Palamina : June 30, 2022 interim financial statements

PALAMINA CORP.

UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTH PERIODS ENDED JUNE 30, 2022 AND 2021

MANAGEMENT'S RESPONSIBILITY FOR

FINANCIAL REPORTING

The accompanying unaudited interim consolidated financial statements of Palamina Corp. (the "Company") are the responsibility of the management and Board of Directors of the Company.

The unaudited interim consolidated financial statements have been prepared by management, on behalf of the Board of Directors, in accordance with the accounting policies disclosed in the notes to the unaudited interim consolidated financial statements. Where necessary, management has made informed judgments and estimates in accounting for transactions which were not complete at the statement of financial position date. In the opinion of management, the interim consolidated financial statements have been prepared within acceptable limits of materiality and are in accordance with International Accounting Standard 34 Interim Financial Reporting of International Financial Reporting Standards using accounting policies consistent with International Financial Reporting Standards appropriate in the circumstances.

Management has established systems of internal control over the financial reporting process, which are designed to provide reasonable assurance that relevant and reliable financial information is produced.

The Board of Directors is responsible for reviewing and approving the unaudited interim consolidated financial statements together with other financial information of the Company and for ensuring that management fulfills its financial reporting responsibilities. An Audit Committee assists the Board of Directors in fulfilling this responsibility. The Audit Committee meets with management to review the financial reporting process and the unaudited interim consolidated financial statements together with other financial information of the Company. The Audit Committee reports its findings to the Board of Directors for its consideration in approving the unaudited interim consolidated financial statements together with other financial information of the Company for issuance to the shareholders.

Management recognizes its responsibility for conducting the Company's affairs in compliance with established financial standards, and applicable laws and regulations, and for maintaining proper standards of conduct for its activities.

Andrew Thomson	Brian Jennings
President and Chief Executive Officer	Chief Financial Officer

NOTICE TO READER

The accompanying unaudited interim consolidated financial statements of the Company have been prepared by and are the responsibility of management. The unaudited interim consolidated statements for the three and six month periods ended June 30, 2022 and 2021 have not been reviewed by the Company's auditors.

PALAMINA CORP.

Unaudited Interim Consolidated Statements of Financial Position

(Expressed in Canadian dollars)

	June 30,	December 31,
	2022	2021
As at,	$	$
ASSETS
Current
Cash and cash equivalents (Note 5)	810,518	2,233,309
Receivables (Note 6)	42,323	60,800
Prepaid expenses (Note 7)	140,732	238,427
Total current assets	993,573	2,532,536
Equipment (Note 8)	29,251	26,457
Investment in associate (Note 17)	-	105,065
Total assets	1,022,824	2,664,058
LIABILITIES AND EQUITY (DEFICIENCY)
Current	282,924	522,050
Trade and other payables (Notes 9 and 10)
Total liabilities	282,924	522,050
Equity (Deficiency)	9,457,211	9,457,211
Share capital (Note 11)
Reserve for share-based payments (Note 12)	1,542,700	1,518,000
Reserve for warrants (Note 13)	3,631,775	3,631,775
Accumulated deficit	(13,863,102)	(12,449,271)
Reserve for foreign currency translation	(28,684)	(15,707)
Total equity (deficiency)	739,900	2,142,008
Total liabilities and equity (deficiency)	1,022,824	2,664,058

Nature of Operations and Going Concern Uncertainty (Note 1)

Commitments and Contingencies (Note 15 and 16)

Subsequent Events (Note 18)

On behalf of the Board of Directors on August 25, 2022:

Andrew Thomson	Christina McCarthy
Director	Director

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

PALAMINA CORP.

Unaudited Interim Consolidated Statements of Loss and Comprehensive Loss

(Expressed in Canadian dollars)

	Three months		Six months
	2022	2021	2022	2021
For the period ended June 30,	$	$	$	$
Expenses
Exploration and evaluation expenditures (Note 14 and 10)	639,137	262,754	974,945	342,342
Salaries, director and management fees (Note 10)	75,297	63,703	152,584	115,703
Share-based payments (Note 10 and 12)	22,000	26,000	24,700	26,000
Investor relations	22,543	7,581	52,628	7,581
Regulatory fees	26,732	16,965	39,634	17,868
Professional fees	31,550	13,138	38,180	21,438
Office and general	10,517	4,020	18,899	11,563
Rent	4,500	4,500	9,000	9,000
Foreign exchange gain	3,002	417	2,486	(11)
Total expenses	835,278	399,078	1,313,056	551,484
Other (income) expense
Interest income	(2,425)	-	(4,290)	-
Loss from investment in associate (Note 17)	57,065	80,000	105,065	100,000
Net loss	889,918	479,078	1,413,831	651,484
Other comprehensive loss - items that will not subsequently reclassify into
income
Exchange on translation of foreign subsidiaries	13,613	788	12,977	(1,843)
Net comprehensive loss	903,531	479,866	1,426,808	649,640

Loss per share	0.01	0.01	0.02	0.01
- basic
0.01	0.01	0.02	0.01
- diluted
Weighted average number of common shares outstanding	65,284,836	48,141,979	65,284,836	46,721,300
- basic
65,284,836	48,141,979	65,284,836	46,721,300
- diluted

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

PALAMINA CORP.

Unaudited Interim Consolidated Statements of Changes in Equity

(Expressed in Canadian dollars)

	Share Capital
	Number of				Reserve for			Accumulated	Reserve for foreign
		Amount		Share-based		Reserve for		currency		Total
	shares			payments		Warrants		deficit		translation
Balance at December 31, 2020	45,284,836	$	6,480,018	$	1,018,000	$	1,684,775	$	(9,385,170)	$	(11,283)	$	(213,660)
Issued pursuant to private placement	20,000,000		5,000,000		-		-		-		-		5,000,000
Warrants issued pursuant to private placement	-		(1,935,000)		-		1,935,000		-		-		-
Broker warrants issued pursuant to private placement	-		(12,000)		-		12,000		-		-		-
Share issue costs	-		(76,557)		-		-		-		-		(76,557)
Share based payments	-		-		26,000		-		-		-		26,000
Net loss	-		-		-		-		(651,484)		-		(651,484)
Other comprehensive income	-		-		-		-		-		1,843		1,843
Balance at June 30, 2021	65,284,836	$	9,456,461	$	1,044,000	$	3,631,775	$	(10,036,654)	$	(9,440)	$	4,086,142
Share issue costs	-		750		-		-		-		-		750
Share based payments	-		-		474,000		-		-		-		474,000
Net loss	-		-		-		-		(2,412,617)		-		(2,412,617)
Other comprehensive loss	-		-		-		-		-		(6,267)		(6,267)
Balance at December 31, 2021	65,284,836	$	9,457,211	$	1,518,000	$	3,631,775	$	(12,449,271)	$	(15,707)	$	2,142,008
Share based payments	-		-		24,700		-		-		-		24,700
Net loss	-		-		-		-		(1,413,831)		-		(1,413,831)
Other comprehensive loss	-		-		-		-		-		(12,977)		(12,977)
Balance at June 30, 2022	65,284,836	$	9,457,211	$	1,542,700	$	3,631,775	$	(13,863,102)	$	(28,684)	$	739,900

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