Southern Arc Minerals : Financial Statements - March 31, 2020

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED

MARCH 31, 2020 AND 2019

(Unaudited- Expressed in Canadian dollars)

NOTICE TO READER

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

The accompanying unaudited condensed consolidated interim financial statements of Southern Arc Minerals Inc. (the "Company") for the three and nine months ended March 31, 2020, have been prepared by management and are the responsibility of the Company's management and have not been reviewed by an auditor.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION (Unaudited - Expressed in Canadian dollars)

As at Assets CurrentMarch 31, 2020

June 30, 2019

Cash

Receivables

Prepaid expenses and other deposits

Loan receivable (Note 3)

Investments (Note 4)

Investments(Note 4)

Investments in associates(Note 3, 4)

Property and equipment(Note 5)

Right-of-use asset(Note 6)

$

495,023 $ 435,968

61,330 64,211

21,987 45,041

1,000,000 574,200

- 1,515,900

2,152,540 2,061,120

3,756,323 8,584,045

6,508,427 6,795,954

8,602 504,770

14,270 -

Total assets

$

12,930,662 $

17,455,389

Liabilities Current

Accounts payable and accrued liabilities Derivative liability (Note 4)

Lease liabilities (Note 6)

Lease liabilities (Note 6)

$

65,700 $

50,636

50,616

410

1,539,137 -

116,726

434,637

1,589,773 -

Total liabilities

551,363

1,589,773

Shareholders' equity

Capital stock (Note 7) Treasury stock (Note 7) Equity reserve (Note 7)

Accumulated other comprehensive income (loss) Deficit

77,022,566

(1,170,000)

12,570,902

(4,524,183)

(71,519,986)

75,437,533

(1,170,000)

12,570,902

655,170

(71,627,989)

Equity attributable to shareholders

12,379,299

15,865,616

Total shareholders' equity

12,379,299

15,865,616

Total liabilities and shareholders' equityNature of operations and going concern (Note 1) Subsequent events (Note 13)

$

Approved by the Board of Directors and authorized for issuance on May 29, 2020:

On behalf of the Board of Directors

"John Proust"

Director

"Morris Klid"

12,930,662 $

17,455,389

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

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF NET LOSS(Unaudited - Expressed in Canadian dollars)

Three months ended,

March 31, 2020

Three months ended,

March 31, 2019

Nine months ended,

March 31, 2020

Nine months ended,

March 31, 2019

Expenses

Depreciation

Consulting

Office and miscellaneous

Financing expense

Management fees (Note 8)

Exploration expenses

Foreign exchange loss (gain)

Investor relations

Professional fees

$

43,955 $ - 19,149 - 105,000 - (12,099) 1,661 34,035 -5,596 $ -131,861 $ 17,824

- 447,987

23,181 -

74,681 182,834

- 26,112

120,000 -

340,000 627,000

- 51,679

399,422

(13,622) 14,482

26,013

3,933 88,514

23,608

129,765 304,315

Rent

12,042 - 145,632

Salaries and benefits - - - 233,113

Interest expense

Transfer agent and filing fees Travel

Share-based compensation

3,327 13,023 - -

- 10,837 - -

5,423

-29,168 72,679

449 81,889

- 251,245

Loss before other itemsOther income (expense)

(208,051)

(620,699)

(701,658)

(2,545,305)

Interest and other income

Realized and unrealized gain (loss) on

investments (Note 3, 4)

Equity loss from investment in

associate (Note 3)

Gain on disposition of investment in

associate (Note 4)

Gain (loss) on fair value adjustment on

derivative liability

Gain on disposition of subsidiary (Note

3)

82,351

3,848 645,612

148,530 14,876

(347,949)

(590,069) 346,847

(273,432)

(373,064)

(891,467)

(800,764)

- 43,088

654,651

- 1,538,727

654,651

(2,509,634)

(2,509,634)

-

6,700,991 - 6,700,991

Gain on sale of property - - - 1,629,375 Gain on dilution of investment in

associate (Note 3)

- (495,942)

- 5,122,404

603,940 809,661

148,032 6,184,374

Net income (loss) before income taxesIncome tax expense

$

(703,993) $-4,501,705 $708,015

108,003 $-

3,639,069708,015

Net income (loss) for the periodNet income (loss) attributable to:

$

(703,993) $

5,209,720 $

108,003 $

4,347,084

Shareholders of Southern Arc

Minerals Inc.

Non-controlling interests

$

(703,993) $ -5,209,720 $ -

108,003 $ -

5,536,936(1,189,852)

$

(703,993) $

5,209,720 $

108,003 $

4,347,084

Basic income per share Diluted income per share

Weighted average shares outstanding Diluted weighted average shares outstanding

$ $

(0.04) $

(0.04) $ 16,549,562 16,549,562

0.36 $ 0.26 $ 14,389,616 19,922,283

0.01 $ 0.38

0.01 $ 0.28

16,650,598 14,389,616

17,125,120 19,922,283

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

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited - Expressed in Canadian dollars)

Three months ended,

March 31, 2020

Three months ended, Nine months ended, Nine months ended,March 31, 2019

March 31, 2020

March 31, 2019

Net income (loss) for the period Other comprehensive income (loss)

$

Items that may be subsequently reclassified to profit/loss:

Change in fair value of available-for-

sale investments Cumulative foreign currency translation adjustment

Net income tax expense related to available for sale investments

(703,963) $

5,209,720 $

108,003 $ 4,347,084

(1,952,387)

5,905,791

(5,179,353) 5,766,891

-

(432,394) - (584,491)

- (1,952,387)

(708,015) - (708,015)

Total comprehensive income (loss) forthe period

$

(2,656,350) $

4,765,382

9,975,102 $

(5,179,353)

(5,071,350) $

4,474,385

8,821,469

Comprehensive income (loss) attributable to:

Shareholders of Southern Arc

Minerals Inc. Non-controlling interests

$

(2,656,350) $ -9,975,102 $ -(5,071,350) $ -

10,384,734 (1,563,265)

$

(2,656,350) $

9,975,102 $

(5,071,350) $

8,821,469

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