Kutcho Copper : Audited Financial Statements year ended April 30, 2022

KUTCHO COPPER CORP.

Consolidated Financial Statements

April 30, 2022

Expressed in Canadian Dollars

INDEPENDENT AUDITOR'S REPORT

To the Shareholders of Kutcho Copper Corp.

Opinion

We have audited the consolidated financial statements of Kutcho Copper Corp. (the "Company"), which comprise the consolidated statements of financial position as at April 30, 2022 and 2021, and the consolidated statements of comprehensive loss, changes in shareholders' equity and cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies (collectively referred to as the "financial statements").

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as at April 30, 2022 and 2021, and its financial performance and its cash flows for the years then ended in accordance with International Financial Reporting Standards.

Basis for Opinion

We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Material Uncertainty Related to Going Concern

We draw attention to Note 1 to the financial statements, which describes matters and conditions that indicate the existence of a material uncertainty that may cast significant doubt about the Company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.

Other Information

Management is responsible for the other information. The other information comprises the information included in Management's Discussion and Analysis.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

We obtained Management's Discussion and Analysis prior to the date of this auditor's report. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Management and Those Charged with Governance for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with International Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company's financial reporting process.

Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
• Conclude on the appropriateness of management's use of the going concern basis of accounting and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

The engagement partner on the audit resulting in this independent auditor's report is Otto Ehinger.

DALE MATHESON CARR-HILTON LABONTE LLP

CHARTERED PROFESSIONAL ACCOUNTANTS

Vancouver, BC

August 29, 2022

KUTCHO COPPER CORP.

Consolidated statements of financial position (Expressed in Canadian dollars)

		April 30,		April 30,
	Notes		2022		2021
ASSETS
Current assets
Cash		$	903,409	$	3,314,220
Receivables	4		407,502		42,477
Advances	8		38,625		1,072,974
Prepaid expenses and deposits			606,821		215,959
Marketable securities	5,17		‐		209,000
			1,956,357		4,854,630
Non‐current assets
Equipment	6		‐		1,780
Investment	7,17		327,527		263,888
Prepaid expenses			208,333		89,863
Reclamation deposit	8,14		160,000		160,000
Exploration and evaluation assets	8		‐		46,760,986
Development assets	8		59,141,713		‐
			59,837,573		47,276,517
TOTAL ASSETS		$	61,793,930	$	52,131,147
LIABILITIES
Current liabilities
Trade payables and accrued liabilities	10,17	$	637,496	$	218,212
Convertible note	11		‐		2,455,458
Loans	12		‐		1,233,084
Flow‐through share liability	13		‐		223,849
			637,496		4,130,603
Long‐term liabilities
Convertible note	11		‐		24,326,848
Deposit liability	9		39,227,173		8,599,500
Asset retirement obligation	14		160,000		160,000
			39,387,173		33,086,348
TOTAL LIABILITIES			40,024,669		37,216,951
SHAREHOLDERS' EQUITY
Share capital	15		65,492,417		47,167,275
Share‐based payment reserve	15, 16		5,929,856		4,765,888
Convertible note reserve	16		‐		1,762,005
Deficit			(49,653,012)		(38,780,972)
TOTAL SHAREHOLERS' EQUITY			21,769,261		14,914,196
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY		$	61,793,930	$	52,131,147

Nature and continuance of operations (Note 1)

Subsequent events (Note 21)

Contingency (Note 22)

Approved and authorized for issuance on behalf of the Board of Directors on August 25, 2022:

"Vince Sorace"		"Jay Sujir"
Vince Sorace - Director		Jay Sujir - Director

4

See accompanying notes to the consolidated financial statements

KUTCHO COPPER CORP.

Consolidated statements of comprehensive loss (Expressed in Canadian dollars)

			Years Ended April 30,
	Notes		2022		2021
Expenses
Administration expenses		$	159,125	$	136,500
Consulting fees			292,634		77,322
Depreciation	6		1,780		9,035
Directors' fees	17		77,375		12,844
Interest and accretion expense	9,11,12		3,113,875		3,454,059
Management fees	17		329,637		309,426
Marketing and investor relations			568,404		473,564
Office and miscellaneous			96,896		73,503
Professional fees			151,717		32,313
Stock‐based compensation	15,17		1,653,792		914,669
Transfer agent and filing fees			144,340		41,162
			(6,589,575)		(5,534,397)
Other income (expenses)
Gain (loss) on sale of investment and securities	5,7		(7,095)		284,236
Unrealized gain (loss) on marketable securities	5		(50,779)		206,500
Change in fair value of investment	7		63,639		163,888
Flow‐through recovery	13		473,849		9,216
Gain on settlement of debenture and loan	11		1,699,821		‐
Foreign exchange gain (loss)	9		(489,222)		1,135,359
			1,690,213		1,799,199
Net and comprehensive loss		$	(4,899,362)	$	(3,735,198)
Loss per share - basic and diluted	15	$	(0.05)	$	(0.05)

5

See accompanying notes to the consolidated financial statements