equity for the years ended December 31, 2021 and 2020
Consolidated Statements of cash flows for the years ended December 31,2021 and 2020
Notes to the consolidated financial statements for the years ended December 31, 2020 and 2020
ITEM
18. FINANCIAL STATEMENTS
Not
applicable. See "Item 17. Financial Statements" above.
56
ITEM
19. EXHIBITS
Exhibit
    No.
Description
1.1*
Certificate of Continuance
1.2*
Articles of Continuance
1.3*
Bylaws
2.1*
Warrant Certificate dated March 17, 2023
2.2*
Form of Broker Warrant Certificate
2.3*
Commitment Letter among Premium Nick Resources Ltd., Guarantors and Pinnacle Island LP, dated November 18, 2022
2.4*
Promissory Note dated November 25, 2022 between Premium Nickel Resources Ltd. and Pinnacle Island LLP
2.5*
Amended and Restated Promissory Note dated March 17, 2022 between Premium Nickel Resources Ltd. and Pinnacle Island LP
2.6*
Description of Securities Registered Under Section 12 of the Exchange Act
4.1*
Asset Purchase Agreement dated September 28, 2021 between Trevor Glaum N.O., BCL Limited, Premium Nickel Resources Proprietary Limited and Premium Nickel Resources Corporation
4.2*
Amending Agreement dated January 19, 2022 between Trevor Glaum N.O., BCL Limited, Premium Nickel Resources Proprietary Limited and the Purchaser Gurantors
4.3*
Agency Agreement dated February 24, 2023 among Paradigm Capital Inc., as lead agent and sole bookrunner, Tamesis Partners LLP, Cormark Securities Inc., Echelon Wealth Partners Inc., Eight Capital, INFOR Financial Inc. and CIBC World Markets Inc. and Premium Nickel Resources Ltd.
8*
List of Subsidiaries
12.1*
Certification of Chief Executive Officer pursuant to s.302 of the Sarbanes-Oxley Act of 2002
12.2*
Certification of Chief Financial Officer pursuant to s.302 of the Sarbanes-Oxley Act of 2002
13.1*
Certification of Chief Executive Officer pursuant to s.906 of the Sarbanes-Oxley Act of 2002
13.2*
Certification of Chief Financial Officer pursuant to s.906 of the Sarbanes-Oxley Act of 2002
15.1
Financial Statements of Premium Nickel Resources Corporation for the three months ended March 31, 2022 and for the years ended December 31, 2021 and 2020 (incorporated by reference to Appendix H of Exhibit 99.8 to the Company's Form 6-K filed with the U.S. Securities and Exchange Commission on August 30, 2022)
15.2
Notice of Change of Auditor (incorporated by reference to Exhibit 99.1 to the Company's Form 6-K filed with the U.S. Securities and Exchange Commission on December 21, 2022)
101*
The following materials from the Company's Annual Report on Form 20-F for the fiscal year ended December 31, 2022, formatted in eXtensible Business Reporting Language (XBRL): (i) Consolidated Statements of Financial Position as of December 31, 2022 and 2021; (ii) Consolidated Statements of Comprehensive Loss for the years ended December 31, 2022, 2021 and 2020; (iii) Consolidated Statements of Changes in Shareholders' Equity for the years ended December 31, 2022, 2021 and 2020; (iv) Consolidated Statements of Cash Flows for the years ended December 31, 2022, 2021 and 2020; and (v) Notes to Consolidated Financial Statements
104*
Cover Page Interactive Data File (formatted as Inline eXtensible Business Reporting Language (iXBRL) and contained in Exhibit 101)
*Filed herewith.
57
SIGNATURES
The
registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized
the undersigned to sign this annual report on its behalf.
PREMIUM
    NICKEL RESOURCES LTD.
Date:
    May ●, 2023
By:
/s/
    Keith Morrison
Name:
Keith
    Morrison
Title:
Chief Executive Officer
58
Formerly
"North American Nickel Inc."
CONSOLIDATED
FINANCIAL STATEMENTS
For
the years ended December 31, 2022 and 2021
In
accordance with International Financial Reporting Standards ("IFRS) " and stated in Canadian dollars, unless otherwise indicated.
INDEX
Management's Responsibility for Financial Reporting
Independent Auditor's Report
Consolidated
Financial Statements
●
Consolidated Statements of Financial Position
●
Consolidated Statements of Comprehensive Loss
●
Consolidated Statements of Changes in Shareholders' Equity (Deficiency)
●
Consolidated Statements of Cash Flows
●
Notes to the Consolidated Financial Statements
MANAGEMENT
RESPONSIBILITY FOR FINANCIAL REPORTING
The
consolidated financial statements, and the notes thereto, of Premium Nickel Resources Ltd., formerly North American Nickel Inc. and its
subsidiaries have been prepared by management in accordance with International Financial Reporting standards. Management acknowledges
responsibility for the preparation and presentation of the consolidated financial statements, including responsibility for significant
accounting judgments and estimates and the choice of accounting principles and methods that are appropriate to the Company's circumstances.
Management,
in discharging these responsibilities, maintains a system of internal controls designed to provide reasonable assurance that its assets
are safeguarded, only valid and authorized transactions are executed and accurate, timely and comprehensive financial information is
prepared. However, any system of internal controls over financial reporting, no matter how well designed and implemented, has inherent
limitations and may not prevent or detect all misstatements.
The
Board of Directors, principally through the Audit Committee, is responsible for reviewing and approving the consolidated financial statements
together with other financial information of the Company and for ensuring that management fulfills its financial reporting responsibilities.
The
consolidated financial statements have been audited by MNP LLP, Chartered Professional Accountants, Licensed Public Accountants, who
were retained by the Company to audit the consolidated financial statements and provide an independent auditor's report thereon.
The auditor's report outlines the scope of their examination and their opinion on the consolidated financial statements. MNP LLP
has full and free access to the Board of Directors.
"signed"
"signed"
Keith Morrison
Sarah Zhu
Chief Executive Officer
Chief Financial Officer
May 2, 2023
2
| PNRL / Year ended 2022 and 2021
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To
the Board of Directors and
Shareholders
of Premium Nickel Resources Ltd. (Formerly North American Nickel Inc.)
Opinion
on the Consolidated Financial Statements
We
have audited the accompanying consolidated balance sheet of Premium Nickel Resources Ltd. (Formerly North American Nickel Inc.) (the
Company) as of December 31, 2022 and the related consolidated statement of comprehensive loss, change in shareholders' equity,
and cash flow for year ended December 31, 2022, and the related notes (collectively referred to as the consolidated financial statements).
In
our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the
Company as of December 31, 2022 and the results of its consolidated operations and its consolidated cash flow for the year ended December
31, 2022, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.
Other
Matter
The
consolidated financial statements of the Company for the year ended December 31, 2021 and December 31, 2020 were audited by another auditor
who expressed an unmodified audit opinion on those consolidated statements on April 25, 2022.
Material
Uncertainty Related to Going Concern
The
accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed
in Note 1 to the consolidated financial statements, the Company incurred a net loss from operations and has no source of operating cash
flows that raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters
are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome
of this uncertainty. This matter is also described in the "Critical Audit Matters" section of our report.
Basis
for Opinion
These
consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion
on the Company's consolidated financial statements based on our audit. We are a public accounting firm registered with the Public
Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance
with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We
conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.
The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part
of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing
an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.
Our
audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due
to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence
regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles
used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that our audit provide a reasonable basis for our opinion.
3
| PNRL / Year ended 2022 and 2021
Critical
Audit Matters
The
critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements
that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are
material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The
communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole,
and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the
accounts or disclosures to which they relate.
Going
Concern
Critical
Audit Matter Description
As
described in Note 1, the Company, being in the exploration and redevelopment stage, is subject to risks and challenges similar to companies
in a comparable stage of development. These risks include the challenges of securing adequate capital for exploration, development and
operational risks inherent in the mining industry, and global economic and metal price volatility and there is no assurance management
will be successful in its endeavors. The ability of the Company to continue operations as a going concern is ultimately dependent upon
achieving profitable operations and its ability to obtain adequate financing. To date, the Company has not generated profitable operations
from its resource activities and will need to invest additional funds in carrying out its planned exploration, development and operational
activities. Management has prepared future cash flow forecasts, which involves judgement and estimation of key variables, such as planned
financing and capital and operational expenditures. Future economic conditions and effects of key events subsequent to the year end,
such as debt and equity financing, also impacted management's judgements and estimates. We identified the Company's ability
to continue as a going concern as a critical audit matter because auditing the Company's going concern assessment is complex and
involves a high degree of auditor judgment to assess the reasonableness of the cash flow forecasts, planned refinancing actions and other
assumptions used in the Company's going concern analysis. The Company's ability to execute the planned refinancing actions
are especially judgmental given that the global financial markets and economic conditions have been, volatile. This matter is also described
in the "Material Uncertainty Related to Going Concern" section of our report.
Audit
Response
We
responded to this matter by performing procedures over management's assessment of the Company's ability to continue as a
going concern. Our audit work in relation to this included, but was not restricted to, the following:
●
We
                                            evaluated the cash flow forecasts prepared by management and evaluated the integrity and
                                            arithmetical accuracy of the model.
●
We
                                            evaluated the key assumptions used in the model to estimate future cash flows for a reasonable
                                            period of time, not exceeding 12 months from the date of the consolidated statements of financial
                                            position, by comparing assumptions used by management against budgets, economic and industry
                                            indicators and publicly available information.
●
We
                                            evaluated the key assumptions pertaining to estimated cash flows from operating activities
                                            and expected cash flows from financing activities, comparing these to available market data,
                                            underlying agreements, private placement raises and subsequent events thereafter. We assessed
                                            the adequacy of the going concern disclosures included in Note 1 of the consolidated financial
                                            statements and consider these to appropriately reflect the assessments that management has
                                            performed.
4
| PNRL / Year ended 2022 and 2021
Reverse
Acquisition of North American Nickel Ltd. - Fair Value of Consideration Received and Net Assets Acquired
Critical
Audit Matter Description
On
April 26, 2022, Premium Nickel Resources Corp. ("PNRC") and North American Nickel Inc. ("NAN") entered into a
definitive amalgamation agreement pursuant to which PNRC would go-public by way of a reverse takeover of NAN. Effective August 3, 2022,
NAN completed the 100% acquisition of the outstanding shares of PNRC for consideration in the amount of $39,142,383 and changed its name
to Premium Nickel Resources Ltd. The substance of the transaction is reverse acquisition of a non-operating company and has been accounted
for as an asset acquisition with NAN being identified as the accounting acquiree and the equity consideration being measured at fair
value ("FV") in accordance with IFRS 2. Refer to note 4 of the consolidated financial statements for further details.
This
matter represented an area of significant risk of material misstatement, given the auditing of the reverse acquisition is complex
due to the subjective nature of estimating the fair values of net assets acquired as at the date of the acquisition, particularly
the exploration and evaluation assets, and fair value of consideration received. Significant auditor attention is required to
evaluate the results of our audit procedures and assess the Company's determination of the fair value of the net assets
acquired and fair value of consideration received.
Audit
Response
We
responded to this matter by performing procedures in relation to fair value of assets acquired and consideration received. Our audit
work in relation to this included, but was not restricted to, the following:
●
We obtained and evaluated management's assessment over appropriate accounting treatment of the transaction;
●
We reviewed the amalgamation agreement to obtain an understanding of the key terms and conditions to identify the necessary accounting considerations and identification of assets and liabilities acquired;
●
With the assistance of our valuation specialists, we evaluated whether the fair value of consideration has been appropriately valued;
●
We performed audit procedures to validate the fair value of net assets acquired, specifically the fair value of exploration and evaluation assets, which involved evaluating budgeted expenditures, work plans, and conducting independent research of transactions in respective geographic regions; and
●
We assessed the adequacy of the Company's disclosure included in note 4, Amalgamation, of the accompanying consolidated financial statements in relation to this matter.
Chartered
Professional Accountants
Licensed Public Accountants
We
have served as the Company's auditor since 2022.
Ottawa,
Canada
May
2, 2023
PCAOB
ID:
1930
5
| PNRL / Year ended 2022 and 2021
Formerly
"North American Nickel Inc."
Consolidated
Statements of Financial Position
(Expressed in Canadian dollars)
Notes
As at December 31, 2022
As at December 31, 2021
ASSETS
CURRENT ASSETS
Cash
5,162,991
1,990,203
Prepaid expenses
470,725
8,664
Other receivables
5
804,630
139,630
TOTAL CURRENT ASSETS
6,438,346
2,138,497
NON-CURRENT ASSETS
Exploration and evaluation assets
6
31,823,982
3,099,926
Property, plant and equipment
7
3,394,670
-
TOTAL NON-CURRENT ASSETS
35,218,652
3,099,926
TOTAL ASSETS
41,656,998
5,238,423
LIABILITIES
CURRENT LIABILITIES
Trade payables and accrued liabilities
8
4,025,716
580,486
Current portion of lease Liability
10
1,365,697
-
Promissory note
9
7,070,959
-
TOTAL CURRENT LIABILITIES
12,462,372
580,486
NON-CURRENT LIABILITIES
Vehicle financing
164,644
-
Provision for leave and severance
177,941
-
Lease liability
10
1,365,697
-
Deferred share units liability
11
298,000
Financial liability – warrant
-
8,974,901
TOTAL NON-CURRENT LIABILITIES
2,006,282
8,974,901
TOTAL LIABILITIES
14,468,654
9,555,387
SHAREHOLDERS' EQUITY (DEFICIENCY)
Share capital – common
11
91,144,268
7,952,675
Share capital – preferred
11
31,516
-
Reserve
15,257,140
1,261,891
Deficit
(
78,092,605
)
(
13,482,624
)
Foreign currency translation reserve
(
1,151,975
)
(
48,906
)
TOTAL SHAREHOLDERS' EQUITY (DEFICIENCY)
27,188,344
(
4,316,964
)
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
41,656,998
5,238,423
Nature
of Operations and Going Concern (Note 1)
Subsequent
Events (Note 18)
The
accompanying notes are an integral part of these Consolidated Financial Statements. Approved by the Board of Directors on May 1, 2023
"
signed"
"
signed"
Keith
Morrison Don Newberry
Chief
Executive Officer Audit Committee Chair
6
| PNRL / Year ended 2022 and 2021
Formerly
"North American Nickel Inc.
Consolidated
Statements of Comprehensive Loss
(Expressed in Canadian dollars)
Year ended
Year ended
Notes
December 31, 2022
December 31, 2021
EXPENSES
Corporate and administration expenses
(
3,317,039
)
(
564,666
)
Management fees
12
(
2,418,984
)
(
675,001
)
Due diligence BCL
(
18,039
)
(
138,935
)
Advisory and consultancy
(
1,895,004
)
(
357,980
)
Depreciation
7
(
96,543
)
-
General exploration expenses
(
69,366
)
-
Interest and bank charges
(
93,937
)
(
2,511
)
Share-based payment
11
(
7,731,117
)
(
1,261,891
)
Deferred share units granted
11
(
298,000
)
-
Warrant fair value movement
11
8,974,901
(
6,345,310
)
Net foreign exchange gain (loss)
143,777
(
13,311
)
(
6,819,351
)
(
9,359,605
)
OTHER ITEMS
Interest expenses and other income
(
416,703
)
-
Acquisition loss on RTO
4
(
29,174,415
)
-
NET LOSS FOR THE YEAR
(
36,410,469
)
(
9,359,605
)
OTHER COMPREHENSIVE LOSS
Exchange differences on translation of foreign operations
(
1,103,069
)
(
48,906
)
TOTAL COMPREHENSIVE LOSS FOR THE YEAR
(
37,513,538
)
(
9,408,511
)
Basic and diluted loss per share
(
0.34
)
(
0.13
)
Weighted average number of common shares outstanding - basic
109,661,379
72,197,650
The
accompanying notes are an integral part of these Consolidated Financial Statements.
7
| PNRL / Year ended 2022 and 2021
Formerly
"North American Nickel Inc.
Consolidated
Statements of Changes in Shareholders' Equity (Deficiency)
(Expressed
in Canadian dollars)
Notes
Number of Shares
Share Capital
Preferred shares
Reserve
Deficit
Foreign Currency Translation Reserve
Total
Shareholders' Equity (Deficiency)
BALXBRLANCE AS AT
DECEMBER 31, 2020
11
64,083,487
1,468,174
-
-
(
4,123,019
)
-
(
2,654,845
)
Net Loss for the year
-
-
-
(
9,359,605
)
-
(
9,359,605
)
Share capital issued through private placement
12,596,421
6,771,729
-
-
6,771,729
Share issue costs
(
287,228
)
-
-
(
287,228
)
Share-based payment
1,261,891
1,261,891
Exchange differences on translation of foreign operations
(
48,906
)
(
48,906
)
BALANCE AS AT DECEMBER 31, 2021
76,679,908
7,952,675
-
1,261,891
(
13,482,624
)
(
48,906
)
(
4,316,964
)
Net loss for the year
(
36,410,469
)
(
36,410,469
)
Share capital issued through private placement
8,936,167
22,388,599
22,388,599
Share issue costs
(
1,535,727
)
(
1,535,727
)
Acquisition of NAN
4
Cancel PNRC shares held by NAN
(
7,667,707
)
(
19,710,608
)
(
19,710,608
)
Cancel PNRC warrant held by NAN
(
28,275,255
)
28,275,255
PNRC shares
exchanged
(
77,948,368
)
-
PNRL shares received in exchange
82,157,536
-
Outstanding shares of NAN acquired in RTO
31,748,399
77,431,152
31,516
9,665,577
87,128,245
Exercise of warrants
1,236,408
569,399
569,399
FV of exercised warrants
2,321,514
(
2,321,514
)
-
Exercise of options
1,379,000
723,076
723,076
FV of exercised options
1,004,188
(
1,004,188
)
-
Expired options
(
75,743
)
75,743
-
Share-based payment
7,731,117
7,731,117
Exchange differences on translation of foreign operations
(
1,103,069
)
(
1,103,069
)
BALANCE AS AT DECEMBER 31, 2022
11
116,521,343
91,144,268
31,516
15,257,140
(
78,092,605
)
(
1,151,975
)
27,188,344
The
accompanying notes are an integral part of these Consolidated Financial Statements.
8
| PNRL / Year ended 2022 and 2021
Formerly
"North American Nickel Inc.
Consolidated
Statements of Cash Flows
(Expressed in Canadian dollars)
Year ended
Year ended
Notes
December 31, 2022
December 31, 2021
OPERATING ACTIVITIES
Total net loss for the year
(
36,410,469
)
(
9,359,605
)
Items not affecting cash:
Share-based payment
7,731,117
1,261,891
Deferred share units granted
298,000
Depreciation
96,543
-
Provision for leave and severance
177,941
-
Accrued interest expense of Promissory note
70,959
Warrant fair value movement
(
8,974,901
)
6,345,310
Loss on acquisition
4
29,174,415
-
Changes in working capital
Prepaid expenses and other receivables
(
1,127,061
)
(
121,241
)
Trade payables and accrued expenses
3,445,230
419,326
Net cash used in operating activities
(
5,518,226
)
(
1,454,319
)
INVESTING ACTIVITIES
Additions to property, plant and equipment
(
737,271
)
-
Additions to Expenditures on exploration and evaluation assets
(
28,924,135
)
(
3,099,926
)
Cash received though RTO transaction
4
11,051,917
-
Net cash used in investing activities
(
18,609,489
)
(
3,099,926
)
FINANCING ACTIVITIES
Proceeds from issuance of common shares
23,404,857
6,771,729
Share issue costs
(
1,535,727
)
(
287,228
)
Vehicle loan financing
164,644
Promissory note financing
6,740,000
-
Net cash provided by financing activities
28,773,774
6,484,501
Impact of currency translation for the foreign operations
(
1,473,271
)
(
48,906
)
Change in cash for the year
3,172,788
1,881,350
Cash at the beginning of the year
1,990,203
108,853
Cash at the end of the year
5,162,991
1,990,203
The
accompanying notes are an integral part of these Consolidated Financial Statements.
9
| PNRL / Year ended 2022 and 2021
Formerly
"North American Nickel Inc.
Notes
to the Consolidated Financial statements
For the years ended December 31, 2022 and 2021
(Expressed in Canadian dollars)
1.
NATURE OF OPERATIONS AND GOING CONCERN
Premium
Nickel Resources Ltd. (TSXV: PNRL) (formerly, North American Nickel Inc.) (the "Company" or "PNRL") was founded
upon the closing of a reverse takeover transaction (the "
RTO
") whereby Premium Nickel Resources Corporation ("
PNRC
")
and 1000178269 Ontario Inc., a wholly owned subsidiary of North American Nickel Inc. ("
NAN
"), amalgamated by way of
a triangular amalgamation under the Business Corporations Act (Ontario) ("
OBCA
") (the "
Amalgamation
")
on August 3, 2022. (Note 4). Prior to the RTO, the common shares of NAN were listed and posted for trading on the TSX Venture Exchange
(the "
Exchange
") under the symbol "NAN".
Prior
to the RTO, PNRC was a private company existing under the OBCA to evaluate, acquire, improve and reopen, assuming economic feasibility,
a combination of certain assets of BCL Limited ("
BCL
") and Tati Nickel Mining Company ("
TNMC
")
that were in liquidation in Botswana. The initial investors of PNRC include NAN, several resource investors and local Namibian and Botswana
mine operators.
In
connection with the RTO, the Company was continued under the OBCA and changed its name from "North American Nickel Inc."
to "Premium Nickel Resources Ltd."
Currently,
the Company's principal business activity is the exploration and development of mineral properties in Botswana through its wholly-owned
subsidiaries.
The
following corporate structure chart sets out details of the direct and indirect ownership of the principal subsidiaries of the Company:
Notes:
(1)
Premium Nickel Resources Proprietary Limited owns the Selebi
Mines (as defined below).
(2)
Premium Nickel Group Proprietary Limited owns the Selkirk mine.
10
| PNRL / Year ended 2022 and 2021
Formerly
"North American Nickel Inc.
Notes
to the Consolidated Financial statements
For the years ended December 31, 2022 and 2021
(Expressed in Canadian dollars)
The
Company has its head and registered office at One First Canadian Place, 100 King Street West, Suite 3400, Toronto, Ontario, Canada, M5X
1A4.
On
September 28, 2021, PNRC executed a definitive asset purchase agreement (the "
Selebi APA
") with the liquidator of
BCL to acquire the Selebi and Selebi North (together, the "Selebi Assets") nickel-copper-cobalt ("
Ni-Cu-Co
")
deposits and related infrastructure formerly operated by BCL. On January 31, 2022, PNRC closed the transaction and ownership of the assets
was transferred to the Company.
PNRC
also negotiated a separate asset purchase agreement to finalize terms for any prioritized assets formerly operated by TNMC. On August
22, 2022, the Company announced the completion of its acquisition of the nickel, copper, cobalt, platinum-group elements ("
Ni-Cu-Co-PGE
")
Selkirk mine in Botswana, together with associated infrastructure and four surrounding prospecting licenses (collectively, the "
Selkirk
Assets
"). The acquisition was completed pursuant to the PNRC's previously announced asset purchase agreement with the
liquidator of TNMC on January 20, 2022. With the acquisition now complete, ownership of the Selkirk mine has been transferred to the
Company
The
Company continues to monitor the global COVID-19 developments and is committed to working with health and safety as a priority and in
full respect of all government and local COVID-19 protocol requirements. PNRL has developed COVID-19 travel, living and working protocols
and is ensuring integration of those protocols with the currently applicable protocols of the Government of Botswana and surrounding
communities. The impact of COVID-19 on the Company's operation was mainly the increase in travelling costs due to travel restriction
as well as inflated material cost for exploration and drilling work.
Going
Concern
The
Company, being in the exploration and redevelopment stage, is subject to risks and challenges similar to companies in a comparable stage
of exploration and development. These risks include the challenges of securing adequate capital for exploration, development and operational
risks inherent in the mining industry, and global economic and metal price volatility and there is no assurance management will be successful
in its endeavors. As at December 31, 2022, the Company had no source of operating cash flows, nor any credit line currently in place.
The Company incurred a net loss of $
36,410,469
for the year ended December 31, 2022 ($
9,359,605
) for the year ended December 31, 2021).
The Company's committed cash obligations and expected level of expenses will vary depending on its operations.
These
consolidated financial statements have been prepared on the assumption that the Company will continue as a going concern, meaning it
will continue in operation for the foreseeable future and will be able to realize assets and discharge liabilities in the ordinary course
of operations. The ability of the Company to continue operations as a going concern is ultimately dependent upon achieving profitable
operations and its ability to obtain adequate financing. To date, the Company has not generated profitable operations from its resource
activities and will need to invest additional funds in carrying out its planned exploration, development and operational activities.
It is not possible to predict whether financing efforts will be successful or if the Company will attain a profitable level of operation.
These material uncertainties cast substantial doubt about the Company's ability to continue as a going concern. These consolidated
financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification
of liabilities and the reported expenses and comprehensive loss that might be necessary should the Company be unable to continue as a
going concern. These adjustments could be material.
The
evaluation properties in which the Company currently has an interest are in pre-revenue exploration stage. As such, the Company is dependent
on external financing to fund its activities. In order to carry out the planned exploration and cover administrative costs, the Company
will use its existing working capital and raise additional amounts as needed. Although the Company has been successful in its past fundraising
activities, there is no assurance as to the success of future fundraising efforts or as to the sufficiency of funds raised in the future.
The Company will continue to assess new properties and seek to acquire interests in additional properties if there is sufficient geologic
or economic potential and if adequate financial resources are available to do so.
11
| PNRL / Year ended 2022 and 2021
Formerly
"North American Nickel Inc.
Notes
to the Consolidated Financial statements
For the years ended December 31, 2022 and 2021
(Expressed in Canadian dollars)
The
consolidated financial statements were approved and authorized for issuance by the Board of Directors of the Company on May 1, 2023.
The discussion in the notes to the consolidated financial statements is stated in Canadian dollars.
2.
BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES
(a)
Statement of Compliance
These
consolidated financial statements were prepared in accordance with International Financial Reporting Standards ("
IFRS
")
as issued by the International Accounting Standards Board (the "IASB") and Interpretations of the International Financial
Reporting Interpretations Committee ("IFRIC").
(b)
Basis of preparation
These
consolidated financial statements have been prepared under the historical cost convention, modified by the revaluation of any financial
assets and financial liabilities where applicable. The preparation of consolidated financial statements in conformity with IFRS requires
the use of certain critical accounting estimates. It also requires management to exercise judgment in the process of applying the Company's
accounting policies. These areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant
to the consolidated financial statements, are disclosed in note 3.
(c)
Basis of consolidation
These
consolidated financial statements include the financial statements of the Company and its wholly owned subsidiaries. All intercompany
transactions, balances, income and expenses are eliminated upon consolidation.
Effective
August 3, 2022, NAN completed the
100
%
acquisition of the outstanding shares of PNRC (Note 4). As the shareholders of PNRC obtained control
of the Company through the exchange of their shares of PNRC for shares of NAN, the acquisition of PNRC has been accounted for in these
consolidated financial statements as a reverse takeover. Consequently, the consolidated statements of loss and cash flows reflect the
results from the operations and cash flows of PNRC, the legal subsidiary, for the year ended December 31, 2022 and 2021, combined with
those of NAN, the legal parent, from the acquisition on August 3, 2022 to December 31, 2022, in accordance with generally accepted accounting
principles for reverse takeovers. The comparative balance sheet reflects the balance sheet of PNRC as at December 31, 2021.
(d)
Foreign currency translation
The
Company's functional and presentation currency is the Canadian dollar. Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the date of the transaction. Foreign currency monetary items are translated at the year-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 statement
of comprehensive loss in the period in which they arise, except where deferred in equity as a qualifying cash flow or net investment
hedge.
Exchange
differences arising on the translation of non-monetary items are recognized in other comprehensive income in the statement of comprehensive
loss to the extent that gains and losses arising on those non-monetary items are also recognized in other comprehensive income. Where
the non-monetary gain or loss is recognized in profit or loss, the exchange component is also recognized in profit or loss.
12
| PNRL / Year ended 2022 and 2021
Formerly
"North American Nickel Inc.
Notes
to the Consolidated Financial statements
For the years ended December 31, 2022 and 2021
(Expressed in Canadian dollars)
(e)
Foreign operations
In
the Company's consolidated financial statements, all assets, liabilities and transactions of the Company's entities with
a functional currency other than the Canadian dollar are translated into Canadian dollars upon consolidation. The functional currency
of the Company's subsidiaries in Barbados is the US dollar, and the Botswana Pula (BWP) for the subsidiaries in Botswana during
the reporting period. On consolidation, assets and liabilities have been translated into Canadian dollars at the closing rate on the
reporting date. Fair value adjustments arising on the acquisition of a foreign entity have been treated as assets and liabilities of
the foreign entity and translated into Canadian dollars at the closing rate on the reporting date. Income and expenses have been translated
into Canadian dollars at the average rate over the reporting period. Exchange differences are charged or credited to other comprehensive
loss and recognized in the currency translation reserve in equity. On disposal of a foreign operation, the related cumulative translation
differences recognized in equity are reclassified to profit or loss and are recognized as part of the gain or loss on disposal.
(f)
Financial instruments
Classification
The
Company classifies its financial instruments in the following categories: at fair value through profit and loss ("FVTPL"),
at fair value through other comprehensive income (loss) ("FVTOCI") or at amortized cost. The Company determines the classification
of financial assets at initial recognition. The classification of debt instruments is driven by the Company's business model for
managing the financial assets and their contractual cash flow characteristics. Equity instruments that are held for trading are classified
as FVTPL. For other equity instruments, on the day of acquisition, the Company can make an irrevocable election (on an instrument-by-instrument
basis) to designate them as at FVTOCI. Financial liabilities are measured at amortized cost, unless they are required to be measured
at FVTPL (such as instruments held for trading or derivatives) or the Company has opted to measure them at FVTPL.
The
following table shows the classification of the Company's financial assets and liabilities:
Financial
    asset/liability
Classification
Cash
FVTPL
Trade
    payables and accrued liabilities
Amortized
    cost
Lease
    liability
Amortized
    cost
Promissory
    note
Amortized
    cost
Vehicle
    financing
Amortized
    cost
Financial
    liability – warrant
FVTPL
Deferred
    share unit liability
FVTPL
Measurement
Financial
assets and liabilities at amortized cost
Financial
assets and liabilities at amortized cost are initially recognized at fair value plus or minus transaction costs,
respectively,
and subsequently carried at amortized cost less any impairment.
Financial
assets and liabilities at FVTPL
Financial
assets and liabilities carried at FVTPL are initially recorded at fair value and transaction costs are expensed in profit or loss. Realized
and unrealized gains and losses arising from changes in the fair value of the financial assets and liabilities held at FVTPL are included
in the statements of comprehensive loss in the period in which they arise.
13
| PNRL / Year ended 2022 and 2021
Formerly
"North American Nickel Inc.
Notes
to the Consolidated Financial statements
For the years ended December 31, 2022 and 2021
(Expressed in Canadian dollars)
Impairment
of financial assets at amortized cost
An
'expected credit loss' impairment model applies that requires a loss allowance to be recognized based on expected credit
losses. The estimated present value of future cash flows associated with the asset is determined and an
impairment loss is
recognized for the difference between this amount and the carrying amount as follows: the carrying amount of the asset is reduced to
estimated present value of the future cash flows associated with the asset, discounted at the financial asset's original
effective interest rate, either directly or through the use of an allowance account and the resulting loss is recognized in profit
or loss for the period.
In
a subsequent period, if the amount of the impairment loss related to financial assets measured at amortized cost decreases, the previously
recognized impairment loss is reversed through profit or loss to the extent that the carrying amount of the investment at the date the
impairment is reversed does not exceed what the amortized cost would have been had the impairment not been recognized.
Derecognition
Financial assets
The
Company derecognizes financial assets only when the contractual rights to cash flows from the financial assets expire, or when it transfers
the financial assets and substantially all of the associated risks and rewards of ownership to another party. Gains and losses on derecognition
are generally recognized in the statements of comprehensive loss.
Investments
are derecognized when the rights to receive cash flows from the investments have expired or the Company has transferred the financial
asset and the transfer qualifies for derecognition.
Financial
liabilities
Financial
liabilities are derecognized when, and only when, the Company's obligations are discharged, cancelled or they expire. The difference
between the carrying amount of the financial liability derecognized and the consideration paid and payable is recognized in the Statement
of Comprehensive Loss.
(g)
Exploration and evaluation assets
Exploration
and evaluation assets include the costs of acquiring licenses, costs associated with exploration and evaluation activity less accumulated
impairment losses and the fair value (at acquisition date) of exploration and evaluation assets acquired in a business combination. Exploration
and evaluation expenditures are initially capitalized.
Costs incurred before the Company has obtained the legal rights to explore an
area are recognized in profit or loss.
Government
tax credits received are generally recorded as a reduction to the cumulative costs incurred and capitalized on the related property.
Exploration
and evaluation assets are assessed for impairment if (i) sufficient data exists to determine technical feasibility and commercial viability,
and (ii) facts, events and circumstances suggest that the carrying amount exceeds the recoverable amount.
Once
the technical feasibility and commercial viability of the extraction of mineral resources in an area of interest are demonstrable, exploration
and evaluation assets attributable to that area of interest are first tested for impairment and then reclassified to mining property
and development assets within property, plant and equipment.
Recoverability
of the carrying amount of any exploration and evaluation assets is dependent on successful development and commercial exploitation, or
alternatively, sale of the respective areas of interest.
The
Company may occasionally enter into farm-out arrangements, whereby it will transfer part of an interest, as consideration, for an agreement
by the farmee to meet certain exploration and evaluation expenditures which would have otherwise been undertaken by the Company. The
Company does not record any expenditures made by the farmee on its behalf. Any cash consideration received from the agreement is credited
against the costs previously capitalized to the mineral interest given up by the Company, with any excess consideration accounted for
in profit.
14
| PNRL / Year ended 2022 and 2021
Formerly
"North American Nickel Inc.
Notes
to the Consolidated Financial statements
For the years ended December 31, 2022 and 2021
(Expressed in Canadian dollars)
When
a project is deemed to no longer have commercially viable prospects to the Company, exploration and evaluation expenditures in respect
of that project are deemed to be impaired. As a result, those exploration and evaluation expenditure costs, in excess of estimated recoveries,
are written off to the consolidated statement of comprehensive loss.
(h)
Impairment of assets
Non-financial
assets, including exploration and evaluation assets and property, plant and equipment, are subject to impairment tests whenever events
or changes in circumstances indicate that their carrying amount may not be recoverable. Where the carrying value of an asset exceeds
its recoverable amount, which is the higher of value in use and fair value less costs to sell, the asset is written down accordingly.
Where
it is not possible to estimate the recoverable amount of an individual asset, the impairment test is carried out on the
asset's cash-generating unit, which is the lowest group of assets in which the asset belongs and for which
there are
separately identifiable cash inflows that are largely independent of the cash inflows from other assets.
An
impairment loss is charged to the profit or loss, except to the extent the loss reverses gains previously recognized in other comprehensive
loss
(i)
Leases
At
commencement of a contract, the Company assesses whether a contract is, or contains, a lease by determining whether the contract conveys
the right to control the use of an identified asset for a period of time in exchange for consideration. A right-of-use (the "ROU
") asset and lease liability are recognized at the lease commencement date. The lease liability is initially measured at the present
value of all future lease payments that have not been paid as of the commencement date of the lease, discounted using the Company's
incremental borrowing rate, unless the rate implicit in the lease is readily determinable. The ROU asset is initially measured at cost,
which is calculated as the initial amount of the lease liability, with an adjustment for any initial direct costs incurred, plus adjustments
for any lease payments made in advance of the commencement date, and less any lease incentives received. Subsequent to initial recognition,
the ROU asset is depreciated on a straight-line basis over the term of the lease or the estimated useful life, with inclusion for any
options to extend that the Company reasonably expects to exercise.
ROU
assets are tested for impairment in accordance with IAS 36 Impairment of Assets. The right-of-use asset is periodically reduced by impairment
losses, if any, and adjusted for certain remeasurements of the lease liability. The lease liability is remeasured when there is a change
in future lease payments arising from a change in an index or rate, if there is a change in the Company's estimate of the amount
expected to be payable under a residual value guarantee, or if the Company changes its assessment of whether it will exercise a purchase,
extension or termination option. These adjustments are recorded through profit or loss.
(j)
Property, plant and equipment
Property,
Plant and Equipment is stated at historical cost less accumulated depreciation and accumulated impairment losses.
Subsequent
costs are included in the asset's carrying amount or recognized as a separate asset, as appropriate, only when it is probable that
future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying
amount of a significant replaced part is derecognized. All other repairs and maintenance are charged to the consolidated statement of
comprehensive loss during the financial period in which they are incurred. Gains and losses on disposals are determined by comparing
the proceeds with the carrying amount and are recognized in profit or loss.
15
| PNRL / Year ended 2022 and 2021
Formerly
"North American Nickel Inc.
Notes
to the Consolidated Financial statements
For the years ended December 31, 2022 and 2021
(Expressed in Canadian dollars)
Depreciation
is calculated on a straight-line method to charge the cost, less residual value, of the assets to their residual values over their estimated
useful lives. The depreciation rate applicable to each category of property, plant and equipment is as follows:
Equipment
Estimated
    useful life (years)
Exploration
    equipment
5
Computer
    software
2
Computer
    equipment
1
-
2
Vehicles
4
Furniture
    and fixture
10
Buildings
25
(k)
Share capital
The
Company's common shares and share warrants are classified as equity instruments.
Incremental
costs directly attributable to the issue of new shares, warrants or options are shown in equity as a deduction from the proceeds.
Proceeds
received on the issuance of units, consisting of common shares and warrants are allocated to share capital.
(l)
Share-based payments
Where
equity-settled share options are awarded to employees, the fair value of the options at the date of grant is recognized over the vesting
period. Performance vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each
reporting date so that, ultimately, the cumulative amount recognized over the vesting period is based on the number of options that eventually
vest. Non-vesting conditions and market vesting conditions are factored into the fair value of the options granted. As long as all other
vesting conditions are satisfied, a charge is made irrespective of whether these non-vesting and market vesting conditions are satisfied.
The cumulative expense is not adjusted for failure to achieve a market vesting condition or where a non-vesting condition is not satisfied.
Where
the terms and conditions of options are modified, the increase in the fair value of the options, measured immediately before and after
the modification, is also recognized over the remaining vesting period.
Where
equity instruments are granted to non-employees, they are recorded at the fair value of the goods or services received. Amounts related
to the issuance of shares are recorded as a reduction of share capital.
When
the value of goods and services received in exchange for the share-based payment cannot be reliably estimated, the fair value is measured
by use of a valuation model. The expected life used in the model is adjusted, based on management's best estimate, for the effects
of non-transferability, exercise restrictions, and behavioural considerations.
All
equity-settled share-based payments are reflected in share-based payments reserve, until exercised. Upon exercise shares are issued from
the treasury and the amount reflected in share-based payments reserve is credited to share capital along with any consideration paid.
(m)
Deferred Share Units
("DSUs)"
In
the year ended December 31, 2022, the Company approved the adoption of a DSU plan. In accordance with IFRS 2 Share Based Payments, this
plan is a cash-settled share-based compensation program whereby the Company records the fair value of the liability at the date upon
which it is incurred and adjusts the liability to the fair value at the end of each reporting period and at the date of settlement, with
any changes in fair value recognized in profit or loss for the period.
16
| PNRL / Year ended 2022 and 2021
Formerly
"North American Nickel Inc.
Notes
to the Consolidated Financial statements
For the years ended December 31, 2022 and 2021
(Expressed in Canadian dollars)
The
DSU Plan enables the Company upon approval by the Directors to grant DSU's to eligible non-management directors. Upon granting
DSU's, the Company records stock-based compensation based on the number of units granted multiplied by the volume weighted average
price of the Company's common shares for the last five trading days ("5-day-VWAP") immediately preceding the date of
the grant.
The
DSUs credited to the account of a director may only be redeemed following the date upon which the holder ceases to be a director. Depending
upon the country of residence of a director, the DSUs may be redeemed at any time prior to December 15 in the calendar year following
the year in which the holder ceases to be a director, and may be redeemed in as many as four installments. Upon redemption, the holder
is entitled to a cash payment equal to the number of units redeemed multiplied by the 5-day-VWAP of the Company's common shares
on that date. The Company may elect, in its sole discretion, to settle the value of the DSUs redeemed in the Company's common shares
on a one-for-one basis, provided shareholder approval has been obtained on or prior to the relevant redemption date.
(n)
Loss per share
The
Company uses the treasury stock method to compute the dilutive effect of options, warrants and similar instruments. Under this method,
the dilutive effect on loss per common share is recognized on the use of the proceeds that could be obtained upon exercise of options,
warrants and similar instruments. It assumes that the proceeds would be used to purchase common shares at the average market price during
the period.
Basic
loss per common share is calculated using the weighted average number of common shares outstanding during the period and does not include
outstanding options and warrants. Dilutive loss per common share is not presented differently from basic loss per share as the conversion
of outstanding stock options and warrants into common shares would be anti-dilutive.
(o)
Income taxes
Income
tax expense comprises current income and deferred income tax. Current tax and deferred tax are recognized in net loss except to the extent
that it arises in a business combination, or from items recognized directly in equity or other comprehensive loss
Current
income tax assets and liabilities for the current period are measured at the amount expected to be recovered from or paid to the taxation
authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting
date, in the countries where the Company operates and generates taxable income.
Current
income tax relating to items recognized directly in other comprehensive losses equity is recognized in other comprehensive loss or equity
and not in profit or loss. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable
tax regulations are subject to interpretation and establishes provisions where appropriate.
Deferred
income tax is calculated using the asset and liability method of temporary differences at the reporting date between the tax bases of
assets and liabilities and their carrying amounts for financial reporting purposes.
The
carrying amount of deferred income tax assets is reviewed at the end of each reporting period and recognized only to the extent that
it is probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilized.
Deferred
income 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 tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting
period.
17
| PNRL / Year ended 2022 and 2021
Formerly
"North American Nickel Inc.
Notes
to the Consolidated Financial statements
For the years ended December 31, 2022 and 2021
(Expressed in Canadian dollars)
Deferred
income tax assets and deferred income tax liabilities are offset only if a legally enforceable right exists to set off current tax assets
against current income tax liabilities and the deferred income taxes relate to the same taxable entity and the same taxation authority.
A
deferred tax asset is recognized for all deductible temporary differences to the extent that it is probable that taxable profit will
be available against which the deductible temporary difference can be utilized. We have not recognized any deferred tax asset as at December
31, 2022 as there are currently no sources of taxable profit currently available to the Company. We will continue to reassess whether
the tax attributes meet the criteria for recognition as a deferred tax asset.
(p)
Accounting standards and amendments issued but not yet effective
Certain
pronouncements were issued by the IASB or the IFRIC that are mandatory for accounting periods commencing on or after January 1, 2023.
Many are not applicable or do not have a significant impact to the Company and have been excluded. The following have not yet been adopted
and are being evaluated to determine their impact on the Company.
IAS
1 – Presentation of Financial Statements ("IAS 1") was amended in January 2020 to provide a more general approach to
the classification of liabilities under IAS 1 based on the contractual arrangements in place at the reporting date. The amendments clarify
that the classification of liabilities as current or non-current is based solely on a company's right to defer settlement at the
reporting date. The right needs to be unconditional and must have substance. The amendments also clarify that the transfer of a company's
own equity instruments is regarded as settlement of a liability, unless it results from the exercise of a conversion option meeting the
definition of an equity instrument. The amendments are effective for annual periods beginning on January 1, 2024.
IAS
1 – In February 2021, the IASB issued 'Disclosure of Accounting Policies' with amendments that are intended to help
preparers in deciding which accounting policies to disclose in their financial statements. The amendments are effective for year ends
beginning on or after January 1, 2023.
IAS
8 – In February 2021, the IASB issued 'Definition of Accounting Estimates' to help entities distinguish between accounting
policies and accounting estimates. The amendments are effective for year ends beginning on or after beginning on or after January 1,
2023.
3.
CRITICAL ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS
The
preparation of the consolidated financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions
that can affect reported amounts of assets, liabilities, revenue and expenses and the accompanying disclosures. Estimates and assumptions
are continuously evaluated and are based on management's historical experience and on other assumptions believed to be reasonable
under the circumstances. However, different judgments, estimates and assumptions could result in outcomes that require a material adjustment
to the carrying amount of assets or liabilities affected in future periods.
The
area involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated
financial statements are:
Critical
Accounting Judgement:
(a) RTO – fair value
Fair
value considerations for the RTO transactions are assessed in accordance with International Financial Reporting Standards (IFRS). These
considerations are based on various factors such as the fair value of the assets acquired or liabilities assumed, the fair value of equity
instruments issued, and any related acquisition costs.
18
| PNRL / Year ended 2022 and 2021
Formerly
"North American Nickel Inc.
Notes
to the Consolidated Financial statements
For the years ended December 31, 2022 and 2021
(Expressed in Canadian dollars)
The
assumptions and estimates used in arriving at fair value figures are based on management's judgments and relevant market data.
The fair value of the equity instruments issued is determined based on market prices or valuation techniques that take into account factors
such as expected share price volatility.
(b)
Recoverability of exploration and evaluation Assets
The
ultimate recoverability of the exploration and evaluation assets with a carrying value of $
31,823,982
at December 31, 2022, is dependent
upon the Company's ability to obtain the necessary financing to complete the exploration and development and commence profitable
production at its projects, or alternatively, upon the Company's ability to dispose of its interests therein on an advantageous
basis. A review of the indicators of potential impairment is carried out at least at each period end.
Management
undertakes a periodic review of these assets to determine whether any indication of impairment exists. Where an indicator of impairment
exists, a formal estimate of the recoverable amount of the assets is made. An impairment loss is recognized when the carrying value of
the assets is higher than the recoverable amount and when mineral license tenements are relinquished or have lapsed. In undertaking this
review, management of the Company is required to make significant estimates of, among other things, discount rates, commodity prices,
availability of financing, future operating and capital costs and all aspects of project advancement. These estimates are subject to
various risks and uncertainties, which may ultimately have an effect on the expected recoverability of the carrying values of the assets.
(c)
Restoration provisions
Management's
best estimates regarding the restoration provisions are based on the current economic environment. Changes in estimates of contamination,
restoration standards and restoration activities result in changes to provisions from period to period. Actual restoration provisions
will ultimately depend on future market prices for future restoration obligations. Management has determined that the Company has no
restoration obligations at December 31, 2022.
(d)
Going concern
Consolidated
financial statements are prepared on a going concern basis unless management either intends to liquidate the Company or has no realistic
alternative to do so. Assessment of the Company's ability to continue as a going concern requires the consideration of all available
information about the future, which is at least, but not limited to, twelve months from the end of the reporting period. This information
includes estimates of future cash flows and other factors, the outcome of which is uncertain. When management is aware, in making its
assessment, of material uncertainties related to events or conditions that may cast substantial doubt upon the Company's ability
to continue as a going concern those uncertainties are disclosed.
Critical
Accounting Estimates
(a)
Valuation of share-based compensation
The
Company estimates the fair value of warrants and options using the Black-Scholes Option Pricing Model which requires significant estimation
around assumptions and inputs such as expected term to maturity, expected volatility and expected forfeiture rates. Note 8 of the consolidated
financial statements contains further details of significant assumptions applied to these areas of estimation.
(b)
Deferred income tax
Tax
benefits from uncertain tax positions may be recognized when it is probable that the Company will be able to use deductible temporary
differences against taxable profit: (i) whether a tax position, based solely on its technical merits, is probable to be sustained upon
examination, and (ii) measuring the tax benefit as the expected value or most likely amount taking into consideration which method better
predicts the realized amounts upon ultimate settlement.
Furthermore,
the Corporation uses the asset and liability method in accounting for deferred income taxes and mining duties. Under this method, deferred
income taxes are recognized for future income tax.
19
| PNRL / Year ended 2022 and 2021
Formerly
"North American Nickel Inc.
Notes
to the Consolidated Financial statements
For the years ended December 31, 2022 and 2021
(Expressed in Canadian dollars)
In
preparing these estimates, management is required to interpret substantially enacted legislation as well as economic and business conditions
along with management's tax and corporate structure plans which may impact taxable income in future periods.
(c)
Estimated useful lives and depreciation of property, plant and equipment
Depreciation
of property, plant and equipment is dependent upon estimates of useful lives which are determined through the exercise of judgment. The
assessment of any impairment of these assets is dependent upon estimates of recoverable amounts that take into account factors such as
economic and market conditions and the useful lives of assets.
4.
AMALGAMATION
On
April 26, 2022, PNRC and NAN entered into a definitive amalgamation agreement (the "
Amalgamation Agreement
") in respect
of their previously-announced RTO transaction, pursuant to which PNRC would "go-public" by way of a reverse takeover of NAN.
Transaction
Particulars
Pursuant
to the Amalgamation Agreement:
(i)
NAN's
                                            subsidiary, 1000178269 Ontario Inc. ("
NAN Subco
"), amalgamated with PNRC
                                            under Section 174 of the OBCA to form one corporation;
(ii)
Holders
                                            of PNRC shares exchanged their shares at a rate of
1.054
shares of NAN for each share of
                                            PNRC (the "
Exchange Ratio
"), after giving effect to a
5-to-1
share consolidation
                                            for each outstanding share of NAN; and
(iii)
the
                                            transactions resulted in an RTO of the Company in accordance with the policies of the TSXV,
                                            all in the manner contemplated by, and pursuant to, the terms and conditions of the Amalgamation
                                            Agreement.
In
connection with the RTO, NAN has, among other things: (i) changed its name to "Premium Nickel Resources Ltd."; (ii) changed
its stock exchange ticker symbol to "PNRL"; and (iii) reconstituted the board of directors and management of the Company.
The outstanding options of PNRC immediately prior to the effective time of the RTO were exchanged and adjusted pursuant to the terms
of the Amalgamation Agreement such that holders thereof were entitled to acquire, following the closing of the RTO, options of the Company
after giving effect to the Exchange Ratio, as applicable.
Pursuant
to the Amalgamation Agreement, the Company issued
82,157,536
common shares of the Company (on a post-consolidation basis) in exchange
for
77,948,368
outstanding shares of PNRC immediately prior to the effective time of the RTO. Immediately after giving effect to the
RTO Transaction, the Company was owned approximately
72.1
% by persons who were shareholders of PNRC prior to the RTO and
27.9
% by persons
who were shareholders of NAN prior to the RTO.
Prior
to this exchange, NAN had
31,748,399
shares outstanding (on a post-consolidation basis). Taking into account the composition of the board
and senior management and the relative ownership percentages of NAN and PNRC shareholders in the newly combined enterprise, from an accounting
perspective PNRC is considered to have acquired NAN, and hence the transaction has been recorded as a reverse takeover.
The
substance of the transaction is a reverse acquisition of a public company. The transaction does not constitute a business acquisition
as NAN does not meet the definition of a business under IFRS 3 as it has no inputs or processes. As a result, the transaction is accounted
for as a capital transaction with NAN being identified as the accounting acquiree and the equity consideration being measured at fair
value ("
FV
").
The
purchase price has been determined based on the number of shares that PNRC would have had to issue on the date of closing to give the
owners of NAN the same percentage equity (
27.9
%) of the combined entity as they hold subsequent to the reverse takeover.
20
| PNRL / Year ended 2022 and 2021
Formerly
"North American Nickel Inc.
Notes
to the Consolidated Financial statements
For the years ended December 31, 2022 and 2021
(Expressed in Canadian dollars)
The
costs of the acquisition have been allocated as follows:
FV of shares transferred
$
77,431,152
FV of options, warrants and agent warrants
9,665,577
FV of preferred shares
31,516
Settlement of pre-existing relationship –
15
% warrant and shares*
(
47,985,863
)
Total FV of consideration transferred
$
39,142,383
Cash
$
11,051,917
Trade and other receivables
450,522
Property, plant and equipment
14,111
Trade payables and accrued liabilities
(
1,548,582
)
Net assets acquired
9,967,968
Loss on acquisition
29,174,415
$
39,142,383
*Pre-existing
relationship
Before
the closing of the RTO, NAN owned
7,667,707
common shares of PNRC and a
15
% warrant which entitled NAN to purchase common shares of PNRC,
for up to
15
% of the then outstanding capital of PNRC, upon payment of US $
10,000,000
prior to the fifth anniversary of the date of issue.
Prior to the date that the Amalgamation became effective, the PNRC shares and the
15
% warrant held by NAN were contributed to NAN Subco,
as part of the securities contribution, resulting in such securities being cancelled by operation of the triangular amalgamation.
Prior
to the RTO, the fair value of the
15
% warrant and the shares held by NAN were $
28,275,255
and $
19,710,608
, respectively. The fair value
of the shares was calculated based on the last offer price of PNRC financing prior to the RTO, and the fair value of the warrants was
calculated using the Black-Sholes Model with the following assumptions: expected life of
2.57
years, expected dividend yield of
0
%, a
risk free rate of
3.14
% and an expected volatility of
141.63
%. As they were the securities contributed by NAN on the closing of the RTO,
the fair value of the warrants and shares were included as part of the consideration on the acquisition date.
Pursuant
to the RTO, an aggregate of
8,827,250
options to purchase common shares of the Company ("
Replacement Options
") were
issued (on a post 5:1 consolidation basis) to the former holders of options to purchase common shares of PNRC (prior to the RTO) ("
PNRC
Options
") in exchange for
8,375,000
PNRC Options. The Replacement Options issued to the former holders of PNRC Options were
on the same terms and conditions as those exchanged by PNRC holders except all the previously unvested options vested immediately. Immediately
prior to the completion of the RTO, PNRC had
2,383,333
unvested options outstanding which re-evaluated at a FV of $
5,138,022
upon the
completion of the RTO according to IFRS2. See Note 11 (d) for details.
Given
that the RTO has been accounted for as a reverse takeover of NAN by PNRC, from an accounting perspective, PNRC is deemed to have issued
options and warrants to the former security holders of NAN. Immediately prior to the closing of the RTO, NAN had
2,995,794
options and
2,228,340
warrants outstanding, respectively, as well as
118,186
preferred shares that could be converted to
13,131
common shares of
NAN (on a post-consolidation basis). The aggregate fair value of such
2,995,794
options,
2,228,340
warrants and
118,186
preferred shares
of NAN was $
9,665,577
, and this amount has been included as a component of the purchase price. Costs related to the transaction were
$
2,327,125
and were expensed as incurred.
21
| PNRL / Year ended 2022 and 2021
Formerly
"North American Nickel Inc.
Notes
to the Consolidated Financial statements
For the years ended December 31, 2022 and 2021
(Expressed in Canadian dollars)
The
fair value of NAN's options and warrants as at August 3, 2022 was calculated using the following assumptions:
As of August 3, 2022
Warrants
Options
Expected dividend yield
0
%
0
%
Share price of last financing
$
0.48
$
0.48
Expected share price volatility
64.91
% -
113.22
%
133.15
% -
143.3
%
Risk free interest rate
3.18
%
2.85
% -
3.08
%
Remaining life of warrants & options
0.03
-
2
years
2.56
–
4.23
years
For
purposes of determining the fair value of the share consideration exchanged on the RTO, the shares of PNRC were valued at US$
2.00
per
share, the offering price for the PNRC shares on the last PNRC equity financing prior to the RTO.
The
RTO resulted in a loss of $
29,174,415
with respect to the fair value of the consideration transferred over the fair value of identifiable
net assets, which has been recorded as a loss during the year in other income.
5.
OTHER RECEIVABLES
A
summary of the other receivables as at December 31, 2022 and December 31, 2021 is detailed in the table below:
December 31,
2022
December 31,
2021
HST paid on purchases
445,128
84,563
VAT paid on purchases
359,502
55,067
804,630
139,630
22
| PNRL / Year ended 2022 and 2021
Formerly
"North American Nickel Inc.
Notes
to the Consolidated Financial statements
For the years ended December 31, 2022 and 2021
(Expressed in Canadian dollars)
6.
EXPLORATION AND EVALUATION ASSETS
Botswana
Selebi
Selkirk
Total
Acquisitions
Balance, December 31, 2021
-
-
Acquisition costs
8,251,518
327,109
8,578,627
Balance, December 31, 2022
8,251,518
327,109
8,578,627
Exploration
Balance, December 31, 2021
3,099,926
-
3,099,926
Site operations & administration
1,601,381
46,100
1,647,481
Care & Maintenance
5,177,677
-
5,177,677
Geology
1,573,182
163,812
1,736,994
Drilling
7,202,715
8,613
7,211,328
Geophysics
1,659,814
12,651
1,672,465
Engineering
1,968,618
66,761
2,035,379
ESG
197,675
35,262
232,937
Metallurgy & MP
75,955
4,800
80,755
Technical studies
46,762
12,202
58,964
Health and safety
277,284
-
277,284
Infrastructure – water studies
14,165
-
14,165
Balance, December 31, 2022
22,895,154
350,201
23,245,355
Total, December 31, 2022
31,146,673
677,310
31,823,982
Total, December 31, 2021
3,099,926
-
3,099,926
The
following is a description of the Company's exploration and evaluation assets and the related spending commitments:
Botswana
Assets - Selebi and Selkirk
On
September 28, 2021, the Company executed the Selebi APA with the BCL liquidator to acquire the Selebi assets and related infrastructure
formerly operated by BCL. On January 31, 2022, the Company closed the transaction and ownership of the Selebi Assets transferred to the
Company.
PNRC
also negotiated a separate asset purchase agreement (the "Selkirk APA") with the liquidator of TNMC to acquire the Selkirk
deposit and related infrastructure formerly operated by TNMC on January 20, 2022 and closed the transaction on August 22, 2022.
Pursuant
to the Selebi APA the aggregate purchase price payable to the seller for the Selebi Assets, shall be the sum of $
76,862,200
(US$
56,750,000
)
which amount shall be paid in three instalments:
●
$
2,086,830
(US$
1,750,000
) payable on the closing date. This payment has been made.
●
$
33,860,000
(US$
25,000,000
) upon the earlier of: a) approval by the Ministry of Mineral Resources, Green
                                            Technology and Energy Security ("
MMRGTES
") of the Company's Section
                                            42 and Section 43 Applications (further extension of the mining license and conversion of
                                            the mining licence into an operating license respectively), and b) on the expiry date of
                                            the study phase, January 31, 2025, which can be extended for one year with written notice.
●
The
                                            third instalment of $
40,632,000
(US$
30,000,000
) is payable on the completion of mine construction
                                            and production start-up (commissioning) by the Company on or before January 31, 2030, but
                                            not later than four years after the approval by the Minister of MMRGTES of the Company's
                                            Section 42 and Section 43 Applications.
●
Payment
                                            of care and maintenance funding contribution in respect of the Selebi Assets for a total
                                            of $
6,164,688
(US$
5,178,747
) from March 22, 2021 to the closing date. This payment has been
                                            made.
23
| PNRL / Year ended 2022 and 2021
Formerly
"North American Nickel Inc.
Notes
to the Consolidated Financial statements
For the years ended December 31, 2022 and 2021
(Expressed in Canadian dollars)
The
total acquisition cost of Selebi included the 1
st
instalment of $
2,086,830
(US$
1,750,000
) and the payment of the care and
maintenance funding contribution of $
6,164,688
(US$
5,178,747
) for the asset. As per the terms and conditions of the Selebi APA, the Company
has the option to cancel the second and third payments and give back the Selebi Assets to the liquidator in the event where the exploration
program determines that the Selebi Assets are not economical. The Company also has an option to pay in advance the second and third payments
in the event where the exploration program determines that the Selebi Assets are economical. The Company's accounting policy, as
permitted by IAS 16 –
Property, Plant and Equipment
, is to measure and record contingent consideration when the conditions
associated with the contingency are met. As of December 31, 2022, none of the conditions of the second and third instalment are met.
Hence, these amounts are not accrued in the consolidated financial statements.
In
addition to the Selebi APA, the purchase of the Selebi Assets is also subject to a contingent compensation agreement as well as a royalty
agreement with the liquidator.
In
regard to the Selkirk Assets, the Selkirk APA does not provide for a purchase price or initial payment for the purchase of the assets.
The acquisition cost of Selkirk of $
327,109
(US$
244,954
) was the care and maintenance funding contribution from April 1, 2021 to the
closing date of the Selkirk APA. The Selkirk APA provides that if the Company elects to develop Selkirk first, the payment of the second
Selebi instalment of $
33,860,000
(US$
25,000,000
) would be upon the approval by the Minister of MMRGTES of the Company's Section
42 and Section 43 Applications (further extension of the Selkirk mining license (years) and conversion of the Selkirk mining license
into an operating license respectively). For the third Selebi instalment of $
40,632,000
(US$
30,000,000
), if Selkirk were to be commissioned
earlier than Selebi, the payment would trigger on Selkirk's commission date.
During
the year ended December 31, 2022, the Company incurred $
28,046,746
and $
677,310
in acquisition and exploration expenditures on the Selebi
Assets and Selkirk Assets, respectively (December 31, 2021 - $
3,099,926
).
Greenland
– Maniitsoq Property
The
Company's Maniitsoq property in Greenland was owned by NAN prior to the RTO. The Maniitsoq property is subject to a
2.5
% net smelter
return ("NSR"). The Company can reduce the NSR to
1
% by paying $
2,000,000
on or before 60 days from the decision to commence
commercial production.
At
the expiration of the first license period, the Company may apply for a second license period (years 6-10), and the Company may apply
for a further
3
-year license for years 11 to 13. Thereafter, the Company may apply for additional
3
-year licenses for years 14 to 16,
17 to 19 and 20 to 22. The Company will be required to pay additional license fees and will be obligated to incur minimum eligible exploration
expenses for such years.
The
Company may terminate the licenses at any time, however any unfulfilled obligations according to the licenses will remain in force, regardless
of the termination.
Future
required minimum exploration expenditures will be adjusted each year on the basis of the change to the Danish Consumer Price Index.
Prior
to the closing of the RTO on August 3, 2022, the Maniitsoq property had a book value of $
36,692,516
. As the transaction is accounted
for as a capital transaction with NAN being identified as the accounting acquiree, the net assets of NAN should be measured at fair value
at the acquisition date. Upon the completion of the RTO, the Company has switched its focus to development of the Botswana assets with
the result that limited resources (management time, capital etc.) have since been allocated or will be allocated to the Greenland assets.
Management believes that facts and circumstances exist to suggest that the carrying amount of the Maniitsoq property at August 3, 2022
exceeds its fair value. As a result, the carrying value of the Greenland assets has been reduced to nil as of August 3, 2022, for a total
impairment of $
36,692,516
.
From
August 3 to December 31, 2022, the Company spent an additional $
48,001
in acquisition and exploration expenditures on the Maniitsoq property,
which is comprised of the Sulussugut, Ininngui, Carbonatite and 2020/05 Licenses. These expenditures were recorded as general exploration
expense in the consolidated statements of comprehensive loss.
24
| PNRL / Year ended 2022 and 2021
Formerly
"North American Nickel Inc.
Notes
to the Consolidated Financial statements
For the years ended December 31, 2022 and 2021
(Expressed in Canadian dollars)
The
Sulussugut License (2011/54), which was first granted on August 15, 2011 by the Bureau of Minerals and Petroleum ("
BMP
")
of Greenland, has been renewed and is valid until December 31, 2022. The Company has available credits of DKK
278,854,152
(approximately
$
55,627,220
) at the end of December 31, 2021. The credits available from each year may be carried forward for three years plus a two-year
extension and expire between December 31, 2022 and December 31, 2024.
The
Ininngui License (2012/28) was first granted by BMP on March 4, 2012.During the year ended December 31, 2021, the Company received a
license extension, which provides for a renewal period until December 31, 2023. Total cumulative surplus credit as at December 31, 2021
was DKK
35,426,696
(approximately $
7,067,162
) and is expected to expire between December 31, 2022 and December 31, 2024.
Carbonatite
License (2018/21) was granted on May 4, 2018 for exclusive exploration rights of an area located near Maniitsoq in West Greenland. The
license is valid for five years until December 31, 2022 and during the year ended December 31, 2021, the Company received a license extension,
which provides for renewal until December 31, 2024. The Company has a total surplus credit of DKK
10,577,191
(approximately $
2,110,012
)
which is expected to expire between December 31, 2023 and December 31, 2024.
On
February 18, 2020, the Company was granted new prospective license No. 2020/05, by the BMP of Greenland for a period of five years ending
December 31, 2024.
Canada
– Post Creek, Halcyon and Quetico Property
NAN
acquired the rights to the Post Creek, Halcyon and Quetico properties within the Sudbury Mining District of Ontario in 2013, 2015, and
2018, respectively. The Company is obligated to pay advances on net smelter return royalties ("NSR") of $
10,000
per annum
for the Post Creek Property and $
8,000
per annum for the Halcyon Property. The total of the advances will be deducted from any payments
to be made under the NSR.
The
work commitment to hold all 809 claim cells of Quetico was $
323,600
, with claims due in April and May of 2022. NAN renewed 49 high priority
claims for two years for the Quetico East Block and renewed 46 claims for one year and four high priority claims for two years for the
West Block. All other claims expired.
Prior
to the closing of the RTO on August 3, 2022, total book value of the Canadian assets was $
2,535,873
which has been written off effective
as at August 3, 2022, the closing date of the RTO as the Company has switched its focus to development of the Botswana assets with the
result that limited resources (management time, capital etc.) have since been allocated or will be allocated to the Canada assets. During
the period from August 3 to December 31, 2022, the Company incurred additional $
21,739
in exploration and license related expenditures
for the Canadian properties and the expenditures were recorded as general exploration expense in the consolidated statements of comprehensive
loss.
High
Atlas Project in Morocco
In
2018, the Company's geologists identified a project opportunity in the high Atlas Mountains of Morocco. There is no modern geophysical
coverage and no drilling on the property.
In
2019, the Company signed a memorandum of understanding (the "
MOU
") with Office National des Hydrocarbons et des Mines
("
ONHYM
"), a government entity and the single largest current permit holder in Morocco. Through this alliance, the
Company was given access to confidential exploration data to develop nickel projects in the High Atlas Region of Morocco. In November
and December 2021, the Company lodged applications for five permits in Morocco. In December, four of the five permits were awarded to
the Company. An application for a fifth permit was submitted and awarded in February 2022. Work plans were submitted in May 2022. The
work obligations are approximately $
65,000
per permit over a three-year period with work commencing within six months.
In
October 2022, the Company and ONHYM decided not to pursue the joint venture discussions that initially set out the general framework
of a joint venture for the exploration and consolidation of permits owned by ONHYM in the Imilchil area. The Company intends to continue
its work on the five permits it acquired in 2021 in the same region.
25
| PNRL / Year ended 2022 and 2021
Formerly
"North American Nickel Inc.
Notes
to the Consolidated Financial statements
For the years ended December 31, 2022 and 2021
(Expressed in Canadian dollars)
The
exploration and license related expenditures for the project are recorded as property investigation expense in the consolidated statements
of comprehensive loss. The Company has spent $nil on the project during the period from August 3 to December 31, 2022.
7.
PROPERTY, PLANT AND EQUIPMENT
The
table below sets out costs and accumulated amortization as at December 31, 2022. The Company had no property, plant and equipment as
at December 31, 2021.
Cost
Land and
Buildings (ROU
Assets)
Furniture
and
Fixtures
Exploration
Equipment
Generator
Vehicles
Computer
and
software
Total
Balance – December 31, 2021
-
-
-
-
-
-
-
Additions
3,077,421
126,605
11,973
31,381
241,884
1,950
3,479,240
Dispositions
-
-
-
-
-
-
Balance – December 31, 2022
3,077,421
126,605
11,973
31,381
241,884
1,950
3,479,240
Accumulated
Depreciation
Land and
Buildings (ROU
Assets)
Furniture
and
Fixtures
Exploration
Equipment
Generator
Vehicles
Computer
and
software
Total
Balance – December 31, 2021
-
-
-
-
-
-
-
Depreciation during the year
51,124
1,872
1,447
562
39,589
1,950
96,543
Balance – December 31, 2022
51,124
1,872
1,447
562
39,589
1,950
96,543
Carrying Value
Land and
Buildings (ROU
Assets)
Furniture
and
Fixtures
Exploration
Equipment
Generator
Vehicles
Computer
and
Software
Total
Balance – December 31, 2021
-
-
-
-
-
-
-
Balance – December 31, 2022
3,026,267
124,733
10,526
30,819
202,295
3,394,670
26
| PNRL / Year ended 2022 and 2021
Formerly
"North American Nickel Inc.
Notes
to the Consolidated Financial statements
For the years ended December 31, 2022 and 2021
(Expressed in Canadian dollars)
8.
TRADE PAYABLES AND ACCRUED LIABILITIES
December 31,
2022
December 31,
2021
Amounts due to related parties (note 12)
43,235
225,904
Trade payables
3,660,519
218,456
Accrued liabilities
321,962
136,126
4,025,716
580,486
9.
PROMISSORY NOTE
On
November 21, 2022, the Company announced a $
7,000,000
million bridge loan (the "
Bridge Loan
") financing from Pinnacle
Island LP (the "
Lender
"). The Bridge Loan financing closed on November 25, 2022 and net proceeds of $
6,740,000
were
received by the Company (after deducting the commitment fee of $
260,000
). The Bridge Loan is evidenced by the issuance of a promissory
note by the Company to the Lender (the "
Promissory Note
"). The Promissory Note has a principal amount of $
7
million
and bears interest at a rate of
10
% per annum, calculated monthly and initially payable on
February 22, 2023
, being the maturity date
of the Promissory Note, with a right of the Company to extend the maturity date to March 22, 2023 and further by providing written notice
to the Lender by February 15, 2023.
The Company extended the maturity to March 22, 2023 and negotiated further extension to November
24, 2023.
All other terms of the Promissory Note remain the same. Further details are disclosed in the subsequent events note 17 for
further details.
In
connection with the promissory note, the Company accrued $
70,959
of interest due to the Lender as at December 31, 2022.
The
obligations of the Company under the Promissory Note are fully and unconditionally guaranteed by each of its existing and future subsidiaries.
No assets of the Company were pledged as collateral under the Promissory Notes. The Promissory Note is subject to certain covenants and
provisions on events of default, repayments and mandatory prepayments.
In
connection with the Bridge Loan financing, the Company also issued
119,229
common share purchase warrants to the Lender, each of which
is exercisable to acquire one common share of the Company at a price of $
2.04
per share until November 25, 2023. The fair value of the
liability of the warrants was estimated at $
46,492
using the Black-Scholes Option Pricing Model. Subsequent to year end, in connection
with the extension of the maturity of the promissory note from March 22, 2023 to November 24, 2023 these warrants were cancelled and
350,000
new non-transferrable common share purchase warrants were issued.
10.
LEASE LIABILITY
On
July 9, 2022, the Company executed a sales agreement (the "Agreement") with Tuli Tourism Pty Ltd. (the "Seller")
for the Syringa Lodge (the "Lodge") in Botswana.
As
per the Agreement of the Lodge, the aggregate purchase price payable to the Seller shall be the sum of $
3,213,404
(BWP
30,720,000.00
)
A deposit of $
482,011
(BWP
4,608,000
) was paid on August 17, 2022. The balance is payable into two installments of $
1,365,697
(BWP
13,056,000.00
)
on July 1, 2023 and August 1, 2024.
In
addition to the above purchase price, the Company will pay to the Seller the Agreed Interest Amount in 12 equal monthly instalments of
$
13,657
(BWP
130,560
), followed by 12 equal monthly instalments of $
6,828
(BWP
65,280
).
27
| PNRL / Year ended 2022 and 2021
Formerly
"North American Nickel Inc.
Notes
to the Consolidated Financial statements
For the years ended December 31, 2022 and 2021
(Expressed in Canadian dollars)
The
details of lease liabilities are as follows:
December 31,
2022
Lease liabilities as of beginning of year
-
Lease additions from acquisitions
3,213,404
Lease payments
(
550,295
)
Interest expense on lease liabilities
68,285
IFRS 16 lease liabilities as of end of year
2,731,394
Current portion of lease liability (less than one year)
1,365,697
Long-term lease liability (one to five year)
1,365,697
11.
SHARE CAPITAL, WARRANTS AND OPTIONS
The
authorized capital of the Company comprises an unlimited number of common shares without par value and
100,000,000
Series 1 convertible
preferred shares without par value.
Effective
August 3, 2022, in connection with the closing of the RTO, the Company completed a share consolidation of the Company's issued
and outstanding common shares, exchanging one (1) post-consolidation common share without par value for every five (5) pre-consolidation
common shares issued and outstanding.
All
references to share capital, warrants, options and weighted average number of shares outstanding have been adjusted in these financial
statements and retrospectively to reflect the Company's RTO share exchange and
5-for-1
share consolidation as if it occurred at
the beginning of the earliest period presented.
a)
Common Shares Issued and Outstanding
On
August 3, 2022, PNRC combined with NAN in a reverse takeover transaction whereby shareholders of PNRC exchanged their shares at a rate
of
1.054
shares of NAN for each share of PNRC, after giving effect to a
5-to-1
share consolidation for each outstanding share of NAN
(Note 4). The following table provides a continuity of share capital presented in these consolidation financial statements:
PNRC common share
Company common share
Number
Amount
Number
Amount
December 31, 2020
64,083,487
$
1,468,174
-
-
Share capital issued through private placement (net of issue costs)
12,596,421
6,484,501
-
-
December 31, 2021
76,679,908
7,952,675
-
-
Share capital issued through private placement (net of issue costs)
8,936,167
20,852,872
-
-
Cancel PNRC shares held by NAN
(
7,667,707
)
-
-
(
19,710,608
)
Shares exchanged on the RTO
(
77,948,368
)
(
28,805,547
)
82,157,536
28,805,547
Share capital of the Company immediately post RTO
31,748,399
77,431,152
Shares issued for exercised warrants
1,236,408
2,890,913
Shares issued for exercised options
1,379,000
1,727,264
Balance as at December 31, 2022
$
116,521,343
$
91,144,268
28
| PNRL / Year ended 2022 and 2021
Formerly
"North American Nickel Inc.
Notes
to the Consolidated Financial statements
For the years ended December 31, 2022 and 2021
(Expressed in Canadian dollars)
2022
In
April 2022, the Company completed a non-brokered private placement of
8,936,167
shares at a price of US$
2.00
/Share for gross proceeds
of $
22,388,599
(US$
17,731,238
). In connection with the private placement, the Company has paid to eligible finders ("Finders")
(i) cash commission equal to
6
%
of the gross proceeds raised from subscribers introduced to the Company by such Finders, being an aggregate
of $
1,535,727
, and (ii) a number of common share equal to
6
%
of the units attributable to the Finders under the private placement, being
an aggregate of
70,548
shares with total value of $
176,398
at the offer price of the private placement.
On
August 3, 2022, the date of the RTO, a total of
82,157,536
common shares of NAN were issued in exchange for
77,948,368
shares of PNRC.
These shares were added to the current NAN shares outstanding balance of
31,748,399
for total shares outstanding of
113,905,935
upon
closing of the RTO.
Before
the closing of the RTO, NAN owned
7,667,707
common shares of PNRC and a
15
%
warrant which entitled NAN to purchase common shares of PNRC, for up to
15
% of the capital of PNRC at the time of such purchase,
upon payment of US $
10,000,000
prior to the fifth anniversary of the date of issue. Prior to the date that the Amalgamation became effective, the PNRC shares and
the
15
% warrant held by NAN were contributed to NAN Subco, as part of the securities contribution, resulting in such securities
being cancelled by operation of the triangular amalgamation.
Prior
to the RTO, the fair value of the
15
% warrant and the shares held by NAN were $
28,275,255
and $
19,710,608
, respectively. The fair value
of the shares was calculated based on the last offer price of PNRC financing prior to the RTO, the fair value of the
15
% warrant was
calculated using the Black-Sholes Model with the
the following assumptions: expected life of
2.57
years, expected dividend yield of
0
%, a risk free rate of
3.14
% and an expected volatility of
141.63
%
. As the securities were contributed by NAN and cancelled on completion
of the RTO, the fair value was included as part of the consideration on the acquisition date.
Post
RTO, during the period from August 3 to December 31, 2022, a total of
1,236,408
common shares of the Company were issued upon the exercise
of warrants at prices between $
0.45
and $
1.75
per share for total cash proceeds of $
569,399
. As a result of these exercises, $
2,880,376
was transferred from reserve to share capital.
Post
RTO, during the period from August 3 to December 31, 2022, a total of
1,379,000
common shares of the Company were issued upon the exercise
of options at prices between $
0.39
and $
1.60
per share for total cash proceeds of $
723,076
. As a result of these exercises, $
1,004,188
was transferred from reserve to share capital.
As
at December 31, 2022, the Company had
116,521,343
common shares issued and outstanding (December 31, 2021 –
80,820,623
on a post-RTO
and post -consolidation basis).
2021
During
the year 2021, the Company closed two non-broker private placement equity financings totalling
12,596,421
shares (pre-RTO, pre-share-consolidation
basis) at a price of $
0.40
and $
0.95
, respectively, and raised aggregate gross proceeds of $
6,771,729
. The Company incurred total share
issuance costs of $
287,228
, including the fair value of $
7,000
for
17,000
shares issued to the agent in conjunction with the first private
placement.
As
at December 31, 2021, the Company had
76,679,908
common shares issued and outstanding (pre-RTO, pre-share-consolidation basis).
b)
Preferred shares issued and outstanding
As
at December 31, 2022 and December 31, 2021 there are
118,186
series 1 preferred shares outstanding (on a post-RTO and post-consolidation
basis).
29
| PNRL / Year ended 2022 and 2021
Formerly
"North American Nickel Inc.
Notes
to the Consolidated Financial statements
For the years ended December 31, 2022 and 2021
(Expressed in Canadian dollars)
The
rights and restrictions of the preferred shares are as follows:
i)
dividends
shall be paid at the discretion of the directors;
ii)
the
                                            holders of the preferred shares are not entitled to vote except at meetings of the holders
                                            of the preferred shares, where they are entitled to one vote for each preferred share held;
iii)
the
                                            shares are convertible at any time after six months from the date of issuance, upon the holder
                                            serving the Company with 10 days written notice; and
iv)
the
                                            number of the common shares to be received on conversion of each preferred share is to be
                                            determined by dividing the conversion value of the share, $
1
per share, by $
9.00
.
c)
Warrants
On
February 26, 2021, PNRC issued NAN a non-transferable share purchase warrant (the "
Warrant
"), which entitled NAN to
purchase common shares of PNRC for up to
15
% of the then outstanding capital of PNRC, upon payment of US $
10,000,000
prior to the fifth
anniversary of the date of issue.
The
Warrant was classified as a derivative financial liability that should be measured at fair value, with changes in value recorded in profit
or loss. Prior to the RTO, on Jun 30, 2022, the Company reassessed the fair value of the warrant at $
28,275,256
and recorded the amount
as a long-term financial liability. The fair value of the warrant did not change up to the date of the RTO as the underline assumptions
remained the same.
The
fair value of the liability of the Warrant was estimated using the Black-Scholes Option Pricing Model with the following assumptions:
December 31, 2022
December 31, 2021
Expected dividend yield
0
%
0
%
Latest private placement price
$
2.49
$
0.95
Expected share price volatility
141.63
%
144.13
%
Risk free interest rate
3.14
%
1.02
%
Remaining life of warrants
2.66
years
3.16
years
Volatility
assumptions for the valuation of the Warrant were derived by reference to the volatility of NAN as the stock price of NAN was highly
correlated to the advancement of the BCL assets acquisition following its investment in PNRC.
Prior
to the date that the Amalgamation became effective, the PNR Shares and the Warrant held by NAN were contributed to NAN Subco, as part
of the securities contribution, resulting in such securities being cancelled by operation of the triangular amalgamation. The fair value
of the Warrant was written off upon the closing of the RTO. PNRC had no other issued and outstanding warrants prior to the RTO.
Warrant
activity, after converting for the Exchange Ratio, for the year ended December 31, 2022 was as follows:
Premium Nickel Resources Ltd.
Number Outstanding
(Post-consolidation basis)
Weighted Average
Exercise Price ($)
December 31, 2021
-
-
Adjustment pursuant to the
RTO
2,228,340
1.11
Issued
119,229
2.04
Exercised
(
1,236,408
)
0.46
Cancelled / expired
(
12,375
)
-
Balance as at December 31, 2022
1,098,786
1.96
PNRC
had no warrants as at December 31, 2021 except the Warrant granted to NAN that was subsequently cancelled upon the RTO.
30
| PNRL / Year ended 2022 and 2021
Formerly
"North American Nickel Inc.
Notes
to the Consolidated Financial statements
For the years ended December 31, 2022 and 2021
(Expressed in Canadian dollars)
At
December 31, 2022, the Company had outstanding common share purchase warrants exercisable to acquire common shares of the Company as
follows:
Warrants Outstanding
Expiry Date
Exercise Price
($)
Weighted Average remaining contractual life (years)
683,905
April 16, 2023
1.75
0.18
295,652
August 3, 2024
2.40
0.43
119,229
November 25, 2023
2.04
0.10
1,098,786
0.71
d) Stock
options
The
Company adopted a Stock Option Plan (the "
Plan
"), providing the authority to grant options to directors, officers,
employees and consultants enabling them to acquire up to
20
% of the issued and outstanding common shares of the Company. Under the Plan,
the exercise price of each option typically equals to the last closing price per share on the trading day immediately preceding the day
on which the Company announces the grant of the option, less applicable discount, if any, permitted by the policies of the Exchanges
and approved by the Board. The options can be granted for a maximum term of five years.
The
outstanding options of each company prior to the completion of the RTO were as follows:
North American Nickel
Number Outstanding
(post-consolidation basis)
Weighted Average
Exercise Price ($)
December 31, 2021
3,010,919
1.35
Cancelled/expired
(
15,125
)
6.00
Balance as at August 3, 2022 prior to business combination with PNRC
2,995,794
1.33
Premium Nickel Resources Corp.
Number Outstanding
Weighted Average
Exercise Price ($)
December 31, 2021
5,775,000
0.52
Granted
2,600,000
2.49
Balance as at August 3, 2022 prior to business combination with NAN
8,375,000
1.13
Subsequent
to the RTO, the outstanding options of the Company were as follows:
Premium Nickel Resources Ltd.
Number Outstanding
Weighted Average
Exercise Price ($)
Balance as at August 3, 2022 prior to business combination with PNRC
2,995,794
1.33
Issued pursuant to RTO in exchange for options of PNRC
8,827,250
1.16
Options exercised
(
1,416,000
)
0.46
Balance as at December 31, 2022
10,407,044
1.10
During
the year ended December 31, 2022, prior to the RTO, PNRC granted an aggregate total of
2,600,000
stock options to employees, directors
and consultants with a maximum term of
five years
. The options are exercisable at US$
2.00
per share (C$
2.49
/share) with 1/3 vesting on
the date of grant, 1/3 on the first anniversary and 1/3 on the second anniversary following the close of the US$
20,000,000
private placement.
31
| PNRL / Year ended 2022 and 2021
Formerly
"North American Nickel Inc.
Notes
to the Consolidated Financial statements
For the years ended December 31, 2022 and 2021
(Expressed in Canadian dollars)
Upon
the closing of the RTO, all PNRC options were exchanged for options of the Company at a rate of
1.054
and vested in full immediately.
Prior to the RTO, PNRC had granted but unvested options of
2,512,033
(Post RTO, Post-consolidation basis). These options were considered
a replacement awarded under the former plan and modification accounting under IFRS 2 Share based payments was applied. When modification
accounting is applied, the Company revalued those stock options using the Black-Scholes Option Pricing Model.
The
fair value of all options, including those granted during the year ended December 31, 2022 as well as the ones granted but not vested
during the year ended December 2021, amounted to $
7,731,117
and was recorded as a share-based payment expense. The weighted average fair
value of options granted is $
1.41
per option.
The
fair value of stock options granted and vested during the year ended December 31, 2022 was calculated using the following assumptions:
December 31, 2022
December 31, 2021
Expected dividend yield
0
%
0
%
Latest private placement price
$
0.40
- $
2.53
$
0.95
Expected share price volatility
125.83
%
-
129.48
%
125.18
%
-
127.03
%
Risk free interest rate
0.42
%
-
2.85
%
0.42
%
-
1.11
%
Expected life of options
4.16
-
5
years
5
years
Volatility
assumptions for the valuation of options were derived by reference to the volatility of NAN as the stock price of NAN was highly correlated
to the advancement of the BCL assets acquisition following its investment in PNRC.
Details
of options outstanding as at December 31, 2022 are as follows:
Options Outstanding
Options Exercisable
Expiry Date
Exercise Price ($)
Weighted average remaining contractual life
(years)
900,000
900,000
February 24, 2025
0.80
0.19
240,000
240,000
August 19, 2025
0.45
0.06
3,689,000
3,689,000
January 26, 2026
0.39
1.09
597,000
597,000
February 25, 2026
1.60
0.15
1,343,850
1,343,850
September 29, 2026
0.91
0.48
998,794
998,794
October 25, 2026
2.00
0.37
2,740,400
2,740,400
January 20, 2027
2.62
1.07
10,407,044
10,407,044
3.41
e)
DSU Plan
Effective
December 2022, the Company approved a Deferred Share Unit Plan ("DSU Plan") ("DSUs") that enables the Company
upon approval by the Directors to grant DSUs to eligible non-management directors. The DSUs credited to the account of a director may
only be redeemed following the date upon which the holder ceases to be a director. Depending upon the country of residence of a director,
the DSUs may be redeemed at any time prior to December 15 in the calendar year following the year in which the holder ceases to be a
director and may be redeemed in as many as four installments. Upon redemption, the holder is entitled to a cash payment equal to the
number of units redeemed multiplied by the 5-day-VWAP of the Company's common shares on that date. The Company may elect, in its
sole discretion, to settle the value of the DSUs redeemed in the Company's common shares on a one-for-one basis, provided shareholder
approval has been obtained on or prior to the relevant redemption date.
32
| PNRL / Year ended 2022 and 2021
Formerly
"North American Nickel Inc.
Notes
to the Consolidated Financial statements
For the years ended December 31, 2022 and 2021
(Expressed in Canadian dollars)
During
the year ended December 31, 2022, DSUs have been granted as follows:
2022
Number of DSUs outstanding at the beginning of the fiscal year
-
Number of DSUs during the year
200,000
Number of DSUs outstanding at the end of the year
200,000
During
the year ended December 31, 2022, the DSU compensation amounted to $
298,000
recorded as share based compensation, and a DSU liability
of the same amount.
f)
Reserve
The
reserve records items recognized as stock-based compensation expense and other share-based payments until such time that the stock options
or warrants are exercised, at which time the corresponding amount will be transferred to share capital. Amounts recorded for forfeited
or expired unexercised options and warrants are transferred to deficit.
During
the year ended December 31, 2022, the Company recorded $
7,731,117
(December 31, 2021 - $
1,261,891
) of share-based payments to reserves
and transferred $
3,325,702
to share capital for exercised warrants and options (December 31, 2021 –
Nil
).
12.
RELATED PARTY TRANSACTIONS
The
following amounts due to related parties are included in trade payables and accrued liabilities (note 8).
December 31,
2022
December 31,
2021
Directors and Officers of the Company
43,235
26,759
NAN
-
199,145
43,235
225,904
These
amounts are unsecured, non-interest bearing and have no fixed terms of repayment.
(a)
Related party transactions
During
the year ended December 31, 2022, ThreeD Capital subscribed for a further
1,213,538
common shares of PNRC (
1,279,069
shares on a post-RTO
and post-consolidation basis), for a further investment of $
3,064,582
(US$
2,427,076
) (2021 - $
374,123
). As of December 31, 2022, ThreeD
Capital beneficially owns
8,662,347
shares (2021 -
7,383,278
shares) in both cases on a post-RTO and post-consolidation basis, constituting
approximately
7.5
%
(2021 –
9.14
%
) of the issued and outstanding shares of the Company.
Between
March 2 and March 3, 2022, PNRC issued promissory notes to its officers and directors as well as its shareholders as below:
Directors and Officers of the Company
35,000
ThreeD Capital
762,180
NAN
1,270,000
2,067,180
33
| PNRL / Year ended 2022 and 2021
Formerly
"North American Nickel Inc.
Notes
to the Consolidated Financial statements
For the years ended December 31, 2022 and 2021
(Expressed in Canadian dollars)
On
April 30, 2022, all amounts owing in respect of the above promissory notes were repaid in full by payment of cash in an amount of $
2,018,568
,
including interest and fees, and by issuing
310,000
PNRC Shares (
326,740
shares of the Company on a post-RTO and post-consolidation basis).
(b)
Key management personnel is defined as members of the Board of Directors and senior officers.
Key management compensation was related
to the following:
December 31, 2022
December 31, 2021
Management fees
2,418,984
675,001
Due diligence BCL
-
131,600
Corporate and administration expenses
102,884
108,193
Share base payment
4,623,089
1,019,932
7,144,957
1,934,726
13.
FINANCIAL
INSTRUMENTS
The
Company thoroughly examines the various financial instrument risks to which it is exposed and assesses the impact and likelihood of those
risks. These risks may include interest rate risk, credit risk, liquidity risk, market risk and currency risk. The carrying value of
cash and trade payables and accrued liabilities approximate their fair value due to their short-term nature. The fair value of the Promissory
Note, vehicle financing and lease liability are equal to their carrying values as all these amounts carry a fix interest rate. The fair
value of the DSUs is the closing price of the Company's common share at the end of each reporting period. Fair value measurements
of financial instruments are required to be classified using a fair value hierarchy that reflects the significance of inputs in making
the measurements. The levels of the fair value hierarchy are defined as follows:
Level
1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level
2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or
indirectly.
Level
3 – Inputs for the asset or liability that are not based on observable market data.
On
December 31, 2022, the fair value of the Company's warrant liabilities are based on Level 3 measurements and the fair value of
cash and DSUs is based on Level 1 measurements.
14.
RISK
MANAGEMENT
The
Company's exposure to market risk includes, but is not limited to, the following risks:
Interest Rate Risk
Interest
rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates.
The Company is not subject to significant changes in interest rates.
Foreign
Currency Exchange Rate Risk
Currency
risk is risk that the fair value of future cash flows will fluctuate because of changes in foreign currency exchange rates. In addition,
the value of cash and other financial assets and liabilities denominated in foreign currencies can fluctuate with changes in currency
exchange rates.
34
| PNRL / Year ended 2022 and 2021
Formerly
"North American Nickel Inc.
Notes
to the Consolidated Financial statements
For the years ended December 31, 2022 and 2021
(Expressed in Canadian dollars)
The
Company operates in Canada, Barbados and Botswana and undertakes transactions denominated in foreign currencies such as US dollar and
Botswana Pula, and consequently is exposed to exchange rate risks. Exchange risks are managed by matching levels of foreign currency
balances and related obligations and by maintaining operating cash accounts in non-Canadian dollar currencies.
Foreign
currency denominated financial assets and liabilities which expose the Company to currency risk are disclosed below. The amount shown
are those reported and translated into CAD at the closing rate.
Short -term exposure
Long-term exposure
USD
BWP
BWP
December 31, 2022
Financial assets
2,834,303
473,980
32,058,793
Financial liabilities
(
1,246,825
)
(
2,176,110
)
(
1,530,341
)
Total exposure
1,587,477
(
1,702,130
)
30,528,452
Short -term exposure
Long-term exposure
USD
BWP
BWP
December 31, 2021
Financial assets
244,154
155,548
739,767
Financial liabilities
(
34,231
)
(
130,270
)
-
Total exposure
209,924
25,278
739,767
The
following table illustrates the sensitivity of net loss in relating to the Company's financial assets and financial liabilities
and the USD/CAD exchange rate and BWP/CAD exchange rate all other things being equal. It assumes +/- 5% change of the USD/CAD and BWP/CAD
exchange rates for the year ended December 31, 2022 and 2021 respectively.
If
the CAD strengthened against the USD and BWP by 5% respectively, (2021 – 5 %), it would have had the following impact:
Profit for the year
Long-term exposure profit for the year
USD
BWP
Total
BWP
December 31, 2022
79,374
(
85,106
)
(
5,733
)
1,526,423
December 31, 2021
10,496
1,264
11,760
36,988
If
the CAD weakened against the USD and BWP by 5% respectively, (2021 – 5 %), it would have had the following impact:
Profit for the year
Long-term exposure profit for the year
USD
BWP
Total
BWP
December 31, 2022
(
79,374
)
85,106
5,733
(
1,526,423
)
December 31, 2021
(
10,496
)
(
1,264
)
(
11,760
)
(
36,988
)
The
higher foreign currency exchange rate sensitivity in profit in 2022 compared with 2021 is attributable to an increase in activities of
foreign operations in Botswana and Barbados.
35
| PNRL / Year ended 2022 and 2021
Formerly
"North American Nickel Inc.
Notes
to the Consolidated Financial statements
For the years ended December 31, 2022 and 2021
(Expressed in Canadian dollars)
Credit
Risk
Credit
risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an
obligation. The credit risk is primarily associated with liquid financial assets. The Company limits exposure to credit risk on liquid
financial assets by holding cash at highly-rated financial institutions.
Liquidity
Risk
Liquidity
risk is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities that are settled
by delivering cash or another financial asset. The Company manages the liquidity risk inherent in these financial obligations by regularly
monitoring actual cash flows to annual budget which forecast cash and expected cash availability to meet future obligations
The
Company will defer discretionary expenditures, as required, in order to manage and conserve cash required for current liabilities.
The
following table shows the Company's contractual obligations as at December 31, 2022:
December 31, 2022
Less than 1 year
1 - 2 years
2 - 5 years
Total
Trade payables and
accrued liabilities
4,450,966
-
-
4,450,966
Vehicle financing
50,291
50,291
64,062
164,644
Lease liability
1,365,697
1,365,697
-
2,731,394
5,866,954
1,415,988
64,062
7,347,004
Capital
Risk Management
The
Company manages its capital to ensure that it will be able to continue as a going concern, so that adequate funds are available or are
scheduled to be raised to meet its ongoing administrative and operating costs and obligations. This is achieved by the Board of Directors'
review and ultimate approval of budgets that are achievable within existing resources, and the timely matching and release of the next
stage of expenditures with the resources made available from capital raisings and debt funding from related or other parties. In doing
so, the Company may issue new shares, restructure or issue new debt.
The
Company is not subject to any externally imposed capital requirements imposed by a regulator or a lending institution.
In
the management of capital, the Company includes the components of equity (deficiency), loans and borrowings, and other current liabilities,
net of cash.
December 31, 2022
December 31, 2021
Shareholder's equity (deficiency)
27,188,344
(
4,316,964
)
Current liabilities
12,462,372
580,486
39,650,716
(
3,736,478
)
Cash
(
5,162,991
)
(
1,990,203
)
34,487,725
(
5,726,681
)
36
| PNRL / Year ended 2022 and 2021
Formerly
"North American Nickel Inc.
Notes
to the Consolidated Financial statements
For the years ended December 31, 2022 and 2021
(Expressed in Canadian dollars)
15.
SEGMENTED INFORMATION
The
Company operates in one reportable operating segment being that of the acquisition, exploration and development of mineral properties
in three geographic segments being Botswana, Greenland and Canada (note 6). The Company's geographic segments are as follows:
December 31, 2022
December 31, 2021
Current assets
Canada
3,198,343
1,779,117
Barbados
493,552
63,677
Botswana
2,746,450
295,703
Total
6,438,346
2,138,497
December
31, 2022
December
31, 2021
Property, plant and equipment
Canada
10,714
-
Botswana
3,383,956
-
Total
3,394,670
-
December 31, 2022
December 31, 2021
Exploration and evaluation assets
Botswana
31,823,982
3,099,926
16.
INCOME TAXES
The
reported recovery of income taxes differs from amounts computed by applying the statutory income tax rates to the reported loss before
income taxes as follows:
Year ended December 31,
2022
Year ended December 31,
2021
Loss before income taxes
$
(
36,410,469
)
$
(
9,359,605
)
Statutory tax rate
26.50
%
26.50
%
Expected income tax recovery at the statutory tax rate
(
9,648,774
)
(
2,480,295
)
Permanent differences and other
7,227
(
6
)
Stock based payment
(
2,378,349
)
334,401
Fair value adjustment on warrants
2,127,716
1,681,507
Change in estimates and other
(
520,103
)
Differences in foreign tax rates
360,345
34,131
Acquisition loss on RTO
7,731,220
Change in deferred tax assets not recognized
2,320,718
430,261
Income tax recovery
$
-
$
-
37
| PNRL / Year ended 2022 and 2021
Formerly
"North American Nickel Inc.
Notes
to the Consolidated Financial statements
For the years ended December 31, 2022 and 2021
(Expressed in Canadian dollars)
As
at December 31, 2022, the Company has the following deferred tax assets (liabilities):
Year ended December 31, 2022
Year ended December 31, 2021
Deferred tax asset
$
$
Non-capital losses available for carry forward
94,260
-
Right-of-use asset
600,907
-
Deferred tax liabilities
Lease Liability
(
695,166
)
-
Net deferred tax asset (liability)
$
-
$
-
Deferred
tax assets in excess of deferred tax liabilities have not been recognized in respect of the following attributes because it is not probable
that future taxable profit will be available against which the Company can use the benefits:
Year ended December 31, 2022
Year ended December 31, 2021
Exploration and evaluation assets
$
1,243,480
$
329,522
Loss carry forwards
10,066,250
369,658
Share issuance costs
2,124,869
62,018
Equipment
3,397
-
Total unrecognized deductible temporary differences
$
13,437,996
$
761,198
The
tax losses that have not been recognized expire as follows:
Losses
2029
$
1,349,090
2039
101,573
2040
351,131
2041
942,144
2042
5,351,811
Indefinite
1,970,501
$
10,066,250
The
company has approximately Canadian non-capital losses of $
6,746,659
which
expire between 2039 and 2042
.
The Company also has Barbados losses of $
1,349,090
which expire in
2029
.
Botswana losses of approximately $
1,970,501
may be carried forward indefinitely.
17.
CONTINGENT LIABILITIES
There
are no environmental liabilities associated with the Selebi Assets and the Selkirk Assets as at the acquisition dates as all liabilities
prior to the acquisitions are the responsibility of the sellers, BCL and TNMC, respectively. The Company has an obligation for the rehabilitation
costs arising subsequent to the acquisitions. As of December 31, 2022, management is not aware of or anticipating any contingent liabilities
that could impact the financial position or performance of the Company related to its exploration and evaluation assets.
38
| PNRL / Year ended 2022 and 2021
Formerly
"North American Nickel Inc.
Notes
to the Consolidated Financial statements
For the years ended December 31, 2022 and 2021
(Expressed
in Canadian dollars)
The
Company's exploration and evaluation assets are affected by the laws and environmental regulations that exist in the various jurisdictions
in which the Company operates. It is not possible to estimate the future contingent liabilities and the impact on the Company's
operating results due to future changes in Company's development of its projects or future changes in such laws and environmental
regulations.
18.
SUBSEQUENT EVENTS
On
February 24, 2023, the Company announced it had closed its previously announced "best efforts" brokered private placement
offering under which
4,437,184
common shares of the Company (the "Common Shares") were issued at a price of $
1.75
per Common
Share for gross proceeds of $
7,765,072.00
(the "Offering") through a syndicate of agents.
In connection with the Offering,
the Company (i) paid to the agents a cash commission equal to 6% of the gross proceeds (other than on certain president's list
purchasers on which a cash commission of 3% was paid), and (ii) issued to the agents that number of non-transferable broker warrants
of the Company (the "Broker Warrants") as is equal to 6% of the number of Common Shares sold under the Offering (other than
on Common Shares issued to president's list purchasers on which Broker Warrants equal to 3% were issued)
. Each Broker Warrant is
exercisable to acquire one Common Share at an exercise price of $
1.75
per Common Share until February 24, 2025. A total of of
221,448
broker warrants were issued to the agents of the Private Placement
On
March 17, 2023, the Company announced that it has entered into an amended and restated promissory note (the "A&R Promissory
Note") extending the maturity of its previously issued $
7,000,000
promissory note from
March 22, 2023 to November 24, 2023
(the
"Extension"). The A&R Promissory Note is held by Pinnacle Island LP, an arm's-length limited partnership formed
under the laws of the Province of Ontario (the "Lender"). All other terms of the Promissory Note remain the same. In connection
with the Extension and entry into of the A&R Promissory Note, the Company paid an amendment and restatement fee of $
225,000
and issued
350,000
non-transferrable common share purchase warrants (the "Warrants") to the Lender. Each Warrant is exercisable to acquire
one common share of the Company (the "Common Shares") at a price of $
1.75
per Common Share for a period of one year from
date of the A&R Promissory Note. In connection with the Extension and issuance of the Warrants, the
119,229
common share purchase
warrants previously issued to the Lender in connection with the initial issuance of the promissory note have been cancelled concurrently
with the Extension. The Warrants and any Common Shares issuable on exercise of the Warrants are subject to a statutory four-month hold
period under applicable Canadian securities laws from the date of issue.
On
April 13, 2023, the Company extended to October 16, 2023 the expiry date of a total of
643,299
common share purchase warrants of the
Company (collectively, the "Subject Warrants"), which were scheduled to expire on April 16, 2023.
Each of the Subject Warrants
entitles the holder thereof to purchase one common share of the Company at a price of $
1.75
per share (on a post-consolidation basis).
Other than the extension of the Subject Warrants from April 16, 2023 to October 16, 2023, all other terms and conditions of the Subject
Warrants remain unchanged.
39
| PNRL / Year ended 2022 and 2021
Consolidated
Financial Statements
For
the year ended December 31, 2021
(In
accordance with International Financial Reporting Standards ("IFRS") and stated in thousands of Canadian dollars, unless
otherwise indicated)
INDEX
Management's Responsibility for Financial Reporting
Report of Independent Registered Public Accounting Firm
Consolidated
Financial Statements
■
Consolidated Statements of Financial Position
■
Consolidated Statements of Comprehensive Loss
■
Consolidated Statements of Changes in Equity
■
Consolidated Statements of Cash Flows
■
Notes to the Consolidated Financial Statements
1
|
North American Nickel / YEAR END 2021
Management
responsibility for financial reporting
The
consolidated financial statements, and the notes thereto, of North American Nickel Inc., and its subsidiary have been prepared by management
in accordance with International Financial Reporting Standards ("IFRS"). Management acknowledges responsibility for the preparation
and presentation of the consolidated financial statements, including responsibility for significant accounting judgments and estimates
and the choice of accounting principles and methods that are appropriate to the Company's circumstances.
Management,
in discharging these responsibilities, maintains a system of internal controls designed to provide reasonable assurance that its assets
are safeguarded, only valid and authorized transactions are executed and accurate, timely and comprehensive financial information is
prepared. However, any system of internal controls over financial reporting, no matter how well designed and implemented, has inherent
limitations and may not prevent or detect all misstatements.
The
Board of Directors, principally through the Audit Committee, is responsible for reviewing and approving the consolidated financial statements
together with other financial information of the Company and for ensuring that management fulfils its financial reporting responsibilities.
The
consolidated financial statements have been audited by Dale Matheson Carr-Hilton LaBonte LLP, Chartered Professional Accountants, Licensed
Public Accountants, who were appointed by the shareholders to examine the consolidated financial statements and provide an independent
auditor's opinion thereon. The report of the independent registered public accounting firm outlines the scope of their examination
and their opinion on the consolidated financial statements. Dale Matheson Carr-Hilton LaBonte LLP has full and free access to the Board
of Directors.
"signed"
Keith
    Morrison
President
    and Chief Executive Officer
"signed"
Sarah
    Zhu
Chief
    Financial Officer
April
    25,
2022
2
|
North American Nickel / YEAR END 2021
Report
of Independent Registered Public Accounting Firm (PCAOB ID1173)
To
the shareholders and the board of directors of North American Nickel Inc.
Opinion
on the Consolidated Financial Statements
We
have audited the accompanying consolidated statements of financial position of North American Nickel Inc. (the "Company")
as of December 31, 2021 and 2020, the related consolidated statements of comprehensive loss, changes in equity and cash
flows, for the years ended December 31, 2021, 2020 and 2019, and the related notes (collectively referred to as the "financial
statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the
Company as of December 31, 2021 and 2020, and its financial performance and its cash flows for the years ended December
31, 2021, 2020 and 2019, in conformity with International Financial Reporting Standards as issued by the International Accounting
Standards Board.
Going
Concern
The
accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note
1 to the financial statements, the Company has not generated revenues since inception, has incurred losses in developing its business,
and further losses are anticipated. These factors raise substantial doubt about the Company's ability to continue as a going concern.
Management's plans in this regard are described in Note 1. The financial statements do not include any adjustments that might result
from the outcome of this uncertainty.
Basis
for Opinion
These
financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's
financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board
(United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal
securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We
conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company
is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting in accordance with
the standards of the PCAOB. As part of our audits we are required to obtain an understanding of internal control over financial reporting
but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting.
Accordingly, we express no such opinion in accordance with the standards of the PCAOB.
Our
audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error
or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding
the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant
estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits
provide a reasonable basis for our opinion.
Critical
Audit Matter
The
critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated
or required to be communicated to the audit committee and (that): (1) relates to accounts or disclosures that are material to the financial
statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters
does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit
matters below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.
3
|
North American Nickel / YEAR END 2021
Critical
    Audit Matter
How
    the Matter was Addressed in the Audit
Valuation
    of exploration and evaluation assets
The
    matter was addressed as follows -
Refer
    to Note 6 – Exploration and Evaluation Assets
The
    principal considerations for our determination that performing procedures relating to the valuation of the exploration and evaluation
    asset is a critical audit matter is due to the high degree of judgment management made to assess whether indicators of impairment
    exist on the Company's exploration and evaluation assets, specifically, related to the Company's ability and intention
    to continue to explore the exploration and evaluation assets. As a result, a high degree of auditor effort was involved when performing
    procedures to evaluate whether management appropriately identified impairment indicators.
●
Obtained
    an understanding of key controls associated with evaluating exploration and evaluation assets for indicators of impairment.
●
Assessed
    management's conclusions and internal and external factors that may be considered indicators of impairment and compared these
    to management's assessment of impairment.
●
Assessed
    the Company's right to perform exploration activities on its exploration and evaluation assets, including that the rights are
    in good standing.
●
Evaluated
    the Company's ability and intent to undertake significant exploration activity on its exploration and evaluation assets.
●
Evaluated
    the associated disclosures in the consolidated financial statements.
DALE
MATHESON CARR-HILTON LABONTE LLP
CHARTERED
PROFESSIONAL ACCOUNTANTS
We
have served as the Company's auditor since 2005
. In 2022, we became the predecessor auditor.
Vancouver,
Canada
April
25, 2022
4
|
North American Nickel / YEAR END 2021
Consolidated
    Statements of Financial Position
(Expressed
    in thousands of Canadian dollars)
Notes
December 31, 2021
December 31, 2020
ASSETS
CURRENT ASSETS
Cash
1,973
308
Receivables and other current assets
4
75
59
Due from related party
9
199
55
TOTAL CURRENT ASSETS
2,247
422
NON-CURRENT ASSETS
Equipment
5
16
21
Exploration and evaluation assets
6
39,099
39,103
Advance
9
-
50
Investment
9,10
321
48
TOTAL NON-CURRENT ASSETS
39,436
39,222
TOTAL ASSETS
41,683
39,644
LIABILITIES
Trade payables and accrued liabilities
7, 10
480
362
Provision for restoration obligation
6, 12
-
267
TOTAL LIABILITIES
480
629
EQUITY
Share capital - preferred
8
591
591
Share capital – common
8
93,451
89,627
Reserve
8
4,252
2,096
Deficit
(57,091
)
(53,299
)
TOTAL EQUITY
41,203
39,015
TOTAL LIABILITIES AND EQUITY
41,683
39,644
Nature
of Operations (Note 1)
Commitments
(Note 6 and 12)
Subsequent
Events (Note 18)
The
accompanying notes are an integral part of these Consolidated Financial Statements.
Approved
by the Board of Directors on April 25, 2022
"signed"
"signed"
Keith
    Morrison
Director
Douglas
    Ford
Audit
    Committee Chair
5
|
North American Nickel / YEAR END 2021
Consolidated
    Statements of Comprehensive Loss
(Expressed
    in thousands of Canadian dollars)
Notes
Year-ended
    December 31,
2021
Year-ended
    December 31, 2020
Year-ended December
                                            31,
2019
EXPENSES
General and administrative expenses
9, 10, 17
(1,159
)
(1,238
)
(2,145
)
Property investigation
6
(26
)
(47
)
(214
)
Amortization
5
(5
)
(7
)
(12
)
Share-based payments
8
(2,531
)
(969
)
-
(3,721
)
(2,261
)
(2,371
)
OTHER ITEMS
Interest income
-
-
26
Reversal of flow-through share premium
8
-
89
-
Impairment of exploration and evaluation assets
6
(99
)
(438
)
(26,510
)
Foreign exchange loss
(7
)
(1
)
(4
)
Equity loss on investment
9
(169
)
(130
)
-
(275
)
(480
)
(26,488
)
TOTAL COMPREHENSIVE LOSS FOR THE YEAR
(3,996
)
(2,741
)
(28,859
)
Basic and diluted weighted average number of common shares outstanding
122,376,897
96,521,169
79,152,786
Basic and diluted loss per share
(0.03
)
(0.03
)
(0.36
)
The
accompanying notes are an integral part of these Consolidated Financial Statements.
6
|
North American Nickel / YEAR END 2021
Consolidated
    Statements of Changes in Equity
(Expressed
    in thousands of Canadian dollars)
Notes
Number
                                            of Shares
Share
                                            capital
Preferred
                                            stock
Reserve
Deficit
Total
                                            Equity
BALANCE DECEMBER 31, 2018
78,792,860
87,947
591
7,749
(29,343
)
66,944
Net and comprehensive loss
-
-
-
-
(28,859
)
(28,859
)
Share capital issued through private placement
8
9,597,931
1,728
-
-
-
1,728
Share issue costs
8
-
(344
)
-
-
-
(344
)
Flow-through share premium
8
-
(89
)
-
-
-
(89
)
Share capital issued as earn-in
8
300,000
51
-
-
-
51
Value allocated to warrants
8
-
(287
)
-
287
-
-
Expired warrants
8
-
-
-
(2,080
)
(2,080
)
-
Forfeited/expired options
8
-
-
-
(1,781
)
1,781
-
BALANCE
DECEMBER 31, 2019
88,690,791
89,006
591
4,175
(54,341
)
39,431
Net and comprehensive loss
(2,741
)
(2,741
)
Share capital issued through private placement
8
21,142,857
1,480
-
-
-
1,480
Share issue costs
8
-
(124
)
-
-
-
(124
)
Value allocated to warrants
8
-
(735
)
-
735
-
-
Expired warrants
8
-
-
-
(2,572
)
2,572
-
Share-based payments
8
-
-
-
969
-
969
Forfeited/expired options
8
-
-
-
(1,211
)
1,211
-
BALANCE AT DECEMBER 31, 2020
109,833,648
89,627
591
2,096
(53,299
)
39,015
Net and comprehensive loss
-
-
-
-
(3,996
)
(3,996
)
Share capital issued through private placement
8
8,290,665
1,990
-
-
-
1,990
Share issue costs
8
-
(90
)
-
-
-
(90
)
Value allocated to warrants
8
-
(495
)
-
495
-
-
Exercised options
8
500,000
112
-
-
-
112
Exercised options fair value
8
-
92
(92
)
-
-
Exercised warrants
8
12,580,314
1,641
-
-
-
1,641
Exercised warrants
8
-
574
-
(574
)
-
-
Expired warrants
8
-
-
-
(106
)
106
-
Share-based payments
8
-
-
-
2,531
-
2,531
Forfeited/expired options
8
-
-
-
(98
)
98
-
BALANCE AT DECEMBER 31, 2021
131,204,627
93,451
591
4,252
(57,091
)
41,203
The
accompanying notes are an integral part of these Consolidated Financial Statements.
7
|
North American Nickel / YEAR END 2021
Consolidated
    Statements of Cash Flows
(Expressed
    in thousands of Canadian dollars)
Year ended
December 31, 2021
Year ended
December 31, 2020
Year
                                            ended
December 31, 2019
OPERATING ACTIVITIES
Loss for the year
(3,996
)
(2,741
)
(28,859
)
Items not affecting cash:
Amortization
5
7
12
Share-based payments
2,531
969
-
Interest income
-
-
(26
)
Reversal of flow-through share premium
-
(89
)
-
Impairment of exploration and evaluation assets
99
438
(26,510
)
Equity loss on investment
169
130
-
Changes in working capital
(282
)
(46
)
11
Other:
Interest received
-
-
36
Net cash used in operating activities
(1,474
)
(1,332
)
(2,316
)
INVESTING ACTIVITIES
Expenditures on exploration and evaluation assets
(122
)
(635
)
(780
)
Short-term investments
-
-
2,500
Investment
(392
)
(121
)
-
Advance
-
(50
)
(24
)
Purchase equipment
-
-
(5
)
Net cash provided by (used in) investing activities
(514
)
(806
)
1,691
FINANCING ACTIVITIES
Proceeds from issuance of common shares
1,990
1,472
1,728
Share issuance costs
(90
)
(124
)
(344
)
Proceeds from exercise of warrants and options
1,753
-
-
Net cash provided by financing activities
3,653
1,348
1,384
Change in cash for the year
1,665
(790
)
759
Cash, beginning of the year
308
1,098
339
Cash, end of the year
1,973
308
1,098
Supplemental
cash flow information (Note 11)
The accompanying notes are an integral part of these Consolidated Financial Statements.
8
|
North American Nickel / YEAR END 2021
Notes
to the Consolidated Financial Statements
For
the year ended December 31, 2021
(Expressed
in Canadian dollars)
The
accompanying notes are an integral part of these Consolidated Financial Statements.
1.
NATURE AND CONTINUANCE OF OPERATIONS
North
American Nickel Inc. (the "Company") was incorporated on September 23, 1983, under the laws of the Province of British Columbia,
Canada. The primary mailing office is located at 3400 – 100 King Street West, PO Box 130, Toronto, Ontario, M5X 1A4 and the records
office of the Company is located at 666 Burrard Street, Suite 2500, Vancouver BC V6C 2X8. The Company's common shares trade on
the TSX Venture Exchange ("TSXV") under the symbol "NAN".
The
Company's principal business activity is the exploration and development of mineral properties in Greenland and Canada, as well
as in Botswana through its participation in Premium Nickel Resources ("Premium Nickel"). The Company has not yet determined
whether any of these properties contain ore reserves that are economically recoverable. The recoverability of carrying amounts shown
for exploration and evaluation assets is dependent upon a number of factors including environmental risk, legal and political risk, the
existence of economically recoverable mineral reserves, confirmation of the Company's interests in the underlying mineral claims,
the ability of the Company to obtain necessary financing to complete exploration and development, and to attain sufficient net cash flow
from future profitable production or disposition proceeds.
These
consolidated financial statements have been prepared on the assumption that the Company will continue as a going concern, meaning
it will continue in operation for the foreseeable future and will be able to realize assets and discharge liabilities in the ordinary
course of operations. The ability of the Company to continue operations as a going concern is ultimately dependent upon achieving profitable
operations and its ability to raise additional capital. To date, the Company has not generated profitable operations from its resource
activities and will need to invest additional funds in carrying out its planned exploration, development and operational activities.
These uncertainties cast substantial doubt about the Company's ability to continue as a going concern. These financial statements
do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities
that might be necessary should the Company be unable to continue as a going concern. Such adjustments could be material.
The
exploration and evaluation properties in which the Company currently has an interest are in the exploration stage. As such, the Company
is dependent on external financing to fund its activities. In order to carry out the planned exploration and cover administrative costs,
the Company will use its existing working capital and raise additional amounts as needed. Although the Company has been successful in
its past fundraising activities, there is no assurance as to the success of future fundraising efforts or as to the sufficiency of funds
raised in the future. The Company will continue to assess new properties and seek to acquire interests in additional properties if there
is sufficient geologic or economic potential and if adequate financial resources are available to do so.
The
coronavirus COVID-19 declared as a global pandemic in March 2020 continued throughout the 2020 year and to date. This contagious disease
outbreak, which continues to spread, and any related adverse public health developments, has adversely affected workforces, economies,
and financial markets globally, potentially leading to an economic downturn. The Company is closely monitoring the impact of the pandemic
on all aspects of its business and COVID-19 has delayed the Company's ability to conduct major fieldwork on projects.
The
consolidated financial statements were approved and authorized for issuance by the Board of Directors of the Company on April 25,
2022. The related notes to the consolidated financial statements are presented in Canadian dollars except amounts in the tables are
expressed in thousands of Canadian dollars.
2.
BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES
(a)
Statement of Compliance
The
Company's consolidated financial statements were prepared in accordance with International Financial Reporting Standards ("IFRS").
9
|
North American Nickel / YEAR END 2021
Notes
to the Consolidated Financial Statements
For
the year ended December 31, 2021
(Expressed
in Canadian dollars)
(b)
Basis of Preparation
These
consolidated financial statements have been prepared under the historical cost convention, modified by the revaluation of any financial
assets and financial liabilities where applicable. The preparation of financial statements in conformity with IFRS requires the use of
certain critical accounting estimates. It also requires management to exercise judgment in the process of applying the Company's
accounting policies. These areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant
to the consolidated financial statements and, are disclosed in Note 3.
(c)
Basis of consolidation
These
consolidated financial statements include the financial statements of the Company and its wholly-owned subsidiary, North American
Nickel (US) Inc. which was incorporated in the State of Delaware on May 22, 2015.
Consolidation
is required when the Company is exposed, or has rights to variable returns from its involvement with the investee and has the ability
to affect those returns through its power over the investee. All intercompany transactions, balances, income and expenses are eliminated
upon consolidation.
(d)
Foreign currency translation
Foreign
currency transactions are translated into the functional 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 consolidated
statement of comprehensive loss in the period in which they arise, except where deferred in equity as a qualifying cash flow or net
investment hedge.
Exchange
differences arising on the translation of non-monetary items are recognized in other comprehensive income in the consolidated
statement of comprehensive loss to the extent that gains and losses arising on those non-monetary items are also recognized in other
comprehensive income. Where the non-monetary gain or loss is recognized in profit or loss, the exchange component is also recognized
in profit or loss.
(e)
Exploration and evaluation assets
Exploration
and evaluation assets include the costs of acquiring licenses, costs associated with exploration and evaluation activity, and the fair
value (at acquisition date) of exploration and evaluation assets acquired in a business combination. Exploration and evaluation expenditures
are initially capitalized. Costs incurred before the Company has obtained the legal rights to explore an area are recognized in profit
or loss.
Government
tax credits received are generally recorded as a reduction to the cumulative costs incurred and capitalized on the related property.
Exploration
and evaluation assets are assessed for impairment if (i) sufficient data exists to determine technical feasibility and commercial viability,
and (ii) facts, events and circumstances suggest that the carrying amount exceeds the recoverable amount.
Once
the technical feasibility and commercial viability of the extraction of mineral resources in an area of interest are demonstrable, exploration
and evaluation assets attributable to that area of interest are first tested for impairment and then reclassified to mining property
and development assets within equipment.
10
|
North American Nickel / YEAR END 2021
Notes
to the Consolidated Financial Statements
For
the year ended December 31, 2021
(Expressed
in Canadian dollars)
Recoverability
of the carrying amount of any exploration and evaluation assets is dependent on successful development and commercial exploitation, or
alternatively, sale of the respective areas of interest.
The
Company may occasionally enter into farm-out arrangements, whereby it will transfer part of an interest, as consideration, for an agreement
by the farmee to meet certain exploration and evaluation expenditures which would have otherwise been undertaken by the Company. The
Company does not record any expenditures made by the farmee on its behalf. Any cash consideration received from the agreement is credited
against the costs previously capitalized to the mineral interest given up by the Company, with any excess consideration accounted for
in profit.
When
a project is deemed to no longer have commercially viable prospects to the Company, exploration and evaluation expenditures in respect
of that project are deemed to be impaired. As a result, those exploration and evaluation expenditure costs, in excess of estimated recoveries,
are written off to the consolidated statement of comprehensive loss/income.
(f)
Restoration and environmental obligations
The
Company recognizes liabilities for statutory, contractual, constructive or legal obligations associated with the retirement of long-term
assets, when those obligations result from the acquisition, construction, development or normal operation of the assets. The net present
value of future restoration cost estimates arising from the decommissioning of plant and other site preparation work is capitalized to
exploration and evaluation assets along with a corresponding increase in the restoration provision in the period incurred. Discount rates
using a pre-tax rate that reflect the time value of money are used to calculate the net present value. The restoration asset will be
depreciated on the same basis as other mining assets.
The
Company's estimates of restoration costs could change as a result of changes in regulatory requirements, discount rates and assumptions
regarding the amount and timing of the future expenditures. These changes are recorded directly to exploration and evaluation assets
with a corresponding entry to the restoration provision. The Company's estimates are reviewed annually for changes in regulatory
requirements, discount rates, effects of inflation and changes in estimates.
Changes
in the net present value, excluding changes in the Company's estimates of reclamation costs, are charged to profit and loss for
the period.
The
costs of restoration projects included in the provision are recorded against the provision as incurred. The costs to prevent and control
environmental impacts at specific properties are capitalized in accordance with the Company's accounting policy for exploration
and evaluation assets.
(g)
Impairment of assets
Impairment
tests on intangible assets with indefinite useful economic lives are undertaken annually at the financial year-end. Other non-financial
assets, including exploration and evaluation assets, are subject to impairment tests whenever events or changes in circumstances indicate
that their carrying amount may not be recoverable. Where the carrying value of an asset exceeds its recoverable amount, which is the
higher of value in use and fair value less costs to sell, the asset is written down accordingly.
Where
it is not possible to estimate the recoverable amount of an individual asset, the impairment test is carried out on the asset's
cash-generating unit, which is the lowest group of assets in which the asset belongs and for which there are separately identifiable
cash inflows that are largely independent of the cash inflows from other assets.
An
impairment loss is charged to the profit or loss, except to the extent the loss reverses gains previously recognized in other comprehensive
loss/income.
11
|
North American Nickel / YEAR END 2021
Notes
to the Consolidated Financial Statements
For
the year ended December 31, 2021
(Expressed
in Canadian dollars)
(h)
Financial instruments
In
accordance with IFRS 9, the Company's accounting policy is as follows:
Classification
The
Company classifies its financial instruments in the following categories: at fair value through profit and loss ("FVTPL"),
at fair value through other comprehensive income (loss) ("FVTOCI"), or at amortized cost. The Company determines the classification
of financial assets at initial recognition. The classification of debt instruments is driven by the Company's business model for
managing the financial assets and their contractual cash flow characteristics. Equity instruments that are held for trading are classified
as FVTPL. For other equity instruments, on the day of acquisition the Company can make an irrevocable election (on an instrument-by-instrument
basis) to designate them as at FVTOCI. Financial liabilities are measured at amortized cost, unless they are required to be measured
at FVTPL (such as instruments held for trading or derivatives) or the Company has opted to measure them at FVTPL.
The
following table shows the classification of the Company's financial assets and liabilities:
Financial
                                            asset/
liability
Classification
Cash
FVTPL
Other
    receivable
Amortized
    cost
Trade
    payables
Amortized
    cost
Advance
Amortized
                                            cost
Measurement
Financial
assets and liabilities at amortized cost
Financial
assets and liabilities at amortized cost are initially recognized at fair value plus or minus transaction costs, respectively, and subsequently
carried at amortized cost less any impairment.
Financial
assets and liabilities at FVTPL
Financial
assets and liabilities carried at FVTPL are initially recorded at fair value and transaction costs are expensed in profit or loss. Realized
and unrealized gains and losses arising from changes in the fair value of the financial assets and liabilities held at FVTPL are included
in the consolidated statements of comprehensive loss in the period in which they arise.
Impairment
of financial assets at amortized cost
An
'expected credit loss' impairment model applies which requires a loss allowance to be recognized based on expected credit
losses. The estimated present value of future cash flows associated with the asset is determined and an impairment loss is recognized
for the difference between this amount and the carrying amount as follows: the carrying amount of the asset is reduced to estimated present
value of the future cash flows associated with the asset, discounted at the financial asset's original effective interest rate,
either directly or through the use of an allowance account and the resulting loss is recognized in profit or loss for the period.
In
a subsequent period, if the amount of the impairment loss related to financial assets measured at amortized cost decreases, the previously
recognized impairment loss is reversed through profit or loss to the extent that the carrying amount of the investment at the date the
impairment is reversed does not exceed what the amortized cost would have been had the impairment not been recognized.
Derecognition
Financial
assets
The
Company derecognizes financial assets only when the contractual rights to cash flows from the financial assets expire, or when it transfers
the financial assets and substantially all of the associated risks and rewards of ownership to another entity. Gains and losses on derecognition
are generally recognized in the consolidated statements of comprehensive loss.
Investments
are derecognized when the rights to receive cash flows from the investments have expired or the Company has transferred the financial
asset and the transfer qualifies for derecognition.
12
|
North American Nickel / YEAR END 2021
Notes
to the Consolidated Financial Statements
For
the year ended December 31, 2021
(Expressed
in Canadian dollars)
Financial
liabilities
Financial
liabilities are derecognized when, and only when, the Company's obligations are discharged, cancelled or they expire. The difference
between the carrying amount of the financial liability derecognized and the consideration paid and payable is recognized in the consolidated
statement of comprehensive loss.
(i)
Loss per share
The
Company uses the treasury stock method to compute the dilutive effect of options, warrants and similar instruments. Under this method,
the dilutive effect on loss per common share is recognized on the use of the proceeds that could be obtained upon exercise of options,
warrants and similar instruments. It assumes that the proceeds would be used to purchase common shares at the average market price during
the period.
Basic
loss per common share is calculated using the weighted average number of common shares outstanding during the period and does not include
outstanding options and warrants. Dilutive loss per common share is not presented differently from basic loss per share as the conversion
of outstanding stock options and warrants into common shares would be anti-dilutive.
(j)
Income taxes
Income
tax expense comprises current and deferred tax. Current tax and deferred tax are recognized in net income except to the extent that it
arises in a business combination, or from items recognized directly in equity or other comprehensive loss/income.
Current
income tax assets and liabilities for the current period are measured at the amount expected to be recovered from or paid to the taxation
authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting
date, in the countries where the Company operates and generates taxable income.
Current
income tax relating to items recognized directly in other comprehensive income or equity is recognized in other comprehensive income
or equity and not in profit or loss. Management periodically evaluates positions taken in the tax returns with respect to situations
in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.
Deferred
income tax is provided using the asset and liability method of temporary differences at the reporting date between the tax bases of assets
and liabilities and their carrying amounts for financial reporting purposes.
The
carrying amount of deferred income tax assets is reviewed at the end of each reporting period and recognized only to the extent that
it is probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilized.
Deferred
income 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 tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting
period.
Deferred
income tax assets and deferred income tax liabilities are offset, only if a legally enforceable right exists to set off current tax assets
against current income tax liabilities and the deferred income taxes relate to the same taxable entity and the same taxation authority.
Flow-through
shares
Any
premium received by the Company on the issuance of flow-through shares is initially recorded as a liability ("flow-through tax
liability"). Upon renouncement by the Company of the tax benefits associated with the related expenditures, a flow-through share
premium liability is recognized and the liability will be reversed as eligible expenditures are made. If such expenditures are capitalized,
a deferred tax liability is recognized. To the extent that suitable deferred tax assets are available, the Company will reduce the deferred
tax liability.
13
|
North American Nickel / YEAR END 2021
Notes
to the Consolidated Financial Statements
For
the year ended December 31, 2021
(Expressed
in Canadian dollars)
(k)
Share-based payments
Where
equity-settled share options are awarded to employees, the fair value of the options at the date of grant is recognized over the vesting
period. Performance vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each
reporting date so that, ultimately, the cumulative amount recognized over the vesting period is based on the number of options that eventually
vest. Non-vesting conditions and market vesting conditions are factored into the fair value of the options granted. As long as all other
vesting conditions are satisfied, a charge is made irrespective of whether these non-vesting and market vesting conditions are satisfied.
The cumulative expense is not adjusted for failure to achieve a market vesting condition or where a non-vesting condition is not satisfied.
Where
the terms and conditions of options are modified, the increase in the fair value of the options, measured immediately before and after
the modification, is also recognized over the remaining vesting period.
Where
equity instruments are granted to non-employees, they are recorded at the fair value of the goods or services received. Amounts related
to the issuance of shares are recorded as a reduction of share capital.
When
the value of goods and services received in exchange for the share-based payment cannot be reliably estimated, the fair value is measured
by use of a valuation model. The expected life used in the model is adjusted, based on management's best estimate, for the effects
of non-transferability, exercise restrictions, and behavioural considerations.
All
equity-settled share-based payments are reflected in share-based payments reserve, until exercised. Upon exercise shares are issued from
treasury and the amount reflected in share-based payments reserve is credited to share capital along with any consideration paid.
(l)
Share capital
The
Company's common shares, preferred shares and share warrants shares are classified as equity instruments.
Incremental
costs directly attributable to the issue of new shares or options are shown in equity as a deduction from the proceeds.
Proceeds
received on the issuance of units, consisting of common shares and warrants are allocated to share capital.
(m)
Flow-through shares
Resource
expenditure deductions for income tax purposes related to exploratory activities funded by flow-through share arrangements are renounced
to investors in accordance with income tax legislation. Pursuant to the terms of the flow-through share agreements, these shares transfer
the tax deductibility of qualifying resource expenditures to investors. On issuance, the Company bifurcates the flow-through share into
a flow-through share premium, equal to the estimated premium, if any, investors pay for the flow-through feature, which is recognized
as a liability and share capital. Upon expenses being incurred, the Company derecognizes the liability and recognizes a deferred tax
liability for the amount of tax reduction renounced to the shareholders. The premium is recognized as other income and the related deferred
tax is recognized as a tax provision.
Proceeds
received from the issuance of flow-through shares are restricted to be used only for Canadian resource property exploration expenditures
within a two-year period. The portion of the proceeds received but not yet expended at the end of the period is disclosed separately
as flow- through share proceeds, if any.
The
Company may also be subject to a Part XII.6 tax on flow-through proceeds renounced under the look-back Rule, in accordance with Government
of Canada flow-through regulations. When applicable, this tax is accrued as a financing expense until qualifying expenditures are incurred.
14
|
North American Nickel / YEAR END 2021
Notes
to the Consolidated Financial Statements
For
the year ended December 31, 2021
(Expressed
in Canadian dollars)
(n)
Equipment
Equipment
is stated at historical cost less accumulated depreciation and accumulated impairment losses.
Subsequent
costs are included in the asset's carrying amount or recognized as a separate asset, as appropriate, only when it is probable that
future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying
amount of a significant replaced part is derecognized. All other repairs and maintenance are charged to the consolidated statement
of comprehensive loss during the financial period in which they are incurred. Gains and losses on disposals are determined by
comparing the proceeds with the carrying amount and are recognized in profit or loss.
Depreciation
and amortization are calculated on a straight-line method to charge the cost, less residual value, of the assets to their residual values
over their estimated useful lives. The depreciation and amortization rate applicable to each category of equipment is as follows:
Equipment
Depreciation
    rate
Exploration
    equipment
20%
Computer
    software
50%
Computer
    equipment
55%
(o)
Equity investment
Investments
in entities over which the Company has a significant influence, but not control, are accounted for by the equity method, whereby the
original cost of the investment is adjusted for the Company's proportionate share of the investee's income or loss. When
the Company's equity investee issues its own shares to outside interest, a dilution gain or loss arises as a result of the difference
between the Company's proportionate share of the proceeds and the carrying value of the underlying equity. When net accumulated
losses from an equity accounted investment exceed its carrying amount, the investment balance is reduced to zero and additional losses
are not provided for unless the Company is committed to provide financial support to the investee.
(p)
Accounting standards and amendments issued but not yet effective
Certain
accounting standards or amendments to existing accounting standards that have been issued but have future effective dates are either
not applicable or are not expected to have a significant impact on the Company's consolidated financial statements.
IAS
16 - "Property, Plant and Equipment"
The
IASB issued an amendment to IAS 16, Property, Plant and Equipment to prohibit the deducting from property, plant and equipment amounts
received from selling items produced while preparing an asset for its intended use. Instead, sales proceeds and its related costs must
be recognized in profit or loss. The amendment will require companies to distinguish between costs associated with producing and selling
items before the item of property, plant and equipment is available for use and costs associated with making the item of property, plant
and equipment available for its intended use. The amendment is effective for annual periods beginning on or after January 1, 2022, with
earlier application permitted. The amendment is not currently applicable.
IAS
1 – "Presentation of Financial Statements"
The
IASB issued an amendment to IAS 1, Presentation of Financial Statements to clarify one of the requirements under the standard for classifying
a liability as non-current in nature, specifically the requirement for an entity to have the right to defer settlement of the liability
for at least 12 months after the reporting period. The amendment includes: (i) specifying that an entity's right to defer settlement
must exist at the end of the reporting period; (ii) clarifying that classification is unaffected by management's intentions or
expectations about whether the entity will exercise its right to defer settlement; (iii) clarifying how lending conditions affect classification;
and (iv) clarifying requirements for classifying liabilities an entity will or may settle by issuing its own equity instruments. An assessment
will be performed prior to the effective date of January 1, 2023 to determine the impact to the Company's financial statements.
15
|
North American Nickel / YEAR END 2021
Notes
to the Consolidated Financial Statements
For
the year ended December 31, 2021
(Expressed
in Canadian dollars)
3.
CRITICAL ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS
The
preparation of the financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that
can affect reported amounts of assets, liabilities revenues and expenses and the accompanying disclosures. Estimates and assumptions
are continuously evaluated and are based on management's historical experience and on other assumptions believed to be reasonable
under the circumstances. However, different judgments, estimates and assumptions could result in outcomes that require a material adjustment
to the carrying amount of assets or liabilities affected in future periods.
The
areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated
financial statements are:
(a)
Recoverability of Exploration and Evaluation Assets
The
ultimate recoverability of the exploration and evaluation assets with a carrying value of $39,099,000
at
December 31, 2021, is dependent upon the Company's ability to obtain the necessary financing and permits to complete the
development and commence profitable production at its projects, or alternatively, upon the Company's ability to dispose of its
interests therein on an advantageous basis. A review of the indicators of potential impairment is carried out at least at each
period end.
Management
undertakes a periodic review of these assets to determine whether any indication of impairment exists. Where an indicator of impairment
exists, a formal estimate of the recoverable amount of the assets is made. An impairment loss is recognized when the carrying value of
the assets is higher than the recoverable amount and when mineral license tenements are relinquished or have lapsed. In undertaking this
review, management of the Company is required to make significant estimates of, among other things, discount rates, commodity prices,
availability of financing, future operating and capital costs and all aspects of project advancement. These estimates are subject to
various risks and uncertainties, which may ultimately have an effect on the expected recoverability of the carrying values of the assets.
During the year ended December 31, 2021, the Company recorded write-off of its Quetico claims of $71,466 and Lingman Lake of $27,657.
During the year ended December 31, 2020, the Company recorded a write- off of its Loveland Nickel property of $437,897
.
(b)
Restoration Provisions
Management's
best estimates regarding the restoration provisions are based on the current economic environment. Changes in estimates of contamination,
restoration standards and restoration activities result in changes to provisions from period to period. Actual restoration provisions
will ultimately depend on future market prices for future restoration obligations. Management has determined that the Company has restoration
obligations at December 31, 2021 of $Nil
(December 31, 2020 - $267,000
)
related to its Greenland exploration and evaluation
asset.
(c)
Valuation of Share-Based Compensation
The
Company estimates the fair value of convertible securities such as warrants and options using the Black-Scholes Option Pricing Model
which requires significant estimation around assumptions and inputs such as expected term to maturity, expected volatility and expected
forfeiture rates. The accounting policies in Note 2(k) and Note 8 of the consolidated financial statements contain further details
of significant assumptions applied to these areas of estimation.
(d)
Going Concern
Financial
statements are prepared on a going concern basis unless management either intends to liquidate the Company or to cease trading, or has
no realistic alternative to do so. Assessment of the Company's ability to continue as a going concern requires the consideration
of all available information about the future, which is at least, but not limited to, twelve months from the end of the reporting period.
This information includes estimates of future cash flows and other factors, the outcome of which is uncertain. When management is aware,
in making its assessment, of material uncertainties related to events or conditions that may cast substantial doubt upon the Company's
ability to continue as a going concern those uncertainties are disclosed.
16
|
North American Nickel / YEAR END 2021
Notes
to the Consolidated Financial Statements
For
the year ended December 31, 2021
(Expressed
in Canadian dollars)
(e)
Equity investment
Management
determines its ability to exercise significant influence over an investee by looking at its percentage interest and other qualitative
factors including but not limited to its voting rights, representation on the board of directors, participation in policymaking processes,
material transactions between the Company and the investee, interchange of managerial personnel, provision of essential technical information
and operating involvement.
At
December 31, 2021, the Company's percentage holding in its private investee was 10%, with significant influence over the private
investee and has used the equity method of accounting for this investment.
4.
RECEIVABLES AND OTHER CURRENT ASSETS
A
summary of the receivables and other current assets as of December 31, 2021 and 2020 is detailed in the table below:
(All
amounts in table are expressed in thousands of Canadian dollars)
December 31,
2021
December 31,
2020
Sales taxes receivable
22
23
Prepaid expenses
53
36
75
59
5.
EQUIPMENT
The
table below sets out costs and accumulated depreciation as at December 31, 2021 and 2020:
Exploration Equipment
Computer Equipment
Computer Software
Total
Cost
Balance – December 31, 2019, 2020 and 2021
67
15
136
218
Accumulated Amortization
Balance – December 31, 2019
48
12
130
190
Amortization
4
1
2
7
Balance – December 31, 2020
52
13
132
197
Amortization
3
1
1
5
Balance – December 31, 2021
55
14
133
202
Carrying Amount
As at December 31, 2020
15
2
4
21
As at December 31, 2021
12
1
3
16
17
|
North American Nickel / YEAR END 2021
Notes
to the Consolidated Financial Statements
For
the year ended December 31, 2021
(Expressed
in Canadian dollars)
6.
EXPLORATION AND EVALUATION ASSETS
(All
amounts in table are expressed in thousands of Canadian dollars)
Canada
US
Greenland
Post Creek
Property
Halcyon
Property
Quetico
Claims
Loveland Nickel (Enid Creek)
Lingman Lake
Section 35
Property
Maniitsoq
Property
Total
Acquisition
Balance, December 31, 2019
298
230
42
83
14
11
42
720
Acquisition costs
10
8
-
-
-
-
4
22
Impairment
-
-
-
(83
)
-
-
-
(83
)
Balance, December 31, 2020
308
238
42
-
14
11
46
659
Acquisition costs – cash
10
8
-
-
-
-
-
18
Impairment
-
-
(37
)
-
(14
)
-
-
(51
)
Balance, December 31, 2021
318
246
5
-
-
11
46
626
Exploration
Balance, December 31, 2019
1,498
233
39
33
13
(11
)
36,108
37,913
Administration
2
1
-
-
-
-
9
12
Property maintenance
6
5
1
-
-
-
25
37
Drilling
-
-
5
167
-
-
43
215
Geology
21
13
69
83
-
-
56
242
Geophysics
2
-
28
72
-
-
3
105
Helicopter charter aircraft
-
-
-
-
-
-
8
8
Camp site cleanup
-
-
-
-
-
-
267
267
Impairment
-
-
-
(355
)
-
-
-
(355
)
31
19
103
(33
)
13
-
411
531
Balance, December 31, 2020
1,529
252
142
-
13
-
36,519
38,445
Administration
-
-
-
-
-
-
7
7
Drilling
-
-
-
-
-
-
42
42
Geology
12
12
10
-
-
-
55
89
Geophysics
-
-
1
-
-
-
-
1
Property maintenance
1
1
1
-
-
-
17
20
Infrastructure
-
-
-
-
-
-
13
13
Camp site cleanup
-
-
-
-
-
-
(95
)
(95
)
Impairment
-
-
(35
)
-
(13
)
-
-
(48
)
13
13
(23
)
-
-
-
39
28
Balance, December 31, 2021
1,542
265
119
-
-
-
36,558
38,473
Total, December 31, 2020
1,837
490
184
-
27
-
36,565
39,103
Total, December 31, 2021
1,860
511
124
-
-
-
36,604
39,099
18
|
North American Nickel / YEAR END 2021
Notes
to the Consolidated Financial Statements
For
the year ended December 31, 2021
(Expressed
in Canadian dollars)
The
following is a description of the Company's exploration and evaluation assets and the related spending commitments:
Post
Creek
On
December 23, 2009 and as last amended on March 12, 2013, the Company completed the required consideration and acquired the rights to
a mineral claim known as the Post Creek Property located within the Sudbury Mining District of Ontario.
Commencing
August 1, 2015, the Company is obligated to pay advances on net smelter return royalties ("NSR") of $10,000 per annum. The
Company paid the required $10,000 during the year ended December 31, 2021 (December 31, 2020 - $10,000). The total of the advances will
be deducted from any payments to be made under the NSR.
During
the year ended December 31, 2021, the Company incurred acquisition and exploration expenditures totalling $22,732
(December 31, 2020 - $41,004
)
on the Post Creek Property.
Halcyon
On
December 31, 2015, the Company completed the required consideration of the option agreement and acquired rights to a mineral claim known
as the Halcyon Property located within the Sudbury Mining District of Ontario, subject to certain NSR and advance royalty payments.
Commencing
August 1, 2015, the Company is obligated to pay advances on the NSR of $8,000 per annum. The Company paid the required $8,000 during
the year ended December 31, 2021 (December 31, 2020 - $8,000). The total of the advances will be deducted from any payments to be made
under the NSR.
During
the year ended December 31, 2021, the Company incurred $20,732 (December 31, 2020 - $27,317) in acquisition and exploration expenditures
on the Halcyon Property.
Quetico
On
April 26 and May 17, 2018, the Company acquired the right to certain mineral claims known as Quetico located within the Sudbury Mining
District of Ontario.
The
Company had no minimum required exploration commitment for the years ended December 31, 2021 2020 and 2019 as it is not
required to file any geoscience assessment work between the initial recording of a mining claim and the first anniversary date of the
mining claim and two one-year exclusions were granted as a result of the COVID-19 pandemic.
In
April 2020, the Company applied for a one - year exclusion under a COVID-19 relief program offered by the Ontario Ministry of Energy,
Northern Development and Mine (ENDM). The one-year exclusion was granted on September 1, 2020, thus adjusting the work requirement due
dates to April and May of 2021. The COVID-19 relief program was offered again in 2021, and the Company lodged a second set of applications
on March 29, 2021 and April 21, 2021 to extend the tenure of the claim blocks. The additional one-year exclusions were granted on May
14 and May 20, 2021 thus adjusting the work requirement due dates to April and May of 2022.
By
the second anniversary of the recording of a claim and by each anniversary thereafter, a minimum of $400 worth of approved exploration
activity per claim unit must be reported to the Provincial Recording Office. Alternately, the Company could maintain mining claims by
filing an Application to Distribute Banked Assessment Work Credits form before any due date. Payments in place of reporting assessment
work may also be used to meet yearly assessment work requirements, provided the payments are not used for the first unit of assessment
work. The total annual work requirement for Quetico project after April 26, 2021 is $324,000 should the Company maintain the current
size of the claims. Work reports for 2020 were filed and total expenditures of $61,783 were approved on June 4, 2021.
During
the year ended December 31, 2021, the Company incurred $11,668 (December 31, 2020 - $102,715) in exploration and license related expenditures
on the Quetico Property.
19
|
North American Nickel / YEAR END 2021
Notes
to the Consolidated Financial Statements
For
the year ended December 31, 2021
(Expressed
in Canadian dollars)
IFRS
6 requires management to assess the exploration and evaluation assets for impairment. Accordingly, at December 31, 2021, management believed
that facts and circumstances existed to suggest that the carrying amount of Quetico claims exceeded its recoverable amount. As a result,
management determined the Quetico claims should be impaired by $71,466 and its recoverable amount was reduced to $124,348 at the end
of December 31, 2021.
Loveland
Nickel (Enid Creek) Property
On
September 25, 2019, the Company entered into earn in agreement to acquire a 100% interest, subject to a 1% NSR, in certain claims known
as the Loveland Nickel (Enid Creek) Property located in Timmins, Ontario. Consideration included acquisition costs of $1,525,000 in cash
and the issuance of 300,000 common shares. During the year ended December 31, 2019, the Company paid $25,000 and issued 300,000 common
shares at a fair value of $51,000. Exploration expenditures of $4,500,000 were to be incurred over a period ending September 25, 2024.
As
of December 31, 2020, the Company incurred an aggregate exploration and acquisition expenditures of $437,897. Based on the results of
the exploration program completed in April 2020, management elected not to proceed with further exploration on the property and terminated
the agreement. Accordingly, all acquisition and exploration related costs were impaired as at December 31, 2020, totalling $437,897.
Lingman
Lake Property
During
the year ended December 31, 2019, the Company staked certain mineral claims known as Lingman Lake located northwest of Thunder Bay, Ontario.
The Company incurred total acquisition and related costs of $Nil
(December 31, 2020 - $Nil
)
during the year ended December 31, 2021. As at December 31, 2021, management elected not to proceed with further exploration on the property.
Accordingly, all acquisition and exploration related costs were impaired as at December 31, 2021, totalling $27,657
.
Section
35 Property
On
January 4, 2016, the Company entered into a 10-year Metallic Minerals Lease (the "Lease") with the Michigan Department of
Natural Resources for an area covering approximately 320 acres. The terms of the Lease required annual rental fees.
At
the end of the fiscal year 2019, management of the Company made a decision to relinquish the mineral lease. As a result, all cumulative
exploration related costs of $11,393 were written-off as at December 31, 2019. The Company applied and received approval for a refund
of a $13,016 (US $10,000) reclamation deposit held by the Department of Natural Resources in Michigan. The reclamation deposit was received
during the year ended December 31, 2020.
Maniitsoq
The
Company has been granted certain exploration licenses, by the Bureau of Minerals and Petroleum ("BMP") of Greenland for exclusive
exploration rights of an area comprising the Maniitsoq Property, located near Ininngui, Greenland. The Maniitsoq Property is subject
to a 2.5% NSR. The Company can reduce the NSR to 1% by paying $2,000,000 on or before 60 days from the decision to commence commercial
production.
At
the expiration of the first license period, the Company may apply for a second license period (years 6-10), and the Company may apply
for a further 3-year license for years 11 to 13. Thereafter, the Company may apply for additional 3-year licenses for years 14 to 16,
17 to 19 and 20 to 22. The Company will be required to pay additional license fees and will be obligated to incur minimum eligible exploration
expenses for such years.
The
Company may terminate the licenses at any time, however any unfulfilled obligations according to the licenses will remain in force, regardless
of the termination.
Future
required minimum exploration expenditures will be adjusted each year on the basis of the change to the Danish Consumer Price Index.
During
the year ended December 31, 2021, the Company spent in aggregate of $133,772 in acquisition and exploration expenditures on the Maniitsoq
Property, which is comprised of the Sulussugut, Ininngui, Carbonatite and 2020/05 Licenses.
20
|
North American Nickel / YEAR END 2021
Notes
to the Consolidated Financial Statements
For
the year ended December 31, 2021
(Expressed
in Canadian dollars)
During
the year ended December 31, 2020, the Company has recorded a $267,000 provision for camp site cleanup and restoration obligations. The
cost accrued was based on the current best estimate of restoration activities that would be required on the Maniitsoq Property. The Company's
provision for future cleanup was based on the level of known disturbance at the reporting date and known requirements. It was not possible
to estimate the impact on operating results, if any, and the actual amount of any economic outflow related to this obligation is dependent
upon future events and cannot be reliably measured. The Company fulfilled the obligation during the year ended December 31, 2021 and
recorded provision recovery of $94,606 since the actual costs incurred were lower than the provision.
IFRS
6 requires management to assess the exploration and evaluation assets for impairment. No facts or circumstances existed at December 31,
2021 and December 31, 2020 to suggest impairment on the Maniitsoq property. The valuation was based on historical drilling results
and management's future exploration plans on the Maniitsoq Property. The Company intends to plan and budget for further exploration
on the Maniitsoq Property in the future.
Further
details on the licenses comprising the Maniitsoq Property and related expenditures are outlined below:
Sulussugut
License (2011/54)
(All
references to amounts in Danish Kroners, "DKK")
Effective
August 15, 2011, the Company was granted an exploration license (the "Sulussugut License") by the BMP of Greenland for exclusive
exploration rights of an area located near Sulussugut, Greenland. The Company paid a license fee of $5,742 (DKK 31,400) upon granting
of the Sulussugut License. The application for another 5-year term on the Sulussugut License was submitted to the Greenland Mineral License
& Safety Authority which was effective on April 11, 2016, with December 31, 2017 being the seventh year. During the year ended December
31, 2016, the Company paid a license fee of $7,982 (DKK 40,400) which provided for renewal of the Sulussugut License until 2020.
During
the year ended December 31, 2021, the Company received a license extension, which provides for renewal period until December 31,
2022.
To
December 31, 2015, under the terms of a preliminary license, the Company completed the exploration requirements of an estimated minimum
of DKK 83,809,340 (approximately $15,808,386) between the years ended December 31, 2011 to 2015 by incurring $26,115,831 on the Sulussugut
License. As of December 31, 2021, the Company has spent $56,367,505 on exploration costs for the Sulussugut License.
The
Company had no minimum required exploration commitment for the year ended December 31, 2021 and available credits of DKK 285,866,733
(approximately $57,026,697
)
at the end of December 31, 2021. During the
year ended December 31, 2021, the Company had approved exploration expenditures of DKK 1,921,180
(approximately $384,236
).
The
credits available from each year may be carried forward for 3 years plus a 2-year extension and expire between December 31, 2022
to December 2024
. The Company has no exploration
commitment for the 2022 fiscal year.
During
the year ended December 31, 2021, the Company spent a total of $104,538
(December 31, 2020 - $117,756
)
in exploration and license related expenditures on the Sulussugut License and recorded a $54,556
camp site cleanup provision recovery.
To
December 31, 2021 and 2020, the Company has completed all obligations with respect to required reduction of the area
of the license.
21
|
North American Nickel / YEAR END 2021
Notes
to the Consolidated Financial Statements
For
the year ended December 31, 2021
(Expressed
in Canadian dollars)
Ininngui
License (2012/28)
Effective
March 4, 2012, the Company was granted an exploration license (the "Ininngui License") by the BMP of Greenland for exclusive
exploration rights of an area located near Ininngui, Greenland. The Company paid a license fee of $5,755
(DKK 32,200
)
upon granting of the Ininngui License. The
Ininngui License was valid for an initial 5 years until December 31, 2016, with December 31, 2012 being the first year. The license was
extended for a further 5 years, until December 31, 2021, with December 31, 2017 being the first year. During the year ended December
31, 2021, the Company received a license extension, which provides for a renewal period until December 31, 2023
.
The
Ininngui License is contiguous with the Sulussugut License.
Should
the Company not incur the minimum exploration expenditures on the license in any one year from years 2-5, the Company may pay 50% of
the difference in cash to BMP as full compensation for that year. This procedure may not be used for more than 2 consecutive calendar
years and as at December 31, 2021, the Company has not used the procedure for the license.
The
Company had no minimum required exploration commitment for the year ended December 31, 2021. As of December 31, 2021, the Company has
spent $5,221,333
on exploration costs for the Ininngui License
and exceeded the minimum requirement with a total cumulative surplus credit of DKK 30,515,237
(approximately $6,087,393
).
The
credits available from each year may be carried forward for 3 years plus a 2-year extension and expire between December 31, 2022
to December 2024
. The Company has no exploration
commitment for the 2022 fiscal year.
During
the year ended December 31, 2021, the Company spent a total of $21,755
(December 31, 2020 - $19,424
)
in exploration and license related expenditures and recorded a $26,700
camp site cleanup provision recovery.
Carbonatite
License (2018/21)
Effective
May 4, 2018, the Company was granted an exploration license (the "Carbonatite License") by the BMP of Greenland for exclusive
exploration rights of an area located near Maniitsoq in West Greenland. The Company paid a license fee of $6,523
(DKK 31,000
)
upon granting of the Carbonatite License. The
Carbonatite License is valid for 5 years until December 31, 2022, with December 31, 2020 being the third year. During the year ended
December 31, 2021, the Company received a license extension, which provides for renewal period until 2024
.
The
Company had no minimum required exploration obligation for the year ended December 31, 2021. As of December 31, 2021, the Company has
spent $1,511,400
on exploration costs for the Carbonatite License.
To December 31, 2021, the Company's expenditures exceeded the minimum requirement and the Company has a total surplus credit of
DKK 10,577,191
(approximately $2,110,012
).
The
credit available from each year may be carried forward 3 years plus a 1-year extension and expire between December 31, 2023 to
December 2024
. The Company has no exploration
commitment for the 2022 fiscal year.
During
the year ended December 31, 2021, the Company spent a total of $7,083
(December 31, 2020 - $6,527
)
in exploration and license related expenditures and recorded a $13,350
camp site cleanup provision recovery.
West
Greenland Prospecting License (2020/05)
On
February 18, 2020, the
Company was granted new prospective license No. 2020/05, by the BMP of Greenland for a period of 5 years ending December 31, 2024
.
The Company paid a granting fee of $4,301
(DKK 21,900
).
There were $396 exploration related costs incurred during the year ended December 31, 2021 (December 31, 2020 - $Nil).
High
Atlas Project in Morocco
In
2018, the Company's geologists identified a project opportunity in the high Atlas Mountains of Morocco. There is no modern
geophysical coverage and no drilling on the property. In 2019, the Company signed an MOU with ONHYM (Office National des
Hydrocarbons et des Mines), a government entity and single largest current permit holder in Morocco. Through this alliance, the
Company was given access to confidential exploration data to develop nickel projects in the High Atlas Region of Morocco. In
November and December 2021, the Company lodged applications for five permits in Morocco. In December, three of the five permits were
awarded to the Company with the decision on the fourth and fifth permit pending.
During
the year ended December 31, 2021, the Company spent a total of $26,652 (December 31, 2020 – $31,630) on the project and recorded
it as property investigation expense in the consolidated statements of comprehensive loss.
7.
TRADE
                                            PAYABLES AND ACCRUED LIABILITIES
(All
amounts in table are expressed in thousands of Canadian dollars)
December 31,
2021
December 31,
2020
Trade payables
401
290
Amounts due to related parties (Note 10)
33
28
Accrued liabilities
46
44
480
362
22
|
North American Nickel / YEAR END 2021
Notes
to the Consolidated Financial Statements
For
the year ended December 31, 2021
(Expressed
in Canadian dollars)
8.
SHARE CAPITAL, WARRANTS AND OPTIONS
The
authorized capital of the Company comprises an unlimited number of common shares without par value and 100,000,000 Series 1 convertible
preferred shares without par value.
a)
Common
                                            shares issued and outstanding
2021
During
the year ended December 31, 2021, the Company issued 13,080,314
common shares on exercise of warrants and options
and received $1,641,675
in proceeds from the exercise of 12,580,314
warrants and $112,000
from the exercise of 500,000
options. There were no
warrants or options exercised during the year
ended December 31, 2020.
As
at December 31, 2021, the Company has 131,204,627 common shares issued and outstanding, (December 31, 2020 – 109,833,648).
On
April 20, 2021 the Company closed a non-brokered private placement consisting of an aggregate of 8,290,665
units of the Company (the "Units")
at a price of $0.24
per unit, for aggregate gross proceeds of $1,989,760
.
Each unit consists of one common share in the capital of the Company and one half transferable common share purchase warrant ("Warrant")
of the Company. Each full Warrant entitles the holder to acquire one common share of the Company within twenty-four (24) months following
its issuance date, at a price of $0.35. The warrants are subject to an acceleration clause such that if the closing market price of the
common shares on the TSX-V is greater than $0.60 per common share for a period of 10 consecutive trading days at any time after the four-month
anniversary of the closing of the placement, the Company may, at its option, accelerate the warrant expiry date to within 30 days.
In
connection with the private placement, the Company has paid eligible finders (the "Finders"): (i) cash commission equal to
6% of the gross proceeds raised from subscribers introduced to the Company by such Finders, being an aggregate of $65,830, and (ii) a
number of common share purchase warrants (the "Finder Warrants") equal to 6% of the units attributable to the Finders under
the private placement, being an aggregate of 274,289 Finder Warrants. Each Finder Warrant entitles the Finder to acquire one common share
of the Company for a period of twenty-four (24) months following its issuance date, at an exercise price of $0.35.
The
Company allocated a $464,493
fair value to the warrants issued in conjunction
with the private placement and $30,735
to agent's warrants. The fair value
of warrants was determined using the Black-Scholes Option Pricing Model with the following assumptions; expected life of 1.5
years, expected dividend yield of 0%
,
a risk-free interest rate of 0.29%
and an expected volatility of 132%
.
2020
On
August 13, 2020, the Company closed the first tranche of its non-brokered private placement equity financing consisting of 15,481,077
units of the Company at a price of $0.07 per unit, for aggregate gross proceeds of $1,083,675. On August 31, 2020, the Company closed
the second and final tranche of its non-brokered private placement equity financing consisting of 5,661,780 units of the Company at a
price of $0.07 per unit, for aggregate gross proceeds of $396,325. Each unit consists of one common share in the capital of the Company
and one transferable common share purchase warrant of the Company. Each warrant will entitle the holder to acquire one common share of
the Company at an exercise price of $0.09 for a period of 24 months from its date of issuance. The warrants are subject to an acceleration
clause such that if the closing market price of the common shares on the TSX-V is greater than $0.12 per common share for a period of
10 consecutive trading days at any time after the four-month anniversary of the closing of the placement, the Company may, at its option,
accelerate the warrant expiry date to within 30 days.
In
connection with the non-brokered private financing, the Company incurred total share issuance costs of $124,222
.
The Company issued an aggregate of 588,154
common share purchase warrants. Each warrant
will entitle the holder to acquire one common share of the Company at an exercise price of $0.09 for a period of 24 months from its date
of issuance.
The
Company allocated a $716,055
fair value to the warrants issued in conjunction
with the private placement and $18,547
to agent's warrants. The fair value
of warrants was determined using the Black-Scholes Option Pricing Model with the following assumptions; expected life of 2
years
, expected dividend yield of 0%
,
a risk-free interest rate of 0.28%
to 0.31%
range and an expected volatility of 158%
to 158.53%
range.
2019
On
October 24, 2019 the TSXV approved the filing of the earn in agreement for the Loveland Nickel Property. As a result, on December 9,
2019, the Company issued 300,000 common shares at fair value of $51,000 (note 6).
On
December 18, 2019, the Company closed a non-brokered private placement equity financing of 7,373,265 units at a price of $0.18 and 2,224,666
flow-through common shares at a price of $0.18 and raised aggregate gross proceeds of $1,727,628. Each unit issued consisted of one common
share in the capital of the Company and one-half of one common share purchase warrant. Each warrant will entitle the holder to acquire
one common share of the Company at an exercise price of $0.25 for a period of 24 months from its date of issuance. All Securities issued
pursuant to this offering were subject to a hold period which expired on April 19, 2020. The Company incurred total share issuance costs
of $343,639. The Company allocated a $265,217 fair value to the warrants issued in conjunction with the private placement and $21,445
to 298,099 agent's warrants. The fair value of warrants was determined using the Black-Scholes Option Pricing Model with the following
assumptions; expected life of 2 years, expected dividend yield of 0%, a risk-free interest rate of
1.73%
and an expected volatility of
147.26%.
On
issuance, the Company bifurcated the flow-through shares into i) a flow-through share premium of $88,987 that investors paid for the
flow-through feature, which is recognized as a liability and; ii) share capital of $311,453. To December 31, 2020, the Company expended
$400,440 (December 31, 2019 – $Nil) in eligible exploration expenditures and, accordingly, the flow-through liability was reduced
to $Nil.
23
|
North American Nickel / YEAR END 2021
Notes
to the Consolidated Financial Statements
For
the year ended December 31, 2021
(Expressed
in Canadian dollars)
b)
Preferred
                                            shares issued and outstanding
As
at December 31, 2021, December 31, 2020 and December 31, 2019 there are 590,931
series 1 preferred shares outstanding.
The
rights and restrictions of the preferred shares are as follows:
i)
dividends
shall be paid at the discretion of the directors;
ii)
the
                                            holders of the preferred shares are not entitled to vote except at meetings of the holders
                                            of the preferred shares, where they are entitled to one vote for each preferred share held;
iii)
the
                                            shares are convertible at any time after 6 months from the date of issuance, upon the holder
                                            serving the Company with 10 days written notice; and
iv)
the
                                            number of the common shares to be received on conversion of the preferred shares is to be
                                            determined by dividing the conversion value of the share, $1 per share, by $9.00.
c)
Warrants
A
summary of common share purchase warrants activity during the years ended December 31, 2021, December 31, 2020 and December
31, 2019 is as follows:
December 31, 2021
December 31, 2020
December 31, 2019
Number Outstanding
Weighted Average Exercise Price
($)
Number Outstanding
Weighted Average Exercise Price
($)
Number Outstanding
Weighted Average Exercise Price
($)
Outstanding, beginning of year
25,715,742
0.11
15,651,397
0.96
25,797,283
1.20
Issued
4,419,620
0.35
21,731,011
0.09
3,984,731
0.25
Exercised
(12,580,314
)
0.13
-
-
-
-
Cancelled / expired
(1,472,223
)
0.25
(11,666,666
)
1.20
(14,130,617
)
1.20
Outstanding, end of year
16,082,825
0.15
25,715,742
0.11
15,651,397
0.96
24
|
North American Nickel / YEAR END 2021
Notes
to the Consolidated Financial Statements
For
the year ended December 31, 2021
(Expressed
in Canadian dollars)
At
December 31, 2021, the Company had outstanding common share purchase warrants exercisable to acquire common shares of the Company as
follows:
Warrants Outstanding
Expiry Date
Exercise Price ($)
Weighted Average remaining contractual life (years)
10,871,817
1
August 13, 2022
0.09
0.41
1,204,638
1
August 31, 2022
0.09
0.05
4,006,370
April 16, 2023
0.35
0.33
16,082,825
0.79
1
The warrants
are subject to an acceleration clause such that if the volume-weighted average trading price of the Company's common shares on
the TSX-V exceeds $0.12 per common share for a period of 10 consecutive trading days at any date before the expiration date of such warrants,
the Company may, at its option, accelerate the warrant expiry date to within 30 days. To December 31, 2021, the Company's common
shares have met the criterion for acceleration. The Company, however, has not accelerated the warrant expiry date.
The
average share price at the dates the finders' warrants were exercised was $0.34.
d)
Stock
                                            options
The
Company adopted a Stock Option Plan (the "Plan"), providing the authority to grant options to directors, officers, employees
and consultants enabling them to acquire up to 10% of the issued and outstanding common stock of the Company. Under the Plan, the exercise
price of each option equals the market price or a discounted price of the Company's stock as calculated on the date of grant. The
options can be granted for a maximum term of 10 years.
A
summary of option activity under the Plan during the years ended December 31, 2021, December 31, 2020 and December 31, 2019
is as follows:
December 31, 2021
December 31, 2020
December 31, 2019
Number Outstanding
Weighted Average Exercise Price ($)
Number Outstanding
Weighted Average Exercise Price ($)
Number Outstanding
Weighted Average Exercise Price ($)
Outstanding, beginning of year
7,978,725
0.17
2,130,550
1.51
2,594,550
1.80
Issued
8,178,972
0.37
7,850,000
0.15
-
-
Exercised
(500,000
)
0.22
-
-
-
-
Cancelled / expired
(603,100
)
0.31
(2,001,825
)
1.51
(464,000
)
4.23
Outstanding, end of year
15,054,597
0.27
7,978,725
0.17
2,130,550
1.51
During
the year ended December 31, 2021, the Company granted an aggregate total of 8,178,972
stock options to employees, directors and consultants
with a maximum term of 5
years. All options vest immediately and are exercisable
as to 3,185,000
options at $0.32
per share and 4,993,972
options at $0.40
per share. The Company calculates the fair value
of all stock options using the Black-Scholes Option Pricing Model. The fair value of options granted during the year ended December 31,
2021 amounted to $2,530,706
and was recorded as a share-based payment expense.
The weighted average fair value of options granted during the year ended December 31, 2021 is $0.31 per option.
During
the year ended December 31, 2020, the Company granted an aggregate total of 7,850,000 stock options to employees, directors and consultants
with a maximum term of 5 years. All options vest immediately and are exercisable as to 6,650,000 options at $0.16 per share and 1,200,000
options at $0.09 per share. The Company calculates the fair value of all stock options using the Black-Scholes Option Pricing Model.
The fair value of options granted during the year ended December 31, 2020 amounted to $969,391 and was recorded as a share-based payment
expense.
There
were no incentive stock options granted during the year ended December 31, 2019.
25
|
North American Nickel / YEAR END 2021
Notes
to the Consolidated Financial Statements
For
the year ended December 31, 2021
(Expressed
in Canadian dollars)
The
fair value of stock options granted and vested during the years ended December 31, 2021, 2020 and 2019 was calculated using
the following assumptions:
December 31, 2021
December 31, 2020
December
                                            31, 2019
Expected dividend yield
0
%
0
%
-
Expected share price volatility
126.4% - 127.8
%
121.5% - 125
%
-
Risk free interest rate
0.93% - 1.34
%
0.39% - 1.21
%
-
Expected life of options
5 years
5 years
-
Details
of options outstanding as at December 31, 2021 are as follows:
Options
Outstanding
Options
Exercisable
Expiry
Date
Exercise
Price ($)
Weighted average remaining contractual life (years)
40,625
40,625
February 21, 2022
*
1.20
0.00
35,000
35,000
February 28, 2023
1.20
0.00
5,800,000
5,800,000
February 24, 2025
0.16
1.22
1,200,000
1,200,000
August 19, 2025
0.09
0.29
2,985,000
2,985,000
February 25, 2026
0.32
0.83
4,993,972
4,993,972
October 25, 2026
0.40
1.61
15,054,597
15,054,597
3.95
*
Subsequently expired,
                                                                                                                                                                                unexercised.
The
average share price at the dates the options were exercised in 2021 was $0.485.
e)
Reserve
The
reserve records items recognized as stock-based compensation expense and other share-based payments until such time that the stock
options or warrants are exercised, at which time the corresponding amount will be transferred to share capital. Amounts recorded for
forfeited or expired unexercised options and warrants are transferred to deficit. During the year ended December 31, 2021, the
Company transferred $203,865
(December
31, 2020 - $3,782,706
) (December
31, 2019 - $3,860,656) to deficit for expired options and warrants and $666,478
to
share capital for exercised warrants and options (December 31, 2020 and 2019 - $Nil
).
During
the year ended December 31, 2021, the Company recorded $2,530,706
(December 31, 2020 - $969,391
)
of share-based payments to reserves. There were no share-based payments during the year ended December 31, 2019.
9.
INVESTMENT IN PREMIUM NICKEL RESOURCES INC.
On
September 30, 2019, the Company entered into a Memorandum of Understanding ("MOU") with Premium Nickel. Pursuant to the MOU,
the Company and Premium Nickel set forth their interests in negotiating and acquiring several of the assets of BCL
Limited, a private company with operations in Botswana that is currently in liquidation.
Concurrent
with the MOU, the Company initially subscribed for 2,400,000
common shares of Premium Nickel at $0.01
,
for a total investment of $24,000
.
The Company's initial investment included a provision that gives the Company the right to nominate two directors to the board of
directors of Premium Nickel. The
Company's initial investment also included Premium Nickel issuing the Company a non-transferable share purchase warrant (the "Warrant"),
which entitles the Company to purchase common shares of Premium Nickel, for up to 15% of the capital of Premium Nickel upon payment of
US $10 million prior to the fifth anniversary of the date of issue
.
At December 31, 2019, the Company's investment was recorded as an advance, as the Company had not yet been issued the common
share certificate nor the Warrant. The initial common share certificate and Warrant were issued during the year ended December 31,
2020.
To
December 31, 2020, the Company subscribed for an additional 4,657,711
common
shares of Premium Nickel, for a further investment of $154,164
.
The common shares underlying the investment are restricted ("Restricted") from being traded before such date that is 4
months after the later of (a) the date of issuance and (b) the date at which Premium Nickel becomes a reporting issuer in any
province or territory. As of December 31, 2020 the underlying common shares were Restricted. During year ended December 31, 2021,
the Company invested an additional $441,446
and
as of December 31, 2021, the Company held a 10%
equity interest in Premium Nickel (December 31, 2020 – 11.01
%)
26
|
North American Nickel / YEAR END 2021
Notes
to the Consolidated Financial Statements
For
the year ended December 31, 2021
(Expressed
in Canadian dollars)
As
of December 31, 2021, the Company was providing the corporate management and technical expertise to Premium Nickel on a contractual
basis, had two directors representing the Company on the Board, who were actively participating in the day-to-day activities of Premium
Nickel and actively contributing to Premium Nickel's financial and operational strategies. Accordingly, the Company determined that
it has significant influence in Premium Nickel and has used equity accounting for the investment. Premium Nickel's financial
information at December 31, 2021 was net assets of $4,770,937
which was comprised primarily of cash, and
a total comprehensive loss of $1,688,310
was recorded for the year ended December
31, 2021.
Details
of the Company's investment at December 31, 2021 is as follows:
Investment
Balance, December 31, 2020
48
Reallocation of advance
50
Investment
392
Share of loss of Premium Nickel
(169
)
Total
321
On
January 1, 2020, the Company entered into a Management and Technical Services Agreement ("the Services Agreement") with Premium
Nickel whereby the Company will provide certain technical, corporate, administrative and clerical, office and other services to Premium
Nickel during the development stage of the contemplated arrangement. The
Company will charge Premium Nickel for expenses incurred and has the right to charge a 2% administrative fee on third party expenses.
The Company will invoice Premium Nickel on a monthly basis and payment shall be made by Premium Nickel no later than 15 days after receipt
of such invoice. The term of the Service Agreement is for an initial period of 3 years and can be renewed for an additional 1 year period.
The Service Agreement can be terminated within 30 days notice, for non-performance, by the Company giving 6 months notice or Premium
Nickel within 90 days provided the Company no longer owns at least 10% of the outstanding common shares of Premium Nickel.
If Premium Nickel defaults on making payments, the outstanding
balance shall be treated as a loan to Premium Nickel, to be evidenced by a promissory note. The promissory note will be payable upon
demand and bear interest at a rate equal to the then current lending rate plus 1%, calculated from the date of default. Subsequent payment
by Premium Nickel will be first applied to accrued interest and then principle of the invoice. During the year ended December 31, 2021,
pursuant to the Services Agreement, the Company charged Premium Nickel $2,370,444
(December 31, 2020 - $647,164
)
for services and charged, $42,315
(December 31, 2020 - $8,495
)
in administrative fees, received $2,225,589
(December 31, 2020 – $701,305
)
and recorded $199,145
in due from Premium Nickel (December 31, 2020
- $54,619
).
Subsequent to December 31, 2021, the Company received the $199,145
in full from Premium Nickel.
10.
RELATED PARTY TRANSACTIONS
The
following amounts due to related parties are included in trade payables and accrued liabilities (Note 7):
(All
amounts in table are expressed in thousands of Canadian dollars)
December 31,
2021
December 31,
2020
Directors and officers of the Company
28
21
Related company
5
7
Total
33
28
These
amounts are unsecured, non-interest bearing and have no fixed terms of repayment.
27
|
North American Nickel / YEAR END 2021
Notes
to the Consolidated Financial Statements
For
the year ended December 31, 2021
(Expressed
in Canadian dollars)
The
following amount due from related party and advance represent as well as the investment in Premium Nickel a private company incorporated
in Ontario, in which certain directors and officers of the Company also hold offices and minority investments.
(All
amounts in table are expressed in thousands of Canadian dollars)
December 31,
2021
December 31, 2020
Due from related party
199
55
Advance
-
50
Investment
321
48
Total
520
153
(a)
Related
                                            party transactions
2021
Sentient
Executive GP IV Limited ("Sentient") and Contemporary Amperex Technology Limited ("CATL") have historically subscribed
to private placements of the Company.
As
of December 31, 2021, Sentient beneficially owns 36,980,982 common shares, constituting approximately 28.19% of the currently issued
and outstanding common shares of the Company.
As
of December 31, 2021, CATL beneficially owns 22,944,444 common shares, constituting approximately 17.49% of the currently issued and
outstanding shares of the Company. CATL has pre-emptive rights and the right to nominate one director to the board of directors of the
Company.
2020
Sentient
Executive GP IV Limited ("Sentient") and Contemporary Amperex Technology Limited ("CATL") have historically subscribed
to private placements of the Company.
As
of December 31, 2020, Sentient beneficially owns 36,980,982 common shares, constituting approximately 33.66% of the currently issued
and outstanding common shares of the Company.
As
of December 31, 2020, CATL beneficially owns 22,944,444 common shares, constituting approximately 20.89% of the currently issued and
outstanding shares of the Company. CATL has pre-emptive rights and the right to nominate one director to the board of directors of the
Company.
During
the year ended December 31, 2020, the Company recorded $185,706 in fees charged by a legal firm in which the Company's former chairman
is a consultant.
2019
As
                                            of December 31, 2019, Sentient beneficially owns 36,980,982 common shares, constituting approximately
                                            41.70% of the currently issued and outstanding common shares of the Company.
On
December 18, 2019, CATL subscribed for a total of 2,944,444 units under a bought deal private placement financing transaction described
in Note 9 for a total net proceeds of $530,000. As part of the subscription, CATL was granted 1,472,222 common share purchase warrants
exercisable at $0.25 until December 18, 2021. As of December 31, 2019, CATL beneficially owns 22,944,444 common shares, constituting
approximately 25.87% of the currently issued and outstanding shares of the Company. CATL has pre-emptive rights and the right to nominate
one director to the board of directors of the Company.
During
the year ended December 31, 2019, the Company recorded $370,127 (2018 - $174,224), (2017 - $244,285) in fees charged by a legal firm
in which the Company's former chairman is a consultant.
28
|
North American Nickel / YEAR END 2021
Notes
to the Consolidated Financial Statements
For
the year ended December 31, 2021
(Expressed
in Canadian dollars)
(b)
Key
                                            management personnel are defined as members of the Board of Directors and senior officers.
Key
management compensation was:
(All
amounts in table are expressed in thousands of Canadian dollars)
December 31, 2021
December 31, 2020
December
                                            31, 2019
Geological consulting fees – expensed
-
5
136
Management fees – expensed
531
478
747
Salaries - expensed
-
182
185
Share-based payments
2,314
756
-
Total
2,845
1,421
1,068
11.
SUPPLEMENTAL CASH FLOW INFORMATION
Changes
in working capital for the year ended December 31, 2021, 2020 and 2019 are as follows:
(All
amounts in table are expressed in thousands of Canadian dollars)
December 31, 2021
December 31, 2020
December
                                            31, 2019
(Increase) decrease in due from related party
(143
)
102
(126
)
(Increase) decrease in prepaid expenses
(17
)
7
3
(Decrease) increase in trade payables and accrued liabilities
(122
)
(155
)
134
Total changes in working capital
(282
)
(46
)
11
During
the year ended December 31, 2021, the Company:
i)
transferred
                                            $203,865 from reserve to deficit;
ii)
recorded
                                            $67,532
as
                                            the net change for accrued exploration and evaluation expenditures;
iii)
recorded
                                            $94,606 provision recovery for restoration obligation;
iv)
reclassed
                                            $50,000 from advance to investment;
During
the year ended December 31, 2020, the Company:
v)
transferred
                                            $3,782,706 from reserve to deficit;
vi)
recorded
                                            $6,506 as the net change for accrued exploration and evaluation expenditures;
vii)
recorded
                                            $267,000 as a provision for restoration obligation;
viii)
reclassed
                                            $24,000 from advance to investment;
ix)
offset
                                            $33,735 from due to related party to investment; and
x)
offset
                                            $7,500 in trade payables to proceeds from issuance of common stock.
During
the year ended December 31, 2019, the Company:
i)
transferred
    $3,860,656 from reserve to deficit;
ii)
recorded
    $171,444 as the net change for accrued exploration and evaluation expenditures;
iii)
paid
    $51,000 as non-cash consideration for exploration and evaluation expenditures; and
iv)
recorded
    $88,987 of flow-through share premium liability.
12.
COMMITMENTS AND CONTINGENCIES
The
Company has certain commitments to meet the minimum expenditures requirements on its exploration and evaluation assets. Further, the
Company has a site restoration obligation with respect to its Greenland exploration and evaluation asset.
Effective
July 1, 2014, the Company had changes to management and entered into the following agreements for services with directors of the Company
and a company in which a director has an interest:
i)
Directors'
                                            fees: $2,000 stipend per month for independent directors and $3,000 stipend per month for
                                            the chairman of the board, and $2,500 for committee chairmen.
ii)
Management
                                            fees: $19,106 per month effective January 1, 2020 and $30,951 per month effective June 2018
                                            up to December 31, 2019.
Effectively
on June 1, 2018, the Company changed the terms with Keith Morrison, the CEO, from direct employment to contracted consultant and entered
into a service agreement with his company.
29
|
North American Nickel / YEAR END 2021
Notes
to the Consolidated Financial Statements
For
the year ended December 31, 2021
(Expressed
in Canadian dollars)
Each
of the agreements shall be continuous and may only be terminated by mutual agreement of the parties, subject to the provisions that in
the event there is a change of effective control of the Company, the party shall have the right to terminate the agreement, within sixty
days from the date of such change of effective control, upon written notice to the Company. Within thirty days from the date of delivery
of such notice, the Company shall forward to the party the amount of money due and owing to the party hereunder to the extent accrued
to the effective date of termination.
13.
RISK MANAGEMENT
The
Company's exposure to market risk includes, but is not limited to, the following risks:
Interest
Rate Risk
Interest
rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates.
The Company is not subject to significant changes in interest rate.
Foreign
Currency Exchange Rate Risk
Currency
risk is risk that the fair value of future cash flows will fluctuate because of changes in foreign currency exchange rates. In addition,
the value of cash and other financial assets and liabilities denominated in foreign currencies can fluctuate with changes in currency
exchange rates.
The
Company operates in Canada and Greenland and undertakes transactions denominated in foreign currencies such as United States dollar,
Euros and Danish Krones, and consequently is exposed to exchange rate risks. Exchange risks are managed by matching levels of foreign
currency balances and related obligations and by maintaining operating cash accounts in non-Canadian dollar currencies. The rate published
by the Bank of Canada at the close of business on December 31, 2021 was 1.2794 USD to CAD, 1.4462 EUR to CAD and 0.1936 DKK to CAD.
The
Company's Canadian dollar equivalent of financial assets and liabilities that are denominated in Danish Krones consist of accounts
payable of $6,776 (2020 - $7,349) and $3,032 in USD currency (2020 - $1,798).
Credit
Risk
Credit
risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an
obligation. The credit risk is primarily associated with liquid financial assets. The Company limits exposure to credit risk on liquid
financial assets by holding cash at highly-rated financial institutions. The credit risk associated with due from related party is
low as it's solely due from Premium Nickel and the outstanding amount was always settled within 30 days upon invoicing.
Price
Risk
The
Company is exposed to price risk with respect to commodity prices. Commodity price risk is defined as the potential adverse impact on
earnings and economic value due to commodity price movements and volatilities. To mitigate price risk, the Company closely monitors commodity
prices of precious metals and the stock market to determine the appropriate course of action to be taken by the Company.
Liquidity
Risk
Liquidity
risk is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities that are settled
by delivering cash or another financial asset. The Company manages the liquidity risk inherent in these financial obligations by regularly
monitoring actual cash flows to annual budget which forecast cash needs and expected cash availability to meet future obligations.
The
Company will defer discretionary expenditures, as required, in order to manage and conserve cash required for current liabilities.
30
|
North American Nickel / YEAR END 2021
Notes
to the Consolidated Financial Statements
For
the year ended December 31, 2021
(Expressed
in Canadian dollars)
The
following table shows the Company's contractual obligations as at December 31, 2021:
(All
amounts in table are expressed in thousands of Canadian dollars)
As at December 31, 2021
Less than
1 year
1 - 2 years
2 - 5 years
Total
Trade payables and accrued liabilities
480
-
-
480
480
-
-
480
Capital
Risk Management
The
Company manages its capital to ensure that it will be able to continue as a going concern, so that adequate funds are available or are
scheduled to be raised to carry out the Company's exploration program and to meet its ongoing administrative and operating costs
and obligations. This is achieved by the Board of Directors' review and ultimate approval of budgets that are achievable within
existing resources, and the timely matching and release of the next stage of expenditures with the resources made available from capital
raisings and debt funding from related or other parties. In doing so, the Company may issue new shares, restructure or issue new debt.
The
Company is not subject to any externally imposed capital requirements imposed by a regulator or a lending institution.
In
the management of capital, the Company includes the components of equity, loans and borrowings, other current liabilities, net of cash.
(All
amounts in table are expressed in thousands of Canadian dollars)
As at December 31,
2021
2020
2019
Equity
41,203
39,015
39,431
Current liabilities
480
629
608
41,683
39,644
40,039
Cash
(1,973
)
(308
)
(1,098
)
39,710
39,336
38,941
14.
FINANCIAL
                                            INSTRUMENTS
Fair
value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants
at the measurement date. The fair value hierarchy establishes three levels to classify the inputs to valuation techniques used
to measure the fair value.
The
three levels of the fair value hierarchy are:
Level
1 – Unadjusted quoted prices in active markets for identical assets or liabilities
Level
2 – Inputs other than quoted prices that are observable either directly or indirectly
Level
3 – Inputs that are not based on observable market data
Cash
is measured using level 1.
31
|
North American Nickel / YEAR END 2021
Notes
to the Consolidated Financial Statements
For
the year ended December 31, 2021
(Expressed
in Canadian dollars)
15.
SEGMENTED
                                            INFORMATION
The
Company operates in one reportable operating segment being that of the acquisition, exploration and development of mineral properties
in two geographic segments being Canada and Greenland (note 6). The Company's geographic segments are as follows:
(All
amounts in table are expressed in thousands of Canadian dollars)
December
31,
2021
December
31,
2020
Equipment
Canada
4
6
Greenland
12
15
Total
16
21
December 31,
2021
December 31,
2020
Exploration and evaluation assets
Canada
2,495
2,538
Greenland
36,604
36,565
Total
39,099
39,103
16.
INCOME
                                            TAXES
A
reconciliation of the expected income tax recovery to the actual income tax recovery is as follows:
(All
amounts in tables are expressed in thousands of Canadian dollars)
Year ended December 31,
2021
Year ended December 31,
2020
Net loss
$
(3,996
)
$
(2,741
)
Statutory tax rate
27
%
27
%
Expected income tax recovery at the statutory tax rate
(1,079
)
(740
)
Permanent differences and other
479
222
Change in valuation allowance
600
518
Net deferred income tax recovery
$
-
$
-
The
significant components of the Company's deferred income tax assets and liabilities are as follows:
Year ended
December 31,
2021
Year ended
December 31,
2020
Exploration and evaluation assets
$
7,209
$
7,198
Loss carry-forwards
5,351
4,878
Share issuance costs
84
175
Cumulative eligible capital
-
34
Investment
81
35
Equipment
273
102
13,022
12,422
Valuation allowance
(13,022
)
(12,422
)
Net deferred tax asset
$
-
$
-
32
|
North American Nickel / YEAR END 2021
Notes
to the Consolidated Financial Statements
For
the year ended December 31, 2021
(Expressed
in Canadian dollars)
The
tax pools relating to these deductible temporary differences expire as follows:
Canadian
non-capital
losses
Canadian
net-capital losses
Canadian
resource pools
Canadian
share issue costs
2022
$
-
$
-
$
-
$
227
2023
-
-
-
112
2024
-
-
-
43
2030
696
-
-
18
2031
517
-
-
-
2032
645
-
-
-
2033
847
-
-
-
2034
1,484
-
-
-
2035
2,141
-
-
-
2036
2,213
-
-
-
2037
2,637
-
-
-
2038
2,656
-
-
-
2039
2,583
-
-
-
2040
1,682
-
-
-
2041
1,503
-
-
-
No expiry
-
58
65,799
-
$
19,604
$
58
$
65,799
400
17.
GENERAL
                                            AND ADMINISTRATIVE EXPENSES
Details
of the general and administrative expenses by nature are presented in the following table:
(All
amounts in table are expressed in thousands of Canadian dollars)
December 31, 2021
December 31, 2020
December 31, 2019
Consulting fees
327
194
286
Filing fees
51
43
94
General office expenses
105
74
220
Investor relations
149
54
32
Management fees
433
467
745
Professional fees
94
158
182
Salaries and benefits
-
248
586
Total
1,159
1,238
2,145
18.
SUBSEQUENT
                                            EVENTS
a)
On February 17, 2022, the
  Company announced that it has executed a non-binding letter of intent ("Non-Binding LOI") providing for a business
  combination of Premium Nickel and the Company, ("Merger"). Under the policies of TSXV, Premium Nickel is a
  "Non-Arm's Length Party" of the Company. The Non-Binding LOI will form the basis upon which Premium Nickel and the
  Company will negotiate one or more definitive agreements governing the proposed Merger. It is currently anticipated that the Merger
  will be completed by way of a triangular amalgamation involving Premium Nickel, the Company and a wholly-owned subsidiary of the
  Company to be formed; provided, however that the definitive structure of the Merger will be determined based on further tax and
  structuring advice to be received prior to the execution of definitive agreements governing the proposed Merger. The company is the
  Resulting Issuer after the closing of the Merger.
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|
North American Nickel / YEAR END 2021
Notes
to the Consolidated Financial Statements
For
the year ended December 31, 2021
(Expressed
in Canadian dollars)
Proposed
Transaction Terms
The
Company
currently owns approximately 9.8%
of the outstanding common shares of Premium
Nickel on a basic, undiluted basis, and a warrant entitling the Company to purchase an additional 15%
of the equity in Premium Nickel, on an
undiluted basis, for US$10
million, until February 26, 2025 (the "15%
Warrant"). While a definitive exchange ratio
remains subject to ongoing due diligence, under the terms of the Non-Binding LOI, each common share of Premium Nickel outstanding
immediate prior to the closing of the Merger, other than any common share of Premium Nickel held by the Company,
would be exchanged for 5.27
common shares of the Resulting Issuer (before
giving effect to any Consolidation) and the 15%
Warrant and the common shares of Premium Nickel
held by the Company would be extinguished. Following completion of the Merger, approximately 25%
of the outstanding common shares of the Resulting
Issuer are expected to be held by the current shareholders of the Company and approximately 75%
of the outstanding common shares of the Resulting
Issuer are expected to be held by the current shareholders of Premium Nickel (other than the Company).
In
connection with the proposed Merger, and subject to any required shareholder and regulatory approvals, the Company is expected
to seek the requisite shareholder and regulatory approvals to change the name and stock ticker symbol of the Resulting Issuer as part
of the Merger to such name and ticker symbol as may be requested by Premium Nickel, acting reasonably, consolidate the
common shares of the Resulting Issuer (the "Consolidation") and reconstitute the board of directors of the Resulting Issuer.
The Non-Binding LOI provides for an exclusivity period ending at 11:59 p.m. (Toronto time) on April 2, 2022, which has been extended
to April 29 by mutual written consent of the parties, to allow parties to complete their due diligence and negotiate definitive
agreements for the proposed Merger.
b)
On March 3, 2022, the Company entered into a promissory note
loan agreement with Premium Nickel, whereby Premium Nickel borrowed US $1,000,000
from the Company and promises to pay back
the loan in full on the maturity date, being April
30, 2022
. Interest accruing at 10%
per annum shall also be paid on maturity date
together with the principal amount of the loan. In addition, Premium Nickel agreed to pay the Company a lender fee being
3%
of the principal amount, which shall be due and
payable to the Company on the maturity date.
c)
On April 2, 2022, the
  Company entered into an agreement with Paradigm Capital Inc. (the "Agent") to act as lead agent and sole bookrunner, on
  behalf of a syndicate, on a "best efforts" basis, for a private placement offering of subscription receipts of the
  Company (the "Subscription Receipts") for gross proceeds of $5,000,000
(the
  "Offering") at a price of $0.48
per
  Subscription Receipt (the "Issue Price"). On April 8, 2022, the Offering was upsized to total gross proceeds of up
  to $10,000,320
.
Each
Subscription Receipt shall be deemed to be automatically exercised, without payment of any additional consideration and without further
action on the part of the holder thereof, into a Resulting Issuer Share. on a one-for one basis, upon satisfaction of the Escrow Release
Conditions (as defined below), subject to adjustment in certain events.
"Escrow
Release Conditions" shall mean each of the following conditions, which conditions may be waived in whole or in part jointly by the
Company and the Lead Agent:
i)
receipt
    of all required corporate, shareholder, regulatory and third-party approvals, if any, required in connection with the Offering and
    the Merger Transaction;
ii)
the
    completion, satisfaction or waiver of all conditions precedent, undertakings, and other matters to be satisfied, completed and otherwise
    met or prior to the completion of the Merger Transaction (other than delivery of standard closing documentation) have been satisfied
    or waived in accordance with the definitive agreement relating to the Merger Transaction, to the satisfaction of the Agents acting
    reasonably (other than the release of the Escrowed Funds);
iii)
written
    confirmation to the Agents from each of the Company and PNR that all conditions of the Merger Transaction have been satisfied or
    waived, other than release of the Escrowed Funds, and that the Merger Transaction shall be completed without undue delay upon release
    of the Escrowed Funds;
iv)
the
    common shares of the Resulting Issuer being conditionally approved for listing on the TSXV; and
v)
the
    Company and the Agents having delivered a joint notice and direction to the Escrow Agent, confirming that the conditions set forth
    in i) to iv) above have been met or waived.
The
Offering is expected to close on or about April 28, 2022 (the "Closing Date"), or such other date as the Lead Agent and
the Company may mutually agree. on the Closing Date, the proceeds of the Offering will be held in escrow pending the earlier of (i)
the satisfaction of the Escrow Release Conditions and (ii) the occurrence of a termination event, of which can be terminated by the
Company any time after 120 days following the agreement entered with the Agent or by the Agent upon written notification immediately.
34
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North American Nickel / YEAR END 2021