---

EXHIBIT F-1













FIRST ENERGY METALS LIMITED



FINANCIAL STATEMENTS



FOR THE YEARS ENDED MARCH 31,
2022, 2021 AND 2020



(Expressed in Canadian dollars)































REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



To the Shareholders and the
Board of Directors of First Energy Metals Limited,



Opinion on the Financial
Statements

We have audited the accompanying
financial statements of First Energy Metals Limited (the “Company”), which comprise the statements of financial position as
at March 31, 2022 and 2021 and the statements of loss and comprehensive loss, changes in equity and cash flows for each of the years in
the three year period ended March 31, 2022, and a summary of significant accounting policies and other explanatory information (collectively
referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects,
the financial position of the Company as at March 31, 2022 and 2021 and its financial performance and its cash flows for each of the years
in the three year period ended March 31, 2022, in accordance with International Financial Reporting Standards as issued by the International
Accounting Standards Board.



Basis for Opinion

These financial statements are the
responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements
based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”)
and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules
and regulations of the Securities and Exchange Commission and the PCAOB.



We conducted our audits in accordance
with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance whether the
financial statements are free of material misstatement, whether due to fraud or error. The Company is not required to have, nor were we
engaged to perform, an audit of internal control over financial reporting. As part of our audits, we are required to obtain an understanding
of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s
internal control over financial reporting. Accordingly, we express no such opinion.



Our audits included performing procedures
to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that
respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial
statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as
evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.



Critical Audit Matter

The critical audit matter communicated
below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated
to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved
our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our
opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate
opinion on the critical audit matter or on the accounts or disclosures to which it relates.



Exploration and Evaluation Assets
– Assessment of Whether Indicators of Impairment Exist

As described in Note 5 to the financial
statements, the Company holds the rights to several exploration stage exploration and evaluation assets, which are the Company’s
primary non-current assets. Note 2(d) to the financial statements explains that the Company capitalizes acquisition costs incurred in
acquiring these exploration and evaluation assets. At the end of each reporting period, as discussed in Note 3(c), the carrying amounts
of the Company’s exploration and evaluation assets are reviewed under IFRS 6 – Exploration and Evaluation of Mineral Resources
to determine whether there is any indication that these assets are impaired.













Management considered
the following factors to determine whether or not an indicator of impairment exists: (i) whether the period for which the Company
has the right to explore its projects has expired or will expire in the near future; (ii) further exploration on its project(s) is
neither budgeted nor planned; (iii) whether exploration activities to date have led to the discovery of commercially viable
quantities of mineral resources; and (iv) whether there is sufficient data that indicates the carrying amount of the Company’s
exploration and evaluation assets are unlikely to be recovered in full from successful development and/or sale. Of the factors that
must be considered, the judgments associated with the Company’s ability and options to develop its projects and the impact of
the Company’s market capitalization relative to the carrying value of its net assets are the most subjective. Auditing these
judgments required a high degree of subjectivity in applying audit procedures and in evaluating the results of those procedures.
This resulted in an increased extent of audit effort.



The principal considerations for our
determination that the assessment of potential impairment is a critical audit matter are:

(i) materiality of the aggregate
amounts involved in respect to quantum; (ii) the degree of judgment required by management when assessing the recoverability of deferred
acquisition costs; and (iii) the required extent of auditor judgment, subjectivity, and effort in performing procedures to evaluate management’s
assessment.



Addressing the matter involved performing
procedures and evaluating audit evidence in connection with forming our overall opinion on the financial statements. These procedures
also included, among others, (i) obtaining and evaluating management’s assessment for determining whether an indicator of impairment
exists; (ii) testing the completeness and accuracy of underlying data used in management’s assessment and evaluating the reasonableness
of the significant estimates and assumptions used by management; and (iii) considering whether the financial statements fairly disclosed
the inherent uncertainties applicable to the recoverability of deferred exploration and evaluation asset costs.







CHARTERED PROFESSIONAL ACCOUNTANTS

Vancouver, Canada

July 27, 2022



We have served as the Company’s auditor since 2017.















|FIRST ENERGY METALS
    LIMITED
    Statements of Financial Position
    (Expressed in Canadian dollars) |      
|-------------------------------------------------------------------------------------------------------- | -----
|                                                                                                         |      
|                                                                                                         |      
|                                                                                                         | Note 
|ASSETS                                                                                                   |      
|Current Assets                                                                                           |      
|Cash                                                                                                     | 10   
|Amounts receivable and prepaid expenses                                                                  | 4    
|Total Current Assets                                                                                     |      
|Non-current Assets                                                                                       |      
|Reclamation deposits                                                                                     |      
|Exploration and evaluation assets                                                                        | 5    
|Total Non-current Assets                                                                                 |      
|Total Assets                                                                                             |      
|LIABILITIES                                                                                              |      
|Current Liabilities
    Accounts payable and accrued liabilities                                         | 6    
|Due to related parties                                                                                   | 7    
|Flow-through share premium liability                                                                     | 8, 12
|Total Liabilities                                                                                        |      
|SHAREHOLDERS’ EQUITY                                                                                     |      
|Share capital                                                                                            | 8    
|Warrants reserve                                                                                         |      
|Share subscriptions                                                                                      |      
|Share-based payments reserve                                                                             | 8    
|Deficit                                                                                                  |      
|Total Shareholders’ Equity                                                                               |      
|Total Liabilities and Shareholders’ Equity                                                               |      
|Nature of operations                                                                                     | 1    
|Subsequent events                                                                                        | 13   



Approved and authorized for issue on behalf of the board of
directors on July 27, 2022 by:



|/s/Gurminder Sangha | /s/Jurgen Wolf
|------------------- | --------------
|Director            | Director      



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



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|FIRST
                                            ENERGY METALS LIMITED

Statements of Loss and Comprehensive Loss
(Expressed in Canadian dollars) |      |   |                                   |   |             |   |           
|-------------------------------------------------------------------------------------------------------------------------------------------------- | ---- | - | --------------------------------- | - | ----------- | - | ----------
|                                                                                                                                                   |      |   |                                   |   |             |   |           
|                                                                                                                                                   |      |   | For the years
    ended March 31,
|                                                                                                                                                   |      |   |                                  
|                                                                                                                                                   | Note |   | 2022                              |   | 2021        |   | 2020      
|Expenses                                                                                                                                           |      |   |                                   |   |             |   |           
|Consultants and directors fees                                                                                                                     | 7    | $ | 127,833                           | $ | 353,751     | $ | 273,500   
|Exploration and evaluation costs                                                                                                                   | 5, 7 |   | 1,609,121                         |   | 246,101     |   | 3,028     
|General and administrative                                                                                                                         |      |   | 16,476                            |   | 12,245      |   | 12,205    
|Investor relations                                                                                                                                 |      |   | 988,025                           |   | 198,012     |   | -         
|Professional fees                                                                                                                                  |      |   | 87,168                            |   | 60,370      |   | 40,251    
|Salaries, fees and benefits                                                                                                                        | 7    |   | 188,021                           |   | 146,500     |   | 70,000    
|Shareholder communications                                                                                                                         |      |   | 763,095                           |   | 289,024     |   | 21,799    
|Share-based payments                                                                                                                               | 7    |   | 632,450                           |   | 990,321     |   | -         
|Loss Before Other Items                                                                                                                            |      |   | (4,412,189)                       |   | (2,296,324) |   | (420,783) 
|Other Items                                                                                                                                        |      |   |                                   |   |             |   |           
|Interest income                                                                                                                                    |      |   | 156                               |   | 38          |   | 154       
|Flow-through recovery                                                                                                                              | 12   |   | 200,961                           |   | -           |   | -         
|Write-down of exploration and evaluation assets                                                                                                    | 5    |   | (480,250)                         |   | (163,375)   |   | (27,000)  
|Total Other Income                                                                                                                                 |      |   | (279,133)                         |   | (163,337)   |   | (26,846)  
|Net Loss and Comprehensive Loss for the Year                                                                                                       |      | $ | (4,691,322)                       | $ | (2,459,661) | $ | (447,629) 
|Loss per Common Share, Basic and Diluted                                                                                                           |      | $ | (0.07)                            | $ | (0.07)      | $ | (0.03)    
|Weighted Average Number of Shares
    Outstanding – Basic and Diluted                                                                              |      |   | 63,040,671                        |   | 35,065,269  |   | 17,631,003



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





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FIRST
                                            ENERGY METALS LIMITED

Statements
of Changes in Equity

(Expressed in Canadian dollars)



|                                                       |      |  |                      |   |             |  |          |           |              |       |           |             |         |           |              |              |              |  |   |             | 
|------------------------------------------------------ | ---- |  | -------------------- | - | ----------- |  | -------- | --------- | ------------ | ----- | --------- | ----------- | ------- | --------- | ------------ | ------------ | ------------ |  | - | ----------- | 
|                                                       |      |  |                      |   |             |  |          |           |              |       |           |             |         |           |              |              |              | 
|                                                       |      |  | Common
   Shares     |   |             |  |          |           |              |       |           |             |         |           |              |              |              | 
|                                                       |      |  | Without
   Par Value |   |             |  |          |           |              |       |           |             |         |           |              |              |              | 
|                                                       |      |  |                      |   |             |  |          |           |              | Share |           | Share-based |         |           |              |              |              |  |  
|                                                       | Note |  |                      |   |             |  | Warrants |           | Subscription |       | Payments  |             |         |           |              | Total Equity |             
|                                                       |      |  | Shares               |   | Amount      |  | Reserve  |           | (Receivable) |       | Reserve   |             | Deficit |           | (Deficiency) |             
|Balance,
   March 31, 2019                             |      |  | 17,631,003           | $ | 35,713,325  |  | $        | 446,899   |              | $     | 24,950    |             | $       | 211,227   |              | $            | (36,195,068) |  | $ | 201,333     | 
|Warrants
   exercised                                  | 8    |  | 750,000              |   | 132,532     |  |          | (42,532)  |              |       | (90,000)  |             |         | -         |              |              | -            |  |   | -           | 
|Shares
   issued for exploration and evaluation assets | 8    |  | 1,250,000            |   | 75,000      |  |          | -         |              |       | -         |             |         | -         |              |              | -            |  |   | 75,000      | 
|Private
   placements                                  | 8    |  | 10,000,000           |   | 500,000     |  |          | -         |              |       | (175,000) |             |         | -         |              |              | -            |  |   | 325,000     | 
|Fair
   value of warrants from private placement       | 8    |  | -                    |   | (162,298)   |  |          | 162,298   |              |       | -         |             |         | -         |              |              | -            |  |   | -           | 
|Share
   issue costs                                   | 8    |  | -                    |   | (7,405)     |  |          | -         |              |       | -         |             |         | -         |              |              | -            |  |   | (7,405)     | 
|Net
   loss for the year                               |      |  | -                    |   | -           |  |          | -         |              |       | -         |             |         | -         |              |              | (447,629)    |  |   | (447,629)   | 
|Balance,
   March 31, 2020                             |      |  | 29,631,003           | $ | 36,251,154  |  | $        | 566,665   |              | $     | (240,050) |             | $       | 211,227   |              | $            | (36,642,697) |  | $ | 146,299     | 
|Warrants
   exercised                                  | 8    |  | 6,466,667            |   | 1,308,317   |  |          | (228,317  | )            |       | 35,200    |             |         | -         |              |              | -            |  |   | 1,115,200   | 
|Shares
   issued for exploration and evaluation assets | 8    |  | 3,825,000            |   | 679,500     |  |          | -         |              |       | -         |             |         | -         |              |              | -            |  |   | 679,500     | 
|Private
   placements                                  | 8    |  | 9,600,000            |   | 1,920,000   |  |          | -         |              |       | 240,050   |             |         | -         |              |              | -            |  |   | 2,160,050   | 
|Fair
   value of warrants from private placement       | 8    |  | -                    |   | (1,184,815) |  |          | 1,184,815 |              |       | -         |             |         | -         |              |              | -            |  |   | -           | 
|Share
   issue costs                                   | 8    |  | -                    |   | (261,220)   |  |          | 63,345    |              |       | 41,534    |             |         | -         |              |              | -            |  |   | (156,341)   | 
|Share-based
   payments                                | 8    |  | -                    |   | -           |  |          | -         |              |       | -         |             |         | 990,321   |              |              | -            |  |   | 990,321     | 
|Net
   loss for the year                               |      |  | -                    |   | -           |  |          | -         |              |       | -         |             |         | -         |              |              | (2,459,661)  |  |   | (2,459,661) | 
|Balance,
   March 31, 2021                             |      |  | 49,522,670           | $ | 38,712,936  |  | $        | 1,586,508 |              | $     | 76,734    |             | $       | 1,201,548 |              | $            | (39,102,358) |  | $ | 2,475,368   | 
|Warrants
   exercised                                  | 8    |  | 232,000              |   | 60,350      |  |          | (11,150   | )            |       | (35,200)  |             |         | -         |              |              | -            |  |   | 14,000      | 
|Shares
   issued for exploration and evaluation assets | 8    |  | 16,800,000           |   | 5,027,000   |  |          | -         |              |       | -         |             |         | -         |              |              | -            |  |   | 5,027,000   | 
|Private
   placements                                  | 8    |  | 11,486,063           |   | 3,099,831   |  |          | -         |              |       | -         |             |         | -         |              |              | -            |  |   | 3,099,831   | 
|Fair
   value of warrants from private placement       | 8    |  |                      |   | (880,124)   |  |          | 880,124   |              |       | -         |             |         | -         |              |              | -            |  |   | -           | 
|Share
   issue costs                                   | 8    |  | 198,161              |   | (76,139)    |  |          | 16,097    |              |       | (22,400)  |             |         | -         |              |              | -            |  |   | (82,442)    | 
|Share-based
   payments                                | 8    |  | -                    |   | -           |  |          | -         |              |       | -         |             |         | 632,450   |              |              | -            |  |   | 632,450     | 
|Net
   loss for the year                               |      |  | -                    |   | -           |  |          | -         |              |       | -         |             |         | -         |              |              | (4,691,322)  |  |   | (4,691,322) | 
|Balance,
   March 31, 2022                             |      |  | 78,238,894           | $ | 45,943,854  |  | $        | 2,471,579 |              | $     | 19,134    |             | $       | 1,833,998 |              | $            | (43,793,680) |  | $ | 6,474,885   | 



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





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FIRST ENERGY METALS LIMITED

Statements of Cash Flows

(Expressed in Canadian dollars)

|                                                           |                               |             |  
|---------------------------------------------------------- | ----------------------------- | ----------- | -
|                                                           | For the years ended March 31,
|                                                           |                               | 2022        |  
|Cash provided by (used in):                                |                               |             |  
|Operations                                                 |                               |             |  
|Net loss for the year                                      | $                             | (4,691,322) | $
|Items not involving cash:                                  |                               |             |  
|Share-based payments                                       |                               | 632,450     |  
|Write-down of exploration and evaluation assets            |                               | 480,250     |  
|Flow-through recovery                                      |                               | (200,961)   |  
|Changes in non-cash operating assets and liabilities:      |                               |             |  
|Amounts receivable and prepaid expenses                    |                               | (652,571)   |  
|Accounts payable and accrued liabilities                   |                               | (18,164)    |  
|Due to related parties                                     |                               | (53,442)    |  
|Cash used in operating activities                          |                               | (4,503,760) |  
|Investing activities                                       |                               |             |  
|Acquisition of exploration & evaluation assets             |                               | (675,000)   |  
|Cash used in investing activities                          |                               | (675,000)   |  
|Financing activities                                       |                               |             |  
|Proceeds from financing                                    |                               | 3,200,000   |  
|Share issue costs                                          |                               | (82,442)    |  
|Proceeds from exercise of warrants                         |                               | 14,000      |  
|Cash provided from financing activities                    |                               | 3,131,558   |  
|Increase (decrease) in cash during the year                |                               | (2,047,202) |  
|Cash, beginning of the year                                |                               | 2,158,688   |  
|Cash, end of the year                                      | $                             | 111,486     | $
|Supplemental information:                                  |                               |             |  
|Shares issued for exploration and evaluation assets        | $                             | 5,027,000   | $
|Fair value of warrants issued in connection with financing | $                             | 880,124     | $
|Fair value of shares issued to finders                     | $                             | 19,134      | $
|Fair value of warrants exercised                           | $                             | 11,150      | $
|Exploration and evaluation assets in accounts payable      | $                             | 18,000      | $
|Write-down of accrued exploration and evalution            |                               |             |  
|acquisition costs included in accounts payable             | $                             | 121,000     | $



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





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FIRST ENERGY METALS LIMITED

Notes to the Financial Statements

For the years ended March
31, 2022, 2021 and 2020

(Expressed in Canadian dollars)






| | 1. | Nature of Operations and Going Concern
| | -- | --------------------------------------



First Energy Metals Limited (“First
Energy” or the “Company”) was incorporated on October 12, 1966 in the Province of British Columbia under the Business
Corporations Act of British Columbia, and its principal business activity is the exploration of mineral properties in Canada.



The Company’s head office
and principal address is Suite 2421 – 1055 West Georgia Street, Vancouver, B.C., Canada, V6E 3P3. The Company’s registered
and records office is 25th Floor-700 West Georgia Street, Vancouver, B.C., Canada, V7Y 1B3.



In March 2020, the World Health
Organization declared coronavirus COVID-19, a global pandemic. This contagious disease outbreak, which has continued to spread, and any
related adverse public health developments, have adversely affected workforces, economies, and financial markets globally, potentially
leading to an economic downturn. To date, the Company has not experienced any significant impact to its business, results of operations,
financial position and cash flows as result of the pandemic. However, it is not possible for the Company to predict the duration or magnitude
of the adverse results of the pandemic and its impact on the Company’s future business or results of operations.



The Company will need to raise
sufficient funds as the Company’s current assets are not sufficient to finance its operations and administrative expenses. The Company
is evaluating financing options including, but not limited to, the issuance of additional equity and debt. The Company has no assurance
that such financing will be available or be available on favourable terms. Factors that could affect the availability of financing include
the Company’s performance (as measured by numerous factors including the progress and results of its projects), the state of international
debt and equity markets, investor perceptions and expectations and the global financial and metals markets. In addition to evaluating
financing options, the Company has also implemented cost savings measures.



The COVID-19 pandemic also creates
uncertainty in respect to global economic and market conditions however its specific, identifiable impact on the Company has not, to date,
been material. Future developments in the course of the pandemic could negatively impact the Company’s operations, however such
future outcomes cannot currently be predicted beyond those expected to affect society as a whole. Like all entities and individuals, the
Company is subject to the COVID-19- related restrictions and mandates instituted by the government of British Columbia, and continues
to comply with all such requirements in the context of its continuing operations.



| | 2. | Significant Accounting Policies
| | -- | -------------------------------



| | (a) | Statement of Compliance
| | --- | -----------------------



These financial statements,
including comparatives, have been prepared in accordance with International Accounting Standard 1, Presentation of Financial Statements
(“IAS 1”) as issued by the International Accounting Standards Board (“IASB”). The policies applied in these financial
statements are based on International Financial Reporting Standards (“IFRS”) and interpretations of the International Financial
Reporting Interpretations Committee (“IFRIC”) issued and outstanding as at July 27, 2022, the date the board of directors
approved these financial statements for issue.



| | (b) | Basis of Measurement and Presentation
| | --- | -------------------------------------



These financial statements have
been prepared using the historical cost convention using the accrual basis of accounting except for some financial instruments, which
have been measured at fair value. In the opinion of management, all adjustments (including normal recurring accruals) considered necessary
for a fair presentation have been included.



| | (c) | Cash
| | --- | ----



Cash consists of cash held in
bank accounts. For purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with a
maturity of three months or less to be cash equivalents to the extent the funds are not being held for investment purposes.





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FIRST ENERGY METALS LIMITED

Notes to the Financial Statements

For the years ended March
31, 2022, 2021 and 2020

(Expressed in Canadian dollars)








| | 2. | Significant Accounting Policies (continued)
| | -- | -------------------------------------------



| | (d) | Exploration and Evaluation Assets
| | --- | ---------------------------------



Exploration and evaluation acquisition
costs are considered assets and capitalized at cost. When shares are issued as consideration for exploration and evaluation asset costs,
they are valued at the closing share price on the date of issuance. Payments relating to a property acquired under an option or joint
venture agreement, where payments are made at the sole discretion of the Company, are recorded in the accounts upon payment. When the
technical and commercial viability of a mineral interest has been demonstrated and a development decision has been made, accumulated expenses
will be tested for impairment before they are reclassified to assets and amortized on a unit of production basis over the useful life
of the ore body following commencement of commercial production.



Costs incurred before the Company
has obtained the legal rights to explore an area are expensed. Mineral property exploration and evaluation expenditures are expensed until
the property reaches the development stage.



The recoverability of the amounts
capitalized for exploration and evaluation assets is dependent upon the determination of economically recoverable mineral deposits, confirmation
of the Company’s interest in the underlying mineral claims, the ability to obtain the necessary financing to complete their development,
and future profitable production or proceeds from the disposition thereof. If it is determined that exploration and evaluation assets
are not recoverable, the property is abandoned, or management has determined an impairment in value, the property is written down to its
estimated recoverable amount.



Refer to note 3(c).



| | (e) | Financial Instruments and Risk Management
| | --- | -----------------------------------------



Financial instruments are measured
on initial recognition at fair value, plus, in the case of financial instruments other than those classified as fair value through profit
or loss (“FVPL”), directly attributable transaction costs. Financial instruments are recognized when the Company become party
to the contracts that give rise to them and are classified as amortized cost, fair value through profit or loss or fair value through
other comprehensive income, as appropriate.



The Company considers whether
a contract contains an embedded derivative when the entity first becomes a party to it. The embedded derivatives are separated from the
host contract if the host contract is not measured at fair value through profit or loss and when the economic characteristics and risks
are not closely related to those of the host contract. Reassessment only occurs if there is a change in the terms of the contract that
significantly modifies the cash flows that would otherwise be required.



Financial assets at FVPL



Financial assets at FVPL include
financial assets held for trading and financial assets not designated upon initial recognition as amortized cost or fair value through
other comprehensive income (“FVOCI”). A financial asset is classified in this category principally for the purpose of selling
in the short term, or if so designated by management. Transaction costs are expensed as incurred. On initial recognition, a financial
asset that otherwise meets the requirements to be measured at amortized cost or FVOCI may be irrevocably designated as FVPL if doing so
eliminates or significantly reduces an accounting mismatch that would otherwise arise. Financial assets measured at FVPL are measured
at fair value with changes in fair value recognized in profit or loss.



Financial assets at FVOCI



On initial recognition of an
equity investment that is not held for trading, an irrevocable election is available to measure the investment at fair value upon initial
recognition plus directly attributable transaction costs and at each period end, changes in fair value are recognized in other comprehensive
income (“OCI”) with no reclassification to profit or loss. The election is available on an investment-by-investment basis.





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FIRST ENERGY METALS LIMITED

Notes to the Financial Statements

For the years ended March 31, 2022, 2021 and 2020

(Expressed in Canadian dollars)



| | 2. | Significant Accounting Policies (continued)
| | -- | -------------------------------------------



| | (e) | Financial Instruments and Risk Management (continued)
| | --- | -----------------------------------------------------



Financial assets at amortized cost



A financial asset is measured at amortized
cost if it is held within a business model whose objective is to hold assets to collect contractual cash flows and its contractual terms
give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding, and
is not designated as FVPL. Financial assets classified as amortized cost are measured subsequent to initial recognition at amortized cost
using the effective interest method. Cash, other receivables and certain other assets are classified as and measured at amortized cost.



Financial liabilities



Financial liabilities, including accounts
payable and accrued liabilities and finance leases are recognized initially at fair value, net of transaction costs. After initial recognition,
other financial liabilities are subsequently measured at amortized cost using the effective interest method. Gains and losses are recognized
in net earnings when the liabilities are derecognized as well as through the amortization process. Borrowing liabilities are classified
as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after
the statement of financial position date. Accounts payable and accrued liabilities and finance leases are classified as and measured at
amortized cost.



Derivative instruments



Derivative instruments, including
embedded derivatives, are measured at fair value on initial recognition and at each subsequent reporting period. Any gains or losses arising
from changes in fair value on derivatives are recorded in profit or loss.



Fair values



The fair value of quoted investments
is determined by reference to market prices at the close of business on the statement of financial position date. Where there is no active
market, fair value is determined using valuation techniques. These include using recent arm’s length market transactions; reference
to the current market value of another instrument which is substantially the same; discounted cash flow analysis; and, pricing models.



Financial instruments that are measured
at fair value subsequent to initial recognition are grouped into a hierarchy based on the degree to which the fair value is observable
as follows:



Level 1 – Unadjusted quoted prices in active
markets for identical assets or liabilities;



Level 2 – Inputs other than
quoted prices that are observable for the asset or liability either directly or indirectly; and



Level 3 – Inputs that are not based
on observable market data.



Impairment of financial assets



A loss allowance for expected credit
losses is recognized in OCI for financial assets measured at amortized cost. At each balance sheet date, on a forward-looking basis, the
Company assesses the expected credit losses associated with its financial assets carried at amortized cost and FVOCI. The impairment methodology
applied depends on whether there has been a significant increase in credit risk. The impairment model does not apply to investment in
equity instruments. The expected credit losses are required to be measured through a loss allowance at an amount equal to the 12- month
expected credit losses (expected credit losses that result from those default events on the financial instrument that are possible within
12 months after the reporting date) or full lifetime expected credit losses (expected credit losses that result from all possible default
events over the life of the financial instrument). A loss allowance for full lifetime expected credit losses is required for a financial
instrument if the credit risk of that financial instrument has increased significantly since initial recognition. Financial instruments
are exposed to credit, liquidity and market risks. Credit risk is the risk that one party to a financial instrument will cause a financial
loss for the other party by failing to discharge an obligation.



10 | P a g e







FIRST ENERGY METALS LIMITED

Notes to the Financial Statements

For the years ended March 31, 2022, 2021 and 2020

(Expressed in Canadian dollars)



| | 2. | Significant Accounting Policies (continued)
| | -- | -------------------------------------------



| | (e) | Financial Instruments and Risk Management (continued)
| | --- | -----------------------------------------------------



Derecognition of financial assets
and liabilities



A financial asset is derecognised
when either the rights to receive cash flows from the asset have expired or the Company has transferred its rights to receive cash flows
from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party. If neither
the rights to receive cash flows from the asset have expired nor the Company has transferred its rights to receive cash flows from the
asset, the Company will assess whether it has relinquished control of the asset or not. If the Company does not control the asset, then
derecognition is appropriate.



A financial liability is derecognised
when the associated obligation is discharged or canceled or expires. When an existing financial liability is replaced by another from
the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or
modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective
carrying amounts is recognised in profit or loss.



Liquidity risk is the risk that an
entity will encounter difficulty in meeting obligations associated with financial liabilities. Market risk is the risk that the fair value
or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of
price risk: currency risk, interest rate risk and other price risk.



Liquidity risk on amounts due to creditors
and amounts due to related parties were significant to the Company’s statement of financial position. The Company manages these
risks by actively pursuing additional share capital issuances to settle its obligations in the normal course of its operating, investing
and financing activities. The Company’s ability to raise share capital is indirectly related to changing metal prices and the price
of silver and gold in particular.



| | (f) | Equipment
| | --- | ---------



Equipment is recorded at cost and depreciated
over its estimated useful life. The cost of an item includes the purchase price and directly attributable costs to bring the asset to
the location and condition necessary for it to be capable of operating in the manner intended by management. Where an item of equipment
comprises major components with different useful lives, the components are accounted for as separate items of equipment.



Subsequent costs are included in the
asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits
associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of the replaced
part is derecognized. All other repairs and maintenance are charged to the statement of operations and comprehensive loss during the financial
period in which they are incurred.



Depreciation is recognized using the
straight-line basis over the estimated useful lives of the various classes of equipment, ranging from three to five years. Depreciation
methods, useful lives and residual values are reviewed at each financial year end and are adjusted if appropriate.



| | (g) | Impairment of Tangible and Intangible Assets
| | --- | --------------------------------------------



At the end of each reporting period,
the Company’s assets are reviewed to determine whether there is any indication that the assets may be impaired. If such indication
exists, the recoverable amount of the identified asset is estimated in order to determine the extent of the impairment, if any. The recoverable
amount is the higher of fair value less cost to sell and value in use. Fair value is determined as the amount that would be obtained from
the sale of the asset in an arm’s length transaction between knowledgeable and willing parties. In assessing value in use, the estimated
future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the
time value of money and the risks specific to the asset. If the recoverable amount of an asset is estimated to be less than its carrying
amount, the carrying amount of the asset is reduced to its recoverable amount and the impairment loss is recognized in profit or loss
for the period. For an asset that does not generate largely independent cash flows, the recoverable amount is determined for the cash
generating unit to which the asset belongs.



Where it is possible to estimate the
recoverable amount of an individual asset, the impairment test is carried out on the asset’s cash-generating unit, which is the
lowest group of assets in which the asset belongs for which there are separately identifiable cash inflows that are largely independent
of the cash inflows from other assets. Each of the Company’s exploration and evaluation properties is considered to be a cash-generating
unit for which impairment testing is performed.



11 | P a g e







FIRST ENERGY METALS LIMITED

Notes to the Financial Statements

For the years ended March 31, 2022, 2021 and 2020

(Expressed in Canadian dollars)



| | 2. | Significant Accounting Policies (continued)
| | -- | -------------------------------------------



| | (g) | Impairment of Tangible and Intangible Assets (continued)
| | --- | --------------------------------------------------------



Where an impairment loss subsequently reverses,
the carrying amount of the asset (or cash generating unit) is increased to the revised estimate of its recoverable amount, but to an amount
that does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (or cash-generating
unit) in prior reporting periods. A reversal of an impairment loss is recognized immediately in profit or loss.



Management’s estimates of mineral prices,
recoverable reserves, and operating, capital and restoration costs are subject to certain risks and uncertainties that may affect the
recoverability of exploration and evaluation assets. A mining enterprise is required to consider the conditions for impairment write-down.
The conditions include significant unfavorable economic, legal regulatory, environmental, political and other factors. In addition, management’s
development activities towards its planned principal operations are key factors considered as part of the ongoing assessment of the recoverability
of the carrying amount of exploration and evaluation assets. Whenever events or changes in circumstances indicate that the carrying amount
of a mineral property in the exploration stage may be impaired, the capitalized costs are written down to the estimated recoverable amount.
Although management has made its best estimate of these factors, it is possible that changes could occur in the near term that could adversely
affect management’s estimate of the net cash flow to be generated from its projects.



| | (h) | Income Taxes
| | --- | ------------



Income tax expense comprises current and deferred
tax. Income tax is recognized in profit or loss except to the extent that it relates to items recognized directly in equity. Current tax
expense is the expected tax payable on taxable income for the year, using tax rates enacted or substantively enacted at period end, adjusted
for amendments to tax payable with regards to previous years.



Deferred tax is recorded using the liability method,
providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts
used for taxation purposes. Temporary differences are not provided for goodwill that is not deductible for tax purposes, the initial recognition
of assets or liabilities that affect neither accounting nor taxable loss, and differences relating to investments in subsidiaries to the
extent that they will probably not reverse in the foreseeable future. The amount of deferred tax provided is based on the expected manner
of realization or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the
statement of financial position date.



A deferred tax asset is recognized only to the
extent that it is probable that future taxable profits will be available against which the asset can be utilized. To the extent that the
Company does not consider it probable that a deferred tax asset will be recovered, it provides a valuation allowance against that excess.



| | (i) | Foreign Currency Translation
| | --- | ----------------------------



The functional currency of an entity is the currency
of the primary economic environment in which the entity operates. The functional currency of the Company and its subsidiary is the Canadian
dollar. The functional currency determinations were made through an analysis of the consideration factors identified in IAS 21, The
Effects of Changes in Foreign Exchange Rates.



Transactions in currencies other than the Canadian
dollar are recorded at exchange rates prevailing on the dates of the transactions. At the end of each reporting period, monetary assets
and liabilities denominated in foreign currencies are translated at the period end exchange rate while non-monetary assets and liabilities
are translated at historical rates. Revenue and expenses are translated at the exchange rates approximating those in effect on the date
of the transactions. Exchange gains and losses arising on translation are included in the statement of operations.



12 | P a g e







FIRST ENERGY METALS LIMITED

Notes to the Financial Statements

For the years ended March 31, 2022, 2021 and 2020

(Expressed in Canadian dollars)



| | 2. | Significant Accounting Policies (continued)
| | -- | -------------------------------------------



| | (j) | Share-based Payments
| | --- | --------------------



The Company accounts for stock options issued
to directors and employees at the fair value determined on the grant date using the Black-Scholes option pricing model. The fair value
of the options is recognized as an expense using the graded vesting method where the fair value of each tranche is recognized over its
respective vesting period. When stock options are forfeited prior to becoming fully vested, any expense previously recorded is reversed.



Share-based payments made to non-employees are
measured at the fair value of the goods or services received or the fair value of the equity instruments issued, if it is determined that
the fair value of the goods or services cannot be reliably measured. These payments are recorded at the date the goods and services are
received.



Share purchase warrants issued are recorded at
estimated fair values determined on the grant date using the Black-Scholes model. If and when the stock options or share purchase warrants
are ultimately exercised, the applicable amounts of their fair values in the reserve accounts are transferred to share capital. If and
when the stock options or share purchase warrants are ultimately expired, the applicable amounts of their fair values in the reserve accounts
are transferred to deficit.



| | (k) | Share Capital
| | --- | -------------



Common shares issued for non-monetary consideration
are recorded at their fair value on the measurement date and classified as equity. The measurement date is defined as the earliest of
the date at which the commitment for performance by the counterparty to earn the common shares is reached or the date at which the counterparty’s
performance is complete.



Transaction costs directly attributable to the
issuance of common shares and share purchase options are recognized as a deduction from equity, net of any tax effects.



The proceeds from the issue of the units are allocated
between common shares and share purchase warrants on a pro-rata basis based on the relative fair values as follows: the fair value of
the common shares is based on the market closing price on the date the units are issued and fair value of the share purchase warrants
is determined using the Black-Scholes option pricing model.



| | (l) | Earnings (Loss) per Common Share
| | --- | --------------------------------



Basic earnings (loss) per common share is calculated
by dividing net income (loss) available to common shareholders by the weighted average number of common shares outstanding during the
period. Dilutive earnings per share reflect the potential dilution of securities that could share in the earnings of an entity. In periods
where a net loss is incurred, potentially dilutive common shares are excluded from the loss per share calculation as the effect would
be anti-dilutive and basic and diluted loss per common share are the same. In a profit year, under the treasury stock method, the weighted
average number of common shares outstanding used for the calculation of diluted earnings per share assumes that the proceeds to be received
on the exercise of dilutive stock options and share purchase warrants are used to repurchase common shares at the average price during
the period.



| | (m) | Flow-through Shares
| | --- | -------------------



Share capital includes flow-through shares which
is a unique Canadian tax incentive pursuant to certain provisions of the Canadian Income Tax Act. Proceeds from the issuance of flow-through
shares are used to fund qualified Canadian exploration and evaluation projects and the related income tax deductions are renounced to
the subscribers of the flow- through shares. The premium paid for flow-through shares in excess of the market value of the shares without
flow-through features, at the time of issue, is credited to other liabilities and recognized in income at the time qualifying expenditures
are incurred. The Company also recognizes a deferred tax liability with a corresponding charge in the statement of operations when the
qualifying exploration and evaluation expenditures are renounced. If the Company has sufficient tax assets to offset the deferred tax
liability, the liability will be offset by the recognition of a corresponding deferred tax asset and recovery of deferred income taxes
through profit or loss in the reporting period.



13 | P a g e







FIRST ENERGY METALS LIMITED

Notes to the Financial Statements

For the years ended March 31, 2022, 2021 and 2020

(Expressed in Canadian dollars)



| | 2. | Significant Accounting Policies (continued)
| | -- | -------------------------------------------



| | (m) | Flow-through Shares (continued)
| | --- | -------------------------------



Proceeds received from the issuance of flow-through
shares are restricted to be used only for Canadian resource property exploration expenditures within a two-year period. The portion of
the proceeds received but not yet expended at the end of the Company’s period is disclosed separately as flow-through expenditure
commitments.



The Company may also be subject to a Part XII.6
tax on flow-through proceeds, renounced under the Look-back Rule, in accordance with Government of Canada flow-through regulations. When
applicable, this tax is accrued as a financial expense until paid.



| | (n) | Decommissioning Liabilities
| | --- | ---------------------------



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



The rehabilitation provision generally arises
when the environmental disturbance is subject to government laws and regulations. When the liability is recognized, the present value
of the estimated costs is capitalized by increasing the carrying amount of the related mining assets. Over time, the discounted liability
is increased for the changes in present value based on current market discount rates and liability specific risks. Additional environmental
disturbances or changes in rehabilitation costs will be recognized as additions to the corresponding assets and rehabilitation liability
in the period in which they occur.



| | (o) | Comparative figures
| | --- | -------------------



Certain comparative figures have been reclassified
to conform to the current year’s presentation.



| | (p) | New, Amended and Future IFRS Pronouncements
| | --- | -------------------------------------------



Accounting standards and amendments issued
but not yet adopted



IAS
16 Property, Plant and Equipment

The IASB issued an amendment to IAS 16, Property,
Plant and Equipment to prohibit the deducting from property, plant and equipment amounts received from selling items produced while preparing
an asset for its intended use. Instead, sales proceeds and its related costs must be recognized in profit or loss. The amendment will
require companies to distinguish between costs associated with producing and selling items before the item of property, plant and equipment
is available for use and costs associated with making the item of property, plant and equipment available for its intended use. The amendment
is effective for annual periods beginning on or after January 1, 2022, with earlier application permitted. The amendment is not currently
applicable.



IAS
1, Presentation of Financial Statements

The IASB issued an amendment to IAS 1,
Presentation of Financial Statements to clarify one of the requirements under the standard for classifying a liability as
non-current in nature, specifically the requirement for an entity to have the right to defer settlement of the liability for at
least 12 months after the reporting period. The amendment includes: (i) specifying that an entity’s right to defer settlement
must exist at the end of the reporting period; (ii) clarifying that classification is unaffected by management’s intentions or
expectations about whether the entity will exercise its right to defer settlement; (iii) clarifying how lending conditions affect
classification; and (iv) clarifying requirements for classifying liabilities an entity will or may settle by issuing its own equity
instruments. An assessment will be performed prior to the effective date of January 1, 2023 to determine the impact to the
Company’s financial statements.



There are no other IFRS that are not yet effective
that would be expected to have a material impact on the Company.



14 | P a g e







FIRST ENERGY METALS LIMITED

Notes to the Financial Statements

For the years ended March 31, 2022, 2021 and 2020

(Expressed in Canadian dollars)



| | 3. | Critical Accounting Judgments and Estimates
| | -- | -------------------------------------------



The preparation of financial statements requires
management to make judgments and estimates that affect the amounts reported in the financial statements and notes. By their nature, these
judgments and estimates are subject to change and the effect on the financial statements of changes in such judgments and estimates in
future periods could be material. These judgments and estimates are based on historical experience, current and future economic conditions,
and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Actual results
could differ from these judgments and estimates. The more significant areas are as follows:



| | (a) | Share-based Payment Transactions
| | --- | --------------------------------



The Company measures the cost of equity-settled
transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. Estimating
fair value for share-based payment transactions requires determining the most appropriate valuation model, which is dependent on the terms
and conditions of the grant. This estimate also requires determining the most appropriate inputs to the valuation model including the
expected life of the share option, volatility and dividend yield and making assumptions about them. The assumptions and models used for
estimating fair value for share-based payment transactions are disclosed in Note 8.



| | (b) | Going Concern
| | --- | -------------



The assessment of the Company’s ability to raise
sufficient funds to finance its exploration and administrative expenses involves judgment. Estimates and assumptions are continually evaluated
and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under
the circumstances.



| | (c) | Intangible Exploration and Evaluation Assets
| | --- | --------------------------------------------



Management is required to assess impairment in
respect of intangible exploration and evaluation assets. Note 5 discloses the carrying value of such assets. The triggering events for
the potential impairment of exploration and evaluation assets are defined in IFRS 6 Exploration for and Evaluation of Mineral Properties
and are as follows:



| | · | the period for which the entity has the right to explore in the specific area has expired during the period
or will expire in the near future, and is not expected to be renewed;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | substantive expenditure on further exploration for and evaluation of mineral resources in the specific
area is neither budgeted nor planned;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------



| | · | exploration for and evaluation of mineralresources in the specific area have not led to the discovery
of commercially viable quantities of mineral resources and the entity has decided to discontinue such activities in the specific area;
and
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | sufficient data exists to indicate that, although a development in the specific area is likely to proceed,
the carrying amount of the exploration and evaluation asset is unlikely to be recovered in full from successful development or by sale.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



In making the assessment, management is required
to make judgments as to the status of each project and its future plans towards finding commercial reserves. The nature of exploration
and evaluation activity is such that only a proportion of projects are ultimately successful and accordingly some assets are likely to
become impaired in future periods.



| | (d) | Deferred Tax Assets
| | --- | -------------------



Deferred income tax asset carrying amounts depend
on estimates of future taxable income and the likelihood of reversal of timing differences. Where reversals are expected, estimates of
future tax rates will be used in the calculation of deferred tax asset carrying amounts. Potential tax assets were considered not to be
recoverable at the current year end.



15 | P a g e







FIRST ENERGY METALS LIMITED

Notes to the Financial Statements

For the years ended March 31, 2022, 2021 and 2020

(Expressed in Canadian dollars)



| | 4. | Amounts Receivable and Prepaid Expenses
| | -- | ---------------------------------------



|                                 |  | March 31, 2022 |         |  | March 31, 2021 |  
|-------------------------------- |  | -------------- | ------- |  | -------------- | -
|GST/HST                          |  | $              | 35,476  |  |                | $
|Prepayments and other receivable |  |                | 740,977 |  |                |  
|Total                            |  | $              | 776,453 |  |                | $



| | 5. | Exploration and Evaluation Assets
| | -- | ---------------------------------



Exploration and evaluation assets deferred to
the statements of financial position at March 31, 2022 and 2021 are as follows:



|                 |  | March 31, 2021 |         |  | Additions |   |           | Write-off |  | March 31, 2022 |          
|---------------- |  | -------------- | ------- |  | --------- | - | --------- | --------- |  | -------------- | ---------
|Phyllis Cobalt   |  | $              | 201,750 |  |           |   |           |           |  | $              | (201,750)
|Kokanee Creek    |  |                | 163,375 |  |           |   | 768,750   |           |  |                | -        
|Scamble Mine     |  |                | 66,000  |  |           |   | -         |           |  |                | (66,000) 
|Shaw Gold        |  |                | 130,000 |  |           |   | -         |           |  |                | (130,000)
|Titan Gold       |  |                | 132,500 |  |           |   | 18,000    |           |  |                |          
|Augustus Lithium |  |                | 112,500 |  |           |   | 222,500   |           |  |                | -        
|Canadian Lithium |  |                | 80,000  |  |           |   | 96,250    |           |  |                | -        
|Abitibi Lithium  |  |                | -       |  |           |   | 1,767,000 |           |  |                | -        
|McNeely          |  |                | -       |  |           |   | 820,000   |           |  |                | -        
|Bald Eagle       |  |                | -       |  |           |   | 203,500   |           |  |                | (203,500)
|Red Lake         |  |                | -       |  |           |   | 792,750   |           |  |                | -        
|Falcon Lake      |  |                | -       |  |           |   | 50,000    |           |  |                | -        
|Electron Lithium |  |                | -       |  |           |   | 981,250   |           |  |                | -        
|                 |  | $              | 886,125 |  |           | $ | 5,720,000 |           |  | $              | (601,250)



|                  |  | March 31, |         |  |           |   |         |           |  | March 31, |          
|----------------- |  | --------- | ------- |  | --------- | - | ------- | --------- |  | --------- | ---------
|                  |  | 2020      |         |  | Additions |   |         | Write-off |  | 2021      |          
|Phyllis Cobalt    |  | $         | 56,000  |  |           | $ | 145,750 |           |  | $         | -        
|Independence Gold |  |           | 37,500  |  |           |   | 125,875 |           |  |           | (163,375)
|Kokanee Creek     |  |           | 37,500  |  |           |   | 125,875 |           |  |           | -        
|Scamble Mine      |  |           | -       |  |           |   | 66,000  |           |  |           | -        
|Shaw Gold         |  |           | -       |  |           |   | 130,000 |           |  |           | -        
|Titan Gold        |  |           | -       |  |           |   | 132,500 |           |  |           | -        
|Augustus Lithium  |  |           | -       |  |           |   | 112,500 |           |  |           | -        
|Canadian Lithium  |  |           | -       |  |           |   | 80,000  |           |  |           | -        
|                  |  | $         | 131,000 |  |           | $ | 918,500 |           |  | $         | (163,375)



(i) Included in the write-off
of the Phyllis Cobalt property is $121,000 of previously accrued acquisition costs.



| | (a) | Bald Eagle Silver Property
| | --- | --------------------------



The Company acquired a 100% interest in the Bald
Eagle Silver property issuing 550,000 common shares on April 20, 2021. Bald Eagle is subject to a 2.0% Net Smelter Return (“NSR”)
royalty of which the Company will have the option to reduce the NSR by 1.0% to 1.0% by paying $500,000.



The Bald Eagle property is located in the Alberni
Mining Division of British Columbia and consists of 3 mining claims covering 1,014 hectares.



During the year ended March 31, 2022, the Bald
Eagle claims were allowed to lapse and as a result the Company has written-off all deferred costs incurred to date as it works to re-stake
the claims.



16 | P a g e







FIRST ENERGY METALS LIMITED

Notes to the Financial Statements

For the years ended March 31, 2022, 2021 and 2020

(Expressed in Canadian dollars)



|5. | Exploration and Evaluation Assets (continued)
|-- | ---------------------------------------------



|(b) | Kokanee Creek and Independence Gold Properties
|--- | ----------------------------------------------



On March 17, 2020, the Company
entered in an option agreement to acquire a 100% interest in the Kokanee Creek and Independence Gold Properties (the “Properties”).
The Properties are located in British Columbia and consist of 5 claims covering 2,690 hectares.



On February 28, 2021 and again
on August 13, 2021, the Company entered into amended option agreements which amended the due dates for certain cash payments, share issuances
and exploration expenditure requirements of the option agreement, as noted below.



Under the terms of the Properties
amended option agreement, the Company has the option to acquire a 100% interest in the Kokanee Creek Property and Independence Gold Property
by completing the following option payments, common share issuances and exploration expenditures:



|Due Dates                            | Option payments 
($) | Issuance of
First Energy  common shares | Minimum
 exploration
 expenditures
 ($) | Cumulative 
exploration 
expenditure
 ($)
|------------------------------------ | -------------------- | --------------------------------------- | --------------------------------------- | -----------------------------------------
|On signing (paid)                    | 10,000               | Nil                                     | Nil                                     | Nil                                      
|December 31, 2021
 (paid and issued) | 35,500               | 2,500,000                               | Nil                                     | Nil                                      
|March 31, 2022
    (issued)          | Nil                  | 2,775,000                               | Nil                                     | Nil                                      



The Company issued the remaining 2,775,000
shares as of March 31, 2022, to acquire a 100% interest in the Properties.



The Properties are subject to
a 2.0% NSR royalty of which the Company will have the option to reduce the NSR by 1.0% by paying $1,000,000.



During the year ended March 31,
2021, the Company announced it would not be pursuing any further exploration work on the Independence Gold property and wrote-off all
deferred costs incurred to date.



|(c) | Abitibi Lithium Property
|--- | ------------------------



On March 12, 2021, the Company
entered into a purchase agreement to acquire a 100% interest in the Abitibi Lithium property (the “Abitibi Agreement”). The
Abitibi Lithium property is comprised of 241 mineral claims covering approximately 12,779 hectares located in the Abitibi area of western
Quebec.



Under the terms of the Abitibi
Agreement, the Company acquired a 100% interest in the Abitibi Lithium property by issuing 4,100,000 common shares of the Company and
by paying $250,000 on April 20, 2021. The Abitibi Lithium Property is subject to a 3% NSR royalty, which the Company will have the option
to reduce the NSR by 1.0% to 2.0% by paying

$1,000,000.



|(d) | Phyllis Cobalt Property
|--- | -----------------------



On January 29, 2018, the Company
entered into an option agreement to acquire a 100% interest in certain mineral claims (the “Phyllis Property”) covering 1,750
hectares located in the Kenora Mining District in northwestern Ontario, Canada.



On January 29, 2019, March 15,
2019 and again on December 30, 2019, the Company entered into amended option agreements (the “Phyllis Amendment Agreement”)
which amended the due dates for certain cash payments, share issuances and exploration expenditure requirements of the Phyllis Cobalt
Agreement, as noted below.





17 | P a g e







FIRST ENERGY METALS LIMITED

Notes to the Financial Statements

For the years ended March 31, 2022, 2021 and 2020

(Expressed in Canadian dollars)



|5. | Exploration and Evaluation Assets (continued)
|-- | ---------------------------------------------



|(d) | Phyllis Cobalt Property (continued)
|--- | -----------------------------------



Under the terms of the Phyllis
Amendment Agreement, the Company has the option to acquire a 100% interest in the Phyllis Property by completing the following option
payments, common share issuances and exploration expenditures:



|Due Dates                        | Option payments
($) | Issuance of First Energy

common shares | Minimum
 exploration

    expenditures
    ($) | Cumulative

    exploration
 expenditure
    ($)
|-------------------------------- | ------------------- | --------------------------------------- | ---------------------------------------------- | ------------------------------------------------
|On signing
    (paid and issued) | 20,000              | 100,000                                 | Nil                                            | Nil                                             
|September 1, 2020(i)             | 35,000              | 150,000
    (issued)                    | 75,000
    (completed)                         | 75,000
    (completed)                          
|December 31, 2020(i)             | 35,000              | 150,000                                 | 25,000
    (completed)                         | 100,000
    (completed)                         
|June 1, 2021(i)                  | 50,000              | 200,000                                 | 25,000
    (completed)                         | 125,000
    (completed)                         

|(i) | Both parties remain in active negotiations for an amendment agreement.
|--- | ----------------------------------------------------------------------



Under the Phyllis Amendment
Agreement, the Phyllis Property is subject to a 3% NSR royalty upon commencement of commercial production. The Company will have the option
to reduce the NSR by 1.0% to 2.0% by paying $1,000,000.



During the year ended March 31,
2022, the Company wrote-off all deferred costs incurred to date as the Company continues negotiations for an amended agreement.



|(e) | Red Lake Property
|--- | -----------------



On September 14, 2020, the Company
entered in an option agreement to acquire a 100% interest in the Red Lake Property. The Red Lake property is located in the Red Lake Mining
District of Northwestern Ontario and consists of 94 mining cell claims covering 1,880 hectares in the Ball and Todd townships.



On February 28, 2021, and again
on August 13, 2021, the Company entered into amended option agreements which amended the due dates for certain cash payments, share issuances
and exploration expenditure requirements of the Properties Option Agreement, as noted below.



Under the terms of the amended
Red Lake option agreement, the Company has the option to acquire a 100% interest in the Red Lake Property by completing the following
option payments, common share issuances and exploration expenditures, subject to regulatory approval:



|Due Dates                | Option payments

($) | Issuance of First
 Energy common
 shares | Minimum 
exploration
 expenditures
 ($) | Cumulative 
exploration 
expenditure
 ($)
|------------------------ | -------------------- | ---------------------------------------- | --------------------------------------- | -----------------------------------------
|March 31, 2022
 (issued) | Nil                  | 2,775,000                                | Nil                                     | Nil                                      



The Company issued 2,775,000 shares
as of March 31, 2022, to acquire a 100% interest in the Red Lake property.



The Red Lake property is subject
to a 2.5% NSR royalty, with the Company having the option to reduce the NSR by 1% to 1.5% by paying $1,000,000.





18 | P a g e







FIRST ENERGY METALS LIMITED

Notes to the Financial Statements

For the years ended March 31, 2022, 2021 and 2020

(Expressed in Canadian dollars)



|5.  | Exploration and Evaluation Assets (continued)
|--- | ---------------------------------------------
|    |                                              
|(f) | Scramble Mine Gold Property                  



On June 2, 2020, the Company
entered into an option agreement to acquire a 100% interest in certain mineral claims (the “Scramble Mine Gold Property”)
located in the Kenora Mining District in northwestern Ontario, Canada.



Under the terms of the Scramble
Mine Option Agreement, the Company has the option to acquire a 100% interest in the Scramble Mine Gold Property by completing the following
option payments, common share issuances and exploration expenditures:



|Due Dates                     | Option payments

($) | Issuance of First
Energy
 common shares | Minimum 
exploration

    expenditures
    ($) | Cumulative

    exploration 
expenditure
    ($)
|----------------------------- | -------------------- | --------------------------------------- | ---------------------------------------------- | ------------------------------------------------
|On signing (issued)           | Nil                  | 400,000                                 | Nil                                            | Nil                                             
|September 1, 2020 (completed) | Nil                  | Nil                                     | 30,000                                         | 30,000                                          
|June 2, 2021(i)               | Nil                  | 300,000                                 | 40,000                                         | 70,000                                          
|June 2, 2022                  | Nil                  | 300,000                                 | 80,000                                         | 150,000                                         
|June 2, 2023                  | 100,000              | Nil                                     | 100,000                                        | 250,000                                         

(i) Both parties remain in
active negotiations for an amendment agreement. Subsequent to March 31, 2022, cash and share issuances past due remain outstanding and
have not been accrued whilst the both parties negotiate an amendment.



The Scramble Mine Gold Property
is subject to a 3.0% NSR royalty. The Company will have the option to reduce the NSR by 1.0% to 2.0% by paying $500,000.



During the year ended March
31, 2022, the Company wrote-off all deferred costs incurred to date, as the Company negotiates an amended agreement.



|(g) | Titan Gold Property
|--- | -------------------



On October 2, 2020, the Company
entered into an option agreement to acquire a 100% interest in the Titan Gold Property (“Titan Gold”). Titan Gold is located
in the Abitibi area of Western Quebec, Canada and is comprised of 80 mining claims covering approximately 4,402 hectares.



Under the terms of the option
agreement, the Company has the option to acquire a 100% interest in the Titan Gold property by completing the following option payments,
common share issuances and exploration expenditures, subject to regulatory approval:



|Due Dates                        | Option payments ($) | Issuance of
    First Energy
 common shares
|-------------------------------- | ------------------- | -------------------------------------------
|On signing
    (paid and issued) | 12,500              | 600,000                                    
|October 2, 2021
 (accrued)       | 18,000              | Nil                                        
|October 2, 2022                  | 28,000              | Nil                                        
|October 2, 2023                  | 40,000              | Nil                                        

(i) Both parties remain
in active negotiations for an amended agreement. Subsequent to March 31, 2022, cash payments past due remain outstanding and
additional payments under the original agreement have not been accrued whilst the both parties negotiate an amendment.



The Titan Gold property is subject
to a 1.5% NSR royalty. The Company will have the option to reduce the NSR by 0.5% to 1.0% by paying $500,000.





19 | P a g e







FIRST ENERGY METALS LIMITED

Notes to the Financial Statements

For the years ended March 31, 2022, 2021 and 2020

(Expressed in Canadian dollars)



|5.  | Exploration and Evaluation Assets (continued)
|--- | ---------------------------------------------
|    |                                              
|(h) | Augustus Lithium Property                    



On January 18, 2021, the Company
entered into an option agreement to acquire a 100% interest in the Augustus Lithium property (the “Augustus Agreement”). The
Augustus Lithium property is comprised of 21 mineral claims covering approximately 937 hectares located in the Abitibi area of western
Quebec.



Under the terms of the Augustus
Agreement, the Company has the option to acquire a 100% interest in the property by completing the following option payments, common share
issuances and exploration expenditures:



|Due Dates                                          | Option payments

($) | Issuance of First Energy
    common shares | Minimum
 exploration
    expenditures
 ($) | Cumulative
 exploration
    expenditure
 ($)
|-------------------------------------------------- | -------------------- | ------------------------------------------ | ------------------------------------------ | --------------------------------------------
|On signing
    (paid and issued)                   | 35,000               | 500,000                                    | Nil                                        | Nil                                         
|January 18, 2022 
(paid, issued and
    completed) | 40,000               | 500,000                                    | 50,000                                     | 50,000                                      
|January 18, 2023                                   | 45,000               | 500,000                                    | 150,000                                    | 200,000                                     
|January 18, 2024                                   | 60,000               | 500,000                                    | 350,000                                    | 550,000                                     



The Augustus Lithium Property
is subject to a 2% NSR royalty. The Company will have the option to reduce the NSR by 1.0% to 1.0% by paying $1,000,000.



|(i) | Canadian Lithium Property
|--- | -------------------------



On February 3, 2021, the Company
entered into an option agreement to acquire a 100% interest in the Canadian Lithium property (the “Canadian Lithium Agreement”).
The Canadian Lithium property is comprised of 12 mineral claims covering approximately 671 hectares located in the Landrienne Township
area of Quebec.



Under the terms of the Canadian
Lithium Agreement, the Company has the option to acquire a 100% interest in the property by completing the following option payments,
common share issuances and exploration expenditures:



|Due Dates                           | Option payments
 ($) | Issuance of First Energy 
common shares
|----------------------------------- | -------------------- | ---------------------------------------
|On signing
    (paid and issued)    | 15,000               | 325,000                                
|February 3, 2022 
(paid and issued) | 20,000               | 250,000                                
|February 3, 2023                    | 25,000               | 300,000                                



The Canadian Lithium Property
is subject to a 2% NSR royalty. The Company will have the option to reduce the NSR by 1.0% to 1.0% by paying $1,000,000.



|(j) | McNeely Lithium Property
|--- | ------------------------



Pursuant to the McNeely Lithium
Property purchase agreement entered on June 7, 2021, the Company acquired a 100% interest in the McNeely Lithium Property, located in
Quebec, by issuing 2,000,000 common shares and paying $250,000. The McNeely Lithium Property is subject to a 3.0% Gross Metal Royalty
(“GMR”). Certain of the claims are subject to a pre-existing 1.0% NSR. The Company will have the option to purchase the NSR
by paying $200,000 to the NSR holder.





20 | P a g e







FIRST ENERGY METALS LIMITED

Notes to the Financial Statements

For the years ended March 31, 2022, 2021 and 2020

(Expressed in Canadian dollars)



|5.  | Exploration and Evaluation Assets (continued)
|--- | ---------------------------------------------
|    |                                              
|(k) | Falcon Lake Property                         
|    |                                              

On January 3, 2022, the Company
entered into an option agreement to acquire a 100% interest in the Falcon Lake property (the “Falcon Lake Agreement”). The
Falcon Lake property is comprised of 48 mineral claims covering approximately 987 hectares located in the Thunder Bay Mining Division,
Ontario.



Under the terms of the Falcon
Lake Agreement, the Company has the option to acquire a 100% interest in the property by completing the following option payments, common
share issuances and exploration expenditures:



|Due Dates                        | Option payments ($) | Issuance of
    First Energy common
 shares | Minimum

    exploration
 Expenditures
    ($) | Cumulative exploration expenditure ($)
|-------------------------------- | ------------------- | ------------------------------------------- | ---------------------------------------------- | --------------------------------------
|On signing
    (paid and issued) | 15,000              | 100,000                                     | Nil                                            | Nil                                   
|January 3, 2023                  | 30,000              | 250,000                                     | 50,000                                         | 50,000                                
|January 3, 2024                  | 40,000              | 250,000                                     | 100,000                                        | 150,000                               
|January 3, 2025                  | Nil                 | Nil                                         | 100,000                                        | 250,000                               



|(l) | Electron Lithium Property
|--- | -------------------------



On March 2, 2022, the Company
entered into a purchase agreement to acquire a 100% interest in the Electron Lithium property (the “Electron Agreement”).
The Electron Lithium property is comprised of 435 mineral claims covering approximately 20,357 hectares of prospective land around the
Augustus Lithium Property in western Quebec.



Under the terms of the Electron
Lithium Agreement, the Company has the right to acquire a 100% interest in the Electron Lithium property by issuing an aggregate 3,750,000
common shares of the Company and by paying an aggregate $300,000, as follows:



|Due Dates                        | Option payments
 ($) | Issuance of
    First Energy
 common shares
|-------------------------------- | -------------------- | -------------------------------------------
|On signing
    (paid and issued) | 100,000              | 3,750,000                                  
|September 2, 2022                | 100,000              | Nil                                        
|March 2, 2023                    | 100,000              | Nil                                        



The Electron Lithium property
is subject to a 3% GMR royalty, which the Company will have the option to reduce the GMR by 1.0% to 2.0% by paying $1,000,000.



|(m) | Shaw Gold Property
|--- | ------------------



On September 18, 2020, the Company
entered into an option agreement with Gravel Ridge Resources Ltd. to acquire a 100% interest in the Shaw Gold Property (“Shaw Gold”).
Shaw Gold is located in Timmins Area Ontario, Canada and is comprised of 18 claims covering approximately 693 hectares in the Shaw, Eldorado
and Whitney Townships near Timmins, Ontario.



During the year ended March 31,
2022, the Company decided it would not be pursuing any further exploration work on the Shaw Gold property and as a result has written-off
all deferred costs incurred to date.





21 | P a g e







FIRST ENERGY METALS LIMITED

Notes to the Financial Statements

For the years ended March 31, 2022, 2021 and 2020

(Expressed in Canadian dollars)



|5. | Exploration and Evaluation Assets(continued)
|-- | --------------------------------------------



Exploration and evaluation expenditures recorded
in the statements of loss and comprehensive loss for the year ended March 31, 2022, 2021 and 2020 are as follows:



|Year ended 
March 31, 2022 | Assay and
 sampling | Drilling and
 mobilization | Field
 expenditures | Geological
 Consulting | Geological 
and 
Technical
 Services | Land
 claims and
 property
 taxes | Total

    March 31,
 2022
|-------------------------- | ------------------- | -------------------------- | ------------------- | ---------------------- | ------------------------------------ | --------------------------------- | --------------------------
|British Columbia           |                     |                            |                     |                        |                                      |                                   |                           
|Kookanee Creek             | $             -     | $             -            | $   17,000          | $   47,500             | $   10,000                           | $              -                  | $     74,500              
|Ontario                    |                     |                            |                     |                        |                                      |                                   |                           
|Phyllis Cobalt             | 9,797               | 11,250                     | -                   | -                      | -                                    | -                                 | 21,047                    
|Quebec                     |                     |                            |                     |                        |                                      |                                   |                           
|Titan Gold                 | -                   | -                          | -                   | 75                     | -                                    | -                                 | 75                        
|Augustus Lithium           | 115,584             | 822,454                    | 208,742             | 280,223                | 73,665                               | 1,593                             | 1,502,261                 
|General Exploration        | -                   | -                          | -                   | 11,238                 | -                                    | -                                 | 11,238                    
|Total                      | $ 125,381           | $ 833,704                  | $ 225,742           | $ 339,036              | $    83,665                          | $       1,593                     | $1,609,121                



|Year ended 
March 31, 2021 | Assay and
 sampling | Drilling and
 mobilization | Field
 expenditures | Geological
 Consulting | Geological
 and
 Technical
 Services | Land 
claims and
 property
 taxes | Total

March 31,
 2021
|-------------------------- | ------------------- | -------------------------- | ------------------- | ---------------------- | ------------------------------------ | --------------------------------- | ----------------------
|British Columbia           |                     |                            |                     |                        |                                      |                                   |                       
|Kookanee Creek             | $    5,000          | $            -             | $   11,600          | $   17,500             | $    13,520                          | $       1,200                     | $    48,820           
|Ontario                    |                     |                            |                     |                        |                                      |                                   |                       
|Scramble Mine Gold         | 6,472               | -                          | 3,169               | 34,826                 | 4,762                                | -                                 | 49,229                
|Shaw Gold                  | -                   | -                          | 713                 | -                      | -                                    | -                                 | 713                   
|Quebec                     |                     |                            |                     |                        |                                      |                                   |                       
|Titan Gold                 | -                   | 3,200                      | -                   | 2,700                  | 44,737                               | -                                 | 50,637                
|Augustus Lithium           | 4,163               | -                          | 9,331               | 30,450                 | 24,408                               | -                                 | 68,352                
|Canadian Lithium           | -                   | -                          | -                   | 3,500                  | 11,250                               | -                                 | 14,750                
|General Exploration        | -                   | -                          | 4,100               | 9,500                  | -                                    | -                                 | 13,600                
|Total                      | $   15,635          | $   
    3,200             | $
      28,913      | $   98,476             | $    98,677                          | $      
    1,200                 | $  246,101            
|                           |                     |                            |                     |                        |                                      |                                   |                       





|Year ended 
March
31, 2020 | Assay and
 sampling | Drilling andmobilization | Field
 expenditures | Geological
 Consulting | Geological
and
 Technical

Services | Land
 claims and
 property
 taxes | Total
 March 31, 
2020
|-------------------------- | ------------------- | ------------------------ | ------------------- | ---------------------- | ----------------------------------- | --------------------------------- | ----------------------
|British Columbia           |                     |                          |                     |                        |                                     |                                   |                       
|Kootenay Lithium           | $          -        | $          -             | $          -        | $          -           | $          -                        | $        3,028                    | $        3,028        
|Total                      | $          -        | $          -             | $          -        | $          -           | $          -                        | $        3,028                    | $        3,028        





22 | P a g e









FIRST ENERGY METALS LIMITED

Notes to the Financial Statements

For the years ended March 31, 2022, 2021 and 2020

(Expressed in Canadian dollars)



|6. | Accounts Payable and Accrued
Liabilities
|-- | ----------------------------------------



|                         |   | March 31,
2022 |   | March 31,
2021
|------------------------ | - | -------------- | - | --------------
|Trade and other payables | $ | 225,798        | $ | 247,687       
|Accrued liabilities      |   | 37,000         |   | 136,275       
|Totals                   | $ | 262,798        | $ | 383,962       



|7. | Related Party Transactions and Balances
|-- | ---------------------------------------



Remuneration of directors and key management personnel
of the Company for the years ended March 31, 2022, 2021 and 2020 were as follows:



|                                                    |   | For the years ended March 31,
|--------------------------------------------------- | - | -----------------------------
|                                                    |   | 2022                         
|Consulting fees charged by directors of the Company | $ | 52,000                       
|Exploration consulting fees charged by directors    |   | 12,000                       
|Salaries, fees and benefits                         |   | 188,021                      
|Share-based payments                                |   | -                            



Related party balances as at March 31, 2022 and 2021 were
as follows:



|                                                              |   | March 31,
    2022 |   | March 31,
    2021
|------------------------------------------------------------- | - | ------------------ | - | ------------------
|Amounts due to directors and officers of the Company          | $ | 5,723              | $ | 71,665            
|Amounts due to companies controlled by directors and officers |   | 31,200             |   | 18,700            
|Total                                                         | $ | 36,923             | $ | 90,365            



The directors’ and officers’ balances also
include fees and expenses owing to directors and officers incurred in the normal course of business.



|8.  | Share Capital                                                                      
|--- | -----------------------------------------------------------------------------------
|    |                                                                                    
|(a) | Authorized -Unlimited number
                   of common shares without par value.



|(b) | Issued share capital
|--- | --------------------



The Company had 78,238,894 common shares issued and outstanding
as at March 31, 2022 and 49,522,670 common shares issued and outstanding as at March 31, 2021.



Fiscal 2022



|i)   | During fiscal year 2022, the Company issued 232,000 common shares pursuant to
the exercise of share purchase warrants for total proceeds of $49,200 ($35,200 received during fiscal year 2021). Fair value of the warrants
exercised was $11,150.
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                                  
|ii)  | On April 20, 2021, in connection with the private placement closed on March 4,
2021, the Company issued 198,161 common shares valued at $41,534 pursuant to a finder’s agreement;                                                                
|     |                                                                                                                                                                                                                                                  
|iii) | On April 20, 2021, the Company issued 4,100,000 common shares valued at $1,517,000,
pursuant to the purchase agreement, to acquire a 100% interest in the Abitibi Lithium Property (see Note 5);                                                 
|     |                                                                                                                                                                                                                                                  
|iv)  | On April 20, 2021, the Company issued 550,000 common shares valued at $203,500,
pursuant to the Bald Eagle Silver Property purchase agreement (see Note 5);                                                                                      





23 | P a g e







FIRST ENERGY METALS LIMITED

Notes to the Financial Statements

For the years ended March 31, 2022, 2021 and 2020

(Expressed in Canadian dollars)



|8. | Share Capital (continued)
|-- | -------------------------



|(b) | Issued share capital (continued)
|--- | --------------------------------



|v)    | On June 3, 2021, the Company closed a non-brokered private placement for aggregate
gross proceeds of $1,000,000 through the issuance of 2,003,376 flow-through units (“FT Units”) at $0.385 per FT Unit for proceeds
of $771,300 and through the issuance of 682,687 non-flow through units (“NFT Units”) at $0.335 per NFT Unit for gross proceeds
of $228,700. Each FT Unit consists of one common share and one-half common share purchase warrant. Each whole warrant entitles the holder
to purchase one common share at a price of $0.45 for a period of two years from the issue date. Each NFT Unit consists of one common share
and one common share purchase warrant. Each warrant entitles the holder to purchase one common share at a price of $0.40 for a period
of two years from the issue date. The Company recognized a liability for flow-through shares of $100,169 (see Note 12). The share purchase
warrants were valued using the Black-Scholes pricing model with the following assumptions: weighted average risk-free interest rate of
0.32%, volatility factor of 231.77% and an expected life of two years. Share issue costs were $67,727, which include a finder’s fee of
$64,384 in cash and the issuance of 105,169 finder’s units fair valued at $35,232 using the Black-Scholes pricing model as above
and $3,343 in other share issue costs. As at March 31, 2022 the shares issuable under the finder’s units had not been issued and
are included in share subscriptions;
|----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|vi)   | On June 9, 2021, the Company acquired a 100% interest in the McNeely Lithium Property,
by issuing 2,000,000 common shares valued at $570,000, pursuant to the McNeely Lithium Property purchase agreement (see Note 5);                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|vii)  | On November 26, 2021, the Company closed a non-brokered private placement for
aggregate proceeds of $2,200,000 from the sale 8,800,000 units at a price of $0.25 cents per unit (the “Unit”). Each Unit consists
of one common share and one fully transferable common share purchase warrant (a “Warrant”). Each Warrant will entitle the holder
to purchase an additional common share for a price of $0.50 per share for a period of one year from the closing date of the private placement.
The share purchase warrants were valued using the Black-Scholes pricing model with the following assumptions: weighted average risk-free
interest rate of 0.90%, volatility factor of 132.01% and an expected life of one year. Share issue costs were $14,715, which include a
finder’s fee of $13,750 in cash and $965 in other share issue costs;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|viii) | During the period from December 2021 to January 2022, the Company issued 2,775,000 common shares
                                                      valued at $ 768,750, pursuant to the purchase agreement, to acquire a 100% interest in the Kokanee Creek Property (see Note 5);                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|ix)   | During the period from December 2021 to January 2022, the Company issued 2,775,000 common shares
                                     valued at $ 792,750, pursuant to the purchase agreement, to acquire a 100% interest in the Red Lake Property (see Note 5);                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|x)    | On January 7, 2022, the Company issued 100,000 common shares valued at $35,000, pursuant to the option
agreement, towards acquiring a 100% interest in the Falcon Property (see Note 5);                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|xi)   | On January 18, 2022, the Company issued 500,000 common shares valued at $182,500, pursuant to the option
agreement, towards acquiring a 100% interest in the Augustus Lithium Property (see Note 5);                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|xii)  | On February 9, 2022, the Company issued 250,000 common shares valued at $76,250, pursuant to the option
agreement, towards acquiring a 100% interest in the Canadian Lithium Property (see Note 5); and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|xiii) | On March 2, 2022, the Company issued 3,750,000 common shares valued at $881,250, pursuant to the option
agreement, towards acquiring a 100% interest in the Electron Lithium Property (see Note 5).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           



Fiscal 2021



|i)   | During fiscal year 2021, the Company issued 6,466,667 common shares pursuant to
the exercise of share purchase warrants for total proceeds of $1,080,000. Fair value of the warrants exercised was $228,317;                              
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                           
|ii)  | On August 5, 2020, the Company issued 1,250,000 common shares valued at $206,250
pursuant to the Kokanee Creek and Independence Agreement towards acquiring a 100% interest in the Kokanee Creek and Independence Properties
(see Note 5);
|     |                                                                                                                                                                                                                                           
|iii) | On August 5, 2020, the Company issued 150,000 common shares valued at $24,750 pursuant
to the Phyllis Property Agreement towards acquiring a 100% interest in the Phyllis Cobalt Property (see Note 5);                                   
|     |                                                                                                                                                                                                                                           
|iv)  | On August 5, 2020, the Company issued 400,000 common shares valued at $66,000
pursuant to the Scramble Mine Property Agreement towards acquiring a 100% interest in the Scramble Mine Property (see Note 5);                              





24 | P a g e







FIRST ENERGY METALS LIMITED

Notes to the Financial Statements

For the years ended March 31, 2022, 2021 and 2020

(Expressed in Canadian dollars)



|8. | Share Capital (continued)
|-- | -------------------------



|(b) | Issued share capital (continued)
|--- | --------------------------------



|v)    | On October 21, 2020, the Company issued 600,000 common shares valued at $120,000
pursuant to the Titan Gold Property Agreement towards acquiring a 100% interest in the Titan Property (see Note 5);                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|vi)   | On October 21, 2020, the Company issued 600,000 common shares valued at $120,000
pursuant to the Shaw Gold Property Agreement towards acquiring a 100% interest in the Shaw Gold Property (see Note 5);                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|vii)  | On December 31, 2020, the Company closed the first tranche of a non-brokered private
placement, consisting of 1,000,000 flow-through Units (“FT Units”) for gross proceeds of $250,000. Each FT Unit consists of
one flow- through common share at a price of $0.25 per FT share and one non-flow-through common share purchase warrant. Each warrant entitles
the holder to purchase one common share at a price of $0.40 for a period of three years from the issue date. The Company recognized a
liability for flow-through shares of $50,000 (see Note 12). The share purchase warrants were valued using the Black-Scholes pricing model
with the following assumptions: weighted average risk- free interest rate of 0.25%, volatility factor of 258.9% and an expected life of
three years;                                                                                                                                                                                                                                                                                                                                                                                                                        
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|viii) | On January 19, 2021, the Company issued 500,000 common shares valued at $77,500
pursuant to the Augustus Lithium Property Agreement towards acquiring a 100% interest in the Augustus Lithium Property (see Note 5);                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|ix)   | On January 27, 2021, the Company closed the second and final tranche of balance
a non-brokered private placement, consisting of 400,000 flow-through Units (“FT Units”) and 1,250,000 non-flow through units
(“NFT Units”) for gross proceeds of $350,000. Each FT Unit consists of one flow-through common share at a price of $0.25 per
FT share and one non-flow-through common share purchase warrant. Each NFT Unit consists of one common share and one common share purchase
warrant at a price of $0.20 per NFT Unit. Each warrant entitles the holder to purchase one common share at a price of $0.40 for a period
of three years from the issue date. The Company recognized a liability for flow- through shares of $20,000 (see Note 12). The share purchase
warrants were valued using the Black-Scholes pricing model with the following assumptions: weighted average risk-free interest rate of
0.19%, volatility factor of 257.38% and an expected life of three years. The Company also paid finder’s fees of $19,974 cash and
issued 70,000 finder options fair valued at $9,474 using the Black-Scholes pricing model as above;                                                                       
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|x)    | On February 5, 2021, the Company issued 325,000 common shares valued at $65,00
pursuant to the Canadian Lithium Property Agreement towards acquiring a 100% interest in the Canadian Lithium Property (see Note 5); and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|xi)   | On March 4, 2021, the Company closed a non-brokered private placement, consisting
of 4,000,000 flow-through units (“FT Units”) and 2,950,000 non-flow through units (“NFT Units”) for gross proceeds
of $1,550,000. Each FT Unit consists of one flow-through common share at a price of $0.24 per FT share and one non-flow-through common
share purchase warrant. Each NFT Unit consists of one common share and one common share purchase warrant at a price of $0.20 per NFT Unit.
Each warrant entitles the holder to purchase one common share at a price of $0.40 for a period of two years from the issue date. The Company
recognized a liability for flow-through shares of $160,000 (see Note 12). The share purchase warrants were valued using the Black-Scholes
pricing model with the following assumptions: weighted average risk-free interest rate of 0.22%, volatility factor of 243.36% and an expected
life of two years. The Company also paid finder’s fees consisting of $107,957 cash, issued 51,500 finder warrants fair valued at
$16,140 using the Black-Scholes pricing model as above and issuing 198,161 finder units fair valued at $79,264 using the Black-Scholes
pricing model as above.



|(c) | Stock Options
|--- | -------------



The Company has a shareholder
approved “rolling” stock option plan (the “Plan”) in compliance with the TSX-V’s policies. Under the Plan,
the maximum number of shares reserved for issuance may not exceed 10% of the total number of issued and outstanding common shares at the
time of granting. The exercise price of each stock option shall not be less than the discounted market price of the Company’s stock
at the date of grant. Such options will be exercisable for a period of up to 10 years from the date of grant. In connection with the foregoing,
the number of common shares reserved for issuance to any one optionee will not, within a twelve-month period, exceed five percent (5%)
of the issued and outstanding common shares and the number of common shares reserved for issuance to all technical consultants will not
exceed, within a twelve- month period, two percent (2%) of the issued and outstanding common shares. Options may be exercised no later
than 90 days following cessation of the optionee’s position with the Company or 30 days following cessation of an optionee conducting
investor relations activities’ position.





25 | P a g e







FIRST ENERGY METALS LIMITED

Notes to the Financial Statements

For the years ended March 31, 2022, 2021 and 2020

(Expressed in Canadian dollars)



|8. | Share Capital(continued)
|-- | ------------------------
|   |                         

|(c) | Stock Options (continued)
|--- | -------------------------



The continuity for stock options for the years ended March
31, 2022, 2021 and 2020 is as follows:



|                                                        | Number of Shares | Weighted Average
    Exercise Price
|------------------------------------------------------- | ---------------- | -----------------------------------
|Balance, fully vested and exercisable at March 31, 2019 | -                | -                                  
|Balance, fully vested and exercisable at March 31, 2020 | -                | -                                  
|Granted                                                 | 3,940,000        | $0.26                              
|Balance, fully vested and exercisable at March 31, 2021 | 3,940,000        | $0.26                              
|Granted                                                 | 2,740,000        | $0.33                              
|Balance, fully vested and exercisable at March 31, 2022 | 6,680,000        | $0.29                              



As at March 31, 2022, the following stock options were outstanding:



|Expiry Date       | Number Outstanding | Number Exercisable | Weighted average
 exercise price | Average 
Remaining
 Contractual Life
|----------------- | ------------------ | ------------------ | -------------------------------- | ------------------------------------
|February 9, 2026  | 2,640,000          | 2,640,000          | $0.21                            | 3.87                                
|Febraury 11, 2026 | 1,300,000          | 1,300,000          | $0.35                            | 3.88                                
|May 14, 2026      | 850,000            | 850,000            | $0.35                            | 4.13                                
|July 13, 2026     | 900,000            | 900,000            | $0.25                            | 4.29                                
|January 5, 2023   | 750,000            | -                  | $0.40                            | 0.77                                
|January 6, 2027   | 240,000            | -                  | $0.35                            | 4.78                                
|                  | 6,680,000          | 5,690,000          | $0.29                            | 3.65                                



|(d) | Share Purchase Warrants
|--- | -----------------------



The continuity for share purchase warrants for the years
ended March 31, 2022, 2021 and 2020 is as follows:



|                        | Number of Warrants | Weighted Average
    Exercise Price
|----------------------- | ------------------ | -----------------------------------
|Balance, March 31, 2019 | 3,555,556          | $0.12                              
|Issued                  | 8,000,000          | $0.20                              
|Exercised               | (750,000)          | $0.12                              
|Balance, March 31, 2020 | 10,805,556         | $0.18                              
|Expired                 | (4,162,889)        | $0.20                              
|Issued                  | 9,919,661          | $0.40                              
|Exercised               | (6,466,667)        | $0.17                              
|Balance, March 31, 2021 | 10,095,661         | $0.40                              
|Issued                  | 10,589,545         | $0.49                              
|Exercised               | (232,000)          | $0.21                              
|Balance, March 31, 2022 | 20,453,206         | $0.45                              





26 | P a g e







FIRST ENERGY METALS LIMITED

Notes to the Financial Statements

For the years ended March 31, 2022, 2021 and 2020

(Expressed in Canadian dollars)



|8. | Share Capital (continued)
|-- | -------------------------
|   |                          

|(d) | Share Purchase Warrants (continued)
|--- | -----------------------------------



As at March 31, 2022, the following share purchase warrants issued in connection with private placements were
outstanding:





|Expiry
    date   | Exercise
    price | Number
    Outstanding and
 Exercisable | Average
    Remaining
 Contractual Life
|----------------- | ------------------ | --------------------------------------- | ---------------------------------------
|December 31, 2023 | $0.40              | 1,000,000                               | 1.76                                   
|December 31, 2023 | $0.25              | 14,000                                  | 1.76                                   
|January 27, 2024  | $0.40              | 1,650,000                               | 1.83                                   
|March 4, 2023     | $0.40              | 7,199,661                               | 0.93                                   
|June 3, 2023      | $0.40              | 787,857                                 | 1.20                                   
|June 3, 2023      | $0.45              | 1,001,688                               | 1.20                                   
|November 26, 2022 | $0.50              | 8,800,000                               | 0.66                                   
|                  | $0.45              | 20,453,206                              | 0.95                                   



|(e) | Share-Based Payments Reserve
|--- | ----------------------------



The share-based payment reserve
records items recognized as stock-based compensation expense and other share-based payments. This reserve also includes the value attributed
to warrants on unit private placements. At the time that the stock options or warrants are exercised, the corresponding amount will be
transferred to share capital.



The fair value of each option
granted to employees, officers, and directors was estimated on the date of grant using the Black-Scholes option-pricing model.



Fiscal 2022



On May 14, 2021, the Company
granted 850,000 incentive stock options to directors, officers and consultants and all of which vested at the date of grant. The options
are exercisable at $0.35 per share, expiring on May 14, 2026. The fair value of these options was $276,997 and was calculated using the
Black-Scholes pricing model, based on the following assumptions: weighted average risk-free interest rate of 0.94%, volatility factor
of 224% and an expected life of five years.



On July 13, 2021, the Company granted
900,000 incentive stock options to consultants and all of which vested at the date of grant. The options are exercisable at $0.25 per
share, expiring on July 13, 2026. The fair value of these options was

$168,437 and was calculated using
the Black-Scholes pricing model, based on the following assumptions: weighted average risk-free interest rate of 0.95%, volatility factor
of 221% and an expected life of five years.



On January 5, 2022, the Company
granted 750,000 incentive stock options to consultants and all of which vested at the date of grant. The options are exercisable at $0.40
per share, expiring on January 5, 2023. The fair value of these options was

$107,899 and was calculated using
the Black-Scholes pricing model, based on the following assumptions: weighted average risk-free interest rate of 1.01%, volatility factor
of 142% and an expected life of one year.



On January 6, 2022, the Company
granted 240,000 incentive stock options to consultants and all of which vested at the date of grant. The options are exercisable at $0.35
per share, expiring on January 6, 2027. The fair value of these options was

$79,117 and was calculated using
the Black-Scholes pricing model, based on the following assumptions: weighted average risk-free interest rate of 1.41%, volatility factor
of 215% and an expected life of five years.



Fiscal 2021



On February 9, 2021, the Company
granted 2,640,000 incentive stock options to directors, officers and consultants and all of which vested at the date of grant. The options
are exercisable at $0.21 per share, expiring on February 9, 2025. The fair value of these options was $549,565 and was calculated using
the Black-Scholes pricing model, based on the following assumptions: weighted average risk-free interest rate of 0.49%, volatility factor
of 234% and an expected life of five years.



On February 11, 2021, the Company
granted 1,300,000 incentive stock options to directors, officers and consultants and all





27 | P a g e







FIRST ENERGY METALS LIMITED

Notes to the Financial Statements

For the years ended March 31, 2022, 2021 and 2020

(Expressed in Canadian dollars)



|8. | Share Capital (continued)
|-- | -------------------------
|   |                          

|(e) | Share-Based Payments Reserve (continued)
|--- | ----------------------------------------



of which vested at the date
of grant. The options are exercisable at $0.35 per share, expiring on February 11, 2025. The fair value of these options was $440,765
and was calculated using the Black-Scholes pricing model, based on the following assumptions: weighted average risk-free interest rate
of 0.48%, volatility factor of 234% and an expected life of five years.



|9. | Segmented Information
|-- | ---------------------



The Company operates in one
business segment being the acquisition and exploration of exploration and evaluation assets and operates in one geographic segment being
Canada. The total assets relate to exploration and evaluation assets and have been disclosed in Note 5.



|10. | Financial Instruments and Risk Management Fair Value
|--- | ----------------------------------------------------



IFRS 7 establishes a fair value hierarchy that prioritizes
the input to valuation techniques used to measure fair value as follows:



Level 1 – Unadjusted quoted prices in active markets
that are accessible at the measurement date for identical, unrestricted assets or liabilities.



Level 2 – Quoted prices in markets that are not active,
or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; and



Level 3 – Prices or valuation techniques that require
inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).



The following provides the valuation method of the Company’s
financial instruments as at March 31, 2022 and 2021:





|                      |       | As at March 31,
|--------------------- | ----- | ---------------
|                      | Level | 2022           
|Cash                  | 1     | $              
|Reclamation deposits  | 1     | $              
|Financial liabilities | 1     | $              



Financial Risk Management



The Company’s activities expose it to a variety of
financial risks including credit risk, liquidity risk and market risk.



Liquidity Risk



Liquidity risk is the risk that
an entity will encounter difficulty in raising funds to meet commitments associated with financial instruments. The Company attempts to
manage liquidity risk by maintaining a sufficient cash balance. As at March 31, 2022, the Company had cash of $111,486 to settle current
liabilities of $299,721. Further information relating to liquidity risk is disclosed in Note 1.



Interest Rate Risk



The Company has no significant exposure at March 31, 2022,
to interest rate risk through its financial instruments.



Credit Risk



Credit risk is the risk that
one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. Financial
instruments that potentially subject the Company to credit risk consist of cash, short-term investment, reclamation bonds and amounts
receivable. The carrying amount of financial assets recorded in the consolidated financial statements, net of any allowances for losses,
represents the maximum exposure to credit risk.





28 | P a g e







FIRST ENERGY METALS LIMITED

Notes to the Financial Statements

For the years ended March 31, 2022, 2021 and 2020

(Expressed in Canadian dollars)



|10. | Financial Instruments and Risk Management (continued)
|--- | -----------------------------------------------------



Credit Risk (continued)



The Company deposits its cash
with a high credit quality major Canadian financial institution as determined by ratings agencies. The Company does not invest in asset-backed
deposits or investments and does not expect any credit losses. To reduce credit risk, the Company regularly reviews the collectability
of its amounts receivable and establishes an allowance based on its best estimate of potentially uncollectible amounts. The Company historically
has not had difficulty collecting its amounts receivable.



Currency Risk



The Company has no significant exposure
at March 31, 2022, to currency risk through its financial instruments.



Financial assets and financial
liabilities that bear interest at fixed rates are subject to fair value interest rate risk. In respect of financial assets, the Company’s
policy is to invest cash at floating rates of interest in order to maintain liquidity while achieving a satisfactory return. Fluctuations
in interest rates impact the amount of return the Company may realize but interest rate risk is not significant to the Company.



There were no transfers from
levels or change in the fair value measurements of financial instruments for the years ended March 31, 2022 and 2021.



|11. | Management of Capital
|--- | ---------------------



The Company primarily considers
shareholders’ equity in the management of its capital. The Company manages its capital structure and makes adjustments to it based
on funds available to the Company, in order to support exploration and development of mineral properties. The Board of Directors has not
established quantitative capital structure criteria management but will review on a regular basis the capital structure of the Company
to ensure its appropriateness to the stage of development of the business.



The Company’s objectives when
managing capital are:



| | • | To maintain and safeguard its accumulated capital in order to
provide an adequate return to shareholders by maintaining sufficient level of funds, to support continued evaluation and maintenance
of the Company’s existing properties, and to acquire, explore and develop other precious metals, base metals and industrial mineral
deposits;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | To invest cash on hand in highly liquid and highly rated financial
instruments with high credit quality issuers, thereby minimizing the risk and loss of principal; and
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | To obtain the necessary financing if and when it is required.
| | - | -------------------------------------------------------------



The properties in which the Company
currently holds an interest are in the exploration stage and the Company is dependent on external financing to explore and take the project
to development. In order to carry out planned exploration and development and pay for administrative costs, the Company will spend its
existing working capital and attempt to raise additional amounts as needed.



Management reviews its capital
management approach on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable.



In order to facilitate the management
of capital and development of its mineral properties, the Company’s management informs the Board of Directors as to the quantum
of expenditures for review and approval prior to commencement of work. In addition, the Company may issue new equity, incur additional
debt, enter into joint venture agreements or dispose of certain assets. When applicable, the Company’s investment policy is to hold
cash in interest bearing accounts at high credit quality financial institutions to maximize liquidity. In order to maximize ongoing development
efforts, the Company does not pay dividends. The Company expects to continue to raise funds, from time to time, to continue meeting its
capital management objectives.





29 | P a g e







FIRST ENERGY METALS LIMITED

Notes to the Financial Statements

For the years ended March 31, 2022, 2021 and 2020

(Expressed in Canadian dollars)



|11. | Management of Capital (continued)
|--- | ---------------------------------



There were no changes in the
Company’s approach to capital management during the year ended March 31, 2022, compared to the year ended to March 31, 2021. The
Company is not subject to externally imposed capital requirements. Further information relating to management of capital is disclosed
in Note 1.



|12. | Income Taxes
|--- | ------------



The income taxes shown in the
statements of operations differ from the amounts obtained by applying statutory rates to net income/loss before income taxes due to the
following:



|                                                                                    | 2022 | 2021      | 2020
|----------------------------------------------------------------------------------- | ---- | --------- | ----
|Net loss (income) for the year                                                      | $    | 4,691,000 | $   
|Statutory tax rate                                                                  |      | 27%       |     
|Expected income tax recovery
    (Decrease) increase to income tax recovery due to: |      | 1,267,000 |     
|Non-deductible permanent differences                                                |      | (577,000) |     
|Change in tax assets not recognized                                                 |      | (690,000) |     
|Income tax recovery                                                                 | $    | -         | $   



The significant components of the Company’s deferred tax assets
are as follows:



|                                   |   | March 31,
2022 |   | March 31,
2021
|---------------------------------- | - | -------------- | - | --------------
|Mineral property interests         | $ | 2,385,000      | $ | 2,181,000     
|Equipment                          |   | 97,000         |   | 97,000        
|Operating losses carried forward   |   | 3,697,000      |   | 3,095,000     
|Capital losses and other           |   | 960,000        |   | 953,000       
|Total deferred tax assets          |   | 7,139,000      |   | 6,326,000     
|Deferred tax assets not recognized |   | (7,139,000)    |   | (6,326,000)   
|                                   | $ | -              | $ | -             



The Company’s unrecognized deductible temporary differences and
unused tax losses consist of the following:



|                                              |   | March 31,
    2022 |   | March 31,
    2021
|--------------------------------------------- | - | ------------------ | - | ------------------
|Mineral property interests                    | $ | 8,833,000          | $ | 8,079,000         
|Equipment                                     |   | 360,000            |   | 360,000           
|Operating losses carried forward              |   | 13,691,000         |   | 11,463,000        
|Capital losses and other                      |   | 3,555,000          |   | 3,530,000         
|Unrecognized deductible temporary differences | $ | 26,439,000         | $ | 23,432,000        





30 | P a g e







FIRST ENERGY METALS LIMITED

Notes to the Financial Statements

For the years ended March 31, 2022, 2021 and 2020

(Expressed in Canadian dollars)



|12. | Income Taxes (continued)
|--- | ------------------------



The realization of income tax
benefits related to these deferred potential tax deductions is uncertain and cannot be viewed as more likely than not. Accordingly, no
deferred income tax assets have been recognized for accounting purposes. The Company has Canadian non-capital losses carried forward of
$13,691,000 that may be available for tax purposes. The losses expire as follows:





|Expiry date | $         
|----------- | ----------
|2027        | 618,000   
|2028        | 928,000   
|2029        | 908,000   
|2030        | 706,000   
|2031        | 1,704,000 
|2032        | 1,339,000 
|2033        | 1,092,000 
|2034        | 879,000   
|2035        | 530,000   
|2036        | 196,000   
|2037        | 233,000   
|2038        | 271,000   
|2039        | 530,000   
|2040        | 428,000   
|2041        | 1,101,000 
|2042        | 2,228,000 
|Total       | 13,691,000





Liability and Income Tax Effect
on Flow-Through Shares



Funds raised through the issuance
of flow-through shares are required to be expended on qualified Canadian mineral exploration expenditures, as defined pursuant to Canadian
income tax legislation. The flow-through gross proceeds, less the qualified expenditures made to date, represent the funds received from
flow-through share issuances that have not been spent.



On December 31, 2020, the Company issued 1,400,000
shares on a flow-through basis at $0.25 per share for proceeds of $350,000 and recognized a liability on flow-through shares of $70,000.
At March 31, 2022, the Company had incurred the $350,000 in qualified expenditures.



On March 4, 2021, the Company issued 4,000,000
shares on a flow-through basis at $0.24 per share for proceeds of $960,000 and recognized a liability on flow-through shares of $160,000.
At March 31, 2022, the Company had incurred the $184,753 in qualified expenditures.



On June 3, 2021, the Company
issued 2,003,376 shares on a flow-through basis at $0.385 per share for proceeds of $771,300 and recognized a liability on flow-through
shares of $100,169. At March 31, 2022, the Company had incurred the $771,300 in qualified expenditures.



During the year ended March 31, 2022, the Company incurred,
in aggregate, $1,306,053 in qualified flow-through expenditures and recognized a recovery flow-through recovery of $200,961.



In total, at March 31, 2022, the Company is required to
incur $775,247 of flow-through qualified expenditures.





31 | P a g e







FIRST ENERGY METALS LIMITED

Notes to the Financial Statements

For the years ended March 31, 2022, 2021 and 2020

(Expressed in Canadian dollars)



|13. | Subsequent Events
|--- | -----------------



|i)  | On May 2, 2022, the Company closed a non-brokered private placement, consisting
of 3,448,571 flow-through units (“FT Units”) priced at $0.245 per FT Unit and 2,750,000 non-flow through units (“NFT
Units”) priced at $0.20 per NFT Unit for aggregate gross proceeds of $1,394,900. Each FT Unit consists of one flow-through common
share and one-half of one common share purchase warrant (each a “Flow Through Warrant”). Each whole Flow Through Warrant entitles
the holder to purchase one common share at a price of $0.45 for a period of two years from the issue date. Each NFT Unit consists of one
non-flow-through common share and one non-flow-through common share purchase warrant. Each NFT warrant entitles the holder to purchase
one common share at a price of $0.50 for a period of one year from the issue date. The Company also paid finder’s fees of $25,350
and issued 126,750 finder’s shares; and
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|ii) | On June 13, 2022, the Company entered into an option agreement to acquire a 100%
interest in the North Spirit Lithium Property (the “North Spirit Agreement), covering approximately 2,480 hectares in Ontario.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | Under the terms the North Spirit Agreement, the Company
has the option to acquire a 100% interest in the property by completing the following option payments, common share issuances and exploration
expenditures:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               





|Due Dates                               | Option
 payments 
($) | Issuance of
    First Energy common
 shares | Minimum
 exploration

    Expenditures
    ($) | Cumulative 
exploration 
expenditure ($)
|--------------------------------------- | --------------------- | ------------------------------------------- | ---------------------------------------------- | ----------------------------------------
|On signing
    (not issued or incurred) | Nil                   | 750,000                                     | 50,000                                         | Nil                                     
|June 13, 2023                           | Nil                   | 750,000                                     | 200,000                                        | 250,000                                 
|June 13, 2024                           | Nil                   | 1,000,000                                   | 250,000                                        | 500,000                                 
|June 13, 2025                           | Nil                   | 1,500,000                                   | Nil                                            | Nil                                     



The property is subject to a 1.0% NSR royalty from any
future production.





32 | P a g e