Ares Strategic Mining : Condensed Interim Consolidated Financial Statements For the Nine Months Ended 30 June 2021

2021

Ares Strategic Mining Inc.

(formerly Lithium Energy Products Inc.)

Condensed Interim Consolidated Financial Statements

For the Nine Months Ended 30 June 2021

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.

TABLE OF CONTENTS
MANAGEMENT'S RESPONSIBILITY………………………………………………………………………………………………………………..i
CONDENSEDINTERIMCONSOLIDATEDSTATEMENTS OFFINANCIALPOSITION ............................................................	1
CONDENSEDINTERIMCONSOLIDATEDSTATEMENTS OFLOSS ANDCOMPREHENSIVELOSS...........................................	2
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY .............................................................	3
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS .......................................................................	4
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS ...................................................................
1)	Nature of operations and going concern .....................................................................................................	6
2)	Basis of preparation - Statement of Compliance ........................................................................................	7
3)	Summary of significant accounting policies .................................................................................................	7
4)	Critical accounting judgements and key sources of estimation uncertainty ..............................................	7
5)	Acquisition transaction ("Amalgamation") ..................................................................................................	8
6)	Financial instruments and risk management ...............................................................................................	9
7)	Amounts receivable ....................................................................................................................................	10
8)	Deposits .......................................................................................................................................................	11
9)	Property and equipment.............................................................................................................................	11
10)	Exploration and evaluation assets..............................................................................................................	12
11)	Short-term loans .........................................................................................................................................	15
12)	Share capital ................................................................................................................................................	16
13)	Related party transactions and obligations................................................................................................	21
14)	Segmented disclosure .................................................................................................................................	22
15)	Capital management...................................................................................................................................	22
16)	Commitment ...............................................................................................................................................	22
17)	Subsequent events......................................................................................................................................	23

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 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.

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.

We draw attention to Note 1 in the Condensed Interim Consolidated Financial Statements which indicates the existence of a material uncertainty that may cast substantial 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
			30 June		30 September
	Note	2021		2020
ASSETS
Current Assets
Cash		$	1,716,693	$	219,770
Restricted cash			90,000		-
Amounts receivable	(7)		59,598		12,831
Prepaid amounts and other assets			378,387		309,585
			2,244,678		542,186
Non-current Assets
Deposits	(8)		77,561		72,181
Property and equipment	(9)		246,015		190,119
Exploration and evaluation assets	(10)		5,942,279		4,444,014
			6,265,855		4,706,314
		$	8,510,533	$	5,248,500

LIABILITIES

Current Liabilities

Accounts payable and accrued liabilities Short-term loans

(13)	$	251,662	$	617,699
(11)		680,923		63,355
		932,585		681,054

EQUITY
Equity Attributable to Shareholders
Share capital	(12)		27,713,462		22,467,660
Shares to be issued (Subscriptions receivable)			800		-
Options - Contributed surplus	(12)		2,417,500		1,152,500
Warrants - Contributed surplus	(12)		1,946,125		2,269,584
Accumulated other comprehensive income ("OCI")			(42,198)		10,393
Deficit			(23,235,382)		(20,108,460)
			8,800,307		5,791,677
Non-controlling interests	(12)		(1,222,359)		(1,224,231)
Total Equity			7,577,948		4,567,446
		$	8,510,533	$	5,248,500

Nature of operations and going concern	(1)	Capital management	(15)
Basis of preparation - Statement of Compliance	(2)	Commitment	(16)
Related party transactions and obligations	(13)	Subsequent events	(0

The Condensed Interim Consolidated Financial Statements were approved by the Board of Directors on 27 August 2021 and were signed on its behalf by:

"Paul Sarjeant"		"Karl Marek"
Paul Sarjeant, Director		Karl Marek, 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

	9 Months	9 Months	3 Months	3 Months
	Ended	Ended	Ended	Ended
	30 June	30 June	30 June	30 June
Note	2021	2020	2021	2020

General and Administrative
Stock-based compensation	$	1,468,000	$	271,000	$	1,468,000	$	-
Office and marketing		1,111,406		381,819		454,028		322,221
Professional fees		158,846		158,209		65,404		25,853
Management fees	(13)	152,250		195,828		51,250		113,750
Transfer agent and filing fees		95,427		64,270		14,507		38,204
Shareholder relations		27,048		9,846		26,798		7,859
Depreciation	(9)	19,438		5,281		6,764		5,281
Insurance		17,784		13,044		10,459		7,752
Bank charges and interest expense		4,067		9,105		1,905		2,602
Travel		975		15,435		731		10,061
Resource property (recoveries) expenses		(3,401)		2,057		5,693		(14,184)
		3,051,840		1,125,894		2,105,539		519,399
Other Expenses
Foreign exchange loss		73,210		11,245		42,019		1,622
Net Loss for the period		(3,125,050)		(1,137,139)		(2,147,558)		(521,021)
Other Comprehensive (Loss) Income
Foreign operations - foreign exchange		(52,591)		47,897		(12,226)		(84,102)
Comprehensive Loss for the period	$	(3,177,641)	$	(1,089,242)	$	(2,159,784)	$	(605,123)
Net Loss Attributed to:
Shareholders		(3,126,922)		(1,133,965)		(2,147,469)		(521,452)
Non-controlling interest		1,872		(3,174)		(89)		431
	$	(3,125,050)	$	(1,137,139)	$	(2,147,558)	$	(521,021)

Comprehensive Loss Attributed to:
Shareholders		(3,179,513)		(1,086,068)		(2,159,695)		(605,554)
Non-controlling interest		1,872		(3,174)		(89)		431
	$	(3,177,641)	$	(1,089,242)	$	(2,159,784)	$	(605,123)
Basic and Diluted Loss per Share	$	(0.01)	$	(0.03)	$	(0.01)	$	(0.01)
Weighted Average Shares Outstanding		90,364,014		37,668,521		99,488,125		63,823,229

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