Canada Nickel : Condensed Interim Consolidated Financial Statements For the Three and Nine Months Ended July 31, 2021 and 2020

Canada Nickel Company Inc.

Condensed Interim Consolidated Financial Statements

For the Three and Nine Months Ended July 31, 2021 and 2020

(Expressed in Canadian Dollars, unless otherwise noted)

Notice of No Auditor Review of Interim Financial Statements

Under National Instrument 51-102, Part 4, subsubsection 4.3(3)(a), if an auditor has not performed a review of the interim financial statements, they must be accompanied by a notice indicating that the financial statements have not been reviewed by an auditor. The accompanying 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 an audit or review of these condensed interim consolidated financial statements in accordance with standards established by the Canadian Institute of Chartered Professional Accountants.

Canada Nickel Company Inc.

Condensed Interim Consolidated Statements of Financial Position

(Expressed in Canadian Dollars)

Unaudited

			As at July 31	As at October 31
	Note	2021	2020
ASSETS		$	$
Current assets		11,477,172	11,167,265
Cash and cash equivalents
Accounts receivable		3,089,732	1,223,397
Loan receivable	4	-	160,224
Prepaid expenses		597,381	274,843
Total current assets			15,164,285	12,825,729
Non-current assets		35,439,226	20,288,628
Exploration and evaluation assets	5
Property, plant and equipment		1,264,139	35,161
Total assets		51,867,650	33,149,518

LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities

Accounts payable and accrued liabilities Flow-through share premium

Total liabilities

Shareholders' equity

Share capital

Share-based compensation and warrant reserves Deficit

Total shareholders' equity

Total liabilities and shareholders' equity

12	3,600,677	1,475,542
6(a)	2,146,320	282,027
		5,746,997	1,757,569
6	50,930,395	30,729,738
	4,150,990	3,739,483
	(8,960,732)	(3,077,272)
		46,120,653	31,391,949
		51,867,650	33,149,518

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

Nature of operations and going concern (Note 1)

Commitments and contingencies (Note 12)

Signed on behalf of the Board:
"Mark Selby"	"David Smith"
Mark Selby, Director	David Smith, Director

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Canada Nickel Company Inc.

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

Unaudited

		For the three months	For the nine months
		ended July 31	ended July 31
	Note	2021	2020	2021	2020
Expenses		$	$	$	$
	269,087		622,409
Salaries and management fees		163,995	276,930
General and administrative costs		156,171	56,170	402,580	164,913
Professional fees		146,710	157,968	397,840	188,364
Consulting and advisory		201,699	158,120	817,291	369,406
Promotion and communication		192,532	73,753	445,100	312,630
Investor relations and marketing		68,605	202,991	206,953	490,342
Share-based compensation	8,9	1,425,822	129,190	3,267,813	277,812
Travel and other		80	-	5,501	60,182
		2,460,706	942,187	6,165,487	2,140,579
Flow-through share premium	6(a)	-	-	(282,027)	-
Net loss and comprehensive loss		2,460,706	942,187	5,883,460	2,140,579
Loss per share - basic and diluted	10	$0.03	$0.01	$0.07	$0.04
Weighted average number of shares		85,136,310		82,455,047
outstanding		67,389,534	60,240,514

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

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Canada Nickel Company Inc.

Condensed Interim Consolidated Statements of Cash Flow

(Expressed in Canadian Dollars)

Unaudited

For the nine months ended July 31

	Note	2021	2020
Operating activities		$	$
	(5,883,460)
Net loss		(2,140,579)
Adjustments for non-cash items:		3,267,813
Share-based compensation		277,812
Flow-through share premium		(282,027)	-
Changes in non-cash working capital items:		(1,866,335)
Accounts receivable		(899,145)
Prepaid expenses		(147,539)	(229,503)
Accounts payable and accrued liabilities		371,277	1,972,776
Net cash used in operating activities		(4,540,271)	(1,018,639)
Investing activities		(12,060,834)
Exploration and evaluation expenditures	5	(8,997,973)
Purchase of property, plant and equipment		(1,264,139)	-
Loan receivable, net of repayments	4	-	(574,498)
Net cash used in investing activities		(13,324,973)	(9,572,471)
Financing activities		11,226,994
Proceeds from share issuances, net of issuance costs	6	10,662,489
Proceeds from exercise of warrants, compensation		6,948,157
options and stock options	7,8	-
Net cash provided from financing activities		18,175,151	10,662,489
Cash and cash equivalents, beginning of year		11,167,265	-
Net change in cash and cash equivalents		309,907	71,379
Cash and cash equivalents, end of year		11,477,172	71,379
Supplementary disclosure
Value of shares issued for acquisitions	5	866,020	8,615,000
Value of shares issued for settlement of accounts		759,250
payable	6(b)	137,500

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

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Canada Nickel Company Inc.

Condensed Interim Consolidated Statement of Changes in Shareholders' Equity

(Expressed in Canadian Dollars)

Unaudited

	Note	Number of		Share-based
		common		compensation	Warrants
		shares	Share capital	reserve	reserve	Deficit	Total
		#	$	$	$	$	$
Balance, October 31, 2019	6	1	-	-	-	-	-
Share issuance - private placements, net	35,146,789	9,259,734	-	1,341,074-	-	10,600,808
Flow-through share premium	6	-	(1,448,977)	-	-	-	(1,448,977)
Share issuance - acquisitions	5	32,500,000	8,615,000	-	-	-	8,615,000
Share issuance - warrants exercised		108,214	103,298	-	(41,616)	-	61,682
Shares issued to settle accounts payable		275,000	137,500	-	-	-	137,500
Fair value of share-based compensation	8,9	-	-	277,812	-	-	277,812
Net loss for the year		-	-	-	-	(2,140,579)	(2,140,579)
Balance, July 31, 2020		68,030,004	16,666,555	277,812	1,299,458-	(2,140,579)	16,103,246
Balance, October 31, 2020		79,939,316	30,729,738	1,165,057	2,574,426	(3,077,272)	31,391,949
Share issuance - flow-through shares, net	7	2,981,000	11,341,994	-	-	-	11,341,994
Share issuance - warrants exercised	3,189,224	8,017,178	-	(1,884,112)	-	6,133,066
Share issuance - compensation options exercised	7	471,450	1,163,548	-	(456,373)	-	707,175
Flow-through share premium		-	(2,146,320)	-	-	-	(2,146,320)
Fair value of share-based compensation	8,9	-	-	3,267,813	-	-	3,267,813
Share issuance - stock options exercised	8	431,664	288,434	(180,518)	-	-	107,916
Share issuance - restricted share units exercised	9	520,750	270,790	(270,790)	-	-	-
Share issuance - acquisitions	5	258,000	866,020	-	-	-	866,020
Shares issued to settle 2020 accounts payable		242,781	45,000	-	-	-	45,000
Shares issued to settle 2021 accounts payable		105,000	289,500	-	-	-	289,500
Shares to be issued to settle accounts payable		-	64,513	-	(64,513)	-	-
Net loss for the year		-	-	-	-	(5,883,460)	(5,883,460)
Balance, July 31, 2021		88,139,185	50,930,395	3,981,562	169,428	(8,960,732)	46,120,653

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

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