Ares Strategic Mining : Condensed Interim Consolidated Financial Statements

2022

Ares Strategic Mining Inc.

Condensed Interim Consolidated Financial Statements

For the Six Months Ended 31 March 2022

Stated in Canadian Dollars

Notice of No Auditor Review of Condensed Interim Consolidated Financial Statements

The accompanying unaudited condensed interim consolidated financial statements of the Company have been prepared by and are the responsibility of the Company's management.

The Company's independent auditor has not performed a review of these condensed interim consolidated financial statements in accordance with standards established by the Chartered Professional Accountants of Canada for a review of interim financial statements by an entity's auditor.

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TABLE OF CONTENTS
MANAGEMENT'S RESPONSIBILITY ..............................................................................................................	1
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION........................................................	1
CONDENSEDINTERIMCONSOLIDATEDSTATEMENTS OFLOSS ANDCOMPREHENSIVELOSS........................................	2
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY ........................................................	3
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS..................................................................	4
1)	Nature of operations and going concern .....................................................................................................	5
2)	Basis of preparation - Statement of Compliance ........................................................................................	6
3)	Summary of significant accounting policies .................................................................................................	6
4)	Critical accounting judgements and key sources of estimation uncertainty ..............................................	6
5)	Acquisition transaction ("Amalgamation") ..................................................................................................	8
6)	Financial instruments and risk management ...............................................................................................	9
7)	Amounts receivable ....................................................................................................................................	11
8)	Capital work in progress..............................................................................................................................	11
9)	Deposits .......................................................................................................................................................	11
10)	Property and equipment.............................................................................................................................	12
11)	Exploration and evaluation assets..............................................................................................................	13
12)	Short-term loans .........................................................................................................................................	16
13)	Convertible debenture................................................................................................................................	17
14)	Derivative liabilities .....................................................................................................................................	18
15)	Share capital ................................................................................................................................................	19
16)	Related party transactions and obligations................................................................................................	23
17)	Segmented disclosure .................................................................................................................................	25
18)	Capital management...................................................................................................................................	25
19)	Commitments..............................................................................................................................................	25
20)	Subsequent events......................................................................................................................................	26

ARES STRATEGIC MINING INC.

(Unaudited) Canadian Dollars

MANAGEMENT'S RESPONSIBILITY

To the Shareholders of Ares Strategic Mining Inc.:

Management is responsible for the preparation and presentation of the accompanying Condensed Interim Consolidated Financial Statements, including responsibility for significant accounting judgments and estimates in accordance with International Financial Reporting Standards. This responsibility includes selecting appropriate accounting principles and methods, and making decisions affecting the measurement of transactions in which objective judgment is required.

In discharging its responsibilities for the integrity and fairness of the Condensed Interim Consolidated Financial Statements, management designs and maintains the necessary accounting systems and related internal controls to provide reasonable assurance that transactions are authorized, assets are safeguarded and financial records are properly maintained to provide reliable information for the preparation of the condensed interim consolidated financial statements.

The Board of Directors and the Audit Committee are composed primarily of Directors who are neither management nor employees of the Company. The Board is responsible for overseeing management in the performance of its financial reporting responsibilities, and for approving the financial information included in the annual report. The Board fulfils these responsibilities by reviewing the financial information prepared by management and discussing relevant matters with management and the external auditors. The Audit Committee has the responsibility of meeting with management, and the external auditors to discuss the internal controls over the financial reporting process, auditing matters and financial reporting issues. The Audit Committee is also responsible for recommending the appointment of Ares Strategic Mining Inc.'s external auditors.

We draw attention to Note 1 in the Condensed Interim Consolidated Financial Statements which indicates the existence of a material uncertainty that may cast significant doubt on the Company's ability to continue as a going concern.

"James Walker"		"Viktoriya Griffin"
James Walker, CEO		Viktoriya Griffin, CFO

ARES STRATEGIC MINING INC.

(Unaudited) Canadian Dollars

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

			As at		As at
			31 March		30 September
	Note		2022		2021
ASSETS
Current Assets
Cash and cash equivalents		$	985,295	$	1,051,149
Restricted cash	(10)		90,000		90,000
Amounts receivable	(7)		1,122,517		43,305
Prepaid amounts and other assets			595,944		234,506
			2,793,756		1,418,960
Non-current Assets

Deposits Capital advances

Capital work-in-progress Property and equipment Exploration and evaluation assets

(9)		95,807		97,629
(8)		-		3,551,000
(8)		4,123,139		-
(10)		242,042		237,932
(11)		8,386,439		8,101,175
		12,847,427		11,987,736
	$	15,641,183	$	13,406,696

LIABILITIES

Current Liabilities

Accounts payable and accrued liabilities

Short-term loans

Non-Current Liabilities

Convertible debenture

Derivative liabilities

EQUITY

Equity Attributable to Shareholders

Share capital

Subscriptions received

Options - Contributed surplus

Warrants - Contributed surplus

Accumulated other comprehensive income ("OCI")

Deficit

Non-controlling interests

Total Equity

(16)	$	414,127	$	452,197
(12)		60,000		2,196,600
		474,127		2,648,797
(13)		344,138		-
(14)		168,000		-
		512,138		-
(15)		37,609,166		31,430,607
(15)		-		1,050
(15)		2,373,500		2,417,500
(15)		1,603,944		1,937,270
		(169,019)		(45,655)
		(25,539,987)		(23,759,558)
		15,877,604		11,981,214
(15)		(1,222,686)		(1,223,315)
		14,654,918		10,757,899
	$	15,641,183	$	13,406,696

Nature of operations and going concern	(1)	Capital management	(18)
Basis of preparation - Statement of Compliance	(2)	Commitment	(19)
Related party transactions and obligations	(16)	Subsequent events	(20)

The Condensed Interim Consolidated Financial Statements were approved by the Board of Directors on 27 May 2022 and were signed on its behalf by:

"Paul Sarjeant"		"Raul Sanabria"
Paul Sarjeant, Director		Raul Sanabria, Director

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-- The accompanying notes form an integral part of the condensed interim consolidated financial statements --

ARES STRATEGIC MINING INC.

(Unaudited) Canadian Dollars

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS

			6 Months		6 Months		3 Months		3 Months
			Ended		Ended		Ended		Ended
			31 March		31 March		31 March		31 March
	Note	2022		2021		2022		2021
General and Administrative			699,151		657,378		490,481
Office and marketing						393,938
Professional fees			174,884		93,442		90,855		59,039
Management fees	(16)		98,000		101,000		50,000		48,000
Stock-based compensation			74,000		-		(295,000)		-
Bank charges and interest expense			49,096		2,162		47,961		1,169
Transfer agent and filing fees			35,127		80,920		24,602		59,611
Insurance			25,537		7,325		10,048		4,296
Accretion expense	(13)		21,001		-		21,001		-
Depreciation	(10)		18,669		12,674		8,514		6,337
Resource property (recoveries) expenses			11,833		(9,094)		12,041		1,013
Travel			1,087		494		638		494
Foreign exchange loss (gain)			12,596		31,191		25,958		(5,028)
			(1,220,981)		(977,492)		(487,099)		(568,869)
Other Expenses
Loss on sale of mineral property	(11)		(301,375)		-		(301,375)		-
Gain on derivative liability			37,000		-		37,000		-
Loss on settlement of liability	(12)		(294,444)		-		-		-
Net Loss for the period			(1,779,800)		(977,492)		(751,474)	$	(568,869)
Other Comprehensive (Loss) Income
Foreign operations - foreign exchange			(103,903)		(40,365)		(3,813)		(44,140)
Comprehensive Loss for the period		$	(1,883,703)	$	(1,017,857)	$	(755,287)	$	(613,009)
Net Loss Attributed to:
Shareholders			(1,779,171)		(975,531)		(749,930)		(569,313)
Non-controlling interest			(629)		1,961		(1,544)		444
	$	(1,779,800)	$	(977,492)	$	(751,474)	$	(568,869)
Comprehensive Loss Attributed to:
Shareholders			(1,883,074)		(1,015,896)		(753,743)		(613,453)
Non-controlling interest			(629)		1,961		(1,544)		444
	$	(1,883,703)	$	(1,017,857)	$	(755,287)	$	(613,009)
Basic and Diluted Loss per Share	$	(0.02)	$	(0.01)	$	(0.01)	$	(0.01)
Weighted Average Shares Outstanding			117,253,101		85,801,956		125,082,832		90,685,627

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-- The accompanying notes form an integral part of the condensed interim consolidated financial statements --