---







Consolidated Annual Financial Statements  For the
years ended December 31, 2016 and 2015 (Expressed in Canadian
dollars)







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| | Tel: 604 688 5421 
      Fax: 604 688 5132 www.bdo.ca | BDO Canada LLP 
      600 Cathedral Place 
      925
      West Georgia Street 
      Vancouver BC V6C 3L2 Canada
| | ----------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------

| | Independent Auditors Report
| | ----------------------------

To the Shareholders of 
  First Mining Finance Corp

We have audited the accompanying consolidated financial
  statements of First Mining Finance Corp., which comprise the consolidated
  balance sheets as at December 31, 2016 and December 31, 2015 and the
  consolidated statements of net loss and comprehensive loss, cash flows and
  changes in equity for the years ended December 31, 2016 and December 31, 2015,
  and a summary of significant accounting policies and other explanatory
  information.

Management's Responsibility for the consolidated Financial
  Statements

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

Auditors Responsibility

Our responsibility is to express an opinion on these
  consolidated financial statements based on our audits. We conducted our audits
  in accordance with Canadian generally accepted auditing standards and the
  standards of the Public Company Accounting Oversight Board (United States).
  Those standards require that we comply with ethical requirements and plan and
  perform the audit to obtain reasonable assurance about whether the consolidated
  financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit
  evidence about the amounts and disclosures in the consolidated financial
  statements. The procedures selected depend on the auditor's judgment, including
  the assessment of the risks of material misstatement of the consolidated
  financial statements, whether due to fraud or error. In making those risk
  assessments, the auditor considers internal control relevant to the entity's
  preparation and fair presentation of the consolidated financial statements 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
  entity's internal control. An audit also includes evaluating the appropriateness
  of accounting policies used and the reasonableness of accounting estimates made
  by management, as well as evaluating the overall presentation of the
  consolidated financial statements.

We believe that the audit evidence we have obtained in our
  audits is sufficient and appropriate to provide a basis for our audit
  opinion.

Opinion

In our opinion, the consolidated financial statements present
  fairly, in all material respects, the financial position of First Mining Finance
  Corp. as at December 31, 2016 and December 31, 2015 and its financial
  performance and its cash flows for the years ended December 31, 2016 and
  December 31, 2015 in accordance with International Financial Reporting
  Standards.

(signed) BDO CANADA LLP

Chartered Professional Accountants

Vancouver, B.C.
  March 27, 2017



BDO Canada LLP, a Canadian limited liability partnership, is a
  member of BDO International Limited, a UK company limited by guarantee, and
  forms part of the international BDO network of independent member firms.

---

FIRST MINING FINANCE CORP.CONSOLIDATED STATEMENTS
OF FINANCIAL POSITION AS AT DECEMBER 31, 2016 AND 2015 (Expressed in
Canadian dollars unless otherwise noted)

|                                                         |   | December 31, |   |   | December 31, |  
|-------------------------------------------------------- | - | ------------ | - | - | ------------ | -
|                                                         |   | 2016         |   |   | 2015         |  
|                                                         |   |              |   |   |              |  
|ASSETS                                                   |   |              |   |   |              |  
|                                                         |   |              |   |   |              |  
|Current                                                  |   |              |   |   |              |  
|Cash and cash equivalents                                | $ | 33,157,447   |   | $ | 683,608      |  
|Accounts and other
      receivables (Note 13)           |   | 1,372,596    |   |   | 368,502      |  
|Prepaid expenditures                                     |   | 449,194      |   |   | 213,512      |  
|Marketable securities (Note 14)                          |   | 5,846,627    |   |   | 8,830        |  
|Total current
      assets                               |   | 40,825,864   |   |   | 1,274,452    |  
|                                                         |   |              |   |   |              |  
|Non-current                                              |   |              |   |   |              |  
|Mineral properties
      (Note 15)                       |   | 223,462,223  |   |   | 107,592,331  |  
|Mineral property investments (Note 16)                   |   | 4,416,780    |   |   | -            |  
|Property and equipment                                   |   | 670,140      |   |   | 70,437       |  
|Reclamation deposit                                      |   | 115,474      |   |   | 115,215      |  
|Accounts and other
      receivables (Note 13)           |   | 67,976       |   |   | 138,166      |  
|Deferred acquisition costs                               |   | -            |   |   | 77,913       |  
|Total non-current assets                                 |   | 228,732,593  |   |   | 107,994,062  |  
|                                                         |   |              |   |   |              |  
|TOTAL ASSETS                                             | $ | 269,558,457  |   | $ | 109,268,514  |  
|                                                         |   |              |   |   |              |  
|LIABILITIES                                              |   |              |   |   |              |  
|                                                         |   |              |   |   |              |  
|Current                                                  |   |              |   |   |              |  
|Accounts payable and accrued
      liabilities (Note 17) | $ | 769,675      |   | $ | 2,840,492    |  
|Loans payable (Note 18)                                  |   | 454,819      |   |   | 1,560,073    |  
|Debenture liability                                      |   | -            |   |   | 307,562      |  
|Total current liabilities                                |   | 1,224,494    |   |   | 4,708,127    |  
|                                                         |   |              |   |   |              |  
|Non-current                                              |   |              |   |   |              |  
|Debenture liability (Note 19)                            |   | 2,106,371    |   |   | -            |  
|Total liabilities                                        |   | 3,330,865    |   |   | 4,708,127    |  
|                                                         |   |              |   |   |              |  
|SHAREHOLDERS EQUITY                                     |   |              |   |   |              |  
|Share capital (Note 20)                                  |   | 262,876,204  |   |   | 104,895,131  |  
|Warrant and share-based
      payment reserve (Note 20)  |   | 23,941,880   |   |   | 7,717,255    |  
|Accumulated other comprehensive income                   |   | 708,672      |   |   | 2,092,242    |  
|Accumulated deficit                                      |   | (21,299,164  | ) |   | (10,144,241  | )
|Total
      shareholders equity                         |   | 266,227,592  |   |   | 104,560,387  |  
|                                                         |   |              |   |   |              |  
|TOTAL
      LIABILITIES AND SHAREHOLDERS EQUITY         | $ | 269,558,457  |   | $ | 109,268,514  |  
|Commitments and contingencies (Note 27)                  |   |              |   |   |              |  
|Subsequent events (Note 28)                              |   |              |   |   |              |  

The consolidated financial statements were approved by the
Board of Directors:

|Signed: Keith Neumeyer, Director | Signed: Raymond Polman, Director
|---------------------------------- | ----------------------------------

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

1

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FIRST MINING FINANCE CORP.CONSOLIDATED STATEMENTS
OF NET LOSS AND COMPREHENSIVE LOSS FOR THE YEARS ENDED DECEMBER 31, 2016 AND
2015 (Expressed in Canadian dollars unless otherwise noted)

|                                                                                                              |   | Year ended December 31, |  
|------------------------------------------------------------------------------------------------------------- | - | ----------------------- | -
|                                                                                                              |   | 2016                    |  
|                                                                                                              |   |                         |  
|EXPENDITURES                                                                                                  |   |                         |  
|Administrative
      and office                                                                               | $ | 580,628                 |  
|Depreciation                                                                                                  |   | 150,144                 |  
|Consultants                                                                                                   |   | 115,059                 |  
|Exploration and evaluation                                                                                    |   | 102,607                 |  
|Investor
      relations, corporate development and marketing communications                                  |   | 3,075,802               |  
|Professional fees                                                                                             |   | 672,039                 |  
|Salaries and
      directors fees                                                                             |   | 1,024,768               |  
|Share-based payments (Note
      20(d))                                                                       |   | 5,154,642               |  
|Transfer agent
      and filing fees                                                                          |   | 189,355                 |  
|Travel and accommodation                                                                                      |   | 368,262                 |  
|Loss before other items                                                                                       |   | (11,433,306             | )
|                                                                                                              |   |                         |  
|                                                                                                              |   |                         |  
|Charge related to public company
      listing (Note 4)                                                       |   | -                       |  
|                                                                                                              |   |                         |  
|Foreign exchange gain (loss)                                                                                  |   | 980,590                 |  
|Gain on
      divestiture of subsidiaries (Note 12)                                                           |   | 806,714                 |  
|Gain on debt settlement                                                                                       |   | 3,408                   |  
|Marketable
      securities fair value adjustment (Note 14)                                                   |   | (1,071,944              | )
|Interest and other expenses                                                                                   |   | (219,183                | )
|Interest and
      other income                                                                               |   | 263,912                 |  
|Write-down of mineral properties (Note 15)                                                                    |   | (485,114                | )
|                                                                                                              |   |                         |  
|Net loss for the year                                                                                         | $ | (11,154,923             | )
|                                                                                                              |   |                         |  
|Other comprehensive (loss) income                                                                             |   |                         |  
|Items that may be
      reclassified to profit or loss:                                                       |   |                         |  
|Reclassification of currency
      translation adjustment on divestiture of     
      subsidiaries (note 12) |   | (1,021,847              | )
|Currency translation adjustment                                                                               |   | (361,723                | )
|                                                                                                              |   |                         |  
|Other comprehensive (loss)
      income                                                                       |   | (1,383,570              | )
|                                                                                                              |   |                         |  
|Total comprehensive loss for the year                                                                         | $ | (12,538,493             | )
|                                                                                                              |   |                         |  
|Basic and diluted loss per share                                                                              | $ | (0.03                   | )
|                                                                                                              |   |                         |  
|Weighted average number of shares outstanding  Basic
      and Diluted                                       |   | 438,644,487             |  

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

2

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FIRST MINING FINANCE CORP.CONSOLIDATED STATEMENTS
OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 (Expressed
in Canadian dollars unless otherwise noted)

|                                                                       |   | Year ended December 31, |  
|---------------------------------------------------------------------- | - | ----------------------- | -
|                                                                       |   | 2016                    |  
|Cash flows from operating activities                                   |   |                         |  
|Net loss for the year                                                  | $ | (11,154,923             | )
|Adjustments for:                                                       |   |                         |  
|Depreciation                                                           |   | 150,144                 |  
|Charge
      related to public company listing (Note 4)                |   | -                       |  
|Unrealized foreign
      exchange (gain) loss                          |   | (1,023,426              | )
|Gain on
      divestiture of subsidiaries (Note 12)                    |   | (806,714                | )
|Marketable securities
      fair value adjustment (Note 14)            |   | 1,071,944               |  
|Share-based payments (Note 20(d))                                      |   | 5,154,642               |  
|Net accrued interest
      (income) expense                            |   | 42,699                  |  
|Other
      miscellaneous                                              |   | 69,305                  |  
|Write-down of mineral properties (Note 15)                             |   | 485,114                 |  
|Operating cash flows
      before movements in working capital         |   | (6,011,215              | )
|Changes in non-cash working capital
      items:                       |   |                         |  
|Decrease
      (increase) in accounts receivable                       |   | 1,397,223               |  
|Increase in prepaid
      expenditures                                 |   | (195,678                | )
|(Increase) decrease in
      accounts payables and accrued liabilities |   | (2,269,876              | )
|Total cash used
      in operating activities                          |   | (7,079,546              | )
|Cash flows from investing activities                                   |   |                         |  
|Property and equipment purchases                                       |   | (456,895                | )
|Mineral property
      expenditures (Note 15)                          |   | (4,052,848              | )
|Other receivables or payments recovered                                |   | 8,886                   |  
|Increase (decrease) in
      deferred acquisition costs                |   | 122,913                 |  
|Purchase of marketable securities                                      |   | (549,740                | )
|Cash expended in
      acquisitions                                    |   |                         |  
|Goldrush
      transaction costs (Note 7)                              |   | (101,515                | )
|Clifton transaction costs (Note 8)                                     |   | (221,975                | )
|Pitt Gold
      transaction costs (Note 9)                             |   | (48,434                 | )
|Cameron Gold transaction costs (Note 10)                               |   | (151,386                | )
|Tamaka
      transaction costs (Note 11)                               |   | (1,504,342              | )
|Coastal Gold transaction costs (Note 5)                                |   | -                       |  
|Gold Canyon
      transaction costs (Note 6)                           |   | -                       |  
|PC Gold transaction costs (Note 6)                                     |   | -                       |  
|Cash paid in Pitt Gold acquisition
      (Note 9)                      |   | (250,000                | )
|Cash acquired in acquisitions                                          |   | 14,243,523              |  
|Total cash
      provided by (used in) investing activities            |   | 7,038,187               |  
|Cash flows from financing activities                                   |   |                         |  
|Issuance of shares for cash in private
      placement (Note 20(b))    |   | 27,000,000              |  
|Cash share
      issuance costs                                        |   | (157 193                | )
|Release of restricted cash                                             |   | -                       |  
|Cash acquired in
      reverse takeover, net of transaction costs      |   | -                       |  
|Proceeds from exercise of warrants and
      share options             |   | 6,581,962               |  
|(Repayments of)
      proceeds from loans payable (Note 18)            |   | (467,623                | )
|Repayment of debenture and interest liability                          |   | (414,552                | )
|Total cash provided by financing activities                            |   | 32,542,594              |  
|Foreign exchange
      effect on cash                                  |   | (27,396                 | )
|Change in cash and cash equivalents                                    |   | 32,473,839              |  
|Cash and cash
      equivalents, beginning                             |   | 683,608                 |  
|Cash and cash equivalents, ending                                      | $ | 33,157,447              |  
|Supplemental cash flow information (Note 24)                           |   |                         |  

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

3

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FIRST MINING FINANCE CORP.CONSOLIDATED STATEMENTS
OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015
(Expressed in Canadian dollars unless otherwise noted)

|                                                            |  |             |  |   |             |   |   |                 |   |   |            |   |   | Share-     |   |   | Accumulated   |   |   |             |   |       |                 |  
|----------------------------------------------------------- |  | ----------- |  | - | ----------- | - | - | --------------- | - | - | ---------- | - | - | ---------- | - | - | ------------- | - | - | ----------- | - | ----- | --------------- | -
|                                                            |  | Number of   |  |   |             |   |   |                 |   |   |            |   |   | based      |   |   | other         |   |   |             |   |       |                 |  
|                                                            |  | common      |  |   | Capital     |   |   | Shares to       |   |   | Warrant    |   |   | payment    |   |   | comprehensive |   |   | Accumulated |   |       |                 |  
|                                                            |  | shares      |  |   | stock       |   |   | be
      issued |   |   | reserve    |   |   | reserve    |   |   | income        |   |   | deficit     |   |       | Total           |  
|                                                            |  |             |  |   |             |   |   |                 |   |   |            |   |   |            |   |   |               |   |   |             |   |       |                 |  
|Balance as at December 31,
      2014                       |  | 46,083,730  |  | $ | 9,047,179   |   | $ | 2,723,750       |   | $ | 34,481     |   | $ | 239,935    |   | $ | 667,513       |   | $ | (5,062,184  | ) | $     | 7,650,674       |  
|Shares issued from private placement                        |  | 12,562,412  |  |   | 5,024,965   |   |   | -               |   |   | -          |   |   | -          |   |   | -             |   |   | -           |   |       | 5,024,965       |  
|Less: issue costs  cash                                    |  | -           |  |   | (546,385    | ) |   | -               |   |   | -          |   |   | -          |   |   | -             |   |   | -           |   |       | (546,385        | )
|Less: issue costs  non-cash                                |  | -           |  |   | (105,946    | ) |   | -               |   |   | 105,946    |   |   | -          |   |   | -             |   |   | -           |   |       | -               |  
|Conversion of subscription receipts                         |  | 10,895,000  |  |   | 2,723,750   |   |   | (2,723,750      | ) |   | -          |   |   | -          |   |   | -             |   |   | -           |   |       | -               |  
|Shares issued on settlement of debt                         |  | 2,633,389   |  |   | 823,378     |   |   | -               |   |   | -          |   |   | -          |   |   | -             |   |   | -           |   |       | 823,378         |  
|Shares of Albion upon RTO (Note 4)                          |  | 2,692,124   |  |   | 673,031     |   |   | -               |   |   | -          |   |   | -          |   |   | -             |   |   | -           |   |       | 673,031         |  
|Share-based payments                                        |  | -           |  |   | -           |   |   | -               |   |   | -          |   |   | 1,267,851  |   |   | -             |   |   | -           |   |       | 1,267,851       |  
|Shares issued on acquisition of
      Coastal Gold (Note 5) |  | 27,499,461  |  |   | 14,024,725  |   |   | -               |   |   | -          |   |   | -          |   |   | -             |   |   | -           |   |       | 14,024,725      |  
|Options issued on acquisition of Coastal Gold Note 5)       |  | -           |  |   | -           |   |   | -               |   |   | -          |   |   | 265,549    |   |   | -             |   |   | -           |   |       | 265,549         |  
|Shares issued on acquisition of PC
      Gold (Note 6)      |  | 28,575,806  |  |   | 11,430,322  |   |   | -               |   |   | -          |   |   | -          |   |   | -             |   |   | -           |   |       | 11,430,322      |  
|Options issued on acquisition of PC Gold (Note 6)           |  | -           |  |   | -           |   |   | -               |   |   | -          |   |   | 377,718    |   |   | -             |   |   | -           |   |       | 377,718         |  
|Warrants issued on acquisition of PC
      Gold (Note 6)    |  | -           |  |   | -           |   |   | -               |   |   | 1,478,683  |   |   | -          |   |   | -             |   |   | -           |   |       | 1,478,683       |  
|Shares issued on acquisition of Gold Canyon (Note 6)        |  | 161,200,447 |  |   | 61,256,170  |   |   | -               |   |   | -          |   |   | -          |   |   | -             |   |   | -           |   |       | 61,256,170      |  
|Options issued on acquisition of Gold
      Canyon Note 6)  |  | -           |  |   | -           |   |   | -               |   |   | -          |   |   | 1,061,683  |   |   | -             |   |   | -           |   |       | 1,061,683       |  
|Warrants issued on acquisition of Gold Canyon Note 6)       |  | -           |  |   | -           |   |   | -               |   |   | 3,084,915  |   |   | -          |   |   | -             |   |   | -           |   |       | 3,084,915       |  
|Exercise of options                                         |  | 1,039,090   |  |   | 482,146     |   |   | -               |   |   | -          |   |   | (181,090   | ) |   | -             |   |   | -           |   |       | 301,056         |  
|Exercise of warrants                                        |  | 108,450     |  |   | 61,796      |   |   | -               |   |   | (18,416    | ) |   | -          |   |   | -             |   |   | -           |   |       | 43,380          |  
|Loss for the year                                           |  | -           |  |   | -           |   |   | -               |   |   | -          |   |   | -          |   |   | -             |   |   | (5,082,057  | ) |       | (5,082,057      | )
|Currency
      translation adjustment                       |  | -           |  |   | -           |   |   | -               |   |   | -          |   |   | -          |   |   | 1,424,729     |   |   | -           |   |       | 1,424,729       |  
|Balance as at December 31, 2015                             |  | 293,289,909 |  | $ | 104,895,131 |   | $ | -               |   | $ | 4,685,609  |   | $ | 3,031,646  |   | $ | 2,092,242     |   | $ | (10,144,241 | ) | **$** | **104,560,387** |  
|                                                            |  |             |  |   |             |   |   |                 |   |   |            |   |   |            |   |   |               |   |   |             |   |       |                 |  
|Shares issued from private placement
      (Note 20(b))     |  | 33,750,000  |  |   | 21,667,853  |   |   | -               |   |   | 5,174,954  |   |   | -          |   |   | -             |   |   | -           |   |       | 26,842,807      |  
|Shares issued on settlement of debt (Note 24)               |  | 2,117,509   |  |   | 1 921 927   |   |   | -               |   |   | -          |   |   | -          |   |   | -             |   |   | -           |   |       | 1,921,927       |  
|Shares issued on acquisition of
      Goldrush (Note 7)     |  | 11,950,223  |  |   | 4,780,089   |   |   | -               |   |   | -          |   |   | -          |   |   | -             |   |   | -           |   |       | 4,780,089       |  
|Warrants issued on acquisition of PC Gold (Note 6)          |  | -           |  |   | -           |   |   | -               |   |   | 153,120    |   |   | -          |   |   | -             |   |   | -           |   |       | 153,120         |  
|Shares issued on acquisition of
      Clifton (Note 8)      |  | 48,209,962  |  |   | 19,766,084  |   |   | -               |   |   | -          |   |   | -          |   |   | -             |   |   | -           |   |       | 19,766,084      |  
|Options issued on acquisition of Clifton (Note 8)           |  | -           |  |   | -           |   |   | -               |   |   | -          |   |   | 528,208    |   |   | -             |   |   | -           |   |       | 528,208         |  
|Shares issued on acquisition of Pitt
      Gold (Note 9)    |  | 2,535,293   |  |   | 1,749,352   |   |   | -               |   |   | -          |   |   | -          |   |   | -             |   |   | -           |   |       | 1,749,352       |  
|Shares issued on acquisition of Cameron Gold Note 10)       |  | 32,260,836  |  |   | 25,808,669  |   |   | -               |   |   | -          |   |   | -          |   |   | -             |   |   | -           |   |       | 25,808,669      |  
|Shares issued on acquisition of
      Tamaka (Note 11)      |  | 92,475,689  |  |   | 69,356,767  |   |   | -               |   |   | -          |   |   | -          |   |   | -             |   |   | -           |   |       | 69,356,767      |  
|Options issued on acquisition of Tamaka (Note 11)           |  | -           |  |   | -           |   |   | -               |   |   | -          |   |   | 2,928,241  |   |   | -             |   |   | -           |   |       | 2,928,241       |  
|Warrants issued on acquisition of
      Tamaka (Note 11)    |  | -           |  |   | -           |   |   | -               |   |   | 8,633,830  |   |   | -          |   |   | -             |   |   | -           |   |       | 8,633,830       |  
|Exercise of options (Note 20(d))                            |  | 10,923,681  |  |   | 6,609,428   |   |   | -               |   |   | -          |   |   | (3,061,121 | ) |   | -             |   |   | -           |   |       | 3,548,307       |  
|Exercise of warrants (Note 20(c))                           |  | 11,926,634  |  |   | 6,320,904   |   |   | -               |   |   | (3,287,249 | ) |   | -          |   |   | -             |   |   | -           |   |       | 3,033,655       |  
|Share-based payments (Note 20(d))                           |  | -           |  |   | -           |   |   | -               |   |   | -          |   |   | 5,154,642  |   |   | -             |   |   | -           |   |       | 5,154,642       |  
|Loss for the period                                         |  | -           |  |   | -           |   |   | -               |   |   | -          |   |   | -          |   |   | -             |   |   | (11,154,923 | ) |       | (11,154,923     | )
|Currency
      translation adjustment                       |  | -           |  |   | -           |   |   | -               |   |   | -          |   |   | -          |   |   | (1,383,570    | ) |   | -           |   |       | (1,383,570      | )
|Balance as at December 31, 2016                             |  | 539,439,736 |  | $ | 262,876,204 |   | $ | -               |   | $ | 15,360,264 |   | $ | 8,581,616  |   | $ | 708,672       |   | $ | (21,299,164 | ) | **$** | **266,227,592** |  

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

4

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|FIRST MINING FINANCE CORP.                                  
|------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS              
|(Expressed in
      Canadian dollars unless otherwise noted)

1. NATURE OF OPERATIONS

First Mining Finance Corp. (formerly Albion Petroleum Ltd.
(Albion)) (the Company or First Mining) was incorporated pursuant to the
provisions of the Business Corporations Act (Alberta) on April 4, 2005 and
completed its initial public offering as a Capital Pool Company (CPC) on
September 30, 2005. As a CPC, the Companys only business had been to identify
and evaluate businesses or assets with a view of completing a Qualifying
Transaction.

On March 30, 2015, the Company completed the acquisition of all
of the issued and outstanding shares of a private company, KCP Minerals Inc.
(KCP) (formerly Sundance Minerals Ltd. (Sundance)) through a reverse
takeover arrangement (the RTO), constituting its Qualifying Transaction under
the applicable policies of the TSX Venture Exchange (TSXV). Upon completion of
the RTO, the shareholders of KCP obtained control of the consolidated entity.
Under the purchase method of accounting, KCP was identified as the acquirer, and
accordingly the entity is considered to be a continuation of KCP with the net
assets of the Company at the date of the RTO deemed to have been acquired by KCP
(Note 4). The 2015 comparative figures in the consolidated financial statements
include the results of operations of KCP prior to the RTO date of March 30,
2015.

The Companys principal activity is the acquisition of
high-quality mineral assets and exploration and evaluation of its North American
property portfolio. During the year ended December 31, 2015, the Company
acquired Coastal Gold Corp. (Coastal Gold) on July 7, 2015, Gold Canyon
Resources Inc. (Gold Canyon) on November 13, 2015, and PC Gold Inc. (PC
Gold) on November 16, 2015. During the year ended December 31, 2016, the
Company completed acquisitions of Goldrush Resources Ltd. (Goldrush) on
January 7, 2016, Clifton Star Resources Inc. (Clifton) on April 8, 2016, the
Pitt Gold exploration property from Brionor Resources Inc. (Brionor) on April
28, 2016, Cameron Gold Operations Ltd. (Cameron Gold) from Chalice Gold Mines
Ltd. (Chalice) on June 9, 2016, and Tamaka Gold Corporation (Tamaka) on June
16, 2016. On September 26, 2016, the Company completed the divestiture of three
Mexican silver exploration properties to Silver One Resources Inc. (Silver
One). Subsequent to December 31, 2016, the Company announced the acquisitions
of mining claims located near Pickle Lake, Ontario and in the Township of
Duparquet, Quebec, which are adjacent to two of the Companys existing
properties.

First Mining is a public company which is listed on the TSXV
under the symbol FF, on the OTCQX under the symbol FFMGF, and on the
Frankfurt Stock Exchange under the symbol FMG.

The Companys head office and principal address is located at
925 West Georgia Street, Suite 1805, Vancouver, British Columbia, Canada, V6C
3L2.

2. BASIS OF PRESENTATION

These consolidated financial statements have been prepared in
accordance with International Financial Reporting Standards (IFRS) as issued
by the International Accounting Standards Board (IASB) and interpretations of
the International Financial Reporting Interpretations Committee (IFRIC),
effective for the Companys reporting for the year ended December 31, 2016.

These consolidated financial statements have been prepared on a
historical cost basis, except for financial instruments classified as fair value
through profit or loss, which are stated at their fair value. The consolidated
financial statements are presented in Canadian dollars, which is the functional
currency of the Companys Canadian entities. The functional currency of the
Companys non-Canadian subsidiaries is US dollars.

5

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|FIRST MINING FINANCE CORP.                                  
|------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS              
|(Expressed in
      Canadian dollars unless otherwise noted)

2. BASIS OF PRESENTATION (continued)

The accounts of subsidiaries are prepared for the same
reporting period as the parent company, using consistent accounting policies.
Inter-company transactions, balances and unrealized gains or losses on
transactions are eliminated. The Companys principal material subsidiaries are
as follows:

|Name                                               | Place of | Ownership
|-------------------------------------------------- | -------- | ---------
|First Mining Finance Corp.                         | Canada   | Parent   
|Cameron Gold Operations Ltd.                       | Canada   | 100%     
|Coastal Gold Corp.                                 | Canada   | 100%     
|Duquesne Gold Mines Inc.                           | Canada   | 100%     
|Gold Canyon Resources Inc.                         | Canada   | 100%     
|Goldlund Resources Inc.                            | Canada   | 100%     
|PC Gold Inc.                                       | Canada   | 100%     
|Ridgemont Iron Ore Corp.                           | Canada   | 100%     
|Impulsora de Proyectos
      Mineros, S.A. de C.V. | Mexico   | 100%     
|Minera Teocuitla, S.A. de C.V.                     | Mexico   | 100%     
|Sundance Minerals USA Inc.                         | USA      | 100%     

The preparation of consolidated financial statements requires
management to make judgments, estimates and assumptions that affect the
application of accounting policies and the reported amounts of assets and
liabilities, income and expense. Actual results may differ from these estimates.

These consolidated financial statements were approved by the
Board of Directors on March 24, 2017.

3. ACCOUNTING POLICIES

These consolidated financial statements have been prepared
using the following accounting policies:

Change in Presentation and
  Functional Currency
  These consolidated financial statements are presented in
  Canadian dollars, which is the functional currency of the Companys parent as
  well as the Companys Canadian subsidiaries. The functional currency of the
  Companys non-Canadian subsidiaries is US dollars.

The functional currency of both the parent company and the
Canadian subsidiaries changed from US to Canadian dollars effective July 1,
2015. At that time, this change reflected the Companys financing and
development activities which are predominently in Canadian dollars. Concurrent
with the change in functional currency, on July 1, 2015, the Company changed its
presentation currency from US dollars to Canadian dollars. The change in
presentation currency was consistent with the Companys business activities and
as described above.

In making this change to the Canadian dollar presentation
currency, the Company followed the guidance in IAS 21The Effects of Changes
in Foreign Exchange Rates (IAS 21) and has thus applied the change
retrospectively.

6

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|FIRST MINING FINANCE CORP.                                  
|------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS              
|(Expressed in
      Canadian dollars unless otherwise noted)

3. ACCOUNTING POLICIES (continued)

Mineral Properties Once the legal right to explore a
property has been acquired, costs directly related to exploration and evaluation
expenditures (E&E) are recognized and capitalized, in addition to the
acquisition costs. These direct expenditures include such costs as mineral
concession taxes, option payments, wages and salaries, surveying, geological
consulting and laboratory, field supplies, travel and administration. Costs not
directly attributable to exploration and evaluation activities, including
general administrative overhead costs, are expensed in the period in which they
are incurred.

Interests in mineral properties, held through minority interest
in equity investment, are classified as mineral property investments and
recorded at fair value, with changes in fair value recorded through profit or
loss, where the Company does not have the right to explore such mineral
properties.

The Company may occasionally enter into option or royalty
arrangements, whereby the Company will transfer part of its mineral properties,
as consideration, for an agreement by the transferee to meet certain exploration
and evaluation expenditures which would have otherwise been undertaken by the
Company. The Company does not record any expenditures made by the optionee on
its behalf. Any cash consideration received from the agreement is credited
against the costs previously capitalized to the mineral interest given up by the
Company, with any excess cash accounted for as a gain on disposal. The fair
value of net smelter return royalties acquired by the Company will be assessed
at least annually or when circumstances dictate.

The Company assesses exploration and evaluation assets for
impairment when facts and circumstances suggest that the carrying amount of an
asset may exceed its recoverable amount. The recoverable amount is the higher of
the assets fair value less costs to sell and value in use.

Once the technical feasibility and commercial viability of
extracting the mineral resource has been determined, the property is considered
to be a mine under development and is classified as mines under construction.
Exploration and evaluation assets are also tested for impairment before the
assets are transferred to development properties.

Impairment of Non-Financial Assets Impairment tests
on intangible assets with indefinite useful economic lives are undertaken
annually at the financial year-end. Other non-financial assets, including
mineral properties are subject to impairment tests whenever events or changes in
circumstances indicate that their carrying amount may not be recoverable. Where
the carrying value of an asset exceeds its recoverable amount, which is the
higher of value in use and fair value less costs to sell, the asset is written
down accordingly. An impairment loss is charged to profit or loss.

For the purposes of assessing impairment, assets are grouped at
the lowest levels for which there are largely independent cash flows
(cash-generating units). As a result, some assets are tested individually for
impairment and some are tested at a cash-generating unit level.

Impairment reviews for exploration and evaluation assets are
carried out on a property by property basis, with each property representing a
single cash generating unit. An impairment review is undertaken when indicators
of impairment arise, but typically when one of the following circumstances
apply:

- The right to explore the area has expired or will expire in the near
  future with no expectation of renewal;
- Exploration and retention costs associated with royalty and concession tax
  payments are neither planned nor budgeted;
- No commercially viable deposits have been discovered, and the decision had
  been made to discontinue exploration in the area; and
- Sufficient work has been performed to indicate that the carrying amount of
  the expenditure carried as an asset will not be fully recovered.

7

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|FIRST MINING FINANCE CORP.                                  
|------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS              
|(Expressed in
      Canadian dollars unless otherwise noted)

3. ACCOUNTING POLICIES (continued)

Property and equipment Property and equipment are
recorded at cost less accumulated depreciation and accumulated impairment
losses. The initial cost of an asset comprises its purchase price or
construction cost, any costs directly attributable to bringing the asset into
operation and, where applicable, the initial estimation of any asset retirement
obligation. The purchase price or construction cost is the aggregate amount paid
and the fair value of any other consideration given to acquire the asset.

Depreciation is recognized in profit or loss on a straight-line
basis over the following estimated useful lives:

Buildings
    10 yearsMachinery and equipment
    5 yearsFurniture and fixtures
    5 yearsVehicles
    5 yearsComputer equipment
    3 years


Depreciation methods, useful lives and residual values are
reviewed at each financial year-end and adjusted if appropriate.

Business Combinations Acquisitions of subsidiaries
and businesses are accounted for using the acquisition method. The consideration
of each business combination is measured, at the date of the exchange, as the
aggregate of the fair value of assets given, liabilities incurred or assumed,
and equity instruments issued by the Company in exchange for control of the
acquiree. Under the guidance of IFRS 10Consolidated Financial
Statements, control is established by having power over the acquiree,
exposure or rights to variable returns from its involvement with the acquiree,
and the ability to use its power over the acquiree to affect the amount of the
acquirors returns. The acquirees identifiable assets, liabilities and
contingent liabilities are recognized at their fair value at the acquisition
date. During the years ended December 31, 2016 and December 31, 2015, the
Companys eight acquisitions (Coastal, Gold Canyon, PC Gold, Goldrush, Clifton,
Pitt Gold, Cameron Gold, and Tamaka) were recorded as asset acquisitions given
they were not considered to be businesses when applying the guidance within IFRS
3, Business Combinations (IFRS 3).

Financial Instruments All financial instruments are
classified into one of the following categories:

(a) Financial assets or financial liabilities at fair value
through profit or loss (FVTPL)

Financial assets and financial liabilities classified as FVTPL
are acquired or incurred principally for the purpose of selling or repurchasing
them in the near term. They are initially recognized at fair value based on
market prices, with any subsequent fair value gains and losses reflected in net
income (loss) for the period in which they arise.

The marketable securities and mineral property investments are
classified as FVTPL and are measured at fair value.

8

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|FIRST MINING FINANCE CORP.                                  
|------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS              
|(Expressed in
      Canadian dollars unless otherwise noted)

3. ACCOUNTING POLICIES (continued)

Financial Instruments (continued) (b) Loans and
receivables

Loans and receivables are initially recognized at fair value
plus transaction costs that are directly attributable to their acquisition or
issue and subsequently carried at amortized cost, using the effective interest
rate method, less any allowance for impairment.

Cash and cash equivalents are classified as loans and
receivables. Cash equivalents include highly liquid investments that are readily
convertible to known amounts of cash and which are subject to an insignificant
risk of change in value. Cash equivalents are held for the purpose of meeting
short-term cash commitments rather than for investment or other purposes.

Accounts and other receivables and reclamation deposit are also
classified as loans and receivables.

(c) Other financial liabilities

Financial liabilities classified as other financial liabilities
are initially recognized at fair value less directly attributable transaction
costs and subsequently carried at amortized cost, using the effective interest
rate method.

Accounts payable and accrued liabilities, loans payable and
debenture liability are classified as other financial liabilities. Accounts
payable and accrued liabilities are obligations to pay for materials or services
that have been acquired in the ordinary course of business from suppliers with
payments due within the next 12 months. Loans payable and debenture liability
are interest bearing promissory notes issued by the Company to another entity or
individual that are repayable on demand or over an agreed period of time.

Environmental Reclamation Provision 
The Company is
subject to various government laws and regulations relating to environmental
disturbances caused by exploration and evaluation activities. The present value
of the estimated costs of legal and constructive obligations required to restore
the exploration sites is recognized in the year in which the obligation is
incurred. The nature of the reclamation activities includes restoration
and re-vegetation of the affected exploration sites.

A reclamation provision
  generally arises when the environmental disturbance is subject to government
  laws and regulations. When a liability is recognized, the present value of the
  estimated costs is capitalized by increasing the carrying amount of the related
  exploration properties. Over time, the discounted liability is increased for the
  changes in present value based on current market discount rates and liability
  specific risks.

Additional environment disturbances or changes in reclamation
costs will be recognized as additions to the corresponding assets and
reclamation provision in the year in which they occur.

Income Taxes Income tax expense comprises of current
and deferred tax. Current tax and deferred tax are recognized in net income
except to the extent that it relates to a business combination or items
recognized directly in equity or in other comprehensive loss.

Current income taxes are recognized for the estimated income
taxes payable or receivable on taxable income or loss for the current year and
any adjustment to income taxes payable in respect of previous years. Current
income taxes are determined using tax rates and tax laws that have been enacted
or substantively enacted by the year-end date.

9

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|FIRST MINING FINANCE CORP.                                  
|------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS              
|(Expressed in
      Canadian dollars unless otherwise noted)

3. ACCOUNTING POLICIES (continued)

Income Taxes (continued) Deferred tax assets and
liabilities are recognized where the carrying amount of an asset or liability
differs from its tax base, except for taxable temporary differences arising on
the initial recognition of goodwill and temporary differences arising on the
initial recognition of an asset or liability in a transaction which is not a
business combination and at the time of the transaction affects neither
accounting nor taxable profit or loss.

Recognition of deferred tax assets for unused tax losses, tax
credits and deductible temporary differences is restricted to those instances
where it is probable that future taxable profit will be available against which
the deferred tax asset can be utilized. At the end of each reporting year the
Company reassesses unrecognized deferred tax assets. The Company recognizes a
previously unrecognized deferred tax asset to the extent that it has become
probable that future taxable profit will allow the deferred tax asset to be
recovered.

Share Capital Equity instruments are contracts that
give a residual interest in the net assets of the Company. Financial instruments
issued by the Company are classified as equity only to the extent that they do
not meet the definition of a financial liability or financial asset. The
Companys common shares are classified as equity instruments.

Incremental costs directly attributable to the issue of new
shares or options are shown in equity as a deduction, net of tax, from the
proceeds.

Loss per Share Basic loss per share is calculated by
dividing the net loss for the year by the weighted average number of shares
outstanding during the year. Diluted loss per share is calculated using the
treasury stock method. Under the treasury stock method, the weighted average
number of shares outstanding used in the calculation of diluted income or loss
per share assumes that the deemed proceeds received from the exercise of stock
options, share purchase warrants and their equivalents would be used to
repurchase common shares of the Company at the average market price during the
year, if they are determined to have a dilutive effect. Existing stock options
and share purchase warrants have not been included in the current year
computation of diluted loss per share as to do so would be anti-dilutive.
Accordingly, the current year basic and diluted losses per share are the same.

Share-based Payments Where equity-settled share
options are awarded to employees, the fair value of the options at the date of
grant is charged to the statement of comprehensive loss over the vesting period.
Performance vesting conditions are taken into account by adjusting the number of
equity instruments expected to vest at each reporting date so that, ultimately,
the cumulative amount recognized over the vesting period is based on the number
of options that eventually vest. Non-vesting conditions and market vesting
conditions are factored into the fair value of the options granted. As long as
all other vesting conditions are satisfied, a charge is made irrespective of
whether these vesting conditions are satisfied. The cumulative expense is not
adjusted for failure to achieve a market vesting condition or where a
non-vesting condition is not satisfied.

Where the terms and conditions of options are modified before
they vest, the increase in the fair value of the options, measured immediately
before and after the modification, is also charged to the statement of
comprehensive loss over the remaining vesting period.

10

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|FIRST MINING FINANCE CORP.                                  
|------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS              
|(Expressed in
      Canadian dollars unless otherwise noted)

3. ACCOUNTING POLICIES (continued)

Share-based Payments (continued) Where equity
instruments are granted to non-employees, they are recorded at the fair value of
the goods or services received in the statement of comprehensive loss. Options
or warrants granted related to the issuance of shares are recorded as a
reduction of share capital.

When the value of goods or services received in exchange for
the share-based payment cannot be reliably estimated, the fair value is measured
by use of a valuation model.

All equity-settled share-based payments are reflected in
share-based payment reserve, until exercised. Upon exercise, shares are issued
from treasury and the amount reflected in contributed surplus is credited to
share capital, together with any consideration paid.

Where a grant of options is cancelled or settled during the
vesting period, excluding forfeitures when vesting conditions are not satisfied,
the Company immediately accounts for the cancellation as an acceleration of
vesting and recognizes the amount that otherwise would have been recognized for
services received over the remainder of the vesting period. Any payment made to
the employee on cancellation is accounted for as the repurchase of an equity
interest except to the extent the payment exceeds the fair value of the equity
instrument granted, measured at the repurchase date. Any such excess is
recognized as an expense.

Segment Reporting Operating segments are reported in
a manner consistent with the internal reporting provided to the chief operating
decision-maker. The chief operating decision-maker is responsible for allocating
resources and assessing performance of the operating segment.

Critical Judgments in Applying Accounting Policies
The critical judgments that the Companys management has made in the process
of applying the Companys accounting policies with the most significant effect
on the amounts recognized in the Companys consolidated financial statements are
as follows:

Economic Recoverability and Probability of Future Economic
Benefits of Mineral PropertiesManagement uses several criteria in its
assessments of economic recoverability and probability of future economic
benefit including geological, technical and economic factors as well as data
regarding quantities, grades, production techniques, recovery rates, production
costs, transport costs, commodity demand, commodity prices and foreign exchange
rates. This process may require complex and difficult geological judgements to
interpret data. The Company uses qualified persons (as defined by Canadian
Securities Administrators National Instrument 43-101) to compile this data.

11

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|FIRST MINING FINANCE CORP.                                  
|------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS              
|(Expressed in
      Canadian dollars unless otherwise noted)

3. ACCOUNTING POLICIES (continued)

Critical Judgments in Applying Accounting Policies
(Continued)

Determining if an Acquisition is a Business Combination or
an Asset AcquisitionWith each acquisition, the Company has to determine
whether it should be accounted for as a business combination or an asset
acquisition. As dictated by IFRS 3, the components of a business must include
inputs, processes and outputs. Management has assessed its acquisitions and has
concluded that each did not include all the necessary components of a business.
As such, they have been recorded as asset acquisitions, being the purchase of
mineral properties and/or working capital.

Identifying the Acquirer in an AcquisitionThe
Company must determine whether it is the acquirer or acquiree in each
acquisition. Under IFRS 3, the acquirer is the entity that obtains control of
the acquiree in the acquisition. If it is not clear which company is the
acquirer, additional information must be considered, such as the combined
entitys relative voting rights, existence of a large minority voting interest,
composition of the governing body and senior management, and the terms behind
the exchange of equity interests.

Determining Amount and Timing of Reclamation ProvisionReclamation provision represents the present value of estimated future
costs for the reclamation of the Companys mineral properties. These estimates
include assumptions as to the future activities, cost of services, timing of the
reclamation work to be performed, inflation rates, exchange rates and interest
rates. The actual cost to reclaim a mine may vary from the estimated amounts
because there are uncertainties in factors used to estimate the cost and
potential changes in regulations or laws governing the reclamation of a mineral
property. Management periodically reviews the reclamation requirements and
adjusts the liability as new information becomes available and will assess the
impact of new regulations and laws as they are enacted.

Key Sources of Estimation Uncertainty The
preparation of consolidated financial statements requires that the Companys
management make assumptions and estimates of effects of uncertain future events
on the carrying amounts of the Companys assets and liabilities at the end of
the reporting period. Actual results may differ from those estimates as the
estimation process is inherently uncertain. Actual future outcomes could differ
from present estimates and assumptions, potentially having material future
effects on the Companys consolidated financial statements. Estimates are
reviewed on an ongoing basis and are based on historical experience and other
facts and circumstances. Revisions to estimates and the resulting effects on the
carrying amounts of the Companys assets and liabilities are accounted for
prospectively.

The significant assumptions about the future and other major
sources of estimation uncertainty as at the end of the reporting period that
have a significant risk of resulting in a material adjustment to the carrying
amounts of the Companys assets and liabilities are as follows:

Impairment of Mineral PropertiesExpenditures on
mineral properties are capitalized. The Company makes estimates and applies
judgment about future events and circumstances in determining whether the
carrying amount of a mineral property exceeds its recoverable amount.

Deferred income taxesDeferred income tax assets and
liabilities are measured using enacted or substantively enacted tax rates at the
reporting date in effect for the period in which the temporary differences are
expected to be recovered or settled. The effect on deferred income tax assets
and liabilities of a change in tax rates is recognized as part of the provision
for income taxes in the period that includes the enactment date. The recognition
of deferred income tax assets is based on the assumption that it is probable
that taxable profit will be available against which the deductible temporary
differences can be utilized.

12

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|FIRST MINING FINANCE CORP.                                  
|------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS              
|(Expressed in
      Canadian dollars unless otherwise noted)

3. ACCOUNTING POLICIES (continued)

Key Sources of Estimation Uncertainty (Continued)

Share-based PaymentsShare-based payments are
determined using the Black-Scholes option pricing model based on estimated fair
values of all share-based awards at the date of grant and are expensed to the
statement of net loss and comprehensive loss over each awards vesting period.
The Black-Scholes option pricing model utilizes subjective assumptions such as
expected price volatility, expected life of the option, risk free interest
rates, and forfeiture rates. Changes in these input assumptions can
significantly affect the fair value estimate.

Financial assetsThe Company makes estimates and
assumptions that affect the carrying value of its financial assets. Certain
financial assets are designated as fair value through profit and loss, and
management needs to determine the fair value based on various estimates and
assumptions including equity prices, commodity prices, and other unobservable
market data. Changes to these estimates and assumptions could result in the fair
value being less than or greater than the amount recorded.

Accounting Standards Issued But Not Yet Applied The
following are accounting standards anticipated to be effective January 1, 2017
or later:

IFRS12Disclosure of Interests in Other EntitiesIFRS 12 has amendments to clarify that the disclosures requirements of
IFRS 12 are applicable to interest in entities classified as held for sale
except for summarised financial information (paragraph B17 of IFRS 12). The
amendments are effective for annual periods beginning on or after January 1,
2017. The Company is currently evaluating the impact this standard is expected
to have on its consolidated financial statements.

IAS7Statement of Cash FlowsThe amendments
require entities to provide disclosures about changes in their liabilities
arising from financing activities, including both changes arising from cash
flows and non-cash changes (such as foreign exchange gains or losses). The
amendments are effective for annual periods beginning on or after January 1,
2017. The Company is currently evaluating the impact this standard is expected
to have on its consolidated financial statements.

IAS12Income TaxesIAS 12 has amendments to
clarify the accounting for deferred tax assets for unrealised losses on debt
instruments measured at fair value. The amendments clarify that an entity needs
to consider whether tax law restricts the sources of taxable profits against
which it may make deductions on the reversal of that deductible temporary
difference. Furthermore, the amendments provide guidance on how an entity should
determine future taxable profits and explains in which circumstances taxable
profit may include the recovery of some assets for more than their carrying
amount. Application of the standard is mandatory for annual periods beginning on
or after January 1, 2017. Currently, no impact on the Companys consolidated
financial statements is expected.

IFRS2Share-based PaymentsThe IASB issued
amendments to IFRS 2 in relation to classification and measurement of
share-based payment transactions. The amendments address three main areas: the
effects of vesting conditions on the measurement of a cash-settled share-based
payment transaction, the classification of a share-based payment transaction
with net settlement features for withholding tax obligations, and the accounting
where a modification to the terms and conditions of a share-based payment
transaction changes its classification from cash-settled to equity-settled. The
amendments are effective for annual periods beginning on or after January 1,
2018. The Company is currently evaluating the impact this standard is expected
to have on its consolidated financial statements.

13

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|FIRST MINING FINANCE CORP.                                  
|------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS              
|(Expressed in
      Canadian dollars unless otherwise noted)

3. ACCOUNTING POLICIES (continued)

Accounting Standards Issued But Not Yet Applied
(Continued)

IFRS9Financial InstrumentsIFRS 9 will
replace IAS 39 Financial Instruments: Recognition and Measurement. IFRS 9
utilizes a single approach to determine whether a financial asset is measured at
amortized cost or fair value and a new mixed measurement model for debt
instruments having only two categories: amortized cost and fair value. The
approach in IFRS 9 is based on how an entity manages its financial instruments
in the context of its business model and the contractual cash flow
characteristics of the financial assets. It also introduces a new expected loss
impairment model and limited changes to the classification and measurement
requirements for financial assets. Application of the standard is mandatory for
annual periods beginning on or after January 1, 2018, with early application
permitted. The Company is currently evaluating the impact this standard is
expected to have on its consolidated financial statements.

IFRS15Revenue from Contracts with
CustomersIFRS 15 will replace IAS 18 Revenue, IAS 11
Construction Contracts, and related interpretations on revenue. IFRS 15
establishes a single five-step model framework for determining the nature,
amount, timing and uncertainty of revenue and cash flows arising from a contract
with a customer. Application of the standard is mandatory for annual periods
beginning on or after January 1, 2018, with early application permitted.
Currently, no impact on the Companys consolidated financial statements is
expected.

IFRIC Interpretation 22Foreign Currency Transactions and
Advance ConsiderationThe interpretation clarifies that in determining
the spot exchange rate to use on initial recognition of the related asset,
expense or income (or part of it) on the derecognition of a non-monetary asset
or non-monetary liability relating to advance consideration, the date of the
transaction is the date on which an entity initially recognises the nonmonetary
asset or non-monetary liability arising from the advance consideration. If there
are multiple payments or receipts in advance, then the entity must determine a
date of the transactions for each payment or receipt of advance consideration.
The interpretation is effective for annual periods beginning on or after January
1, 2018. The Company is currently evaluating the impact this standard is
expected to have on its consolidated financial statements.

IFRS16LeasesIFRS 16 will replace IAS 17
Leases. IFRS 16 specifies how to recognize, measure, present and disclose
leases. The standard provides a single lessee accounting model, requiring
lessees to recognize assets and liabilities for all leases unless the lease term
is 12 months or less or the underlying asset has a low value. Application of the
standard is mandatory for annual periods beginning on or after January 1, 2019,
with early application permitted. The Company is currently evaluating the impact
this standard is expected to have on its consolidated financial statements.

14

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|FIRST MINING FINANCE CORP.                                  
|------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS              
|(Expressed in
      Canadian dollars unless otherwise noted)

4. REVERSE TAKEOVER TRANSACTION

On July 1, 2014, Albion and Sundance entered into an
Arrangement Agreement (Arrangement), whereby Albion would acquire all of the
issued and outstanding shares of Sundance, in exchange for shares of the
resulting entity.

On March 11, 2015, Sundance Minerals Ltd. was renamed as KCP
Minerals Inc. and on March 30, 2015, Albion Petroleum Ltd. completed the
acquisition of all of the issued and outstanding shares of KCP Minerals Inc. on
a 1:1 basis, constituting a qualifying transaction under the applicable policies
of the TSX Venture Exchange. On the same day, Albion Petroleum Ltd. was renamed
as First Mining Finance Corp. Prior to completion of the transaction, Albion
consolidated all of its issued and outstanding shares on a four-for-one basis.

In accordance with IFRS 3, the substance of the transaction was
a reverse takeover (RTO) of a non-operating company. The transaction does not
constitute a business combination since Albion does not meet the definition of a
business under IFRS 3. As a result, the transaction is accounted for as an asset
acquisition with KCP being identified as the acquirer (legal subsidiary) and
Albion being treated as the accounting subsidiary (legal parent) with the
transaction being measured at the fair value of the equity consideration issued
to Albion.

The net assets acquired was the fair value of the net assets of
Albion, which on March 30, 2015 was $67,917.

The amount was calculated as follows:

|                                                                        |   |         |  
|----------------------------------------------------------------------- | - | ------- | -
|Cash and cash equivalents                                               | $ | 93,294  |  
|Accounts receivable                                                     |   | 2,624   |  
|Accounts payable and accrued liabilities                                |   | (28,001 | )
|Net assets acquired                                                     | $ | 67,917  |  
|Fair value of 2,692,124 shares issued by KCP at $0.25 per
      share   |   | 673,031 |  
|Fair value of consideration paid in excess of net assets
      acquired |   | 605,114 |  
|Transaction costs related to acquisition                                |   | 50,016  |  
|Charge related
      to public company listing                          | $ | 655,130 |  

5. ACQUISITION OF COASTAL GOLD CORP.

On July 7, 2015, the Company completed the acquisition of all
of the outstanding common shares of Coastal Gold Corp. (Coastal) on the basis
of 0.1625 common share of the Company for each Coastal common share (the
Transaction). The Transaction was conducted by way of a court-approved plan of
arrangement under the Business Corporations Act (Ontario), which
resulted in Coastal becoming a wholly-owned subsidiary of the Company.

For accounting purposes, the acquisition of Coastal has been
recorded as an asset acquisition as Coastal is not considered to be a business
when applying the guidance within IFRS 3.

Consideration paid:

|                                                    |   |            | 
|--------------------------------------------------- | - | ---------- | 
|Fair value of 27,499,461 common shares
      issued | $ | 14,024,725 | 
|Fair value of options issued by the Company         |   | 265,549    | 
|Transaction costs incurred by the Company           |   | 2,273,541  | 
|Total
      consideration paid                      | $ | 16,563,815 | 

15

---

|FIRST MINING FINANCE CORP.                                  
|------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS              
|(Expressed in
      Canadian dollars unless otherwise noted)

5. ACQUISITION OF COASTAL GOLD CORP. (continued)

The fair value of identifiable assets acquired and liabilities
assumed from Coastal were as follows:

|                                         |   |            |  
|---------------------------------------- | - | ---------- | -
|Cash                                     | $ | 68,933     |  
|Receivables and prepaids                 |   | 98,219     |  
|Mineral properties                       |   | 17,466,287 |  
|Equipment                                |   | 84,340     |  
|Accounts payable and accrued liabilities |   | (1,153,964 | )
|Net
      identifiable assets acquired   | $ | 16,563,815 |  

6. ACQUISITION OF GOLD CANYON RESOURCES INC. AND PC GOLD
INC.

On November 13, 2015 the Company completed the acquisition of
all of the issued and outstanding common shares of Gold Canyon Resources Inc.
(Gold Canyon), and on November 16, 2015 all of the issued and outstanding
common shares of PC Gold Inc. (PC Gold). Under the Agreements, shareholders of
Gold Canyon received one common share of the Company for each Gold Canyon share
held, in addition to shares in a newly formed spinout company (Irving Resources
Inc.), which holds certain non-gold exploration assets previously held by Gold
Canyon, and is an unrelated entity. Shareholders of PC Gold received 0.2571
common shares of the Company for each PC Gold share. The Transactions were
conducted by way of a court-approved plan of arrangement under the Business
Corporations Act (British Columbia) in the case of Gold Canyon, and
under the Business Corporations Act (Ontario) in the case of PC
Gold, which resulted in both Gold Canyon and PC Gold becoming wholly-owned
subsidiaries of the Company.

For accounting purposes, the acquisitions of both Gold Canyon
and PC Gold have been recorded as asset acquisitions as neither company is
considered to be a business when applying the guidance within IFRS 3.

Gold Canyon

Consideration paid:

|                                                     |   |            | 
|---------------------------------------------------- | - | ---------- | 
|Fair value of 161,200,447 common shares
      issued | $ | 61,256,170 | 
|Fair value of options issued by the Company          |   | 1,061,683  | 
|Fair value of warrants issued by the
      Company   |   | 3,084,915  | 
|Transaction costs
      incurred by the Company      |   | 700,041    | 
|Total consideration paid                             | $ | 66,102,809 | 

The fair value of identifiable assets acquired and liabilities
assumed from Gold Canyon were as follows:

|                                               |   |            |  
|---------------------------------------------- | - | ---------- | -
|Cash                                           | $ | 178,592    |  
|Receivables and prepaids                       |   | 162,638    |  
|Mineral properties                             |   | 66,170,491 |  
|Accounts payable
      and accrued liabilities |   | (408,912   | )
|Net identifiable assets acquired               | $ | 66,102,809 |  

16

---

|FIRST MINING FINANCE CORP.                                  
|------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS              
|(Expressed in
      Canadian dollars unless otherwise noted)

6. ACQUISITION OF GOLD CANYON RESOURCES INC. AND PC GOLD
INC. (continued)

PC Gold

Consideration paid:

|                                                            |   |            | 
|----------------------------------------------------------- | - | ---------- | 
|Fair value of 28,575,806 common shares
      issued         | $ | 11,430,322 | 
|Fair value of options issued by the Company                 |   | 377,718    | 
|Fair value of warrants issued by the
      Company          |   | 1,631,803  | 
|Shares issued for debt (1,057,522 shares @ $0.40 per share) |   | 423,009    | 
|Transaction costs incurred by the Company                   |   | 1,103,261  | 
|Total
      consideration paid                              | $ | 14,966,113 | 

During 2016, Management identified additional replacement
broker warrants with a fair value of $153,120 had been issued prior to the
acquisition. These replacement broker warrants were fully exercised during 2016.

The fair value of identifiable assets acquired and liabilities
assumed from PC Gold were as follows:

|                                         |   |            |  
|---------------------------------------- | - | ---------- | -
|Cash                                     | $ | 315        |  
|Receivables and prepaids                 |   | 48,014     |  
|Mineral properties                       |   | 15,308,538 |  
|Equipment                                |   | 3,248      |  
|Reclamation deposit                      |   | 113,325    |  
|Accounts payable and accrued liabilities |   | (199,765   | )
|Debenture liability                      |   | (307,562   | )
|Net
      identifiable assets acquired   | $ | 14,966,113 |  

7. ACQUISITION OF GOLDRUSH RESOURCES LTD.

On January 7, 2016, the Company completed the acquisition of
all the outstanding common shares of Goldrush Resources Ltd. (Goldrush) on the
basis of 0.0714 common shares in the capital of First Mining for each Goldrush
share by way of a plan of arrangement under the Business Corporations Act
(British Columbia) (the Goldrush Transaction). The Goldrush Transaction
was conducted by way of a court-approved plan of arrangement, which resulted in
Goldrush becoming a wholly-owned subsidiary of First Mining. No replacement
options or warrants were required as part of the Goldrush Transaction.

For accounting purposes, the acquisition of Goldrush has been
recorded as an asset acquisition as Goldrush is not considered to be a business
when applying the guidance within IFRS 3 Business Combinations (IFRS
3).

Consideration paid:

|                                                    |   |           | 
|--------------------------------------------------- | - | --------- | 
|Fair value of 11,950,223 common shares
      issued | $ | 4,780,089 | 
|Transaction costs
      incurred by the Company     |   | 101,515   | 
|Total consideration paid                            | $ | 4,881,604 | 

17

---

|FIRST MINING FINANCE CORP.                                  
|------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS              
|(Expressed in
      Canadian dollars unless otherwise noted)

7. ACQUISITION OF GOLDRUSH RESOURCES LTD. (continued)

The fair value of identifiable assets acquired and liabilities
assumed from Goldrush were as follows:

|                                         |   |           |  
|---------------------------------------- | - | --------- | -
|Cash                                     | $ | 3,446,574 |  
|Accounts and other receivables           |   | 1,077,817 |  
|Prepaid expenditures                     |   | 22,745    |  
|Mineral properties                       |   | 361,894   |  
|Accounts payable and accrued liabilities |   | (27,426   | )
|Net
      identifiable assets acquired   | $ | 4,881,604 |  

8. ACQUISITION OF CLIFTON STAR RESOURCES INC.

On April 8, 2016, the Company completed the acquisition of all
the outstanding common shares of Clifton Star Resources Inc. and its
subsidiaries (collectively, Clifton) on the basis of 1 common share in the
capital of First Mining for each Clifton share by way of a plan of arrangement
under the Business Corporations Act (British Columbia) (the Clifton
Transaction). The Clifton Transaction was conducted by way of a court-approved
plan of arrangement, which resulted in Clifton becoming a wholly-owned
subsidiary of First Mining.

For accounting purposes, the acquisition of Clifton has been
recorded as an asset acquisition as Clifton is not considered to be a business
when applying the guidance within IFRS 3.

Consideration paid:

|                                                    |   |            | 
|--------------------------------------------------- | - | ---------- | 
|Fair value of 48,209,962 common shares
      issued | $ | 19,766,084 | 
|Fair value of options issued by the Company         |   | 528,208    | 
|Transaction costs incurred by the Company           |   | 221,975    | 
|Total
      consideration paid                      | $ | 20,516,267 | 

The fair value of identifiable assets acquired from Clifton
were as follows:

|                                   |   |            | 
|---------------------------------- | - | ---------- | 
|Cash                               | $ | 10,756,645 | 
|Accounts and other receivables     |   | 284,806    | 
|Prepaid expenditures               |   | 17,259     | 
|Equipment                          |   | 60,153     | 
|Mineral properties                 |   | 4,980,624  | 
|Mineral property
      investments |   | 4,416,780  | 
|Identifiable assets acquired       | $ | 20,516,267 | 

Clifton has a 100% interest in three properties, the Duquesne,
the Joutel, and the Morris gold projects. In addition, Clifton has a 10% equity
interest in the shares of Beattie Gold Mines Ltd., 2699681 Canada Ltd., and
2588111 Manitoba Ltd. which directly or indirectly own various mining
concessions and surface rights, collectively known as the Duparquet gold
project. All properties are located within the Abitibi Greenstone Belt in
Quebec. Due to the early stage of the Joutel and Morris properties, no amounts
have been capitalized to mineral properties as at December 31, 2016.

18

---

|FIRST MINING FINANCE CORP.                                  
|------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS              
|(Expressed in
      Canadian dollars unless otherwise noted)

9. ACQUISITION OF THE PITT GOLD PROPERTY

On April 28, 2016, the Company completed the acquisition of the
Pitt Gold Property from Brionor Resources Inc. (Brionor). The aggregate
purchase price was $2,047,786, satisfied through the issuance of 2,535,293 First
Mining common shares to Brionor as well as $250,000 in cash.

For accounting purposes, the acquisition of the Pitt Gold
Property has been recorded as an asset acquisition as the Pitt Gold Property is
not considered to be a business when applying the guidance within IFRS 3.

Consideration paid:

|                                                   |   |           | 
|-------------------------------------------------- | - | --------- | 
|Fair value of 2,535,293 common shares
      issued | $ | 1,749,352 | 
|Cash paid                                          |   | 250,000   | 
|Transaction costs incurred by the Company          |   | 48,434    | 
|Total
      consideration paid                     | $ | 2,047,786 | 

The fair value of identifiable assets acquired from Brionor
were as follows:

|Mineral properties                 | $ | 2,047,786 | 
|---------------------------------- | - | --------- | 
|Identifiable
      assets acquired | $ | 2,047,786 | 

10. ACQUISITION OF THE CAMERON GOLD PROJECT

On June 9, 2016, the Company completed the acquisition of
Cameron Gold Operations Ltd. (Cameron Gold), a wholly-owned subsidiary of
Chalice Gold Mines Limited (Chalice), which owns the Cameron Gold project
located in Ontario, in exchange for 32,260,836 common shares of First Mining
(the Cameron Transaction). The Cameron Transaction resulted in Cameron Gold
Operations Ltd. becoming a wholly-owned subsidiary of First Mining.

For accounting purposes, the acquisition of Cameron Gold has
been recorded as an asset acquisition as Cameron Gold is not considered to be a
business when applying the guidance within IFRS 3.

Consideration paid:

|                                                    |   |            | 
|--------------------------------------------------- | - | ---------- | 
|Fair value of 32,260,836 common shares
      issued | $ | 25,808,669 | 
|Transaction costs
      incurred by the Company     |   | 151,386    | 
|Total consideration paid                            | $ | 25,960,055 | 

The fair value of identifiable assets acquired and liabilities
assumed from Cameron Gold were as follows:

|                                   |   |            | 
|---------------------------------- | - | ---------- | 
|Accounts and other receivables     | $ | 2,632      | 
|Equipment                          |   | 158,231    | 
|Mineral properties                 |   | 25,799,192 | 
|Identifiable
      assets acquired | $ | 25,960,055 | 

19

---

|FIRST MINING FINANCE CORP.                                  
|------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS              
|(Expressed in
      Canadian dollars unless otherwise noted)

11. AMALGAMATION WITH TAMAKA GOLD CORPORATION

On June 16, 2016, the Company, through a wholly-owned
subsidiary, completed its amalgamation with Tamaka Gold Corp. (Tamaka) and
received all the outstanding common shares of this privately held mineral
exploration company, which owns the Goldlund project located in northwestern
Ontario, in exchange for 92,475,689 common shares of First Mining (the Tamaka
Transaction). The Tamaka Transaction was conducted by way of an amalgamation
arrangement, which ultimately resulted in Tamaka becoming a wholly-owned
subsidiary of First Mining.

For accounting purposes, the amalgamation with Tamaka has been
recorded as an asset acquisition as Tamaka is not considered to be a business
when applying the guidance within IFRS 3.

Consideration paid:

|                                                    |   |            | 
|--------------------------------------------------- | - | ---------- | 
|Fair value of 92,475,689 common shares
      issued | $ | 69,356,767 | 
|Fair value of options issued by the Company         |   | 2,928,241  | 
|Fair value of warrants issued by the
      Company  |   | 8,633,830  | 
|Transaction costs
      incurred by the Company     |   | 2,643,915  | 
|Total consideration paid                            | $ | 83,562,753 | 

The fair value of identifiable assets acquired and liabilities
assumed from Tamaka were as follows:

|Cash                                | $ | 40,304     |  
|----------------------------------- | - | ---------- | -
|Accounts and other receivables      |   | 991,453    |  
|Equipment                           |   | 77,022     |  
|Mineral properties                  |   | 84,859,301 |  
|Accounts payable                    |   | (298,956   | )
|Debenture
      liability (Note 19) |   | (2,106,371 | )
|Net identifiable assets acquired    | $ | 83,562,753 |  

12. DIVESTITURE OF SUBSIDIARIES

On September 26, 2016, the Company completed its divestiture
transaction (the Silver One Transaction) with Silver One Resources Inc., an
exploration company publicly listed on the TSXV, by selling the Companys 100%
wholly owned subsidiary, KCP Minerals Inc., including its interest in the
Peñasco Quemado, the La Frazada and the Pluton mineral properties (collectively,
the Properties), in exchange for six million common shares of Silver One and a
2.5% net smelter return royalty (NSR) on the Properties.

The Silver One Transaction resulted in an accounting gain of
$806,714 based on the $6,360,000 fair value total proceeds received, less the
carrying value of the disposed net assets, including the Properties, of
$5,519,756 and other transfer fees of $33,530. The total proceeds represented
6,000,000 common shares at $1.06 per share, being the closing share price on the
day the Silver One Transaction completed. The Company did not assign any value
to the NSR as it concluded that the risk-adjusted present value of expected
proceeds from these cash streams was likely immaterial given the early stage and
operational uncertainty of the Properties. The value of the NSR will be
reassessed annually or earlier when circumstances dictate.

20

---

|FIRST MINING FINANCE CORP.                                  
|------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS              
|(Expressed in
      Canadian dollars unless otherwise noted)

12. DIVESTITURE OF SUBSIDIARIES (continued)

The divestiture of subsidiaries resulted in a reclassification
of approximately $1.0 million in accumulated other comprehensive income,
currency translation adjustment, into foreign exchange gain (loss) in the
statements of net loss.

13. ACCOUNTS AND OTHER RECEIVABLES

|Category                                     |   | December 31, |  |   | December 31, | 
|-------------------------------------------- | - | ------------ |  | - | ------------ | 
|                                             |   | 2016         |  |   | 2015         | 
|Current                                      |   |              |  |   |              | 
|GST receivables                              | $ | 179,569      |  | $ | 368,502      | 
|Quebec mining tax receivables                |   | 61,002       |  |   | -            | 
|Other receivables(1)                         |   | 460,675      |  |   | -            | 
|Nord Prognoz
      receivable(2)             |   | 671,350      |  |   | -            | 
|Total current accounts and other receivables | $ | 1,372,596    |  | $ | 368,502      | 
|Non-current                                  |   |              |  |   |              | 
|Mexican VAT receivable                       |   | 67,976       |  |   | 138,166      | 
|                                             |   |              |  |   |              | 
|Total accounts and other receivables         | $ | 1,440,572    |  | $ | 506,668      | 

|(1) | Current other receivables includes a balance of
      USD$250,000, which represents the consideration for title transfer of the
      Goldrush West Africa SARL Rima permit, and is expected to complete prior
      to June 30, 2017.                                                                                                                                                                                                                                                                                                  
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|(2) | The Nord Prognoz receivable relates to USD$500,000 owing
      from Nord Prognoz Ltd (Nord Prognoz), as the residual consideration
      payable to Goldrush for the sale of its then wholly-owned subsidiary
      Goldrush Burkina SARL in 2014. The amount is held in escrow and subject to
      any deductions for certain liabilities that occurred prior to closing the
      Goldrush Burkina SARL transaction. Terms of the contract specify that the
      amount owing will be released from escrow on December 31,
  2017.

14. MARKETABLE SECURITIES

All marketable securities owned by the Company are designated
as fair value through profit and loss (FVTPL), with changes in fair value
recorded through profit or loss.

|Security                                               |   | December 31, |  |   | December 31, | 
|------------------------------------------------------ | - | ------------ |  | - | ------------ | 
|                                                       |   | 2016         |  |   | 2015         | 
|Silver One Resources Inc. (TSX.V: SVE)
      (Note 12) | $ | 5,280,000    |  | $ | -            | 
|Other Marketable
      Securities                      |   | 566,627      |  |   | 8,830        | 
|Total                                                  | $ | 5,846,627    |  | $ | 8,830        | 

During the year ended December 31, 2016, the Company recognized
an unrealized loss of $1,071,944 (2015  $nil) related to the fair value
adjustments of its marketable securities.

21

---

|FIRST MINING FINANCE CORP.                                  
|------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS              
|(Expressed in
      Canadian dollars unless otherwise noted)

15. MINERAL PROPERTIES

As at December 31, 2016 and December 31, 2015, the Company has
capitalized the following acquisition, exploration and evaluation costs on its
mineral properties:

|                |   | Balance December 31,
      2015 |  |   | Acquisition |   |   | Concessions, taxes, and
      royalties |  |   | Wages and salaries       |  |   | Drilling, exploration, and
      technical consulting |  |   | Assaying, field supplies, and
      environmental |  |   | Travel and other expenditures |  |   | Total expenditures       |  |   | Option payments and
      expenditures recovered |   |   | Currency translation
      adjustments |   |   | Disposal or write-down of
      mineral properties |   |   | Balance Dec 31,
      2016 | 
|--------------- | - | ------------------------------- |  | - | ----------- | - | - | --------------------------------------- |  | - | ------------------------ |  | - | ----------------------------------------------------- |  | - | ------------------------------------------------- |  | - | ----------------------------- |  | - | ------------------------ |  | - | ------------------------------------------------ | - | - | -------------------------------------- | - | - | -------------------------------------------------- | - | - | -------------------------- | 
|Hope Brook      | $ | 17,543,366                      |  | $ | (45,000     | ) | $ | 38,900                                  |  | $ | 7,492                    |  | $ | 25,718                                                |  | $ | 19,081                                            |  | $ | 5,740                         |  | $ | 96,931                   |  | $ | -                                                |   | $ | -                                      |   | $ | -                                                  |   | $ | 17,595,297                 | 
|Springpole      |   | 66,249,495                      |  |   | -           |   |   | 256,992                                 |  |   | 332,890                  |  |   | 663,348                                               |  |   | 466,532                                           |  |   | 151,957                       |  |   | 1,871,719                |  |   | -                                                |   |   | -                                      |   |   | -                                                  |   |   | 68,121,214                 | 
|Pickle Crow     |   | 15,176,626                      |  |   | 153,120     |   |   | 122,984                                 |  |   | 17,215                   |  |   | 315,892                                               |  |   | 32,128                                            |  |   | 3,457                         |  |   | 491,676                  |  |   | -                                                |   |   | -                                      |   |   | -                                                  |   |   | 15,821,422                 | 
|Duquesne        |   | -                               |  |   | 4,980,624   |   |   | 1,280                                   |  |   | -                        |  |   | 28,785                                                |  |   | 6,428                                             |  |   | 5,902                         |  |   | 42,395                   |  |   | -                                                |   |   | -                                      |   |   | -                                                  |   |   | 5,023,019                  | 
|Pitt Gold       |   | -                               |  |   | 2,047,786   |   |   | 732                                     |  |   | -                        |  |   | 25,182                                                |  |   | -                                                 |  |   | 141                           |  |   | 26,055                   |  |   | -                                                |   |   | -                                      |   |   | -                                                  |   |   | 2,073,841                  | 
|Cameron Gold    |   | -                               |  |   | 25,799,192  |   |   | 3,267                                   |  |   | 65,414                   |  |   | 108,888                                               |  |   | 20,395                                            |  |   | 19,547                        |  |   | 217,511                  |  |   | -                                                |   |   | -                                      |   |   | -                                                  |   |   | 26,016,703                 | 
|Goldlund Gold   |   | -                               |  |   | 84,859,301  |   |   | 3,151                                   |  |   | 71,374                   |  |   | 92,629                                                |  |   | 64,009                                            |  |   | 12,826                        |  |   | 243,989                  |  |   | -                                                |   |   | -                                      |   |   | -                                                  |   |   | 85,103,290                 | 
|Canada Total    | $ | 98,969,487                      |  | $ | 117,795,023 |   | $ | 427,306                                 |  | $ | 494,385                  |  | $ | 1,260,442                                             |  | $ | 608,573                                           |  | $ | 199,570                       |  | $ | 2,990,276                |  | $ | -                                                |   | $ | -                                      |   | $ | -                                                  |   | $ | 219,754,786                | 
|Miranda         |   | 679,715                         |  |   | -           |   |   | 47,409                                  |  |   | 21,645                   |  |   | 16,468                                                |  |   | 6,512                                             |  |   | 9,238                         |  |   | 101,272                  |  |   | -                                                |   |   | (20,601                                | ) |   | -                                                  |   |   | 760,386                    | 
|Socorro         |   | 587,889                         |  |   | -           |   |   | 105,543                                 |  |   | 9,636                    |  |   | 7,341                                                 |  |   | 11,299                                            |  |   | 7,416                         |  |   | 141,235                  |  |   | -                                                |   |   | (17,498                                | ) |   | -                                                  |   |   | 711,626                    | 
|San Ricardo     |   | 634,908                         |  |   | -           |   |   | 146,431                                 |  |   | 24,013                   |  |   | 18,742                                                |  |   | 17,797                                            |  |   | 6,525                         |  |   | 213,508                  |  |   | -                                                |   |   | (18,957                                | ) |   | -                                                  |   |   | 829,459                    | 
|Peñasco Quemado |   | 2,783,382                       |  |   | -           |   |   | 105,726                                 |  |   | 6,308                    |  |   | -                                                     |  |   | -                                                 |  |   | 242                           |  |   | 112,276                  |  |   | -                                                |   |   | (145,747                               | ) |   | (2,749,911                                         | ) |   | -                          | 
|La Frazada      |   | 1,891,699                       |  |   | -           |   |   | 1,845                                   |  |   | -                        |  |   | -                                                     |  |   | -                                                 |  |   | -                             |  |   | 1,845                    |  |   | -                                                |   |   | (97,947                                | ) |   | (1,795,597                                         | ) |   | -                          | 
|Pluton          |   | 904,292                         |  |   | -           |   |   | 65,882                                  |  |   | 906                      |  |   | 2,277                                                 |  |   | 885                                               |  |   | 512                           |  |   | 70,462                   |  |   | -                                                |   |   | (35,518                                | ) |   | (939,236                                           | ) |   | -                          | 
|Others(1)       |   | 460,099                         |  |   | -           |   |   | 287,236                                 |  |   | 12,121                   |  |   | 3,985                                                 |  |   | 1,217                                             |  |   | 5,501                         |  |   | 310,060                  |  |   | (53,018                                          | ) |   | (14,620                                | ) |   | -                                                  |   |   | 702,521                    | 
|Mexico Total    | $ | 7,941,984                       |  | $ | -           |   | $ | 760,072                                 |  | $ | 74,629                   |  | $ | 48,813                                                |  | $ | 37,710                                            |  | $ | 29,434                        |  | $ | 950,658                  |  | $ | (53,018                                          | ) | $ | (350,888                               | ) | $ | (5,484,744                                         | ) | $ | 3,003,992                  | 
|USA             |   | 680,860                         |  |   | -           |   |   | 40,977                                  |  |   | -                        |  |   | 460                                                   |  |   | -                                                 |  |   | 275                           |  |   | 41,712                   |  |   | -                                                |   |   | (19,127                                | ) |   | -                                                  |   |   | 703,445                    | 
|Burkina Faso    |   | -                               |  |   | 361,894     |   |   | -                                       |  |   | 85,385                   |  |   | 5,864                                                 |  |   | 22,290                                            |  |   | 9,681                         |  |   | 123,220                  |  |   | -                                                |   |   | -                                      |   |   | (485,114                                           | ) |   | -                          | 
|Total           | $ | 107,592,331                     |  | $ | 118,156,917 |   | $ | 1,228,355                               |  | $ | 654,399                  |  | $ | 1,315,579                                             |  | $ | 668,573                                           |  | $ | 238,960                       |  | $ | 4,105,866                |  | $ | (53,018                                          | ) | $ | (370,015                               | ) | $ | (5,969,858                                         | ) | $ | 223,462,223                | 
|                |   |                                 |  |   |             |   |   |                                         |  |   |                          |  |   |                                                       |  |   |                                                   |  |   |                               |  |   |                          |  |   |                                                  |   |   |                                        |   |   |                                                    |   |   |                            | 
|                |   | Balance December 31, 2014       |  |   | Acquisition |   |   | Concessions, taxes, and royalties       |  |   | Wages
      and salaries |  |   | Drilling, exploration, and technical consulting       |  |   | Assaying, field supplies, and environmental       |  |   | Travel and other expenditures |  |   | Total
      expenditures |  |   | Option payments and expenditures recovered       |   |   | Currency translation adjustments       |   |   | Disposal or write-down of mineral properties       |   |   | Balance December 31, 2015  | 
|Hope Brook      | $ | -                               |  | $ | 17,466,287  |   | $ | 11,844                                  |  | $ | -                        |  | $ | 20,323                                                |  | $ | 32,621                                            |  | $ | 12,291                        |  | $ | 77,079                   |  | $ | -                                                |   | $ | -                                      |   | $ | -                                                  |   | $ | 17,543,366                 | 
|Springpole      |   | -                               |  |   | 66,170,491  |   |   | -                                       |  |   | 34,350                   |  |   | 7,611                                                 |  |   | 16,858                                            |  |   | 20,185                        |  |   | 79,004                   |  |   | -                                                |   |   | -                                      |   |   | -                                                  |   |   | 66,249,495                 | 
|Pickle Crow     |   | -                               |  |   | 15,155,418  |   |   | -                                       |  |   | 1,263                    |  |   | 19,454                                                |  |   | 491                                               |  |   | -                             |  |   | 21,208                   |  |   | -                                                |   |   | -                                      |   |   | -                                                  |   |   | 15,176,626                 | 
|Canada Total    | $ | -                               |  | $ | 98,792,196  |   | $ | 11,844                                  |  | $ | 35,613                   |  | $ | 47,388                                                |  | $ | 49,970                                            |  | $ | 32,476                        |  | $ | 177,291                  |  | $ | -                                                |   | $ | -                                      |   | $ | -                                                  |   | $ | 98,969,487                 | 
|Miranda         |   | 400,339                         |  |   | -           |   |   | 45,863                                  |  |   | 20,443                   |  |   | 78,376                                                |  |   | 19,086                                            |  |   | 20,690                        |  |   | 184,458                  |  |   | -                                                |   |   | 94,918                                 |   |   | -                                                  |   |   | 679,715                    | 
|Socorro         |   | 308,078                         |  |   | -           |   |   | 103,614                                 |  |   | 9,787                    |  |   | 38,904                                                |  |   | 33,770                                            |  |   | 18,009                        |  |   | 204,084                  |  |   | -                                                |   |   | 75,727                                 |   |   | -                                                  |   |   | 587,889                    | 
|San Ricardo     |   | 337,470                         |  |   | -           |   |   | 113,640                                 |  |   | 12,273                   |  |   | 39,068                                                |  |   | 49,681                                            |  |   | 19,202                        |  |   | 233,864                  |  |   | (8,830                                           | ) |   | 72,404                                 |   |   | -                                                  |   |   | 634,908                    | 
|Peñasco Quemado |   | 2,052,879                       |  |   | -           |   |   | 305,359                                 |  |   | 1,340                    |  |   | -                                                     |  |   | -                                                 |  |   | 330                           |  |   | 307,029                  |  |   | -                                                |   |   | 423,474                                |   |   | -                                                  |   |   | 2,783,382                  | 
|La Frazada      |   | 1,580,969                       |  |   | -           |   |   | 1,979                                   |  |   | 2,203                    |  |   | -                                                     |  |   | 29                                                |  |   | 1,075                         |  |   | 5,286                    |  |   | -                                                |   |   | 305,444                                |   |   | -                                                  |   |   | 1,891,699                  | 
|Pluton          |   | 675,937                         |  |   | -           |   |   | 107,256                                 |  |   | 894                      |  |   | 53                                                    |  |   | 990                                               |  |   | 122                           |  |   | 109,315                  |  |   | -                                                |   |   | 119,040                                |   |   | -                                                  |   |   | 904,292                    | 
|Others(1)       |   | 673,912                         |  |   | -           |   |   | 303,796                                 |  |   | 21,899                   |  |   | 388                                                   |  |   | 1,859                                             |  |   | 2,665                         |  |   | 330,607                  |  |   | (131,817                                         | ) |   | 153,941                                |   |   | (566,544                                           | ) |   | 460,099                    | 
|Mexico Total    | $ | 6,029,584                       |  | $ | -           |   | $ | 981,507                                 |  | $ | 68,839                   |  | $ | 156,789                                               |  | $ | 105,415                                           |  | $ | 62,093                        |  | $ | 1,374,643                |  | $ | (140,647                                         | ) | $ | 1,244,948                              |   | $ | (566,544                                           | ) | $ | 7,941,984                  | 
|USA             |   | 533,877                         |  |   | -           |   |   | 40,730                                  |  |   | -                        |  |   | 982                                                   |  |   | -                                                 |  |   | 262                           |  |   | 41,974                   |  |   | -                                                |   |   | 105,009                                |   |   | -                                                  |   |   | 680,860                    | 
|Total           | $ | 6,563,461                       |  | $ | 98,792,196  |   | $ | 1,034,081                               |  | $ | 104,452                  |  | $ | 205,159                                               |  | $ | 155,385                                           |  | $ | 94,831                        |  | $ | 1,593,908                |  | $ | (140,647                                         | ) | $ | 1,349,957                              |   | $ | (566,544                                           | ) | $ | 107,592,331                | 

| | (1) | Other mineral properties as at December 31, 2016 and
      December 31, 2015 include the Puertecitos, Los Tamales, Margaritas,
      Geranio, El Apache, El Roble, Batacosa, Lachatao and Montana
  Negra.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

16. MINERAL PROPERTY INVESTMENTS

Mineral property investments are designated as FVTPL, with
changes in fair value recorded through profit or loss.

|Category               |   | December 31, |  |   | December 31, | 
|---------------------- | - | ------------ |  | - | ------------ | 
|                       |   | 2016         |  |   | 2015         | 
|Duparquet gold project | $ | 4,416,780    |  | $ | -            | 
|Total                  | $ | 4,416,780    |  | $ | -            | 

The Company, through its subsidiary Clifton, has a 10% equity
interest in the shares of Beattie Gold Mines Ltd., 2699681 Canada Ltd., and
2588111 Manitoba Ltd which directly or indirectly own various mining concessions
and surface rights, collectively known as the Duparquet gold project.

22

---

|FIRST MINING FINANCE CORP.                                  
|------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS              
|(Expressed in
      Canadian dollars unless otherwise noted)

17. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

|Category                        |   | December 31, |  |   | December 31, | 
|------------------------------- | - | ------------ |  | - | ------------ | 
|                                |   | 2016         |  |   | 2015         | 
|Accounts payable                | $ | 560,675      |  | $ | 2,380,489    | 
|Other accrued
      liabilities |   | 209,000      |  |   | 460,003      | 
|Total                           | $ | 769,675      |  | $ | 2,840,492    | 

18. LOANS PAYABLE

During 2013 and 2014, the Company had received cash and issued
promissory notes for a total of $549,245 (USD$500,000) to First Majestic Silver
Corp. (First Majestic), a related party. In January 2015, the Company received
cash and issued an additional $635,550 (USD$500,000) promissory note to First
Majestic, under similar terms. The promissory notes carry an interest rate of 9%
per annum and are repayable 30 days following the date First Majestic demands
repayment.

On July 12, 2016, the Company entered into a debt settlement
agreement (the Agreement) with First Majestic pursuant to which the Company
has agreed to settle all of the outstanding promissory notes owed to First
Majestic. Under the terms of the Agreement, the Company issued 820,437 common
shares to First Majestic to settle $656,354 (US$500,000) of the principal, and
the remaining balance of approximately $925,000 (US$705,000), including expected
interest accrual up to the end of June 2017, is to be settled in twelve equal
monthly cash installments in accordance with the terms of the Agreement. The
first of these payments was made at the end of July 2016, and the final payment
will be made at the end of June 2017.

As at December 31, 2016, the total principal outstanding was
$335,675 (USD$250,000) and interest of $119,144 (USD$88,735) has been accrued
(December 31, 2015 - $1,384,000 (USD$1,000,000) and $176,073 (USD$127,220),
respectively).

19. DEBENTURE LIABILITY

As part of the amalgamation with Tamaka on June 16, 2016, the
Company assumed $2,139,900 in debenture liability previously held by Tamaka,
less $33,529 in transaction costs. The debentures were originally granted on
August 15, 2014, December 31, 2014, and December 31, 2015, and bear interest at
a rate of 10.0% per annum, payable annually (See Note 27). As at December 31,
2016, the Company has paid all interest up to December 31, 2016 pursuant to the
debenture agreement. The maturity dates for the debentures are as follows:

-      
 $2,000,000 due August 15, 2021
-        $38,000 due December 31, 2021
-        $101,900 due December 31, 2022

23

---

|FIRST MINING FINANCE CORP.                                  
|------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS              
|(Expressed in
      Canadian dollars unless otherwise noted)

20. SHARE CAPITAL

a)      Authorized

Unlimited number of common shares with no par value.
Unlimited number of preferred shares with no par value.

b)       Issued and
Fully Paid

Common shares: 539,439,736 (December 31, 2015  293,289,909).
Preferred shares: nil (December 31, 2015  nil).

On August 5, 2016, the Company completed a non-brokered private
placement financing of 33,750,000 units (Units) at a price of $0.80 per unit to
raise gross proceeds of $27,000,000. Net proceeds after transaction cost is
$26,842,807. Each Unit consists of one common share of the Company and one-half
of a common share purchase warrant, with each whole warrant entitling the holder
to purchase one additional common share of the Company at $1.10 for a period of
36 months.

Consideration received from the private placement financing is
allocated to the share capital and the warrant reserve accounts using the
relative fair value method. As prescribed by this method, the consideration is
allocated to the value of share capital and warrant reserve on a pro rata basis.
The share capital was valued at the closing share price of the Company on the
completion date of the private placement and the warrant reserve was valued
using the Black-Scholes option pricing model.

There were a total of 7,332,273 common shares of the Company
held in escrow under the Escrow Value Security Agreement dated March 30, 2015,
on the completion of the RTO. Under this agreement, 10% of the shares were
released immediately and 15% will be released every six months thereafter with
the final release being on March 30, 2018. As at December 31, 2016, there were
3,299,524 common shares of the Company in escrow (December 31, 2015 
5,499,206).

There were a total of 1,369,500 common shares of the Company
held in escrow under the CPC Escrow Agreement dated August 2, 2005. At
completion of the RTO, 10% of the common shares were released and 15% will be
released every six months thereafter with the final release being March 30,
2018. As at December 31, 2016 there were 583,275 common shares of the Company in
escrow (December 31, 2015  1,027,124).

With the acquisition of Tamaka on June 16, 2016, certain
shareholders have deposited the First Mining shares received into escrow. Twenty
percent of such escrowed shares will be released from escrow on June 17, 2017,
and an additional 20% will be released every six months thereafter, with the
final tranche released on June 17, 2019. As at December 31, 2016 there were a
total of 29,658,290 shares held in escrow as a result of the Tamaka transaction.

24

---

|FIRST MINING FINANCE CORP.                                  
|------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS              
|(Expressed in
      Canadian dollars unless otherwise noted)

20. SHARE CAPITAL (continued)

c) Warrants

The Companys warrants outstanding as at December 31, 2016 and
December 31, 2015 and the changes for the years then ended are as follows:

|                                                           |  | Number      |   |   | Weighted Average | 
|---------------------------------------------------------- |  | ----------- | - | - | ---------------- | 
|                                                           |  |             |   |   | Exercise Price   | 
|Balance as at December 31, 2015                            |  | 16,783,906  |   | $ | 0.19             | 
|Issued  November 16, 2015 (Replacement PC Gold warrants)  |  | 520,883     |   |   | 0.20             | 
|Issued  June 16, 2016 (Replacement Tamaka
      warrants) |  | 28,687,018  |   |   | 0.76             | 
|Issued  August 5, 2016 (private placement warrants)       |  | 16,875,000  |   |   | 1.10             | 
|Exercised                                                  |  | (11,926,634 | ) |   | 0.25             | 
|Expired                                                    |  | (1,500      | ) |   | 0.40             | 
|Balance as at December 31, 2016                            |  | 50,938,673  |   | $ | 0.80             | 

The following table summarizes information about the warrants
as at December 31, 2016:

Exercise Price
      per
    Number of
    Weighted Average
    Weighted AverageShare of Warrants
    Warrants
    Exercise Price
    Remaining LifeOutstanding
    ($ per Share)
    (Years)$ 0.00  0.50
    13,014,799
    $ 0.32
    1.99$ 0.51  1.00
    21,048,874
    0.85
    1.46$ 1.01  1.50
    16,875,000
    1.10
    2.5950,938,673
    $
      0.80
    1.97


The Black-Scholes Pricing Model was used to estimate the fair
value of the warrants using the following assumptions:

Issue Date
    Expected
    Risk
      Free
    Dividend
    Expected
    WeightedWarrant Life
    Interest Rate
    Yield
    Volatility
    Average FairNovember 13, 2015(1)
    2.26
    1.03%
    nil
    104.56%
    $0.27November 16, 2015(2)
    2.48
    1.03%
    nil
    104.37%
    $0.29November 16, 2015(2)
    3.38
    1.03%
    nil
    98.80%
    $0.30June 16, 2016(3)
    1.84
    1.00%
    nil
    70.70%
    $0.38June 16, 2016(3)
    2.00
    1.00%
    nil
    68.92%
    $0.26June 16, 2016(3)
    5.00
    1.38%
    nil
    71.39%
    $0.52August 5, 2016
    3.00
    1.15%
    nil
    71.39%
    $0.53


|(1) | Originally issued by Gold Canyon. Following the
      acquisition of Gold Canyon, the warrants were replaced with First Mining
      warrants using the transaction share exchange ratio. These warrants have
      an expiry date of February 15, 2018 in accordance with the Arrangement
      Agreement.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Originally issued by PC Gold. Following the acquisition
      of PC Gold, the warrants were replaced with First Mining warrants using
      the transaction share exchange ratio. These warrants have various expiry
      dates in accordance with the Arrangement Agreement.                             
|(3) | Originally issued by Tamaka. Following the acquisition of
      Tamaka, the warrants were replaced with First Mining warrants using the
      transaction share exchange ratio. These warrants have various expiry dates
      in accordance with the Amalgamation Agreement.                              

25

---

|FIRST MINING FINANCE CORP.                                  
|------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS              
|(Expressed in
      Canadian dollars unless otherwise noted)

20. SHARE CAPITAL (continued)

d) Share Options

The Company has adopted a share option plan that allows for the
issuance of up to 10% of the issued and outstanding shares as incentive share
options to Directors, Officers, employees and certain consultants of the
Company. Share options granted under the plan may be subject to vesting
provisions as determined by the Board of Directors. All options granted and
outstanding are fully vested and exercisable, with the exception of the grants
for certain employees in accordance with TSXV regulations. The Companys share
options outstanding as at December 31, 2016 and December 31, 2015 and the
changes between are as follows:

|                                                     |  | Number      |   |   | Weighted Average | 
|---------------------------------------------------- |  | ----------- | - | - | ---------------- | 
|                                                     |  |             |   |   | Exercise Price   | 
|Balance as at December 31, 2015                      |  | 13,616,504  |   | $ | 0.39             | 
|Issued  April 8, 2016 (Replacement Clifton options) |  | 4,150,000   |   |   | 0.95             | 
|Issued  June 16, 2016                               |  | 10,770,000  |   |   | 0.75             | 
|Issued  June 16, 2016 (Replacement Tamaka options)  |  | 7,517,779   |   |   | 0.44             | 
|Issued  September 6, 2016                           |  | 250,000     |   |   | 0.91             | 
|Issued  November 17, 2016                           |  | 450,000     |   |   | 0.73             | 
|Issued  December 5, 2016                            |  | 50,000      |   |   | 0.91             | 
|Options exercised                                    |  | (10,923,681 | ) |   | 0.32             | 
|Options expired                                      |  | (1,439,985  | ) |   | 0.89             | 
|Balance as at
      December 31, 2016                |  | 24,440,617  |   | $ | 0.67             | 

The total share-based payment expense recorded during the year
ended December 31, 2016 was $5,154,642 (2015  $1,267,851).

The following table summarizes information about the share
options outstanding as at December 31, 2016:

Exercise Price
      per
    Number of
    Weighted Average
    Weighted AverageShare of Options
    Options
    Exercise Price
    Remaining LifeOutstanding
    ($ per Share)
    (Years)$ 0.00  0.50
    10,299,383
    $ 0.39
    2.26$ 0.51  1.00
    12,116,234
    0.76
    4.32$ 1.01  1.50
    1,390,000
    1.34
    1.27$ 1.51  2.00
    -
    -
    -$ 2.01  2.50
    635,000
    2.18
    1.2724,440,617
    $
      0.67
    3.20


26

---

|FIRST MINING FINANCE CORP.                                  
|------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS              
|(Expressed in
      Canadian dollars unless otherwise noted)

20. SHARE CAPITAL (continued)

d) Share options (continued)

The Black-Scholes Pricing Model was used to estimate the fair
value of the share options using the following assumptions:

Issue Date
    Expected
    Risk
      Free
    Dividend
    Expected
    WeightedOption Life
    Interest
    Yield
    Volatility
    Average FairMarch 30, 2015
    5.00
    1.38%
    nil
    87.67%
    $0.27July 27, 2015
    5.00
    1.50%
    nil
    89.69%
    $0.28September 9, 2015
    5.00
    1.50%
    nil
    91.96%
    $0.28October 27, 2015
    5.00
    1.50%
    nil
    91.28%
    $0.33December 30, 2015
    5.00
    1.50%
    nil
    90.79%
    $0.12April 8, 2016(1)
    2.00
    1.00%
    nil
    66.68%
    $0.13June 16, 2016
    5.00
    1.38%
    nil
    71.40%
    $0.44June 16, 2016(2)
    1.00
    0.85%
    nil
    87.24%
    $0.39September 6, 2016
    5.00
    1.38%
    nil
    70.63%
    $0.53November 17, 2016
    5.00
    1.45%
    nil
    69.58%
    $0.42December 5, 2016
    5.00
    1.45%
    Nil
    69.90%
    $0.53


|(1) | Originally issued by Clifton with various exercise prices
      and expiry dates. Following the acquisition of Clifton the share options
      were replaced with First Mining share options using the transaction share
      exchange ratio. These options have an expiry date of April 8, 2018, being
      two years after the transaction, in accordance with First Minings share
      option plan.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Originally issued by Tamaka with various exercise prices
      and expiry dates. Following the acquisition of Tamaka the share options
      were replaced with First Mining share options using the transaction share
      exchange ratio. These options have an expiry date of June 16, 2017, being
      one year after the transaction, in accordance with First Minings share
      option plan.   

21. SEGMENT INFORMATION

The Company operates in a single reportable operating segment,
being the acquisition, exploration and retention of mineral property assets.
Geographic segment information of the Companys non-current assets as at
December 31, 2016 and December 31, 2015 are as follows:

|Non-current assets |   | December 31, |  |   | December 31, 2015 | 
|------------------ | - | ------------ |  | - | ----------------- | 
|                   |   | 2016         |  |   |                   | 
|Canada             | $ | 224,956,454  |  | $ | 99,242,994        | 
|Mexico             |   | 3,072,694    |  |   | 8,070,208         | 
|USA                |   | 703,445      |  |   | 680,860           | 
|Total              | $ | 228,732,593  |  | $ | 107,994,062       | 

27

---

|FIRST MINING FINANCE CORP.                                  
|------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS              
|(Expressed in
      Canadian dollars unless otherwise noted)

22. INCOME TAXES

Taxation in the Company and its subsidiaries operational
jurisdictions is calculated at the rate prevailing in the respective
jurisdictions. There is no tax charge arising for the year in Canada, Mexico, or
the United States.

The difference between tax expense for the year and the
expected income taxes based on the statutory tax rate arises as follows:

|                                                           |   | Year
      ended  |   |   | Year
      ended      |  
|---------------------------------------------------------- | - | ----------------- | - | - | --------------------- | -
|                                                           |   | December 31, 2016 |   |   | December 31, **2015** |  
|Net loss before income tax                                 | $ | 11,154,923        |   | $ | 5,082,057             |  
|Combined statutory
      income tax rate                   |   | 26.00%            |   |   | 26.00%                |  
|Income tax recovery computed at statutory
      income tax |   | 2,900,000         |   |   | 1,321,000             |  
|Tax effect of:                                             |   |                   |   |   |                       |  
|Permanent differences                                      |   | (748,000          | ) |   | (531,000              | )
|Impact from acquisitions                                   |   | 10,867,000        |   |   | 8,892,000             |  
|Impact from disposition of
      subsidiaries              |   | (2,157,000        | ) |   | -                     |  
|Difference in tax rates in foreign
      jurisdictions     |   | 64,000            |   |   | 33,000                |  
|Changes in estimate and others                             |   | 288,000           |   |   | (450,000              | )
|Changes in
      unrecognized deferred tax assets          |   | (11,214,000       | ) |   | (9,265,000            | )
|                                                           | $ | -                 |   | $ | -                     |  

For the 2016 taxation year, the Canadian Federal and British
Columbia provincial corporate tax rate remained at 15.00% and 11.00%,
respectively. The federal statutory rate applicable for the 2016 taxation year
remained at 30.00% for Mexico and 34.00% for the United States.

Deferred tax assets and liabilities are offset if they relate
to the same taxable entity and same taxation authority. Future potential tax
deductions that do not offset deferred tax liabilities are considered to be
deferred tax assets. No deferred tax asset has been recognized in respect to the
deferred tax asset losses and temporary differences below, as it is not
considered probable that sufficient future taxable profit will allow the
deferred tax asset to be recovered.

|                                       |   | Year
      ended |   |   | Year
      ended |  
|-------------------------------------- | - | ---------------- | - | - | ---------------- | -
|                                       |   | December 31,     |   |   | December 31,     |  
|Deferred income
      tax assets       |   | 2016             |   |   | 2015             |  
|Losses carried forward                 | $ | 22,585,000       |   | $ | 11,501,000       |  
|Investment tax credits                 |   | 674,000          |   |   | -                |  
|Undeducted financing costs and others  |   | 148,000          |   |   | 138,000          |  
|Others                                 |   | (58,000          | ) |   | 18,000           |  
|Mineral properties                     |   | (239,000         | ) |   | 239,000          |  
|Unrecognized
      deferred tax assets |   | (23,110,000      | ) |   | (11,896,000      | )
|Total unrecognized deferred tax assets | $ | -                |   | $ | -                |  

28

---

|FIRST MINING FINANCE CORP.                                  
|------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS              
|(Expressed in
      Canadian dollars unless otherwise noted)

22. INCOME TAXES (continued)

At December 31, 2016, the Company has non-capital losses
(NCLs) of $80,845,000 (2015 - $40,253,000), which may be applied against
future years taxable income in Canada. The NCLs expire as follows:

|Year of Expiry |   | Available Loss | 
|-------------- | - | -------------- | 
|               |   | Carryforward   | 
|2025           | $ | 1,108,000      | 
|2026           |   | 3,371,000      | 
|2027           |   | 5,055,000      | 
|2028           |   | 3,782,000      | 
|2029           |   | 6,377,000      | 
|2030           |   | 10,389,000     | 
|2031           |   | 13,253,000     | 
|2032           |   | 13,849,000     | 
|2033           |   | 9,191,000      | 
|2034           |   | 3,801,000      | 
|2035           |   | 4,551,000      | 
|2036           |   | 6,118,000      | 
|Total          | $ | 80,845,000     | 

23. RELATED PARTY TRANSACTIONS

The Companys related parties consist of the Companys
Directors and Officers, and any companies associated with them. The Company
incurred the following expenditures during the years ended December 31, 2016 and
2015:

|Service or Item           |   | Year ended December 31, | 
|------------------------- | - | ----------------------- | 
|                          |   | 2016                    | 
|Administration and office | $ | 192,813                 | 
|Total                     | $ | 192,813                 | 

Administration and office expenses include amounts paid to
First Majestic Silver Corp. (First Majestic), a company with two Directors in
common, which provides office space and some administrative services to the
Company.

As at December 31, 2016, included in accounts payable is an
amount of $20,141 (December 31, 2015 - $40,492) due to the Chief Executive
Officer. Included in current liabilities is an amount of $454,819 (December 31,
2015 - $1,560,073) due to First Majestic relating to the outstanding loans
payable (Note 18), as well as $1,487 (December 31, 2015 - $15,000) due to First
Majestic for administration and office expenses.

29

---

|FIRST MINING FINANCE CORP.                                  
|------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS              
|(Expressed in
      Canadian dollars unless otherwise noted)

23. RELATED PARTY TRANSACTIONS (continued)

Key Management Compensation

Key management includes the Officers and Directors of the
Company. The compensation paid or payable to key management for services during
the years ended December 31, 2016 and 2015 are as follows:

|Service or Item                 |   | Year ended December 31, | 
|------------------------------- | - | ----------------------- | 
|                                |   | 2016                    | 
|Directors fees                 | $ | 121,000                 | 
|Salaries and consultants fees  |   | 714,606                 | 
|Share-based payments (non-cash) |   | 4,309,634               | 
|Total                           | $ | 5,145,240               | 

24. SUPPLEMENTAL CASH FLOW INFORMATION

During the year ended December 31, 2016, significant non-cash
investing and financing transactions were as follows:

| | 11,950,223 shares issued as part
      of the acquisition of Goldrush (Note 7);                        
|- | -------------------------------------------------------------------------------------------------------
| | 48,209,962 shares issued as part
      of the acquisition of Clifton (Note 8);                         
| | 2,535,293 shares issued as part
      of the acquisition of the Pitt Gold Property (Note 9);           
| | 32,260,836 shares issued as part
      of the acquisition of Cameron Gold (Note 10);                   
| | 92,475,689 shares issued as part
      of the acquisition of Tamaka (Note 11);                         
| | Issued 323,076 shares for the
      settlement of $126,000 accounts payable previously held by PC Gold;
| | Issued 973,996 shares for the
      settlement of $1,139,573 Tamaka transaction costs;                 
| | Issued 820,437 shares for the
      settlement of $656,354 debt owed to First Majestic; and            
| | Paid or accrued $nil for income
      taxes.                                                           

During the year ended December 31, 2015, the significant
non-cash investing and financing transactions were as follows:

| | 10,895,000 subscription receipts
      were converted into common shares with a value of $2,723,750;
|- | ----------------------------------------------------------------------------------------------------
| | Issued 1,533,185 shares for
      settlement of $479,410 in debt;                                   
| | 2,692,124 shares issued as part
      of the RTO transaction with Albion and Sundance (see Note 4); 
| | 27,499,461 shares issued as part
      of the acquisition of Coastal (see Note 5);                  
| | 161,200,447 shares issued as part
      of the acquisition of Gold Canyon (see Note 6);             
| | 28,575,806 shares issued as part
      of the acquisition of PC Gold (see Note 6);                  
| | Issued 1,057,522 shares for the
      settlement of debt in the PC Gold acquisition;                
| | Issued 42,682 shares for the
      settlement of debt previously held by Coastal; and               
| | Paid or accrued $nil for income
      taxes.                                                        

30

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|FIRST MINING FINANCE CORP.                                  
|------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS              
|(Expressed in
      Canadian dollars unless otherwise noted)

25. FAIR VALUE

Fair values have been determined for measurement and/or
disclosure purposes based on the following methods.

The Company characterizes inputs used in determining fair value
using a hierarchy that prioritizes inputs depending on the degree to which they
are observable. The three levels of the fair value hierarchy are as follows:

| | Level 1: fair value measurements are those derived from
      quoted prices (unadjusted) in active markets for identical assets or
      liabilities;                                                                                                           
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Level 2: fair value measurements are those derived from
      inputs other than quoted prices included within level 1 that are
      observable for the asset or liability, either directly (i.e. as prices) or
      indirectly (i.e. derived from prices); and
| | Level 3: fair value measurements are those derived from
      valuation techniques that include inputs for the asset or liability that
      are not based on observable market data (unobservable inputs).                                                     

The carrying values of cash and cash equivalents, accounts
receivable, and accounts payable and accrued liabilities approximated their fair
values because of the short-term nature of these financial instruments.

The carrying values of reclamation deposit, other receivables,
loans payable, and debenture liability approximated their fair values because
the carrying values represented the amounts that the Company would receive or
pay if those financial instruments were to settle as of December 31, 2016.

The carrying value of marketable securities was based on the
quoted market prices of the shares as at December 31, 2016 and was therefore
considered to be Level 1.

The carrying value of the mineral property investments was not
based on observable market data and was therefore considered to be Level 3. The
valuation of the mineral property investments was determined based on
attributable pro-rata gold ounces for the Companys 10% indirect interest in the
Duparquet project, which formed part of the identifiable assets from the Clifton
Transaction. The dollar per gold ounce paid for the acquisition of the 10%
indirect interest in the Duparquet project was comparable to other gold
transactions around the time of the Clifton Transaction, and as at December 31,
2016, no change in fair value was identified. Therefore, the carrying values of
mineral property investments approximated their fair values.

The following table presents the Companys fair value hierarchy
for financial assets that are measured at fair value:

December 31, 2016
    
    
    December 31, 2015Fair value measurement
    
    
    
    
    
    Fair value measurementCarrying
    
    
    Level 1
    
    
    Level 3
    
    
    Carrying
    
    
    Level 1
    
    
    Level 3Financial assets:Marketable securities
    $
    5,846,627
    
    $
    5,846,627
    
    $
    -
    
    $
    8,830
    
    $
    -
    
    $
    8,830Mineral property investments
    
    4,416,780
    
    
    -
    
    
    4,416,780
    
    
    -
    
    
    -
    
    
    -Total
    $
    10,263,407
    
    $
    5,846,627
    
    $
    4,416,780
    
    $
    8,830
    
    $
    -
    
    $
    8,830


None of the Companys financial liabilities are measured at
fair value.

During the year ended December 31, 2016 there have been no
transfers of amounts between Level 1, Level 2, and Level 3 of the fair value
hierarchy.

31

---

|FIRST MINING FINANCE CORP.                                  
|------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS              
|(Expressed in
      Canadian dollars unless otherwise noted)

25. FAIR VALUE (continued)

The classification of the financial instruments as well as
their carrying values as at December 31, 2016 and 2015 is shown in the table
below:

|At December 31, 2016         |   |                 |  |   |            |  |   |             |  |   |            | 
|---------------------------- | - | --------------- |  | - | ---------- |  | - | ----------- |  | - | ---------- | 
|                             |   |                 |  |   | FVTPL      |  |   | Other       |  |   | Total      | 
|                             |   | **Loans and**   |  |   |            |  |   | Financial   |  |   |            | 
|                             |   | **Receivables** |  |   |            |  |   | Liabilities |  |   |            | 
|Financial assets:            |   |                 |  |   |            |  |   |             |  |   |            | 
|Cash and cash equivalents    | $ | 33,157,447      |  | $ | -          |  | $ | -           |  | $ | 33,157,447 | 
|Accounts receivable          |   | 701,246         |  |   | -          |  |   | -           |  |   | 701,246    | 
|Marketable securities        |   | -               |  |   | 5,846,627  |  |   | -           |  |   | 5,846,627  | 
|Mineral property investments |   | -               |  |   | 4,416,780  |  |   | -           |  |   | 4,416,780  | 
|Reclamation deposit          |   | 115,474         |  |   | -          |  |   | -           |  |   | 115,474    | 
|Other receivables            |   | 739,326         |  |   | -          |  |   | -           |  |   | 739,326    | 
|Total financial
      assets | $ | 34,713,493      |  | $ | 10,263,407 |  | $ | -           |  | $ | 44,976,900 | 
|Financial liabilities:       |   |                 |  |   |            |  |   |             |  |   |            | 
|Accounts payable and accrued | $ | -               |  | $ | -          |  | $ | 769,675     |  | $ | 769,675    | 
|Loans payable                |   | -               |  |   | -          |  |   | 454,819     |  |   | 454,819    | 
|Debenture
      liability    |   | -               |  |   | -          |  |   | 2,106,371   |  |   | 2,106,371  | 
|Total financial liabilities  | $ | -               |  | $ | -          |  | $ | 3,330,865   |  | $ | 3,330,865  | 

|At December 31, 2015         |   |                 |  |   |       |  |   |             |  |   |           | 
|---------------------------- | - | --------------- |  | - | ----- |  | - | ----------- |  | - | --------- | 
|                             |   |                 |  |   | FVTPL |  |   | Other       |  |   | Total     | 
|                             |   | **Loans and**   |  |   |       |  |   | Financial   |  |   |           | 
|                             |   | **Receivables** |  |   |       |  |   | Liabilities |  |   |           | 
|Financial assets:            |   |                 |  |   |       |  |   |             |  |   |           | 
|Cash and cash equivalents    | $ | 683,608         |  | $ | -     |  | $ | -           |  | $ | 683,608   | 
|Accounts receivable          |   | 368,502         |  |   | -     |  |   | -           |  |   | 368,502   | 
|Marketable securities        |   | -               |  |   | 8,830 |  |   | -           |  |   | 8,830     | 
|Reclamation deposit          |   | 115,215         |  |   | -     |  |   | -           |  |   | 115,215   | 
|Other receivables            |   | 138,166         |  |   | -     |  |   | -           |  |   | 138,166   | 
|Total financial
      assets | $ | 1,305,491       |  | $ | 8,830 |  | $ | -           |  | $ | 1,314,321 | 
|Financial liabilities:       |   |                 |  |   |       |  |   |             |  |   |           | 
|Accounts payable and accrued | $ | -               |  | $ | -     |  | $ | 2,840,492   |  | $ | 2,840,492 | 
|Loans payable                |   | -               |  |   | -     |  |   | 1,560,073   |  |   | 1,560,073 | 
|Debenture
      liability    |   | -               |  |   | -     |  |   | 307,562     |  |   | 307,562   | 
|Total financial liabilities  | $ | -               |  | $ | -     |  | $ | 4,708,127   |  | $ | 4,708,127 | 

32

---

|FIRST MINING FINANCE CORP.                                  
|------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS              
|(Expressed in
      Canadian dollars unless otherwise noted)

26. FINANCIAL AND CAPITAL RISK MANAGEMENT

The Company thoroughly examines the various financial
instruments and risks to which it is exposed and assesses the impact and
likelihood of those risks. These risks include foreign currency risk, interest
rate risk, credit risk, liquidity risk, and price risk. Where material, these
risks are reviewed and monitored by the Board of Directors.

The Board of Directors has overall responsibility for the
determination of the Companys risk management objectives and policies. The
overall objective of the Board is to set policies that seek to reduce risk as
far as possible without unduly affecting the Companys competitiveness and
flexibility.

a)Market Risk

Market risk is the risk that the fair value of future cash
flows of a financial instrument will fluctuate due to changes in market prices.
Market risk includes foreign currency risk and interest rate risk.

Foreign Currency Risk

The Company is exposed to the financial risk related to the
fluctuation of foreign exchange rates. The Company operates in Canada, the
United States, and Mexico and a portion of the Companys expenses are incurred
in Canadian dollars (CAD), US dollars (USD), and Mexican Pesos (MXN). A
significant change in the currency exchange rates between the Canadian, US and
Mexican currencies, could have an effect on the Companys results of operations,
financial position or cash flows. The Company has not hedged its exposure to
currency fluctuations.

As at December 31, 2016, the Company is exposed to currency
risk on the following assets and liabilities denominated in USD and MXN. The
sensitivity of the Companys net earnings due to changes in the exchange rate
between the USD and MXN against the Canadian dollar is included in the table
below in Canadian dollar equivalents:

|                                         |   | USD Amount |   |   | MXN Amount |   |   | Total     |  
|---------------------------------------- | - | ---------- | - | - | ---------- | - | - | --------- | -
|Cash and cash equivalents                | $ | 3,429,354  |   | $ | 16,944     |   | $ | 3,446,298 |  
|Receivables and prepaid expenditures     |   | 1,113,736  |   |   | 36,400     |   |   | 1,150,136 |  
|Value added tax receivable               |   | -          |   |   | 67,977     |   |   | 67,977    |  
|Accounts payable and accrued liabilities |   | (82,117    | ) |   | (15,869    | ) |   | (97,986   | )
|Loans payable                            |   | (454,819   | ) |   | -          |   |   | (454,819  | )
|Net
      exposure                       | $ | 4,006,154  |   | $ | 105,452    |   | $ | 4,111,606 |  
|Effect of +/- 10% change in currency     | $ | 400,615    |   | $ | 10,545     |   | $ | 411,160   |  

Interest Rate Risk

Interest rate risk is the risk that future cash flows will
fluctuate as a result of changes in market interest rates. The Company does not have any borrowings that are subject to
fluctuations in market interest rate. Interest rate risk is limited to potential
decreases on the interest rate offered on cash and cash equivalents held with
chartered Canadian financial institutions. The Company considers this risk to be
immaterial.

b)Credit Risk

Credit risk is the risk of financial loss to the Company if a
customer or counterparty to a financial instrument fails to meet its contractual
obligations. Financial instruments which are potentially subject to credit risk
for the Company consist primarily of cash and cash equivalents, receivables and
value added tax receivables, and the reclamation deposit. The Company considers
credit risk with respect to its cash and cash equivalents to be immaterial as
cash and cash equivalents are mainly held through large Canadian financial
institutions. The Company is exposed to credit risk related to receivables
collectible from third party and value added tax collectible from the government
of Mexico. All balances are expected to be recovered in full. The valued added
tax receivable is classified as non-current due to the tax rules, and the
complex and untimely collection process.

33

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|FIRST MINING FINANCE CORP.                                  
|------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS              
|(Expressed in
      Canadian dollars unless otherwise noted)

26. FINANCIAL AND CAPITAL RISK MANAGEMENT (continued)

c)Liquidity Risk

Liquidity risk is the risk that the Company will not be able to
meet its financial obligations as they become due. The Companys policy is to ensure that it will have sufficient
cash to allow it to meet its liabilities when they become due, under both normal
and stressed conditions, without incurring unacceptable losses or risking damage
to the Companys reputation.

The following table summarizes the maturities of the Companys
financial liabilities as at December 31, 2016 based on the undiscounted
contractual cash flows:

Carrying
    
    
    Contractual
    
    
    Less
      than 1
    
    
    1 
      3
    
    
    4 
      5
    
    
    After 5Amount
    
    
    Cash Flows
    
    
    year
    
    
    years
    
    
    years
    
    
    yearsAccounts payable and accrued
    $
    769,675
    
    $
    769,675
    
    $
    769,675
    
    $
    -
    
    $
    -
    
    $
    -Loans payable
    
    454,819
    
    
    473,554
    
    
    473,554
    
    
    -
    
    
    -
    
    
    -Debenture liability
    
    2,106,371
    
    
    3,220,040
    
    
    213,990
    
    
    427,980
    
    
    2,465,980
    
    
    112,090Total
    $
    3,330,865
    
    $
    4,463,269
    
    $
    1,457,219
    
    $
    475,066
    
    $
    2,465,980
    
    $
    112,090


As at December 31, 2016, the Company held cash and cash
equivalents of $33,157,447 (December 31, 2015 - $683,608). The Company believes
it has sufficient cash on hand to meet operating requirements as they arise for
at least the next 12 months.

d)Capital Risk Management

The Companys objectives when managing capital are to safeguard
the Companys ability to continue as a going concern in order to pursue the
exploration of and retention of its mineral properties. The Company has the
ability to raise new capital through equity issuances and/or through surplus
cash as part of its acquisitions. In the management of capital, the Company
includes the components of shareholders equity as well as cash. The Company
prepares annual estimates of exploration and administrative expenditures and
monitors actual expenditures compared to the estimates to ensure that there is
sufficient capital on hand to meet ongoing obligations. The Companys investment
  policy is to invest its cash in savings accounts or highly liquid short-term
  deposits with terms of one year or less and which can be liquidated after thirty
  days without interest penalty.

The Company is not exposed to any externally imposed capital
requirements, nor were there changes in the Companys approach to capital
management during the year.

34

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|FIRST MINING FINANCE CORP.                                  
|------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS              
|(Expressed in
      Canadian dollars unless otherwise noted)

27. COMMITMENTS AND CONTINGENCIES

COMMITMENTS

The Company has commitments in respect of an office lease, site
equipment leases, and liabilities assumed through its acquisitions as follows:

|                                            |   | Expected payments due by period as at December
      31, | 
|------------------------------------------- | - | -------------------------------------------------------- | 
|                                            |   | Less than                                                | 
|                                            |   | 1
      year                                             | 
|Office premises (PC Gold acquisition)       | $ | 70,630                                                   | 
|Equipment leases (Gold Canyon acquisition)  |   | 14,972                                                   | 
|Repayments:                                 |   |                                                          | 
|First Majestic Silver Corp.  loans payable |   | 473,554                                                  | 
|Kesselrun Resources Ltd.  debenture        |   | 213,990                                                  | 
|Total                                       | $ | 773,146                                                  | 

The Company has a sub-lease agreement for the use of office
premises in Toronto, Ontario, for $4,000 per month until October 30, 2018. The
total sub-lease payments committed is $48,000 for the first year from December
31, 2016, and $40,000 for the remainder of the agreement.

CONTINGENCY

On June 16, 2016, the Company assumed control of the business
and assets of Tamaka as a result of an amalgamation between Tamaka and a wholly
owned subsidiary of the Company. Tamaka was a party to three debentures with an
aggregate principal amount of approximately $2.1 million the "Debentures"),
payable to Kesselrun Resources Ltd. (Kesselrun) (TSXV: KES). Kesselrun has
commenced an action before the Ontario Superior Court alleging that the
debentures were required to be converted into common shares of the Company as a
result of the amalgamation transaction with Tamaka and is seeking an order for,
among other things, the issuance to Kesselrun of shares of First Mining or, in
the alternative, damages. The Company disagrees with this position and takes the
position that the Debentures have not been converted and remain outstanding.

The Company has engaged legal counsel and at this time cannot
definitively predict the outcome of this dispute. In the event that Kesselrun
prevails, the primary relief sought by Kesselrun would be to convert the full
amount of the Debentures principal, amounting to approximately $2.1 million,
into approximately 5.6 million of the Companys common shares, which had a fair
market value of approximately $4.8 million as at December 31, 2016.

28. SUBSEQUENT EVENTS

a) Acquisition of GoldON Property and Central Duparquet
Property

Subsequent to December 31, 2016, the Company entered into asset
purchase agreements to purchase certain mineral claims located in Ontario and
Quebec. The first agreement is with GoldON Resources Ltd., and the Company has
agreed to acquire five unpatented mining claims located near Pickle Lake,
Ontario in exchange for 200,000 common shares of the Company. The second
agreement is with a private individual, and the Company has agreed to acquire
eighteen mining claims located in the Township of Duparquet, Quebec in exchange
for $250,000 and 2,500,000 common shares of the Company.

The Company acquired these mineral claims for strategic reasons
as they are contiguous or close to other mineral properties currently owned by
the Company.

35

---

|FIRST MINING FINANCE CORP.                                  
|------------------------------------------------------------
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS              
|(Expressed in
      Canadian dollars unless otherwise noted)

28. SUBSEQUENT EVENTS (continued)

b) Exercise of Warrants and Share Options

Subsequent to December 31, 2016, a total of 845,263 warrants of
the Company were exercised for gross proceeds of $173,122, and a total of
483,234 share options of the Company were exercised for gross proceeds of
$179,002.

c) Share Option Grants

Subsequent to December 31, 2016, the Company has granted
10,630,000 share options to Directors, Officers, employees and consultants of
the Company under the terms of its stock option plan. The share options have an
exercise price of $0.85 per share and are exercisable for a period of five years
from the grant date.

36

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