Interim Condensed Consolidated Financial Statements

Fortune Minerals Limited

June 30, 2021

Fortune Minerals Limited

NOTICE OF NO AUDITOR REVIEW OF INTERIM FINANCIAL STATEMENTS

Under National Instrument 51-102, Part 4, Subsection 4.3(3)(a), if an auditor has not performed a review of the interim condensed consolidated financial statements, they must be accompanied by a notice indicating that the financial statements have not been reviewed by an auditor.

The accompanying unaudited consolidated interim 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 financial statements in accordance with standards established by the Canadian Institute of Chartered Accountants for a review of interim financial statements by an entity's auditor.

Fortune Minerals Limited

Incorporated under the laws of Ontario

CONSOLIDATED STATEMENTS OF

FINANCIAL POSITION

(expressed in Canadian dollars)

Unaudited

As at

June 30,

December 31,

2021

2020

ASSETS

Current assets

1,049,962

Cash and cash equivalents [note 10]

1,078,884

Reclamation security deposits [note 7]

25,217

25,186

Accounts receivable

75,089

68,537

Prepaid expenses

68,449

55,719

Total current assets

1,218,717

1,228,326

Reclamation security deposits [note 7]

150,899

195,671

Capital assets, net [note 8]

345,216

375,153

Mining properties [note 3]

74,746,412

74,541,391

76,461,244

76,340,541

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities

152,460

Accounts payable and accrued liabilities

186,482

Lease Liability [note 12]

41,571

39,495

Flow-through share premium

260,555

273,835

Total current liabilities

454,586

499,812

Provision for environmental rehabilitation [note 7]

22,442

30,775

Lease Liability [note 12]

293,391

314,915

Long-term debts [note 11]

10,721,996

10,008,154

Derivatives [note 5ii[a]]

2,652,800

1,306,541

Total liabilities

14,145,215

12,160,197

SHAREHOLDERS' EQUITY

173,090,476

Share capital [note 5]

172,538,621

Other reserves [notes 5 and 6]

15,987,782

15,611,882

Deficit

(126,762,229)

(123,970,159)

Total shareholders' equity

62,316,029

64,180,344

76,461,244

76,340,541

See accompanying notes to the consolidated financial statements

See note 2 going concern uncertainty

1

Fortune Minerals Limited

CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND

COMPREHENSIVE INCOME (LOSS)

(expressed in Canadian dollars)

Unaudited

Three months ended

Six months ended

June 30,

June 30,

2021

2020

2021

2020

REVENUE AND OTHER INCOME

Interest and other income [note 14]

7,103

22,207

14,104

48,796

EXPENSES

7,103

22,207

14,104

48,796

173,212

364,047

General and administrative

234,915

563,083

Stock-based compensation [note 6]

-

-

299,205

-

Interest

364,779

322,310

724,394

640,174

Corporate development

16,415

27,997

42,332

74,741

Amortization [note 8]

14,964

3,473

29,937

6,946

Change in fair value related to derivative liability [note 5ii.[a]]

(1,583,755)

490,526

1,346,259

(138,729)

(1,014,385)

1,079,221

2,806,174

1,146,215

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

1,021,488

(1,057,014)

(2,792,070)

(1,097,419)

Basic and diluted income (loss) per share [note 18]

-

-

(0.01)

-

See accompanying notes to the consolidated financial statements

2

Fortune Minerals Limited

CONSOLIDATED STATEMENTS OF

CASH FLOWS

(expressed in Canadian dollars)

Unaudited

For the six-month periods ended June 30,

2021

2020

OPERATING ACTIVITIES

(2,792,070)

Net loss for the period from continuing operations

(1,097,419)

Add (deduct) items not involving cash

(8,333)

Accretion

(10,350)

Amortization

29,937

6,946

Flow-through share premium

(13,280)

(24,599)

Stock-based compensation

299,205

-

Non-cash portion of loan discount [note 11]

429,650

368,929

Non-cash portion of lease expense

(19,448)

-

Gain on disposal of capital assets

-

(552)

Change in fair value related to derivative liability

1,346,259

(138,729)

Changes in non-cash working capital balances

related to operations

(6,552)

Accounts receivable

451,386

Prepaid expenses

(12,730)

11,022

Accounts payable and accrued liabilities

(34,022)

(23,419)

Accrued interest on debentures

284,192

271,245

Cash used provided in operating activities

(497,192)

(185,540)

INVESTING ACTIVITIES

(69,884)

Increase in exploration and evaluation expenditures, net

(342,536)

Purchase of capital assets, including in mining properties

(37,842)

(16,064)

Posting of security for reclamation security deposits, net

(259)

(1,215)

Receipt of reclamation security deposit

45,000

-

Proceeds on disposal of capital assets

-

1,354

Cash used in investing activities

(62,985)

(358,461)

FINANCING ACTIVITIES

486,755

Proceeds on issuance of units, net

-

Proceeds on exercise of warrants

10,000

-

Proceeds of government loan

-

30,000

Proceeds on exercise of options

34,500

-

Cash provided by financing activities

531,255

30,000

Decrease in cash and cash equivalents

during the period, net

(28,922)

(514,001)

Cash and cash equivalents, beginning of period

1,078,884

2,104,901

Cash and cash equivalents, end of period [note 10]

1,049,962

1,590,900

See accompanying notes to the consolidated financial statements

3

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Fortune Minerals Limited published this content on 19 August 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 19 August 2021 11:53:03 UTC.