Canada Nickel : Interim consolidated financial statements for the three and six months ended April 30, 2022

Canada Nickel Company Inc.

Condensed Interim Consolidated Financial Statements

For the Three and Six Months Ended April 30, 2022 and 2021

(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

			April 30	October 31
	Note	2022	2021
ASSETS		$	$
Current assets		23,760,345	3,334,643
Cash and cash equivalents
Harmonized sales tax receivable		2,005,033	3,300,595
Accounts receivable		377,133	352,700
Prepaid expenses		251,074	430,226
Total current assets			26,393,585	7,418,164
Non-current assets		97,124,168	47,304,907
Exploration and evaluation assets	4
Equipment and right-of-use assets	5	620,781	527,784
Total assets		124,138,534	55,250,855
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities		8,351,363	6,992,243
Accounts payable and accrued liabilities	12,13
Flow-through share premium	7	5,942,672	959,399
Total liabilities			14,294,035	7,951,642
Shareholders' equity		115,352,506	51,036,468
Share capital	7
Share-based compensation and warrant reserves	8,9,10	8,402,045	5,718,120
		(13,910,052	(9,455,375)
Deficit		)
Total shareholders' equity			109,844,499	47,299,213
Total liabilities and shareholders' equity			124,138,534	55,250,855

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 13)

Subsequent events (Note 15)

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

2

Canada Nickel Company Inc.

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

Unaudited

For the Three and Six Months Ended April 30

		For the three months	For the six months
			ended April 30	ended April 30
	Note	2022	2021	2022	2021
Expenses		$	$	$	$
	273,262		528,107
Salaries and management fees	12	211,762	353,322
General and administrative costs		317,201	22,550	559,698	246,409
Professional fees		244,347	143,480	356,262	251,130
Consulting and advisory		455,223	310,628	685,524	615,592
Promotion and communication		98,557	117,576	227,215	252,568
Investor relations and marketing		63,280	73,025	140,260	138,348
Share-based compensation	9,10	1,054,401	1,155,705	2,056,149	1,841,991
Travel and other		48,726	11	53,627	5,421
Transaction costs and interest expense	6	367,580	-	807,234	-
		2,922,577	2,034,737	5,414,076	3,704,781
Flow-through share premium	7(b)	-	-	(959,399)	(282,027)
Net loss and comprehensive loss		2,922,577	2,034,737	4,454,677	3,422,754
Loss per share - basic and diluted	11	$0.03	$0.02	$0.05	$0.04
Weighted average number of shares outstanding		98,824,056	82,120,009	94,956,170	81,092,195

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

3

Canada Nickel Company Inc.

Condensed Interim Consolidated Statements of Cash Flow

(Expressed in Canadian Dollars)

Unaudited

For the Six Months Ended April 30

	Note	2022	2021
Operating activities		$	$
	(4,454,677)
Net loss		(3,422,754)
Add - transaction costs included in financing activities		524,094	-
Adjustments for non-cash items:		2,056,149
Share-based compensation		1,841,991
Flow-through share premium		(959,399)	(282,027)
Accretion on short-term loan facility	6	283,140	-
Changes in non-cash working capital items:		1,295,562	(1,063,629)
Harmonized sales tax receivable
Accounts receivable and prepaid expenses		154,719	(279,081)
		(193,826	15,555
Accounts payable and accrued liabilities		)
Net cash used in operating activities		(1,294,238)	(3,189,945)
Investing activities		(26,030,601)
Exploration and evaluation expenditures	4	(7,306,274)
Purchase of equipment	5	(92,997)	(133,655)
Net cash used in investing activities		(26,123,598)	(7,439,929)
Financing activities
Proceeds from short-term loan facility, net of		12,302,085
transaction costs	6	-
Repayment of short-term loan facility and related		(12,826,178)
interest	6	-
Proceeds from share issuances, net of costs	7	48,242,253	(115,000)
Proceeds from exercise of warrants, compensation		125,378
options and stock options	8,9	6,757,657
Net cash provided by financing activities		47,843,538	6,642,657
Cash and cash equivalents, beginning of period		3,334,643	11,167,265
Net change in cash and cash equivalents		20,425,702	(3,987,217)
Cash and cash equivalents, end of period		23,760,345	7,180,048
Supplementary disclosure
Value of shares issued for acquisitions	4	20,280,880	829,520
Value of shares issued for settlement of accounts		-
payable	7(c)	759,250

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

4

Canada Nickel Company Inc.

Condensed Interim Consolidated Statement of Changes in Shareholders' Equity

(Expressed in Canadian Dollars)

Unaudited

	Note	Number of		Share-based	Warrants
		common	Share capital	compensation	Deficit	Total
		shares	reserve	reserve
		#	$	$	$	$	$
Balance, October 31, 2020	8	79,939,316	30,729,738	1,165,057	2,574,426	(3,077,272)	31,391,949
Share issuance - warrants exercised	3,189,224	8,017,177	-	(1,884,111)	-	6,133,066
Share issuance - compensation options exercised		346,950	855,958	-	(335,533)		520,425
Fair value of share-based compensation	9,10	-	-	1,841,991	-	-	1,841,991
Share issuance - stock options exercised	9	416,664	178,926	(74,760)	-		104,166
Share issuance - restricted share units exercised	10	328,750	170,950	(170,950)	-		-
Share issuance - acquisitions	4	248,000	829,520	-	-	-	829,520
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 six months ended April 30		-	-	-	-	(3,422,754)	(3,422,754)
Balance, April 30, 2021		84,816,685	41,181,282	2,761,338	290,269	(6,500,026)	37,732,863
Balance, October 31, 2021		88,383,650	51,036,468	5,551,009	167,111	(9,455,375)	47,299,213
Share issuance - equity offering	7(a)	15,364,708	48,242,253	-	-	-	48,242,253
Flow-through share premium reserve	7(a)	-	(5,942,672)	-	-	-	(5,942,672)
Share issuance - warrants exercised		13,275	39,450	-	(11,573)		27,877
Share issuance - compensation options exercised	8	26,550	66,813	-	(26,988)	-	39,825
Share issuance - stock options exercised	9	187,500	100,682	(43,005)			57,677
Share issuance - restricted share units exercised	10	196,069	296,632	(296,632)	-	-	-
Share issuance - acquisitions	4	6,288,000	20,280,880	-	-	-	20,280,880
Fair value of warrants issued	6	-	-	-	283,140	-	283,140
Fair value of share-based compensation	9,10	-	-	2,778,983	-	-	2,778,983
Shares to be issued to settle accounts payable	7(b)	-	1,232,000	-	-	-	1,232,000
Net loss for the six months ended April 30		-	-	-	-	(4,454,677)	(4,454,677)
Balance, April 30, 2022		110,459,752	115,352,506	7,990,355	411,690	(13,910,052)	109,844,499

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

5