First Mining Gold Corp.

05/11/2022 | Press release | Distributed by Public on 05/11/2022 10:44

Condensed Interim Consolidated Financial Statements For the three months ended March 31, 2022 and 2021 (Expressed in thousands of Canadian dollars unless otherwise noted) -[...]

Condensed Interim Consolidated Financial Statements

For the three months ended March 31, 2022 and 2021

(Expressed in thousands of Canadian dollars unless otherwise noted)

(Unaudited)

1

FIRST MINING GOLD CORP.

INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

AS AT MARCH 31, 2022 AND DECEMBER 31, 2021

(Expressed in thousands of Canadian dollars unless otherwise noted)

(Unaudited)

March31,

2022

December 31,

2021

ASSETS

Current

Cash and cash equivalents

$ 23,724 $ 29,516

Investments (Note 3)

11,183 13,386

Prepaid expenses, accounts and other receivables

1,181 1,009

Total current assets

36,088 43,911

Non-current

Mineral properties (Note 4)

180,918 170,017

Investment in Treasury Metals Inc. (Note 5)

15,271 15,400

Investment in PC Gold Inc. (Note 6)

21,569 21,570

Investment in Big Ridge Gold Corp. (Note 7)

1,434 1,491

Investment in Beattie Gold Mines Ltd. (Note 8)

5,544 -

Mineral property investments (Note 9)

4,739 6,435

Property and equipment

1,457 1,086

Other assets

365 399

Total non-current assets

231,297 216,398

TOTAL ASSETS

$ 267,385 $ 260,309

LIABILITIES

Current

Accounts payable and accrued liabilities

$ 6,759 $ 4,491

Current portion of lease liability

131 127

Provision for Pickle Crow reclamation funding (Note 4(c))

990 990

Option - PC Gold (Note 4(c))

4,347 4,347

Total current liabilities

12,227 9,955

Non-current

Lease liability

281 315

Silver Stream derivative liability (Note 10)

25,693 26,114

Total non-current liabilities

25,974 26,429

TOTAL LIABILITIES

38,201 36,384

SHAREHOLDERS' EQUITY

Share capital (Note 11)

321,524 318,499

Warrant and share-based payment reserve (Note 11)

48,335 47,282

Accumulated other comprehensive gain (loss)

2,364 410

Accumulated deficit

(143,039 ) (142,266 )

Total shareholders' equity

229,184 223,925

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$ 267,385 $ 260,309

The consolidated financial statements were approved by the Board of Directors:

Signed: "Keith Neumeyer", Director

Signed: "Raymond Polman", Director

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

2

FIRST MINING GOLD CORP.

INTERIM CONSOLIDATED STATEMENTS OF NET INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS)

FOR THE THREE MONTHS ENDED MARCH 31, 2022 AND 2021

(Expressed in thousands of Canadian dollars unless otherwise noted)

(Unaudited)

Three months ended

March 31,

2022

2021

OPERATING EXPENSES (Note 12)

General and administration

$ 1,423 $ 1,355

Exploration and evaluation

177 239

Investor relations and marketing communications

292 473

Corporate development and due diligence

109 157

Impairment of non-current assets (Note 5)

- 23,555

Loss from operational activities

(2,001 ) (25,779 )

OTHER ITEMS

Fair value (gain) loss on Silver Stream liability (Note 10)

(421 ) 6,003

Investments fair value (gain) loss (Note 3)

(801 ) 787

Foreign exchange (gain) loss

(187 ) 68

Other expenses

42 39

Interest and other income

(48 ) (65 )

Loss before income taxes

$ (586 ) $ (32,611 )

Equity loss and dilution impacts of equity

accounted investments (Note 5,6 ,7 & 8)

(187 ) (390 )

Net loss for the period

$ (773 ) $ (33,001 )

OTHER COMPREHENSIVE INCOME (LOSS)

Items that will not be reclassified to net income or (loss):

Investments fair value gain

1,504 349

Mineral property investments fair value gain (loss) (Note 9)

458 (700 )

Items that are or may be reclassified to net income or (loss):

Currency translation adjustment of foreign subsidiaries

(8 ) (4 )

Other comprehensive income (loss)

1,954 (355 )

Net income (loss) and comprehensive income (loss)

for the period

$ 1,181 $ (33,356 )

Income (loss) per share

Basic

$ (0.00 ) $ (0.05 )

Diluted

$ 0.00 $ (0.05 )

Weighted average number of shares outstanding

Basic

706,663,426 697,275,841

Diluted

707,768,912 697,275,841

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

3

FIRST MINING GOLD CORP.

INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31, 2022 AND 2021

(Expressed in thousands of Canadian dollars unless otherwise noted)

(Unaudited)

Three months ended March 31,

2022

2021

Cash flows from operating activities

Net loss for the period

$ (773 ) $ (33,001 )

Adjustments for:

Impairment of non-current assets (Note 5(b))

- 23,555

Share-based payments (Note 11)

656 776

Depreciation

98 76

Fair value loss (gain) on Silver Stream derivative liability (Note 10)

(421 ) 6,003

Investments fair value loss (gain) (Note 3)

(801 ) 787

Other expenses

42 38

Accrued interest receivable

(4 )

(37)

Unrealized foreign exchange loss (gain)

23 54

Equity and dilution loss on equity accounted investments

187 390

Operating cash flows before movements in working capital

(993 ) (1,359 )

Changes in non-cash working capital items:

Decrease in prepaid expenditures, accounts and other receivables

102 139

Decrease in accounts payables and accrued liabilities

(1,543 ) (654 )

Total cash used in operating activities

(2,434 ) (1,874 )

Cash flows from investing activities

Mineral property expenditures (Note 4)

(5,955 ) (3,098 )

Proceeds from sale of investments (Note 3)

4,478 10,825

Property and equipment purchases

(435 ) (238 )

Cash expended in acquisitions

(1,367 ) -

Total cash provided by (used in) investing activities

(3,279 ) 7,489

Cash flows from financing activities

Proceeds from Silver Stream (Note 10)

- 4,757

Proceeds from exercise of warrants and stock options

- 9

Repayment of lease liability

(30 ) (27 )

Finance costs paid

(11 ) (13 )

Total cash used in financing activities

(41 ) 4,726

Foreign exchange effect on cash

(38 ) (68 )

Change in cash and cash equivalents

(5,792 ) 10,273

Cash and cash equivalents, beginning

29,516 28,901

Cash and cash equivalents, ending

$ 23,724 $ 39,174

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

4

FIRST MINING GOLD CORP.

INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

FOR THE THREE MONTHS ENDED MARCH 31, 2022 AND 2021

(Expressed in thousands of Canadian dollars, except share and per share amounts)

(Unaudited)

Number of common

shares

Share capital

Warrant reserve

Share-based payment reserve

Accumulated other comprehensive income (loss)

Accumulated deficit

Total

Balance as at December 31, 2020

697,216,453 $ 317,167 $ 25,056 $ 19,592 $ (1,392 ) $ (116,870 ) $ 243,553

Exercise of options (Note 11(c))

25,000 9 - (3 ) - - 6

Exercise of warrants (Note 11(c))

10,000 4 (1 ) - - - 3

Shares issued for prior mineral property acquisition

118,483 46 - - - - 46

Share-based payments

- - - 1,184 - - 1,184

Obligation to distribute investments

- - - - - 12,291 12,291

Loss for the period

- - - - - (33,001 ) (33,001 )

Other comprehensive income

- - - - (355 ) - (355 )

Balance as at March 31, 2021

697,369,936 $ 317,226 $ 25,055 $ 20,773 $ (1,747 ) $ (137,580 ) $ 223,727

Balance as at December 31, 2021

700,200,059 $ 318,499 $ 25,063 $ 22,219 $ 410 $ (142,266 ) $ 223,925

Exercise of options (Note 11(c))

- - - - - - -

Exercise of warrants (Note 11(c))

- - - - - - -

Shares issued on acquisition of Beattie Gold Mines (Note 8)

7,636,944 2,024 - - - - 2,024

Shares issued in connection with mineral property tenure (Note 4)

3,599,784 1,001 - - - - 1,001

Share reduction due to expiry

(118,029 ) - - - - - -

Share-based payments

- - - 1,053 - - 1,053

Loss for the period

- - - - - (773 ) (773 )

Other comprehensive loss

- - - - 1,954 - 1,954

Balance as at March 31, 2022

711,318,758 $ 321,524 $ 25,063 $ 23,272 $ 2,364 $ (143,039 ) $ 229,184

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

5

FIRST MINING GOLD CORP.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Canadian dollars unless otherwise noted, tabular amounts are expressed in thousands of Canadian dollars)

(Unaudited)

1. NATURE OF OPERATIONS

First Mining Gold Corp. (the "Company" or "First Mining") is a public company which is listed on the Toronto Stock Exchange (the "TSX") under the symbol "FF", on the OTCQX under the symbol "FFMGF", and on the Frankfurt Stock Exchange under the symbol "FMG". The Company's head office and principal address is Suite 2070 - 1188 West Georgia Street, Vancouver, British Columbia, Canada, V6E 4A2.

First Mining was incorporated on April 4, 2005. The Company changed its name to First Mining Gold Corp. in January 2018.

First Mining is advancing a portfolio of gold projects in Canada, with the most advanced project being the Springpole Gold Project in northwestern Ontario. The Company also holds a 15% equity position in Treasury Metals Inc. which is advancing the Goliath Gold Complex toward construction. First Mining's portfolio of gold projects in eastern Canada also includes Hope Brook (being advanced in partnership with Big Ridge Gold Corp.), Cameron, Central Duparquet, Duquesne, and Pitt gold projects. In addition, the Company holds a 30% interest in the PC Gold Inc. legal entity which holds the Pickle Crow gold project (being advanced by Auteco Minerals Ltd).

In March 2020, the World Health Organization declared the COVID-19 outbreak a global pandemic. The Company continues to evaluate the potential impacts arising from COVID-19 on all aspects of its business. For the period ended March 31, 2022, there were no significant financial impacts on the Company.

2. BASIS OF PRESENTATION

These unaudited condensed interim consolidated financial statements have been prepared in accordance with International Accounting Standard 34, Interim Financial Reporting using policies consistent with International Financial Reporting Standards as issued by the International Accounting Standards Board ("IFRS"). These condensed interim consolidated financial statements should be read in conjunction with the Company's audited annual consolidated financial statements for the year ended December 31, 2021, as some disclosures from the annual consolidated financial statements have been condensed or omitted.

These unaudited condensed interim consolidated financial statements have been prepared on a historical cost basis, except for financial instruments classified as fair value through profit and loss or fair value through other comprehensive income (loss), which are stated at their fair value. The condensed interim consolidated financial statements are presented in thousands of Canadian dollars, unless otherwise noted, and tabular amounts are expressed in thousands of Canadian dollars.

These condensed interim consolidated financial statements include the accounts of the Company and its subsidiaries.

The functional currency of the Company and its Canadian subsidiaries is the Canadian dollar while the functional currency of the Company's non-Canadian subsidiary is the US dollar.

These unaudited condensed interim consolidated financial statements were approved by the Board of Directors on May 10, 2022.

6

FIRST MINING GOLD CORP.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Canadian dollars unless otherwise noted, tabular amounts are expressed in thousands of Canadian dollars)

(Unaudited)

2. BASIS OF PRESENTATION (continued)

In preparing the Company's unaudited condensed interim consolidated financial statements for the three months ended March 31, 2022, the Company used the same accounting policies, methods of computation and accounting policy judgments as in the annual consolidated financial statements for the year ended December 31, 2021. Additionally, the areas of estimation uncertainty remain unchanged from those disclosed in the annual consolidated financial statements. There are no IFRS or IFRS Interpretations Committee interpretations that are not yet effective that, if adopted, would be expected to have a material impact on the Company's condensed interim consolidated financial statements.

3. INVESTMENTS

The movements in investments during the three months ended March 31, 2022 and the year ended December 31, 2021 are summarized as follows:

Marketable Securities (FVTPL)

Marketable Securities

(FVTOCI)

Warrants

(FVTPL)

Total

Investments

Balance as at December 31, 2021

$ 8,400 $ 4,986 $ - $ 13,386

Additions

- - - -

Disposals

(4,454 ) (54 ) - (4,508 )

Gain recorded in other comprehensive loss

- 1,504 - 1,504

Gain recorded in net loss

801 - - 801

Balance as at March 31, 2022

$ 4,747 $ 6,436 $ - $ 11,183

Marketable Securities (FVTPL)

Marketable Securities

(FVTOCI)

Warrants

(FVTPL)

Total

Investments

Balance as at December 31, 2020

$ 9,267 $ 3,386 $ 5,772 $ 18,425

Additions

13,691 216 - 13,907

Disposals

(13,971 ) (710 ) - (14,681 )

Gain recorded in other comprehensive income

- 2,094 - 2,094

Loss recorded in net loss

(587 ) - (3,698 ) (4,285 )

Distribution to shareholders

- - (2,074 ) (2,074 )

Balance as at December 31, 2021

$ 8,400 $ 4,986 $ - $ 13,386

The Company holds securities of publicly traded companies as strategic interests. The investments where the Company does not have significant influence are classified as marketable securities. The Auteco and First Majestic common shares are classified as FVTPL. Other marketable securities are designated as FVTOCI.

During the three months ended March 31, 2022, the Company:

·

Sold a total of 60,000,000 common shares of Auteco for net proceeds of $4,406,000 which resulted in a $96,000 realized loss on sale based on the initial value at the time of initial recognition of the securities; and

·

Sold a total of 49,000 common shares of other marketable securities for net proceeds of $72,000 which resulted in a realized gain on sale of $48,000 based on the original cost at the time of initial recognition of the securities.
7

FIRST MINING GOLD CORP.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Canadian dollars unless otherwise noted, tabular amounts are expressed in thousands of Canadian dollars)

(Unaudited)

4. MINERAL PROPERTIES

As at March 31, 2022 and December 31, 2021, the Company has capitalized the following acquisition, exploration, and evaluation costs on its mineral properties:

Springpole

Birch-Uchi

(Note 4(a))

Cameron

Duquesne/

Pitt

Hope Brook

(Note 4(b))

Pickle Crow

(Note 4(c))

Others (1)

Total

Balance

December 31, 2021

$ 104,065 $ 1,320 $ 32,329 $ 7,244 $ 18,027 $ - $ 7,032 $ 170,017

Acquisition

1,566 212 - - - - 36 1,814

Concessions, taxes and royalties

5 - 6 - - - - 11

Salaries and share-based payments

1,067 63 13 6 - - 44 1,193

Drilling, exploration, and technical consulting

3,945 31 14 - - - 71 4,061

Assaying, field supplies, and environmental

3,187 4 7 - - - 5 3,203

Travel and other expenditures

620 2 - - - - - 622

Total Expenditures

$ 10,390 $ 312 $ 40 $ 6 $ - $ - $ 156 $ 10,904

Disposal, impairment or reclassification

- - - - - - (3 ) (3 )

Balance

March 31, 2022

$ 114,455 $ 1,632 $ 32,369 $ 7,250 $ 18,027 $ - $ 7,185 $ 180,918

Springpole

Birch-Uchi

Cameron

Duquesne/

Pitt

Hope Brook

Pickle Crow

Others (1)

Total

Balance

December 31, 2020

$ 87,907 $ - $ 31,875 $ 7,229 $ 20,612 $ 24,986 $ 6,820 $ 179,429

Acquisition

1,222 1,047 21 - - - - 2,290

Concessions, taxes and royalties

684 - 32 3 20 - - 739

Salaries and share-based payments

3,311 3 185 6 44 22 114 3,685

Drilling, exploration, and technical consulting

4,235 269 102 6 16 3,251 290 8,169

Assaying, field supplies, and environmental

5,194 1 80 - 3 - 18 5,296

Travel and other expenditures

1,512 - 34 - 17 - 6 1,569

Total Expenditures

$ 16,158 $ 1,320 $ 454 $ 15 $ 100 $ 3,273 $ 428 $ 21,748

Disposal, impairment or reclassification

- - - - (2,685 ) (28,259 ) (216 ) (31,160 )

Balance

December 31, 2021

$ 104,065 $ 1,320 $ 32,329 $ 7,244 $ 18,027 $ - $ 7,032 $ 170,017

(1)

Other mineral properties as at March 31, 2022 and December 31, 2021 include: the mining claims and concessions located in the Township of Duparquet, Quebéc, which are near the Company's Duquesne gold project with a 1.5% NSR Royalty under the terms of the Treasury Share Purchase Agreement (defined in Note 5); and the Turquoise Canyon property in Nevada (under option with Momentum Minerals Ltd. which was subsequently acquired by IM Exploration Inc. on July 6, 2021 and IM Exploration Inc. was renamed to Westward Gold Inc. on October 7, 2021).

8

FIRST MINING GOLD CORP.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Canadian dollars unless otherwise noted, tabular amounts are expressed in thousands of Canadian dollars)

(Unaudited)

4. MINERAL PROPERTIES (continued)

The Company has various underlying agreements and commitments with respect to its mineral properties, which define annual or future payments in connection with royalty buy-backs or maintenance of property interests, the most significant of which are discussed below. During the period ended March 31, 2022, the company issued 3,000,000 shares in relation to a Springpole property acquisition and issued 599,784 shares in accordance with certain Birch-Uchi option agreements.

a) Birch-Uchi Properties

i) Swain Post property option

On February 26, 2021, the Company entered into a three year earn-in agreement with Exiro Minerals Corp. ("Exiro") pursuant to which First Mining may earn a 100% interest in Exiro's Swain Post property ("Swain Post Property") in northwestern Ontario by making total cash and share payments of $335,000 to Exiro during the term of the option, and by completing all assessment work requirements on the Swain Post Property during the three year option term.

ii) Swain Lake property option

On April 28, 2021, the Company entered into an earn-in agreement with Whitefish Exploration Inc. ("Whitefish"), which gives First Mining the option to earn up to a 100% interest in Whitefish's Swain Lake project ("Swain Lake") in northwestern Ontario in two stages over a period of five years. First Mining may earn a 70% interest in Swain Lake by making cash payments totaling $200,000 and share payments totaling $425,000, and by incurring at least $500,000 worth of expenditures on the Swain Lake Property during the first three years of the earn-in term. Upon completing the first stage of the earn-in, First Mining will hold a 70% interest in the Swain Lake Property and will have an additional period of two years within which to acquire the remaining 30% of the project by paying $1,000,000 in cash and issuing $1,000,000 worth of First Mining shares to Whitefish.

iii) Vixen properties acquisition

On September 15, 2021, the Company entered into a three year option agreement with ALX Resources Corp. ("ALX") pursuant to which First Mining may earn up to a 100% interest in ALX's Vixen North, Vixen South and Vixen West properties (the "Vixen Properties") in northwestern Ontario in two stages over a period of five years. First Mining may earn a 70% interest in the Vixen Properties by making cash and share payments of approximately $950,000 to ALX during the term of the option, and by incurring at least $500,000 worth of expenditures on the property during the initial three year option term. Upon completing the first stage of the earn-in, First Mining will hold a 70% interest in the Vixen Properties and will have an additional period of two years to acquire the remaining 30% of the project by paying $500,000 in cash and issuing $500,000 worth of First Mining shares to ALX.

iv) Birch Lake properties acquisition

On October 11, 2021, the Company entered into an earn-in agreement with Pelangio Exploration Inc. ("Pelangio") pursuant to which First Mining may earn up to an 80% interest in Pelangio's Birch Lake properties (the "Birch Lake Properties") in two stages over a period of six years. First Mining may earn a 51% interest in the Birch Lake Properties by making cash payments totaling $350,000 and issuing in aggregate 1,300,000 First Mining shares and by incurring at least $1,750,000 worth of expenditures on the Birch Lake Properties during the first 4 years of the earn-in term. Upon completing the first stage of the earn-in, First Mining will hold a 51% interest in the Birch Lake Properties and will have an additional period of 2 years to acquire a further 29% interest in the Birch Lake Properties by paying $400,000 to Pelangio in cash or issuing First Mining Shares, at First Mining's sole discretion, and by incurring an additional $1,750,000 worth of expenditures on the Birch Lake Properties.

9

FIRST MINING GOLD CORP.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Canadian dollars unless otherwise noted, tabular amounts are expressed in thousands of Canadian dollars)

(Unaudited)

4. MINERAL PROPERTIES (continued)

v) Stargazer properties acquisition

On October 29, 2021, the Company entered into a three year earn-in agreement with a private individual pursuant to which First Mining may earn a 100% interest in the Stargazer and other properties ("Stargazer Properties") in northwestern Ontario by making cash and share payments of $250,000 to the private individual during the term of the option, and by incurring at least $350,000 worth of expenditures on the Stargazer Properties during the three year option term.

b) Hope Brook Project

On June 8, 2021, the Company announcedit had closed a definitive earn-in agreement with Big Ridge Gold Corp. "Big Ridge" (the "Big Ridge transaction") whereby Big Ridge may earn up to an 80% interest in First Mining's Hope Brook Gold Project located in Newfoundland, Canada. Pursuant to the definitive earn-in agreement, Big Ridge can earn an 80% interest in the Hope Brook Project through a two-stage earn-in over five years by incurring a total of $20,000,000 in qualifying expenditures, issuing up to 36.5 million shares of Big Ridge to First Mining and making a future cash payment to First Mining. Upon completion of the earning in, First Mining will retain a 20% interest in the Hope Brook Project and a 1.5% net smelter returns royalty on the Hope Brook Project, of which 0.5% can be bought back by Big Ridge for $2,000,000. In accordance with the agreement, First Mining nominated one member to the Board of Directors of Big Ridge upon closing and received $500,000 and 11,500,000 shares of Big Ridge which have been credited against the Hope Brook project mineral property balance. At the end of the reporting period, the Company assessed the Hope Brooke Project for impairment indicators, no impairment indicators were identified. See Note 7 below for further details of the equity accounted investment in Big Ridge.

c) Pickle Crow Project

On March 12, 2020, the Company and Auteco executed a definitive Earn-In Agreement (the "Auteco Earn-In Agreement") whereby Auteco may earn up to an 80% interest in PC Gold, a then wholly-owned subsidiary of First Mining which owns the Pickle Crow Project. Pursuant to the Auteco Earn-In Agreement, the Earn-In is comprised of two stages and on June 9, 2021, the Company announced completion of the Stage 1 earn-in and accordingly Auteco obtained a 51% ownership of the PC Gold legal entity. First Mining received the scheduled 100,000,000 Auteco shares and executed the joint venture shareholders agreement.

Following the completion of the Stage 1 earn-in by AuTeco, First Mining's percentage ownership of its former subsidiary, PC Gold, was reduced from 100% to 49%, which led to a loss of control and the resulting deconsolidation of PC Gold Inc. from First Mining's financial statements. Following completion of the Stage 2 earn-in in Q3 2021 the Company delivered the additional 19% interest in PC Gold to Auteco from the Option - PC Gold balance which represented the fair value loss on the reduced 30% PC Gold ownership. A corresponding reduction in the equity accounted investment in PC Gold was also recorded as a result of this dilution. The $4,347,000 balance as at March 31, 2022 represents the additional net dilution which would result from Auteco completing its additional 10% equity interest. Following receipt of $3,000,000 under this option First Mining's ownership would reduce to 20%.

The Company's agreement with Auteco requires First Mining to contribute its pro-rata share of environmental reclamation funding, which was 30% as at March 31, 2022 following completion of the stage 2 earn-in. Accordingly, the company has recorded a provision of $990,000 as at March 31, 2022 (December 31, 2021 - $990,000).

10

FIRST MINING GOLD CORP.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Canadian dollars unless otherwise noted, tabular amounts are expressed in thousands of Canadian dollars)

(Unaudited)

5. INVESTMENT IN TREASURY METALS

a) Treasury Share Purchase Agreement Overview

On August 7, 2020, First Mining completed a transaction with Treasury Metals under a share purchase agreement (the "Treasury Share Purchase Agreement"), pursuant to which Treasury Metals agreed to acquire all of the issued and outstanding shares of Tamaka Gold Corporation, a previously wholly-owned subsidiary of the Company, and 100% owner of the Goldlund Project. Under the terms of the Treasury Share Purchase Agreement, First Mining received total consideration of $91,521,000 which was comprised of (i) 43.33 million common shares (post-consolidation) of Treasury Metals ("Treasury Metals Shares") with a fair value of $78,000,000; (ii) 11.67 million common share purchase warrants (post-consolidation) of Treasury Metals ("Treasury Metals Warrants") with an exercise price of $1.50 for a three year term with a fair value of $9,812,000; (iii) a retained 1.5% Net Smelter Returns ("NSR") royalty on Goldlund (0.5% of which can be bought back by Treasury Metals for $5 million in cash) with a fair value of $3,709,000; and (iv) the right to certain contingent milestone payments totaling $5 million, payable in cash on certain key advancements at Goldlund which have not been recorded as at March 31, 2022.

b) Equity Accounting Method for Investment in Treasury Metals and Impairment

The Company has concluded it has significant influence over Treasury Metals. The Company is accounting for itsinvestment using the equity method. As at March 31, 2022 the fair market value of the Company's investment in common shares of Treasury Metals was $13,600,000, based on the Treasury Metals quoted market price. As at March 31, 2022, the Company owns approximately 20.0 million Treasury Metals Shares.

March 31,

2022

December 31,

2021

Balance, beginning of period

$ 15,400 $ 63,812

Acquisition - Initial Recognition on August 7, 2020

- -

Equity (loss)

(129 ) (167 )

Dilution event in Q2, 2021

- (5,000 )

Impairment of Investment in Treasury Metals Inc.

- (24,304 )

Distribution to shareholders

- (18,941 )

Balance, end of period

$ 15,271 $ 15,400

The equity accounting for Treasury Metals is based on published results to December 31, 2021 and an estimate of results for the period of January 1, 2022 to March 31, 2022. The Company's estimated equity share of Treasury's net loss for the three-month period ending March 31, 2022 was $129,000.

6. INVESTMENT IN PC GOLD INC.

Following the completion of the Stage 1 earn-in into PC Gold by Auteco, First Mining determined that its then 49% investment in the common shares of PC Gold gave it significant influence over PC Gold, requiring PC Gold to be recorded in First Mining's financial statements using the equity method of accounting as an investment in associate.

The initial recognition of the investment in associate was accounted for based on an estimated fair value using a market approach to value Pickle Crow's inferred resources on a per unit of metal basis derived fromcomparable gold project transactions.

11

FIRST MINING GOLD CORP.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Canadian dollars unless otherwise noted, tabular amounts are expressed in thousands of Canadian dollars)

(Unaudited)

6. INVESTMENT IN PC GOLD INC. (continued)

March 31,

2022

December 31,

2021

Balance, beginning of period

$ 21,570 $ -

Acquisition - Initial Recognition on June 9, 2021

- 36,000

Equity loss

(1 ) (3 )

Dilution of ownership - Stage 2 earn-in completion

- (14,427 )

Balance, end of period

$ 21,569 $ 21,570

The subsequent equity accounting for PC Gold is based on audited results for the year-ended June 30,2021, and an estimate of results for the period of July 1, 2021 to March 31, 2022. The Company's estimated equity share of PC Gold's net loss for the interim period ending March 31, 2022 was $1,000.

7. INVESTMENT IN BIG RIDGE GOLD CORP.

Following completion of the Big Ridge transaction on June 7, 2021, the Company's common share ownership interest in Big Ridge was approximately 19.8% (Initial Recognition fair value - $2,185,000) and was 10.61% on March 31, 2022 following a dilution event whereby Big Ridge issued 23.4 million flow-through shares as part of a private placement. In addition to its share ownership interest, the Company considered various qualitative factors including representation rights on Big Ridge's board of directors in arriving at the determination that significant influence exists, and therefore the Company applies the equity method of accounting.

March 31,

2022

December 31,

2021

Balance, beginning of period

$ 1,491 $ -

Acquisition - Initial Recognition on June 7, 2021

- 2,185

Equity loss

(57 ) (106 )

Dilution event in Q2 2021

- (588 )

Balance, end of period

$ 1,434 $ 1,491

The subsequent equity accounting for Big Ridge is based on unaudited results for the year end June 30, 2021 and an estimate of results for the period of July 1, 2021 to March 31, 2022.The Company's estimated equity share of Big Ridge's net loss for the interim period ending March 31, 2022 was $57,000.

8. INVESTMENT IN BEATTIE GOLD MINES LTD.

On February 7 2022, the Company announced that it had acquired an aggregate of 286,904 common shares of Beattie Gold Mines Ltd. ("Beattie"), a private company that owns the mineral rights to mining claims that make up the former Beattie mining concession that form a large part of the Duparquet Gold Project located on the Destor-Porcupine Fault in Québec. Together with the 187,839 common shares of Beattie already owned by Clifton Star Resources Inc., a wholly-owned subsidiary of First Mining, the Company now owns 474,743 shares of Beattie, increasing its ownership in Beattie from 10% to 25.3% of the issued and outstanding common shares of Beattie.

Following completion of the Beattie transaction the Company determined that its 25.3% investment in the common shares of Beattie gave it significant influence, requiring Beattie to be recorded in First Mining's financial statements using the equity method of accounting as an investment in associate.

12

FIRST MINING GOLD CORP.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Canadian dollars unless otherwise noted, tabular amounts are expressed in thousands of Canadian dollars)

(Unaudited)

8. INVESTMENT IN BEATTIE GOLD MINES LTD. (continued)

The initial recognition of the investment in associate was accounted for based on consideration payments under the purchase agreement for an additional 15.3% equity ($3,390,000) combined with a reclassification from Mineral Property Investments (Note 9) of the historically owned 10% equity of Beattie ($2,154,000).

March 31,

2022

December 31,

2021

Balance, beginning of period

$ - $ -

Acquisition - Initial Recognition on Feb 7, 2022

5,544 -

Equity loss (Feb 7, 2022 to March 31, 2022)

- -

Balance, end of period

$ 5,544 $ -

The Company's estimated equity share of Beattie Gold's net loss for the interim period ending March 31, 2022 was $500.

9. MINERAL PROPERTY INVESTMENTS

The Company, through its subsidiary Clifton Star Resources Inc. ("Clifton"), has a 10% interest in the shares of 2699681 Canada Ltd., and 2588111 Manitoba Ltd. which directly or indirectly own various mining concessions and surface rights, collectively known as the Duparquet gold project.

Mineral property investments (which comprise equity interests in the shares of two private companies) are designated as FVTOCI, with changes in fair value recorded in other comprehensive income (loss). During the period ended March 31, 2022, the 10% investment in Beattie Gold Mines Ltd was reclassed to Investment in Beattie Gold Mines Ltd. (Note 8) following the purchase of an additional 15.3% equity ownership.

March 31,

2022

December 31,

2021

Balance, beginning of period

$ 6,435 $ 6,726

Fair value gain (loss) - FVTOCI

458 (291 )

Reclassified to Investment in Beattie Gold Mines

(2,154 ) -

Balance, end of period

$ 4,739 $ 6,435

10. SILVER STREAM DERIVATIVE LIABILITY

a) Silver Purchase Agreement Overview and Consideration Received

On June 10, 2020, the Company entered into a silver purchase agreement (the "Silver Purchase Agreement") with First Majestic Silver Corp. ("First Majestic"), which closed on July 2, 2020. Under the terms of the Silver Purchase Agreement, First Majestic agreed to pay First Mining total consideration of US$22.5 million (approx. $30.6 million as at the closing date), in three tranches, for the right to purchase 50% of the payable silver produced from the Springpole Gold Project over the life of the project (the "Silver Stream") and also received 30 million common share purchase warrants of First Mining. Each share purchase warrant entitles First Majestic to purchase one common share of First Mining at an exercise price of $0.40 for a period of five years. The fair value of the warrants issued of $6,278,000 was recorded in Equity (Warrant reserve) on the Company's consolidated statements of financial position.

13

FIRST MINING GOLD CORP.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Canadian dollars unless otherwise noted, tabular amounts are expressed in thousands of Canadian dollars)

(Unaudited)

10. SILVER STREAM DERIVATIVE LIABILITY (continued)

First Mining has the right to repurchase 50% of the Silver Stream for US$22.5 million (approx. $28.1 million as at March 31, 2022) at any time prior to the commencement of production at Springpole (the "Buy-Back Right").

Per the Silver Purchase Agreement, First Majestic paid US$10 million ($13.7 million) to First Mining on the July 2, 2020 closing date, with US$2.5 million ($3.3 million) paid in cash and the remaining US$7.5 million ($10.4 million) paid in 805,698 common shares of First Majestic ("Tranche 1"). Upon announcement of the Pre-Feasibility Study ("PFS") on March 4, 2021, First Mining received US$7.5 million ($9.8 million) from First Majestic, with US$3.75 million ($4.8 million) paid in cash and the remaining US$3.75 million ($5.0 million) paid in 287,300 common shares of First Majestic ("Tranche 2"). The final trance ("Tranche 3") of US$5.0 million ($6.5 million) is payable by First Majestic upon First Mining receiving approval of a federal or provincial EA for the Springpole Gold Project, which is to paid half in cash and half in shares of First Majestic.

b) Silver Stream Derivative Liability Fair Value

The Company has concluded that the Silver Stream is a standalone derivative measured at FVTPL.

The estimated fair value of the Silver Stream derivative liability is determined using a discounted cash flow model which incorporates a Monte Carlo simulation. The fair value of the Silver Stream derivative liability is a Level 3 measurement.

The fair value of the Silver Stream derivative liability is calculated at each reporting date as the net of the future Advance Payment tranches receivable (an asset for the Company) and the Silver Stream obligation (a liability to the Company), with gains or losses recorded in the statement of net loss and comprehensive loss. The fair value of the Silver Stream derivative liability as at March 31, 2022 is US$20,560,000 ($25,693,000), which is comprised of the Silver Stream obligation fair value of US$23,761,000 ($29,693,000) less the Advance Payment receivable fair value of US$3,201,000 ($4,000,000). The fair value of the Silver Stream derivative liability as at December 31, 2021 was US$20,664,000 ($26,114,000), which is comprised of the Silver Stream obligation fair value of US$23,818,000 ($30,098,000) less the Advance Payment receivable fair value of US$3,154,000 ($3,984,000).

Silver Stream

derivative liability

Balance, December 31, 2020

$ (13,260 )

Advance payment received (Tranche 2) (US$7.5 million)

(9,808 )

Change in fair value during the period

(3,046 )

Balance, December 31, 2021

$ (26,114 )

Change in fair value during the period

421

Balance, March 31, 2022

$ (25,693 )
14

FIRST MINING GOLD CORP.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Canadian dollars unless otherwise noted, tabular amounts are expressed in thousands of Canadian dollars)

(Unaudited)

11. SHARE CAPITAL

a) Authorized

Unlimited number of common shares with no par value.

Unlimited number of preferred shares with no par value.

b) Issued and Fully Paid

Common shares: 711,318,758 (December 31, 2021 - 700,200,059).

Preferred shares: nil (December 31, 2020 - nil).

c) Warrants

The movements in warrants during the three months ended March 31, 2022 and year ended December 31, 2021 are summarized as follows:

Number

Weighted average exercise price

Balance as at December 31, 2020

93,085,657 $ 0.48

Warrants issued

2,100,228 0.38

Warrants exercised

(265,650 ) 0.33

Warrants expired

(3,027,615 ) 0.44

Balance as at December 31, 2021

91,892,620 $ 0.45

Warrants issued

- -

Warrants exercised

- -

Warrants expired

- -

Balance as at March 31, 2022

91,892,620 $ 0.45

The following table summarizes information about warrants outstanding as at March 31, 2022:

Exercise price

Number of warrants

outstanding

Weighted average exercise price

($ per share)

Weighted average

remaining life (years)

$

0.31

18,247,009

$

0.31

0.91

$

0.37

44,845,611

0.37

2.36

$

0.42

50,000

0.42

1.33

$

0.65

28,750,000

0.65

0.41

91,892,620

$

0.45

1.46

There were no warrants issued during the three months ended March 31, 2022.

15

FIRST MINING GOLD CORP.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Canadian dollars unless otherwise noted, tabular amounts are expressed in thousands of Canadian dollars)

(Unaudited)

11. SHARE CAPITAL (continued)

d) Stock Options

The Company has adopted a stock option plan that allows for the granting of stock options to Directors, Officers, employees and certain consultants of the Company for up to 10% of the Company's issued and outstanding common shares. Stock options granted under the plan may be subject to vesting provisions as determined by the Board of Directors.

The movements in stock options during the three months ended March 31, 2022 and year ended December 31, 2021 are summarized as follows:

Number

Weighted average exercise price

Balance as at December 31, 2020

45,820,000 $ 0.53

Options granted

12,190,000 0.23

Options exercised

(2,287,500 ) 0.25

Options expired

(7,820,000 ) 0.75

Options forfeited

(2,762,500 ) 0.39

Balance as at December 31, 2021

45,140,000 $ 0.44

Options granted

14,835,000 0.27

Options exercised

- -

Options expired

(6,865,000 ) 0.84

Options forfeited

(131,250 ) 0.44

Balance as at March 31, 2022

52,978,750 $ 0.34

The weighted average closing share price at the date of exercise for the three months ended March 31, 2022 was nil (March 31, 2021 - $0.42). There were no stock options exercised during the three months ended March 31, 2022 (March 31, 2021 - 25,000).

The following table summarizes information about the stock options outstanding as at March 31, 2022:

Options Outstanding

Options Exercisable

Exercise

price

Number of

options

Weighted average

exercise price

($ per share)

Weighted average

remaining life

(years)

Number of

options

Weighted average

exercise price

($ per share)

Weighted average

remaining life

(years)

$ 0.25 - 0.50

47,678,750 $ 0.35 3.39 31,981,250 $ 0.37 2.78

$ 0.51 - 1.00

5,300,000 0.60 0.80 5,300,000 0.60 0.80
52,978,750 $ 0.37 3.14 37,281,250 $ 0.40 2.51

During the three months ended March 31, 2022, there were 14,835,000 (March 31, 2021 - 8,615,000) stock options granted with an aggregate fair value at the date of grant of $3,975,750 (March 31, 2021 - $1,990,685), or a weighted average fair value of $0.14 per option (March 31, 2021 - $0.25). As at March 31, 2022, 15,697,500 (March 31, 2021 - 9,886,250) stock options remain unvested with an aggregate grant date fair value of $2,516,408 (March 31, 2021 - $1,275,000).

16

FIRST MINING GOLD CORP.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Canadian dollars unless otherwise noted, tabular amounts are expressed in thousands of Canadian dollars)

(Unaudited)

11. SHARE CAPITAL (continued)

Certain stock options granted were directly attributable to exploration and evaluation expenditures on mineral properties and were therefore capitalized to mineral properties. In addition, certain stock options were subject to vesting provisions. These two factors result in differences between the aggregate fair value of stock options granted and total share-based payments expensed during the periods. Total share-based payments expense during the periods ended March 31, 2022 and March 31, 2021 was classified within the financial statements as follows:

For the three months ended

March 31,

Statements of Net Loss:

2022

2021

General and administration

$ 509 $ 498

Exploration and evaluation

20 115

Investor relations and marketing communications

66 89

Corporate development and due diligence

61 74

Subtotal

$ 656 $ 776

Statements of Financial Position:

Mineral Properties

397 408

Total

$ 1,053 $ 1,184

The grant date fair value of the stock options recognized in the period has been estimated using the Black-Scholes option pricing model with the following weighted average assumptions:

Three months ended

Year ended

March 31,

2022

December 31,

2021

Risk-free interest rate

1.75 % 0.86 %

Share price at grant date (in dollars)

$ 0.27 $ 0.44

Exercise price (in dollars)

$ 0.27 $ 0.41

Expected life (years)

5.00 years

5.00 years

Expected volatility (1)

64.14 % 67.89 %

Forfeiture rate

7.50 % 7.50 %

Expected dividend yield

Nil

Nil

(1)

The computation of expected volatility was based on the Company's historical price volatility, over a period which approximates the expected life of the option.

e) Restricted Share Units

During the three months ended in March 31, 2022, the company granted 1,090,000 Restricted Share Units ("RSUs") under its share-based compensation plan to the Company's executive officers as part of the Company's long-term incentive plan ("LTIP"). Unless otherwise stated, the awards typically have a graded vesting schedule over a three-year period and will be settled in equity upon vesting.

The associated compensation cost, which is based on the underlying share price on the date of grant, is recorded as share-based payments expense against share-based payment reserve.

17

FIRST MINING GOLD CORP.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Canadian dollars unless otherwise noted, tabular amounts are expressed in thousands of Canadian dollars)

(Unaudited)

11. SHARE CAPITAL (continued)

The following table summarizes the changes in RSU's for the three months ended March 31, 2022:

Number

Weighted average fair value

Balance as at December 31, 2021

1,550,000 $ 0.40

Granted - February 3, 2022

1,090,000 0.25

RSUs forfeited

(233,333 ) 0.40

Balance as at March 31, 2022

2,406,667 $ 0.33

f) Deferred Share Units

During the three months ended in March 31, 2022, the company granted 356,000 Deferred Share Units ("DSUs") under its share-based compensation plan to a director as part of the Company's LTIP. DSUs have a graded vesting schedule over an 18-month period and will be settled in equity upon vesting.

The associated compensation cost, which is based on the underlying share price on the date of grant, is recorded as share-based payments expense against share-based payment reserve.

Number

Weighted average fair value

Balance as at December 31, 2021

303,000 $ 0.36

Granted - February 11, 2022

356,000 0.26

Balance as at March 31, 2022

659,000 $ 0.30

12. OPERATING EXPENSES

Operating expenses by nature, which map to the Company's functional operating expense categories presented in the consolidated statements of net loss and comprehensive loss, are as follows:

For the three months ended March 31, 2022

General and administration

Exploration and evaluation

Investor relations and marketing communications

Corporate development and due diligence

Total

Administrative and office

$ 76 $ 46 $ 2 $ - $ 124

Consultants

93 5 - - 98

Depreciation (non-cash)

44 55 - - 99

Directors fees

83 - - - 83

Investor relations and marketing communications

- - 138 - 138

Professional fees

184 - - - 184

Salaries

317 23 84 47 471

Share-based payments (non-cash) (Note 11(d))

509 20 66 61 656

Transfer agent and filing fees

115 - - - 115

Travel and accommodation

2 28 2 1 33

Operating expenses total

$ 1,423 177 $ 292 $ 109 $ 2,001
18

FIRST MINING GOLD CORP.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Canadian dollars unless otherwise noted, tabular amounts are expressed in thousands of Canadian dollars)

(Unaudited)

12. OPERATING EXPENSES (continued)

For the three months ended March 31, 2021

General and administration

Exploration and evaluation

Investor relations and marketing communications

Corporate development and due diligence

Total

Administrative and office

$ 63 $ 37 $ 6 $ - $ 106

Consultants

62 4 15 - 81

Depreciation (non-cash)

43 33 - - 76

Directors fees

68 - - - 68

Investor relations and marketing communications

- - 218 - 218

Professional fees

298 - - - 298

Salaries

218 48 145 83 494

Share-based payments (non-cash) (Note 11(d))

498 115 89 74 776

Transfer agent and filing fees

104 - - - 104

Travel and accommodation

1 2 - - 3

Operating expenses total

$ 1,355 239 $ 473 $ 157 $ 2,224

Impairment of non-current assets (non-cash) (Note 5)

23,555

Loss from operational activities

$ 25,779

13. SEGMENT INFORMATION

The Company operates in a single reportable operating segment, being the acquisition, exploration, development and strategic disposition of its North American mineral properties. Geographic information about the Company's non-current assets, excluding financial instruments, as at March 31, 2022 and December 31, 2021 is as follows: Canada - $226,336,000 (December 31, 2021 - $209,739,000) and USA - $222,000 (December 31, 2021 - $226,000).

14. RELATED PARTY TRANSACTIONS

The Company's related parties consist of the Company's Directors and Officers, and any companies associated with them.

Key management includes the Directors, Officers and Vice Presidents of the Company. The compensation paid or payable to key management for services during the three months ended March 31, 2022 and 2021 is as follows:

Service or Item

Three months ended March 31,

2022

2021

Directors' fees

$ 83 $ 68

Salaries and consultants' fees

514 476

Share-based payments (non-cash)

605 454

Total

$ 1,202 $ 998
19

FIRST MINING GOLD CORP.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Canadian dollars unless otherwise noted, tabular amounts are expressed in thousands of Canadian dollars)

(Unaudited)

15. FAIR VALUE

Fair values have been determined for measurement and/or disclosure requirements based on the methods below.

The Company characterizes fair value measurements using a hierarchy that prioritizes inputs depending on the degree to which they are observable. The three levels of the fair value hierarchy are as follows:

·

Level 1 fair value measurements are quoted prices (unadjusted) in active markets for identical assets or liabilities;

·

Level 2 fair value measurements are those derived from inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and

·

Level 3 fair value measurements are those derived from valuation techniques that include significant inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The carrying values of cash and cash equivalents, current accounts receivables, and accounts payable and accrued liabilities approximated their fair values because of the short-term nature of these financial instruments. These financial instruments are financial assets and liabilities at amortized cost.

The carrying value of investments was based on the quoted market prices of the shares as at March 31, 2022 and was therefore considered to be Level 1.

The mineral property investments (First Mining's 10% equity interest in two privately held companies that own the Duparquet Gold Project) are classified as financial assets at FVTOCI. The fair value of the mineral property investments was not based on observable market data and was therefore considered to be Level 3. The initial fair value of the mineral property investments was determined based on attributable pro-rata gold ounces for the Company's 10% indirect interest in the Duparquet project, which formed part of the identifiable assets from the acquisition of Clifton. Subsequently, the fair value has been reassessed at each period end. Scenarios which may result in a significant change in fair value include, among others, a change in the performance of the investee, a change in the performance of comparable entities, a change in gold price, a change in the economic environment, or evidence from external transactions in the investee's equity. During the three months ended March 31, 2022, management concluded that there was an increase in the fair value of the mineral property investments, and a fair value gain of $458,000 (March 31, 2021 - fair value loss of $700,000) was recorded (Note 4).

As the Earn‐In Agreement provides Auteco the right to earn an interest in PC Gold, rather than a direct interest in the Pickle Crow project, Auteco's option to acquire PC Gold shares is a financial liability of First Mining. As a derivative, the Pickle Crow project option liability is classified as financial liability at FVTPL. The carrying value of the Option - Pickle Crow Gold Project is not based on observable market data and therefore is considered to be Level 3. The fair value of the Option - Pickle Crow Gold Project as at March 31, 2022 was determined by reference to the portion of the estimated fair value of PC Gold to be given up by the Company with the option for Auteco to earn an additional 10%, net of $3,000,000 proceeds to be received on exercise.

The Silver Stream was determined to be a derivative liability, which is classified as a financial liability at FVTPL. The carrying value of the derivative liability was not based on observable market data and involved complex valuation methods and was therefore considered to be Level 3.

20

FIRST MINING GOLD CORP.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Canadian dollars unless otherwise noted, tabular amounts are expressed in thousands of Canadian dollars)

(Unaudited)

15. FAIR VALUE (continued)

The following table presents the Company's fair value hierarchy for financial assets and liabilities that are measured at fair value:

March 31, 2022

December 31, 2021

Fair value measurement

Fair value measurement

Carrying value

Level 1

Level 2

Level 3

Carrying value

Level 1

Level 2

Level 3

Financial assets:

Investments (Notes 3, 5)

$ 11,185 $ 11,185 $ - $ - $ 13,386 $ 13,386 $ - $ -

Mineral property investments (Note 9)

4,739 - - 4,739 6,435 - - 6,435

Financial liabilities:

Silver Stream derivative liability (Note 10)

25,693 - - 25,693 26,114 - - 26,114

Option - PC Gold (Note 4(b))

$ 4,347 $ - $ - $ 4,347 $ 4,347 $ - $ - $ 4,347

During the three months ended March 31, 2022 there has been a transfer out of level 3 in the fair value hierarchy related to the Beattie Gold Mines 15.3% equity ownership increase that required a reclassification from Mineral Property Investments of the historically owned 10% equity of Beattie ($2,154,000).

21