Probe Gold : Third Quarter Report for the Period Ending September 30, 2023

CONDENSED INTERIM FINANCIAL STATEMENTS OF

PROBE GOLD INC.

(FORMERLY PROBE METALS INC.)

FOR THE THREE AND NINE MONTHS ENDED

SEPTEMBER 30, 2023

(EXPRESSED IN CANADIAN DOLLARS)

(UNAUDITED)

NOTICE TO READER

The accompanying unaudited condensed interim financial statements of Probe Gold Inc. (formerly Probe Metals Inc.) (the "Company") have been prepared by, and are the responsibility of management. The unaudited condensed interim financial statements have not been reviewed by the Company's auditors.

Probe Gold Inc. (formerly Probe Metals Inc.)

Condensed Interim Statements of Financial Position (Expressed in Canadian Dollars)

(Unaudited)

		As at		As at
	September 30,	December 31,
		2023		2022
ASSETS
Current assets	$	18,479,094
Cash and cash equivalents	$	23,557,285
Trade accounts receivable and other receivables (note 3)		1,091,292		2,734,635
Marketable securities (note 4)		3,354,485		3,280,178
Prepaid expenses		95,252		179,130
Total current assets		23,020,123		29,751,228
Non-current assets		4,852,680
Quebec refundable tax credits and mining duties refund receivable			2,952,428
Reclamation bonds (note 5)		969,448		413,050
Property and equipment (note 6)		559,323		596,684
Rights-of-use assets (note 7)		469,591		549,948
Total non-current assets		6,851,042		4,512,110
Total assets	$	29,871,165	$	34,263,338
LIABILITIES AND EQUITY
Current liabilities	$	1,550,251
Amounts payable and other liabilities (notes 8 and 18)	$	2,127,809
Current portion of lease liability (note 9)		90,813		65,241
RSU liability (note 14)		587,487		637,550
Flow-through share liability (note 10)		1,399,925		-
Total current liabilities		3,628,476		2,830,600
Non-current liabilities		442,555
Lease liability (note 9)			513,427
Restoration liabilities (note 5)		1,646,721		1,018,865
Total non-current liabilities		2,089,276		1,532,292
Total liabilities		5,717,752		4,362,892
Equity		162,012,691
Share capital (note 11)			145,792,683
Warrants (note 12)		3,679,449		3,679,449
Contributed surplus (notes 13 and 14)		7,922,457		8,888,468
Accumulated deficit		(149,461,184)		(128,460,154)
Total equity		24,153,413		29,900,446
Total liabilities and equity	$	29,871,165	$	34,263,338

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

Nature of operations (note 1)

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Probe Gold Inc. (formerly Probe Metals Inc.)

Condensed Interim Statements of Loss and Comprehensive Loss (Expressed in Canadian Dollars)

(Unaudited)

		Three months ended		Nine months ended
		September 30,		September 30,
		2023		2022		2023		2022
Operating expenses	$	10,431,814			$	19,515,365
Exploration and evaluation expenditures (note 16)	$	8,421,499	$	24,482,389
General and administrative expenses (note 17)		1,334,547		902,168		4,595,452		3,631,671
Operating loss before interest and other income,
accretion expense, premium on flow-through
shares and unrealized (loss) gain on marketable
securities	(11,766,361)		(9,323,667)	(24,110,817)	(28,114,060)
Interest and other income		297,210		279,392		897,903		465,638
Accretion expense (notes 5 and 9)		(27,491)		(29,713)		(83,210)		(95,902)
Premium on flow-through shares (note 10)		1,230,453		1,008,368		2,220,783		2,280,366
Unrealized (loss) gain on		(604,711)				74,307
marketable securities (note 4)			(107,933)			(1,182,731)
Loss before income taxes	(10,870,900)		(8,173,553)		(21,001,034)	(26,646,689)
Income tax recovery		-		-		-		303,539
Loss and comprehensive loss for the period	$(10,870,900)	$	(8,173,553)	$(21,001,034)	$(26,343,150)
Basic and diluted loss per share (note 15)	$	(0.07)	$	(0.05)	$	(0.13)	$	(0.18)
Weighted average number of common shares
outstanding - basic and diluted	161,728,730	151,412,679	157,961,806	146,176,999

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

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Probe Gold Inc. (formerly Probe Metals Inc.)

Condensed Interim Statements of Cash Flows (Expressed in Canadian Dollars)

(Unaudited)

	Nine months ended
	September 30,
	2023	2022
Operating activities:	$ (21,001,034)
Net loss for the period	$ (26,343,150)
Adjustments for:	2,375,185
Share-based payments (notes 13 and 14)	1,878,171
Depreciation (notes 6 and 7)	143,650	139,051
Accrued interest receivable	41,462	91,469
Shares issued to acquire mineral property (note 11(b)(iv) and (v))	2,581,301	-
Unrealized (gain) loss on marketable securities (note 4)	(74,307)	1,182,731
Premium on flow-through share (note 10)	(2,220,783)	(2,280,366)
Accretion expense (notes 5 and 9)	83,210	95,902
Restoration fees (note 5)	603,146	-
Quebec refundable tax credits and mining duties refund receivable accrued	(1,900,252)	-
Changes in non-cash working capital items:	1,564,619
Trade accounts receivable and other receivables	(1,824,186)
Prepaid expenses	83,878	(31,991)
Amounts payable and other liabilities	(577,558)	1,313,631
Net cash used in operating activities	(18,297,483)	(25,778,738)
Investing activities:	(25,932)
Purchase of property and equipment (note 6)	(16,229)
Purchase of reclamation bonds (note 5)	(556,398)	-
Net cash used in investing activities	(582,330)	(16,229)
Financing activities:	(657,984)
Cash paid for RSUs (note 14)	-
Proceeds from private placements (note 11(b))	15,000,076	31,270,000
Share issue costs	(1,109,196)	(2,008,748)
Exercise of warrants	-	8,450
Exercise of stock options	672,526	136,000
Lease payments (note 9)	(103,800)	(162,390)
Net cash provided by financing activities	13,801,622	29,243,312
Net change in cash and cash equivalents	(5,078,191)	3,448,345
Cash and cash equivalents, beginning of period	23,557,285	28,866,655
Cash and cash equivalents, end of period	$ 18,479,094	$ 32,315,000

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

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Probe Gold Inc. (formerly Probe Metals Inc.)

Condensed Interim Statements of Changes in Shareholders' Equity (Expressed in Canadian Dollars)

(Unaudited)

Equity attributable to shareholders
	Share			Contributed	Accumulated
	capital		Warrants		surplus	deficit	Total
Balance, December 31, 2021	$122,578,430	$	1,074,738	$	6,942,813	$ (99,615,433)	$ 30,980,548
Private placement (note 11(b)(i)(ii))	31,270,000		-		-	-	31,270,000
Warrants (note 11(b)(i)(ii))	(3,741,790)		3,741,790		-	-	-
Share issue costs	(2,008,748)		-		-	-	(2,008,748)
Flow-through share premium	(2,622,451)		-		-	-	(2,622,451)
Exercise of warrants	8,450		-		-	-	8,450
Exercise of stock options	246,451		-		(110,451)	-	136,000
Share-based payments (notes 13 and 14)	-		-		1,889,129	-	1,889,129
Loss and comprehensive loss	-		-		-	(26,343,150)	(26,343,150)
Balance, September 30, 2022	$145,730,342	$	4,816,528	$	8,721,491	$(125,958,583)	$ 33,309,778
Balance, December 31, 2022	$145,792,683	$	3,679,449	$	8,888,468	$(128,460,154)	$ 29,900,446
Shares issued to acquire mineral property (note 11(b)(iv) and (v))	2,581,301		-		-	-	2,581,301
Private placements (note 11(b)(iii))	15,000,076		-		-	-	15,000,076
Shares issue costs	(1,109,196)		-		-	-	(1,109,196)
Flow-through share premium (note 10(i))	(3,620,708)		-		-	-	(3,620,708)
RSUs vested (note 14)	755,034		-		(988,652)	-	(233,618)
Exercise of warrants	-		-		-	-	603,146
Exercise of stock options	2,613,501		-		(1,940,975)	-	672,526
Stock options expired	-		-		(4)	4	-
Share-based payments (notes 13 and 14)	-		-		1,963,620	-	1,963,620
Loss and comprehensive loss	-		-		-	(21,001,034)	(21,001,034)
Balance, September 30, 2023	$162,012,691	$	3,679,449	$	7,922,457	$(149,461,184)	$ 24,756,559

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

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Probe Gold Inc. (formerly Probe Metals Inc.)

Notes to Condensed Interim Financial Statements September 30, 2023

(Expressed in Canadian Dollars) (Unaudited)

1. Nature of Operations

Probe Gold Inc. (formerly Probe Metals Inc.) (the "Company" or "Probe") was incorporated pursuant to the Business Corporations Act (Ontario) under the name "2450260 Ontario Inc." on January 16, 2015. Articles of amendment were subsequently filed on February 3, 2015 to change the name of the Company to "Probe Metals Inc." and on January 9, 2023 to change the name of the Company to "Probe Gold Inc.". The Company's head office is located at 56 Temperance Street, Suite 1000, Toronto, Ontario, Canada, M5H 3V5. The Company's common shares started trading on the TSX Venture Exchange ("TSXV") on March 17, 2015 under the trading ticker symbol "PRB". On January 27, 2023, the Company's common shares started trading on the Toronto Stock Exchange ("TSX") and ceased trading on the TSXV. The Company's symbol remained "PRB'. The Company, a Canadian precious metal exploration company, was formed following the acquisition of Probe Mines Limited by Goldcorp Inc. pursuant to the arrangement announced on January 19, 2015.

Probe is a leading Canadian gold exploration company focused on the acquisition, exploration and development of highly prospective gold properties. The Company is committed to discovering and developing high-quality gold projects, including its key asset the multimillion-ounce Novador (formerly Val-d'Or East Gold Project), Québec. The Company is well-funded and controls a strategic land package of approximately 1,500-square-kilometres of exploration ground within some of the most prolific gold belts in Québec.

The financial year end of the Company is December 31st.

2. Significant Accounting Policies

Statement of Compliance

The Company applies International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") and the interpretations issued by the IFRS Interpretations Committee. These unaudited condensed interim financial statements have been prepared in accordance with International Accounting Standard 34, Interim Financial Reporting. Accordingly, they do not include all of the information required for full annual financial statements required by IFRS as issued by the IASB.

The policies applied in these unaudited condensed interim financial statements are based on IFRSs issued and outstanding as of November 8, 2023, the date the Board of Directors approved the statements. The same accounting policies and methods of computation are followed in these unaudited condensed interim financial statements as compared with the most recent annual financial statements as at and for the year ended December 31, 2022. Any subsequent changes to IFRS that are given effect in the Company's annual financial statements for the year ending December 31, 2023 could result in restatement of these unaudited condensed interim financial statements.

3. Trade Accounts Receivable and Other Receivables

		As at		As at
	September 30,	December 31,
		2023		2022
Sales tax receivable - (Canada)	$	962,017	$	2,636,853
Accrued interest receivable		78,724		89,545
Receivable from Midland Exploration Inc.		448		3,373
Other		50,103		4,864
	$	1,091,292	$	2,734,635

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Probe Gold Inc. (formerly Probe Metals Inc.)

Notes to Condensed Interim Financial Statements September 30, 2023

(Expressed in Canadian Dollars) (Unaudited)

4. Marketable Securities

	September 30,	December 31,
		2023		2022
Balance, beginning of period	$	3,280,178	$	3,846,656
Unrealized gain (loss)		74,307		(566,478)
Balance, end of period	$	3,354,485	$	3,280,178

During the three and nine months ended September 30, 2023, the Company recorded an unrealized loss on marketable securities of $604,711 and an unrealized gain of $74,307, respectively (three and nine months ended September 30, 2022 - unrealized loss of $107,933 and $1,182,731, respectively) in the unaudited condensed interim statements of loss and comprehensive loss.

5.	Reclamation Bonds and Restoration Liabilities
Reclamation Bonds
			As at		As at
		September 30,	December 31,
			2023		2022
Insurance bond - Monique Property	$	402,757	$	402,757
Insurance bond - Pascalis Property		10,293		10,293
Insurance bond - Croinor Property (i)		556,398		-
Total reclamation bonds	$	969,448	$	413,050
Restoration Liabilities
		September 30,	December 31,
			2023		2022
Novador Project (Monique Property) restoration liabilities	$	1,008,572
Balance, beginning of period	$	1,620,358
Reduction during the period		-		(639,006)
Accretion		24,710		27,220
Balance, end of period	$	1,033,282	$	1,008,572
Novador Project (Pascalis Property) restoration liabilities	$	10,293
Balance, beginning and end of period	$	10,293
Other Val d'Or Projects (Croinor Property) restoration liabilities	$	-
Balance, beginning and end of period	$	-
Additions during the period (i)		603,146		-
Balance, end of period	$	603,146	$	-
Total restoration liabilities	$	1,646,721	$	1,018,865

1. On July 28, 2023, the Company acquired the Croinor Property (refer to note 16(i)). With the acquisition, the Company also assumed the reclamation liabilities associated with the past-producing Croinor mine totalling $603,146, of which $556,398 has been paid by the Company.

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Probe Gold Inc. (formerly Probe Metals Inc.)

Notes to Condensed Interim Financial Statements September 30, 2023

(Expressed in Canadian Dollars) (Unaudited)

6. Property and Equipment

					Computer		Field		Site
Cost			Artwork	equipment		equipment		building		Building		Total
Balance, December 31, 2022	$	121,776	$	106,301	$	417,529	$	15,833	$	456,411	$	1,117,850
Additions		-		5,255		20,677		-		-		25,932
Balance, September 30, 2023	$	121,776	$	111,556	$	438,206	$	15,833	$	456,411	$	1,143,782
					Computer		Field		Site
Accumulated depreciation		Artwork		equipment		equipment		building		Building		Total
Balance, December 31, 2022	$	-	$	70,556	$	286,057	$	15,833	$	148,720	$	521,166
Depreciation during the period		-		8,309		31,908		-		23,076		63,293
Balance, September 30, 2023	$	-	$	78,865	$	317,965	$	15,833	$	171,796	$	584,459
					Computer		Field		Site
Carrying value		Artwork		equipment		equipment		building		Building		Total
Balance, December 31, 2022	$	121,776	$	35,745	$	131,472	$	-	$	307,691	$	596,684
Balance, September 30, 2023	$	121,776	$	32,691	$	120,241	$	-	$	284,615	$	559,323
7.	Rights-of-use Assets
													Building
Balance, December 31, 2022											$	549,948
Depreciation												(80,357)
Balance, September 30, 2023											$	469,591

8. Amounts Payable and Other Liabilities

		As at		As at
	September 30,	December 31,
		2023		2022
Amounts payables	$	1,402,464	$	982,192
Accrued liabilities		147,787		1,145,617
	$	1,550,251	$	2,127,809

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Probe Gold Inc. (formerly Probe Metals Inc.)

Notes to Condensed Interim Financial Statements September 30, 2023

(Expressed in Canadian Dollars) (Unaudited)

9.	Lease Liabilities
									Building
Balance, December 31, 2022							$	578,668
Accretion expense								58,500
Lease payments								(103,800)
Balance, September 30, 2023							$	533,368
			Under		Between		Between
Lease maturity		1 year		1 - 2 years		3 - 5 years		Total
Building	$	160,124	$	162,099	$	407,683	$	729,906

10. Flow-Through Share Liability

The following is a continuity schedule of the liability of the flow-through shares issuance:

Balance, December 31, 2022	$	-
Liability incurred on flow-through shares issued (i)		3,620,708
Settlement of flow-through share liability on incurring expenditures (i)		(2,220,783)
Balance, September 30, 2023	$	1,399,925

1. The flow-through common shares issued in the brokered private placement completed on March 27, 2023 were issued at a premium to the market price in recognition of the tax benefits accruing to subscribers. The flow-through premium was calculated to be $3,620,708.

The flow-through premium is derecognized through income as the eligible expenditures are incurred. For the nine months ended September 30, 2023, the Company satisfied $2,220,783 of the commitment by incurring eligible expenditures of approximately $9,200,000 and as a result the flow-through premium has been reduced to $1,399,925.

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Probe Gold Inc. (formerly Probe Metals Inc.)

Notes to Condensed Interim Financial Statements September 30, 2023

(Expressed in Canadian Dollars) (Unaudited)

11. Share Capital

1. Authorized share capital

The authorized share capital consists of an unlimited number of common shares. The common shares do not have a par value. All issued shares are fully paid.

1. Common shares issued

As at September 30, 2023 the issued share capital amounted to $162,012,691. Changes in issued share capital are as follows:

	Number of
	common
	shares	Amount
Balance, December 31, 2021	138,606,181	$122,578,430
Private placements (i)(ii)	12,699,999	31,270,000
Warrants (i)(ii)	-	(3,741,790)
Flow-through share premium	-	(2,622,451)
Share issue costs	-	(2,008,748)
Exercise of warrants	6,500	8,450
Exercise of stock options	100,000	246,451
Balance, September 30, 2022	151,412,680	$145,730,342
Balance, December 31, 2022	151,412,680	$145,792,683
Private placements (iii)	7,389,200	15,000,076
Flow-through share premium (note 10(i))	-	(3,620,708)
Share issue costs	-	(1,109,196)
Shares issued for mineral properties (iv)(v)	1,583,620	2,581,301
Exercise of stock options (note 13(v))	1,136,420	2,613,501
RSUs vested (note 14)	641,200	755,034
Balance, September 30, 2023	162,163,120	$162,012,691

1. On March 8, 2022, the Company completed a bought deal private placement consisting of 6,700,000 flow-through units of the Company at a price of $3.10 per flow-through unit for aggregate gross proceeds of $20,770,000. Each flow-throughunit consists of one flow-throughcommon share of the Company and one-halfof one common share purchase warrant. Each whole warrant will entitle the holder to acquire one common share of the Company for 2 years from the closing of the offering at a price of $2.40.

The fair value of the 3,350,000 warrants was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions: share price of $2.31; expected dividend yield of 0%; risk-free interest rate of 1.46%; volatility of 64% and an expected life of 2 years. The fair value assigned to these warrants was $2,670,549.

The offering was completed through a syndicate of underwriters led by Canaccord Genuity Corp., and including Sprott Private Partners, CIBC Capital Markets, BMO Capital Markets, iA Private Wealth, Research Capital Corporation and Laurentian Bank Securities (collectively, the "Underwriters"). In consideration for their services, the Underwriters received a cash commission equal to 6% of the gross proceeds of the offering. All securities issued and issuable pursuant to the offering are subject to a hold period of four months and one day from closing.

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